April 22,2020 Board Minutes

A special meeting of the Board of Directors of the Arrowhead Metropolitan District, Eagle County, Colorado, was held on April 22, 2020 at 3:30 p.m. via electronic Zoom meeting https://us04web.zoom.us/j/662376387  Phone Only US 1 253 215 8782, Meeting ID: 662 376 387, Eagle County, Colorado, in accordance with the applicable statutes of the State of Colorado.

Attendance:  The following Directors were present and acting:
• Bob Shafer
• Bill Roe
• Tom Svoboda (via telephone)
• Vincent Riggio
• Thomas Howard

Also in attendance were:
• Jerry Hensel, Director of Resort Operations, Vail Resorts
• Ken Marchetti, Marchetti & Weaver, LLC
• Beth Johnston, Marchetti & Weaver, LLC, recording secretary
• Randy Smith, President of Arrowhead at Vail Association
• George Coleman, Arrowhead Resident
• Geoff Dreyer, UERWA representative
• Paul Gorbold, Vail Resorts
• Mike Trueblood, Vail Resorts

Call To Order:  The special meeting of the Board of Directors of Arrowhead Metropolitan District was called to order by Director Shafer on April 22, 2020, at 3:35 p.m. noting a quorum was present. No conflicts of interest were disclosed.

Consideration Of Agenda:  Mr. Hensel requested that Transportation discussion be moved to the top of the agenda.

Public Input: There was no public input.

Minutes: The Board reviewed the minutes included in the Board packet, and by motion duly made and seconded, it was unanimously

RESOLVED to approve the minutes of the regular meeting on February 27, 2020 as presented.

Accounts Payable:  Director Shafer and Ms. Johnston reviewed the Accounts Payable list included in the packet. Following discussion and by motion duly made and seconded, it was unanimously

RESOLVED to approve the accounts payable list as presented.

Transportation:  Director Shafer introduced Mike Trueblood and Paul Gorbold, thanking them for all they and their staff did to get the mountain closed and keep Arrowhead safe in the wake of the COVID-19 crisis. Mr. Trueblood gave background on the mountain shutdown process and explained how Vail Resorts was going to address the disruption in transportation services and related billing. Mr. Trueblood reviewed the service hours that were scheduled per the Transportation Agreement and the actual hours that were provided. Mr. Trueblood explained that there was no direction in the Transportation Agreement for this type of situation however he is recommending that Vail Resorts provide a 60% credit to the scheduled March and April services. Ms. Johnston confirmed that the March invoices for service were not yet paid. Mr. Trueblood said that the original March invoices would be cancelled and new invoices including the credit would be distributed for March and April. General discussion continued on the formula used to arrive at the credit amount, what was being done for other Districts, and the service agreements for next season.

Following discussion, Mr. Trueblood said Vail Resorts would send written confirmation to confirm the final agreement.

Action List: The Board reviewed the action list. General discussion was had on:
• Sales tax implementation was continuing as expected.
• There was one Board seat open after the election was cancelled.

UERWA Update: Ms. Johnston confirmed that the March 26 UERWA meeting minutes summary had been distributed via email to the AMD Board members. Mr. Dreyer reviewed the February and March minutes:
• The Traer Creek Tank would be rebuilt using a new design in the same location with construction expected to be completed in 2022.
• 87 acre feet of Eagle Park Reservoir water owned by Eagle County will be transferred to the UERWA for use for affordable housing developments that conserve water and for projects that promote healthy streams and rivers in the Eagle River basin.
• The Eagle Park Reservoir due diligence application for the remaining portions of conditional water rights was filed with no opposition received.
• ERWSD and UERWA were focused on Covid-19 and developing crisis plans for continuing operations and water delivery if there was a significant outbreak of the virus. Mr. Dreyer reviewed procedures for delinquent accounts due to hardships related to COVID-19.

AVA Update:  Mr. Smith reviewed the following activity for Arrowhead at Vail Association:
• The AVA Budget relies on 36% of its revenue from real estate transfer assessments (RETA) which is significantly down for the first quarter with no indication of a rebound until possibly the third quarter. The Finance Committee is looking into cuts and ways to minimize expenses to offset the loss in revenue.
• Reviewed security within Arrowhead.
• Discussion on Vail Recreation District collaborations for the summer.
• The lighting study was progressing however there would be no spending in 2020 and the project will carry over into 2021.

The Committee is working on narrowing down the options and materials. A general discussion on the Season’s (Sawatch Drive) lighting issue was had given the delay in the AVA lighting study. Mr. Hensel said there would be a plan for the area within a couple months and that is should be added back to the action log.

Transportation Reports:  Mr. Hensel reviewed the Transportation report included in the Board packet noting the year over year ridership numbers indicating that the night service was successful. The Vail bus numbers were also up over the previous season however it could have been due to owners inviting guests from outside Arrowhead. General discussion continued on the bus service, how it should be run, and potential service changes for next season.

Operations Report: Mr. Hensel reported for the Board:
• Alpine Engineering would be inspecting the roads for damage and the report would be ready for the May meeting.
• The Parking Lot Paving project is on schedule with paving to be done 5/7 and 5/8, weather permitting. The District requested that United provide a comprehensive COVID-19 compliance plan before starting the project.
• Gate Security was addressing bikers and skiers skinning up the mountain. Gate house staff is no longer accepting any packages or drop offs, and Security is 50% staffed so fewer patrols are being done.
• One Arrowhead team employee was confirmed positive for COVDI-19.The employee is currently in quarantine and no other team members are showing symptoms.
• Street cleanup and landscaping is starting up with a modified work schedule to ensure proper distancing and compliance with current safety guidelines.

General discussion continued on the need for a doggie waste station on Highway6 between North and South Arrowhead. The Board asked Mr. Hensel to check with Eagle County Trails and report back on options.

Operations Plan: for 2020 Director Roe reviewed the background on the Operations Plan. Director Roe reported that the Plan is complete for 2020 but can be easily adjusted if changes are needed. The Board asked Management to upload the Plan to the website.

Highway 6 Crossing:  Director Shafer reviewed the Highway 6 pedestrian access background and the March 9 committee meeting noting the following:
• Eagle County likes the roundabout option and a tunnel could present challenges as the existing gas line would need to be relocated.
• Eagle County would be supportive and wants to keep the process moving forward.
• Funding should not be expected from CDOT, Eagle County may contribute after a plan review, and Edwards Metro District wants more evidence that the roundabout would be a full community benefit.

Mr. Marchetti reviewed the Edwards Metropolitan District meeting presentation and concurred that the reaction was not as positive as that from Eagle County. The Edwards Metro District is interested in knowing how a crossing would benefit the entire Edwards Community and suggested that representatives from Eagle County and the District attend the next Edwards Metro District meeting to provide more information and support for the plan. General discussion continued on fine tuning the cost and funding allocation. The Board requested that the working group continue moving forward.

Bike Safety:  Mr. Howard reviewed the background on the bike safety issue in the community especially on Cresta Road. The Safety group met and provided guidelines that included funneling outside recreationists to the main gate for access to Arrowhead and an education program. Mr. Howard reviewed the material included in the packet on education and also the pedestrian gate proposal that was distributed via email prior to the meeting. Mr. Howard then reviewed Cresta Road specific suggestions explaining that District counsel is being consulted. General discussion followed, including a suggestion to place mirrors at all curves on Cresta Road to increase views. The Board requested the committee continue moving forward with input from Randy Smith as AVA’s representative and preparation of a full budget for the plan. The Board also requested that District Counsel review at the Cresta Road Agreement to determine right to access Cresta Road.

Financial Statements:  Mr. Marchetti reviewed the financial statements included in the packet. Mr. Marchetti reported that the 2020 forecast for sales tax revenue was updated with potential impacts from COVID-19 since short term rentals were expected to be significantly impacted. The transportation lines would be updated once the credits are received from Vail Resorts. Mr. Marchetti then reviewed the potential impacts to property taxes included in the packet. Mr. Marchetti explained that home valuations are based on comparative sales and home sales prices during the period for gathering comparable sales are expected to remain consistent with recent trends. [Subsequent to the meeting Colorado Division of Property Taxation announced that their current projections are that the residential assessment rate will drop by 18% resulting in a corresponding reduction in the overall assessed value for property taxes to be collected in 2022]. Mr. Marchetti also reported that if home values decline that decline will impact the District’s 2024 and subsequent budgets.

Draft 2019 Audit: Mr. Marchetti and Ms. Johnston reviewed the draft audit included in the board packet. The Board requested that the audit committee, which would consist of Directors Shafer and Riggio, meet with Dan Cudahy with McMahan and Associates to review the audit in detail and report back to the Board in May.

Sales Tax Implementation: Ms. Johnston reviewed the sales tax implementation plan and progress to date. The Board reviewed the draft letters and communications included in the packet and requested that Ms. Johnston send out the initial notices to identified businesses, short term rentals, and all owners. Discussion turned to the Host Compliance sales tax monitoring module. Mr. Hensel and Ms. Johnston explained that the District would piggy-back the sales tax module on the AVA’s current database and that the AVA’s term would renew at the end of June. Following discussion, Mr. Smith gave permission for the District to move forward with the piggyback and would provide the list of identified rentals for sales tax
notice purposes. The Board requested that Management move forward with implementation of the new module with the AVA’s renewal

Future Meetings:  The Board confirmed that the next regular meeting would be May 27, 2020, starting at 3:30 p.m.

Adjournment:  There being no further business to come before the Board, by motion duly made and seconded, it was unanimously

RESOLVED to adjourn the special meeting of the Arrowhead Metropolitan District Board of Directors this 22nd day of April, 2020.

Respectfully submitted,
Beth Johnston
Secretary for the Meeting