GENERAL MANAGERS REPORT FOR MARCH 2006 On January 26, I went to Santa Fe. I met with Frank Coppler, and we drafted a request for capital outlay money, that we took to Senator Asbill to try to get additional money for the District. We were successful in getting $100,000 in capital outlay money. We got $50,000 for a settling tank where the upper fishing lake is, and $50,000 for water line replacement. The TWSD attorney advised me that I should try to meet with the DFA as soon as possible so that they understood the problems we were having. I thought it would be a good idea to have them meet with our Board of Directors. I asked Debbie Goss to arrange a meeting. We tentatively had one set for the 20th of February, but on the 17th, DFA cancelled the meeting and said they would not meet with the Board. I then asked Debbie to call them back and see if they would meet with her and me. They agreed, so on February 20th, Debbie Goss and I went to Santa Fe and met with DFA and the State Auditor. I believe the meeting was very beneficial and they well understand the devastation to Timberon if the ad valorm tax is reduced to10 mil. K.D. Huey is drilling our new well. He is scheduled to drill to a depth of 1000 feet and complete the well with an eight inch production casing. The engineers from Souder, Miller and Assoc. will periodically monitor the drilling progress with the assistance of TWSD. Since 2002, I have continually heard complaints that in the year 2000, TWSD illegally transferred $149,000 from the water department into the general fund. We have continually stated that the transfer was legal and approved by the DFA. The most recent rumor has it that, even though the DFA approved the transfer, the money was transferred and spent before the DFA approved it. I call your attention to resolution #99/00010 which the Board of Directors approved to transfer $109,000, not $149,000 from the water department to the general fund. Somehow the amount grew significantly as the story was repeated. On the resolution is the signature, authority, and approval date from DFA. The approval date is March 27, 2000. An examination of the General Journal transactions, shows that the transaction which actually moves the funds, was made on April 28, 2000, more than thirty days after the DFA approval. Now may we please let this dog die? Billy R. Gideon General Manager