Tuesday, September 15, 1998

MINUTES OF A REGULAR MEETING
of the
BOARD OF DIRECTORS OF THE MONTECITO WATER DISTRICT
held at the
DISTRICT BOARD ROOM
583 SAN YSIDRO ROAD, MONTECITO, CALIFORNIA
at 3:00 p.m. on TUESDAY, SEPTEMBER 15, 1998

The meeting was called to order by Vice President Campbell at 3:00 p.m.
Those in attendance were:

Present:	Directors Abel, Campbell, Jones, Wilson
Absent:	Puddicombe
Also Present:	C. Charles Evans, General Manager/Secretary Evalyn Kerman, Business Manager/Assistant Secretary Chip Wullbrandt, District Counsel Cathy Muneio, Secretary Jim Buckley, Montecito Journal

Vice-President Campbell opened the public hearing at 3:02 p.m. to take comments on the proposed increase to the Capital Cost Recovery Fee. The General Manager said that a letter had been received from Mr. Ackerman opposing an assessment of properties within the District. The General Manager explained that he had left a message by telephone and responded in writing to Mr. Ackerman and explained to him that the Capital Cost Recovery Fee was for purchasing a new meter, and was not a property assessment. Mr. Ackerman had also asked about the Carpinteria Fire District curtailing its functions and he requested assurance that the Montecito Fire Protection District would respond in the event of a threat of fire in Toro Canyon area. The General Manager said the Water District had sent a copy of this letter to the Carpinteria/Summerland Fire Department for its consideration.

The Business Manager reported on the proposed Capital Cost Recovery Fee. She said in 1997 the Board had established a formula to determine the Capital Cost Recovery Fee for new meters by which all new customers would pay their fair share of past District costs. She explained that this resolution would automatically increase the Capital Cost Recovery Fee for the next five years. The Business Manager explained that the District did increase this fee last year with the new budget but the accounting method used to account for the State Water costs had changed. It was recommended that this fee be increased due to the payment of the June 1 CCWA prepayment which was not in the original calculation. Director Wilson asked about the title of fixed assets and if these were the original costs. The Business Manager explained that this language came directly from the District’s annual report to the auditor. Counsel Wullbrandt requested that an additional sentence be added to the resolution stating where the information came from. Director Wilson made a motion to adopt the amended Resolution No. 1865 setting the Capital Cost Recovery Fees and amending a portion of Section 3 of Resolution No. 1837 dated July 1, 1997, as amended. The motion was seconded by Director Abel. The motion carried with the following roll call vote:

The General Manager explained that an item had arisen subsequent to the agenda being posted that required action. He said that CCWA needed this information to develop recommendations for the CCWA Operating Committee meeting of September 21, 1998 and the CCWA Boad meeting of September 24, 1998, for the possible defeasement of the CCWA Series A Bonds and possible sixth year of capitalized interest. A motion was made by Director Abel to adopt Resolution No. 1886 to consider adding to the agenda an item to take action on the proposed defeasement of the CCWA Series A Bonds. The motion was seconded by Director Jones. The motion carried with the following roll call vote:

Vice-President Campbell explained that the District had previously voted to capitalize interest for a sixth year and that the 30 year plan included this capitalization. He said that there would be a District budget impact of about $500,000 (the $219,800 payment to CCWA and the $300,000 refund anticipated in the budget) if this course were changed at this time by defeasing the bonds in the fifth year. A motion was made by Director Wilson, seconded by Director Abel and unanimously carried to reaffirm the Board’s decision to capitalize interest on the CCWA revenue bonds for a full six years and not approve the defeasement of any CCWA Series A bonds. The motion carried unanimously.

During public forum, Jim Buckley, publisher of the Montecito Journal, asked if the District is involved in the Pacifica Institute lawsuit. The General Manager explained that homeowners around the Institute were alleging that the Institute was discharging septic wastes directly into groundwater. The General Manager said this had come before the Central Coast Regional Water Quality Board and was referred to staff for a recommendation to be brought back to the CCRWQC Board in October. It was pointed out that the law states that septic waste disposal needs to be at least 10 feet above groundwater. Ben Wiener, attorney for the homeowners, was reported to have reports from Mike Hoover and Dames and Moore which conclude that septic wastes are being discharged directly into the groundwater. The General Manager stated that all the data would need to be reviewed before any determination could be made.

Director Abel distributed an article regarding steelhead in the Santa Ynez River.

Note: The agenda for this meeting was posted at the front counter and on the front wall at the Montecito Water District on August 28, 1998.