REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, January 19, 2010

2:00 P.M.

1. CALL TO ORDER, ROLL CALL, DETERMINATION OF QUORUM

President Morgan called the meeting to order at 2:00 p.m.

Directors Present:

Directors Samuel Frye, W. Douglas Morgan, Richard Shaikewitz, and Larry Wilson

Directors Absent:

Jan E. Abel

Staff Present:

Tom Mosby, General Manager

Chip Wullbrandt, District Counsel

Toni Bailey, Business Manager

Lois Werner, Recording Secretary

Guest Present

None

2. PUBLIC FORUM

There were no members of the public present who wished to speak on items not on the agenda.

3. CONSENT CALENDAR

Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to approve the Consent Calendar as revised.

4. Montecito Water District Financing Corporation

A. ADJOURN TO ANNUAL MEETING OF MONTECITO WATER DISTRICT FINANCING CORPORATION

The Board of Directors adjourned to the annual meeting of the Montecito Water District Financing Corporation at 2:17 p.m.

The Board reconvened the regular meeting of the Montecito Water District Board of Directors at 2:40 p.m.

5. Cachuma MATTERS

A. COMB SCC Upper Reach Reliability Project: Final Documents / Agreements

Mr. Mosby and Mr. Wullbrandt presented this item and answered Directors’ questions. Following discussion, it was moved by Director Shaikewitz, seconded by Director Frye, and carried by a vote of three to one, with Director Wilson opposed, to approve the Indemnification Agreement for the COMB Bond as amended, subject to letters from Counsel and Bond Counsel expressing their confidence that MWD has been reasonably protected from liability associated with the issuance of the COMB bond.

Following further discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and carried by a vote of three to one with Director Wilson opposed, to approve as to form the MWD Contribution Agreement as amended.

B. Resolution No. 2065 — Approving Issuance of Revenue Bonds by the Cachuma Operation and Maintenance Board

Following discussion it was moved by Director Frye, seconded by Director Shaikewitz, and carried by the following roll-call vote to adopt Resolution No. 2065 as amended:

AYES: Directors Frye, Morgan, Shaikewitz

NOES: Director Wilson

ABSTAIN: None

ABSENT: Director Abel

C. COMB CIP Status Update

Mr. Mosby presented this item. Following discussion it was the consensus of the Board that, due to funding limitations, MWD will not provide approvals for any additional COMB CIP projects beyond the Second Pipeline project and installation of an SCC section valve above Mission Creek with a lateral connection for future use if the SCC were to break in the creek.

6. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt had nothing to report.

B. Closed Session – Pursuant to Government Code Section 54956.9(a), Existing Litigation, Montecito Water District Et Al vs. Penfield & Smith Engineers et al; Santa Barbara Superior Court Case Number 1303752

The meeting adjourned to closed session on the above matter at 3:54 p.m.

The meeting reconvened in open session at 4:05 p.m. There was no reportable action.

7. Board of Directors

A. Review of Committee Assignments

President Morgan reviewed the Board Committee and agency representative assignments for 2010.

8. District Business Report

A. 1998A Bond Financing

Mr. Mosby and Ms Bailey introduced this item. Following discussion it was the Board requested that staff set up a workshop with the proposed Bond Counsel and Bond Underwriter to have all questions answered prior to approving engaging these professionals and beginning the process of refinancing the COP’s.

B. Employee Fidelity Bond

Ms Bailey introduced this item. Following discussion it was the consensus of the Board to continue the $2,000,000 excess crime coverage policy through ACWA/JPIA and investigate the cost of getting a bond or policy for an additional $2,000,000 coverage.

C. ACWA/JPIA Recognition Award

Ms Bailey presented this item.

D. Water Sales Report for December 2009

Ms Bailey presented this item and answered Directors’ questions.

E. November 2009 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

F. Quarterly Budget Report

Ms Bailey presented this item and answered Directors’ questions.

9. district Operations Report

A. Unaccounted Water and Action Status REport

Mr. Mosby presented this report and answered Directors’ questions

B. reacquisition of SB County Suspended Table A State Water

Mr. Mosby presented this item and answered Directors’ questions.

C. 2009 Annual Water Main Break report

Mr. Mosby presented this report.

D. 2009 Water Conservation Program Report

Mr. Mosby presented this report and answered Directors’ questions.

E. Water Works Operation Report

Mr. Mosby presented this report and answered Directors’ questions.

10. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

(1) Distribution Department

(2) Treatment Department

(3) miscellaneous

Mr. Mosby reported on District operations and activities not covered elsewhere in the agenda.

12. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF December 21, 2009

Director Wilson left the meeting early and there was no report on the subject meeting.

B. OPERATIONS COMMITTEE

Directors Frye and Shaikewitz reported that the activities of the Operations Committee had been covered elsewhere in the agenda.

C. FINANCE COMMITTEE

Directors Morgan and Wilson reported that the Finance Committee had reviewed a revision of the employee handbook to be brought to the Board at a later date. Other activities of the Finance Committee had been covered elsewhere in the agenda.

D. PUBLIC INFORMATION COMMITTEE

Director Shaikewitz reported that the Public Information Committee had not met. A meeting was being scheduled for Friday, January 22.

E. Ad Hoc Water Supply Committee

The Ad Hoc Water Supply Committee has been disbanded.

13. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for February 16, 2010.

14. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:23 p.m.

Approved:

_____________________________

W. Douglas Morgan, President

Attest:

__________________________________

Tom Mosby, Secretary