REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, California

TUESDAY, March 20, 2007

2:00 P.M.

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

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

Directors Present:

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

Directors Absent:

None

Staff Present:

Bob Roebuck, General Manager

Toni Bailey, Business Manager

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

David Strauss, District customer

Diane Morgan, District customer

Steven Bachman, PhD, District Consultant

2. PUBLIC FORUM

Mr. Strauss addressed the Board on the subject of water rates.

3. CONSENT CALENDAR

The Board requested the Finance Committee to look into the possibility of changing the dental insurance plan. Following discussion, the items on the Consent Calendar were voted on separately. It was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to approve the Minutes of February 20, 2007 as corrected. It was moved by Director Frye, seconded by Director Wilson, and carried with one abstention to approve the Minutes of February 22, 2007. It was moved by Director Frye, seconded by Director Wilson, and carried with one abstention to approve the Minutes of February 23, 2007. It was moved by Director Shaikewitz, seconded by Director Frye, and unanimously carried to approve the Payment of Bills for February 2007. It was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to approve the Investment of District Funds as presented.

4. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt discussed the exchange agreement with Santa Ynez Improvement District #1 and the issue of “spill water.”

5. Cachuma Matters

A. Cachuma Conservation and RElease Board meeting of February 26, 2007

Director Abel reported on the subject meeting and called the Board’s attention to the materials presented in their agenda packets.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF February 26, 2007

Director Abel reported on the subject meeting.

6. Board of Directors

A. Oath of Office And Certificate of Appointment, Director W. Douglas Morgan

Director Morgan was formally sworn in to his seat on the Board by Mr. Roebuck. The Directors who appointed Director Morgan signed the certificate of appointment.

B. Revised Director Assignments to COMMITTEES and other organizations

President Abel presented the revised committee assignments for 2007.

C. Update — Dedication of New Garden Area to Former Director Robert W. Puddicombe

President Abel informed the Board of arrangements being made for the dedication ceremonies for the new front garden area, which is to be dedicated in Director Bob Puddicombe’s honor on April 17 at 1:15 p.m.

7. District Business Report

A. Notice Regarding Proposed Resolution Relative to Exemption from Proposition 4 Spending Limitations

President Abel read the following into the minutes:

“A resolution will be presented to the Board for adoption at a regular Board meeting of June 19, 2007 (which meeting for adoption must be at least 15 days after this statement), which resolution shall establish that the District’s various user fees, rates and charges for Fiscal Year 2007-08 do not exceed the costs reasonably borne by the District for providing the services for which the fees, rates and charges were made.”

B. Contract for Deposit of Monies

Ms Bailey answered Directors’ questions on this item. Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to authorize staff to sign the contract for deposit of monies with Santa Barbara Bank and Trust, and the associated waiver of security.

8. district Operations Report

A. Ortega Reservoir Project Status Report (oral)

Mr. Roebuck brought the Board up to date on the status of the Ortega Reservoir Project.

B. Time Certain, 3:30 p.m. – FUTURE WATER DEMAND AND WATER SUPPLY OPTIONS

Mr. Roebuck introduced Steven Bachman, PhD, who presented his Future Water Demand and Water Supply Options Report to the Board and answered Directors’ questions. Following discussion, it was moved by Director Shaikewitz, seconded by Director Morgan, and unanimously carried to accept the report.

C. JAMESON LAKE FIELD TRIP

Mr. Roebuck reminded the Board of the upcoming field trip to Jameson Lake and requested that Directors interested in making the trip let Lois know of their availability in the fourth week of April so that a date can be set.

D. LAURo DAM SEISMIC RETROFIT AGREEMENT, Resolution No. 2025

Mr. Roebuck introduced this item and answered Directors’ questions. Following discussion, it was moved by Director Wilson, seconded by Director Morgan, and carried by the following roll-call vote to approve Resolution No. 2025 as presented.

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

NOES: None

ABSENT: None

ABSTAIN: None

E. 2006/07 WATER SUPPLY REPORT – PURCHASE OF STATE WATER

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

9. GENERAL MANAGER’S REPORT

A. Ongoing Projects Update

Mr. Roebuck presented his summary of ongoing projects.

B. Water Sales Report for February 2007

Mr. Roebuck presented this item.

C. January 2007 Monthly Revenues and Expenditures

Mr. Roebuck presented this item.

D. Water Works Operation Report for February 2007

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

Legal Counsel Departed at this point.

10. DIRECTOR AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF February 26,2007

Director Wilson reported on the subject meeting.

11. COMMITTEE REPORTS/RECOMMENDATIONS

A. OPERATIONS COMMITTEE

Directors Shaikewitz and Wilson stated that the activities of the Committee had been covered elsewhere in the agenda.

B. FINANCE COMMITTEE

Directors Wilson and Morgan stated that the activities of the Committee had been covered elsewhere in the agenda.

C. PUBLIC INFORMATION COMMITTEE

Director Abel informed the Board that the next newsletter was underway. The draft will be reviewed at the next Committee meeting on April 5 and the final newsletter should be in customers’ mailboxes by late April or early May.

12. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for April 17, 2007.

13. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 4:23 pm.

Approved:

__________________________

Jan E. Abel, President

Attest:

__________________________________

Robert L. Roebuck, Secretary