REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, February 17, 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:

W. Douglas Morgan, Richard Shaikewitz, and Larry Wilson

Directors Absent:

Jan E. Abel, Samuel Frye,

Staff Present:

Tom Mosby, General Manager

Toni Bailey, Business Manager

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

None

2. PUBLIC FORUM

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

3. CONSENT CALENDAR

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

Director Shaikewitz requested that the Board be shown a running total on money paid out on the self-funded dental insurance program when they begin discussing the next FY budget. This information will be presented to the Finance Committee prior to being brought to the Board.

4. LEGAL MATTERS

A. Recent and Pending Legal Matters Review – Oral Report

Mr. Wullbrandt brought the Board up to date on legal and legislative matters, including appeals under Ordinance No. 89, his upcoming trip to Washington DC on behalf of COMB, and effort to coordinate discussions on fisheries issues with CA Fish and Game, Cal TROUT and NMFS.

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

C. Closed Session – Pursuant to government 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

The Board adjourned to closed session on the two above matters at 2:40 p.m.

The Board reconvened to open session at 3:34 p.m. President Shaikewitz reported that direction had been given to Counsel and staff.

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

President Shaikewitz distributed proposed changes to the draft letter as presented to the Board in their agenda packets. Following discussion, it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to authorize the President to sign the revised draft letter. It was the consensus of the Board that either President Shaikewitz or Mr. Mosby should attend the February 24, 2009 Board of Supervisors’ meeting.

E. District Legal Costs

Board and staff discussed the increase in legal costs due to current and possible litigation, the likelihood that a budget adjustment may be required for this fiscal year, and that legal costs will continue to be high into the next fiscal year.

Director Shaikewitz requested that only one attorney work on a matter or attend a meeting, to prevent billing from more than one attorney for a matter. He also requested more detailed bills. He reminded the Board that Directors who have legal questions should not call Counsel directly, but go through the General Manager. He requested that Counsel supply an “educated estimate” of legal costs likely to be incurred for current and likely litigation.

5. Board of Directors

A. Resolution No. 2053 — Directors’ Compensation

Director Morgan requested that this item be tabled until the next meeting, when all Directors are present.

6. district Operations Report

A. juncal dam – expanded deflection study report and division of safety of dams inspection

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

B. Water Works Operations Report, January 2009

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

7. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

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

8. District Business Report

A. 2^nd Quarterly Investment Report as of December 31, 2008

Ms Bailey presented this item and answered Directors’ questions.

B. 2^nd Quarterly Budget Report as of December 31, 2008

Ms Bailey presented this item and answered Directors’ questions.

C. Water Sales Report for January 2009

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

D. December 2008 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

E. Annual 1996 CCWA Bonds Continuing Disclosure

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson and unanimously carried to ratify the 2007/08 District submission to CCWA for transmittal to the Trustee of the 1996 CCWA bonds continuing disclosure update.

F. Annual 1998 Series A Bonds Continuing Disclosure

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson and unanimously carried to approve the 2007/08 District Continuing Disclosure submittal to the Trustee for the 1998A Bonds.

G. Annual 2004 COMB BONDS Continuing Disclosure

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson and unanimously carried to Approve the 2007/08 District Continuing Disclosure submittal to the Trustee for the 2004 COMB Bonds.

H. CALIFORNIA OFFICE OF EMERGENCY SERVICES CLAIM FOR COSTS ASSOCIATED WITH THE TEA FIRE IN NOVEMBER 2008

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

9. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. PUBLIC INFORMATION COMMITTEE

Director Shaikewitz reported that the PI Committee met on January 29 and on February 10, with Director Morgan attending as alternate for Director Abel. The Committee discussed the PI budget and the current usage of a PI consultant.

B. OPERATIONS COMMITTEE

Director 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 activities of the Finance Committee had been covered elsewhere in the agenda.

D. Ad Hoc Water Supply Committee

Director Shaikewitz reported on the last CCWA meeting, where they had the election of officers. The representative from Santa Maria was elected President and the representative from CVWD was elected Vice President. Director Shaikewitz was elected to the CCWA Finance Committee. CCWA has been told that State Water allocations may be as low as 9% if the year’s precipitation remains low. January was the third driest in the department’s history. Water purchased through the dry-year water bank could sell as high as $300/AF. There may only be 100,000 AF available, with only 1000 AF of that available to CCWA.

Directors Shaikewitz and Morgan reported that the Ad Hoc Water Supply Committee met with Montecito Sanitary District Board members and staff to discuss the possible use of reclaimed water in the District.

10. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for March 17, 2009.

11. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:30 p.m.

Approved:

__________________________

Richard Shaikewitz, President

Attest:

__________________________________

Tom Mosby, Secretary