REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, January 20, 2009

2:00 P.M.

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

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

Directors Present:

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

Directors Absent:

None

Staff Present:

Tom Mosby, General Manager

Toni Bailey, Business Manager

Karl Meier, Engineering Manager

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

Virginia Castagnola Hunter, District customer

Mark Poindexter, Poindexter & Company

2. PUBLIC FORUM

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

3. Time Certain Item

A. Time Certain 2:05 p.m. — Appeal of Virginia Hunter, Account Number 02-1996-0

Director Abel presented this item for the Appeals Committee. Mrs. Hunter presented her appeal. Director Shaikewitz noted Mrs. Hunter’s concern about the 34-day billing period during October; under the average per-day use for that period, the three additional days would have used 18.5 units. Mr. Mosby pointed out the Mrs. Hunter’s use would still have been in the highest tier.

Following discussion it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to deny the appeal of Mrs. Hunter for adjustment to her high October 2008 water bill.

B. Time Certain 2:30 p.m. —Fiscal Year 2007/08 Financial Audit

Ms Bailey introduced Mark Poindexter, Poindexter & Company, who presented the FY 2007/08 audit and he and Ms Bailey answered Directors’ questions. Following discussion it was moved by Director Wilson, seconded by Director Morgan, and unanimously carried to accept the FY 2007/08 Audited Financial Statements. It was moved by Director Morgan, seconded by Director Frye and unanimously carried to authorize the General Manager to send the Response to the Auditor.

4. CONSENT CALENDAR

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

5. 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 2:58 p.m.

The Board reconvened the regular meeting of the Montecito Water District Board of Directors at 3:05 p.m.

6. Cachuma MATTERS

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF December 15, 2008

Director Abel reported on the subject meeting, at which the audit was approved, and called the Board’s attention to the materials provided in their agenda packets.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF December 15, 2008

Director Abel reported on the subject meeting, at which the audit was approved and the COMB Board approved the Ocean View Homeowners’ Association agreement.

7. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt reported on legal matters of interest to the Board.

B. Closed Session – Pursuant to governtment Code Section 54956.9(a), Existing Litigation, Protect our Village vs. John Price, Olive Oil and Gas LLP, and Montecito Water District; Santa Barbara Superior Court Case Number 1304740

C. 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 Board adjourned to closed session on the two items above at 4:00 p.m.

The Board reconvened in open session at 4:25 p.m. President Shaikewitz reported that the Board had given direction to staff and legal counsel on both cases.

D. MWD Letter to Santa Barbara County Board of Supervisors REgarding Quagga Mussel Prevention at Lake Cachuma

Mr. Mosby and Mr. Wullbrandt presented this item and answered Directors’ questions. Following discussion it was the consensus of the Board that the proposed letter should be amended to include information recently received that the boat inspection station is closed and other edits suggested by Directors, then returned to the Board for approval. If the boat inspection station is determined to be closed, a brief letter from staff and Counsel should be sent immediately, then the revised longer letter.

8. Board of Directors

A. Review of Committee Assignments

President Shaikewitz called the Board’s attention to the roster of committee assignments included in their agenda packets.

B. Directors’ Compensation

President Shaikewitz introduced this item and asked whether the Board wished to give direction to staff at this time to prepare a resolution. Following discussion the Board requested that staff prepare the resolution for presentation at the February meeting.

9. district Operations Report

A. Hidden Valley Lane Special Homeowner Road-Improvement Assessment

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Abel, seconded by Director Morgan, and unanimously carried to authorize and approve payment of $3,273 to the Hidden Valley Lane Homeowners Association for the District’s share of costs in the repaving of Hidden Valley Lane, which provides access to two District-owned parcels.

B. Refurbishing and maintenance of employee Housing, 585 San Ysidro Road

Director Shaikewitz, representing the Operations Committee, presented this item and he and Mr. Mosby answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Abel and unanimously carried to approve and authorize the expenditure of an amount not to exceed $30,000 for maintenance and refurbishment of the District-owned house at 585 San Ysidro Road.

C. Jameson Lake Communication System Maintenance

Mr. Mosby presented this item. It was moved by Director Abel, seconded by Director Frye, and unanimously carried to approve the appropriation of an amount not to exceed $15,000 for maintenance and improvements to the District’s communication cable between Doulton Tunnel South Portal and Jameson Lake.

D. 2008 Calendar Year Main Break REport

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

E. Water Works Operations Report, December 2008

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

10. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

Mr. Mosby reported to the Board on ongoing projects and District operations not covered elsewhere in the agenda.

11. District Business Report

A. Water Sales Report for December 2008

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

B. November 2008 Revenue and Expense Report

Ms Bailey provided this report.

C. Resolution 2052 — Establishing an Identity Theft and Privacy Policy

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Morgan, and carried by the following roll call vote to approve Resolution No. 2052 as presented with the ID theft and privacy policy as amended.

AYES: Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: none

ABSTAIN: none

ABSENT: none

12. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the Public Information Committee had not met since the last Board 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 Operation and Reserve account will be monitored on a regular basis by the Committee. The other activities of the Finance Committee had been covered elsewhere in the agenda.

13. AGENDA ITEM REQUESTS

Director Wilson requested that the subject of Cachuma Manager and Attorney’s meetings shared costs be discussed at a future meeting. There were no other requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for February 17, 2009.

14. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:17 p.m.

Approved:

__________________________

Richard Shaikewitz, President

Attest:

__________________________________

Tom Mosby, Secretary