MINUTES - APRIL 1, 1997

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, APRIL 1, 1997

Present:	Directors Abel, Muller, Puddicombe and Wilson
Absent:	Director Campbell
Also Present:	C. Charles Evans, General Manager/Secretary Chip Wullbrandt, District Counsel Evalyn Kerman, Business Manager Tom Mosby, Engineering Manager Jerry Paley, Financial Specialist Philip P. Kirst Carol Valentine Harry Edmondson

President Muller recommended a change to the minutes. A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to approve the amended minutes of March 18, 1997.

The Board reviewed the water production report and it was noted that water production was 238 AF over that projected for March.

A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to ratify the transfer of $250,000 from the District’s LAIF/General Capital Repair & Replacement / Operations fund account to the District’s Montecito Bank & Trust Operational Account.

The Board discussed the report on the Water Distribution System and Fireflow Upgrade Program. It was noted that the District would be obtaining bids for the Hill Road and Butterfly Lane main replacements.

The Board discussed the 1997-98 Preliminary District Budget. After considerable discussion the Preliminary Budget was referred to the Finance Committee for further review and the committee was directed to report back to the Board with any recommendations. Director Wilson made a motion to set aside the 1997-98 Preliminary Budget , review of the Capital Cost Recovery Fees, review of the Meter Service Connection Fees and the restructuring of Capital Debt payments, and to investigate the contracting of an outside consultant to review the District’s financial needs and make recommendations accordingly regarding the 1997-98 Budget. He also requested that the outside consultant be Mr. Gaffney at Bartle and Wells. The motion died due to lack of a second.

Director Puddicombe moved to approve in concept the Capital Cost Recovery Fee proposal. It was seconded by Director Abel. The motion carried unanimously.

Director Abel moved to approve in concept the Meter Service Connection Fee proposal. It was seconded by Director Puddicombe. The motion carried unanimously. The General Manager said that this will not result in any increase in the 1997-98 Budget.

The General Manager explained that the Operations Committee had met on March 31st and had considered the Agreement with the City of Santa Barbara regarding the desalination plant. After discussion it was the consensus of the Board to have the General Manager meet with Goleta Water District to see if a more equitable joint agreement could be worked out, and then to meet with the City of Santa Barbara representatives.

A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to approve a contribution of $250 to the cooperative water awareness campaign for May 1997.

RES. #1831 SUSPENDING SUMMERLAND WATER
DISTRICT ORDINANCES, RESOLUTIONS & RULES AND REGULATIONS

Director Puddicombe made a motion to approve Resolution No. 1831 to suspend all of the conflicting Summerland Water District ordinances, resolutions, rules and regulations. The motion was seconded by Director Abel. A roll call vote resulted as follows:

The Engineering Manager reported that he had met with Maeton Freel at the Forest Service and that the Forest Service had agreed to allow diversions to continue at Fox Creek for the month of April and possibly May. Director Abel asked about reporting the status of these diversions. The Engineering Manager said that the District and Forest Service staff would be meeting monthly and would be giving a quarterly written report to the Board, with the first report to be out in May.

The General Manager reported that he had met with the Executive Committee at ACWA/JPIA requesting reimbursement for disputed legal costs regarding the Hill lawsuit case. A letter was received from ACWA/JPIA stating that the Executive Committee approved ACWA/JPIA not paying these costs.

Director Puddicombe made a motion to direct the General Manager to prepare a letter in line with ACWA’s suggestions regarding opposing AB556 which would encourage consolidation of special districts. Director Wilson seconded the motion. The motion carried unanimously.

The General Manager asked that the request to CCWA regarding funding of pumping plants be postponed.

The Board discussed Director Muller’s memorandum regarding analyzing the restructuring of the District’s capital debt payments. Instead of paying the same over 40 years, the District would propose to pay less now and more when water sales are higher and other debts are paid off. Director Muller said this had been discussed with Dave Houston of Smith, Barney and that a target goal for debt service reduction was proposed to be $500,000 per year in the early years. Director Abel said that she would like a more detailed written proposal on how this could be accomplished. The General Manager was directed to request a more detailed proposal including other possible alternatives from Dave Houston.

A motion was made by Director Puddicombe to approve Resolution No. 1832 adding a closed session agenda item to discuss potential litigation regarding the cancellation of an offer for 192 Santa Elena, and an open session agenda item to discuss the backup offer from Mr. Kirst for 192 Santa Elena Lane. It was seconded by Director Abel. A roll call vote resulted as follows:

When the Board returned to open session at 5:57 p.m. the Board said they were willing to accept Mr. Kirst’s backup offer for $312,500 and immediately enter into escrow. Mr. Kirst was concerned that the original offer by Mr. Horne was a fair offer since it affected his offer. After discussion Mr. Kirst said that he was still interested in pursuing the sale of 192 Santa Elena Lane with the contingency of an ALTA title report and a 30 day escrow. A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to accept Mr. Kirst’s offer of $312,500.

Director Muller said there was nothing to report regarding the Cachuma seismic safety work but that there would be a site visit at Bradbury Dam on Wednesday, April 9 at 10:45 a.m. to see the work currently in progress.

Director Abel said there was nothing to report regarding the Lompoc lawsuit against the USBR regarding the Cachuma Renewal EIR/EIS.

Director Abel said that written progress reports were now being provided on the status of the SWRCB Board Order 94-5 studies.

Director Abel reported that the Lompoc lawsuit against the USBR claiming water quality damages had been transferred to Sacramento from Los Angeles and that Judge Karlton would be the presiding judge.

Director Abel reported on the CCRB meeting of March 19, 1997 and asked that the Board ratify the proposed 1997-98 CCRB budget. Director Abel moved to ratify the MWD portion of $46,144 of the CCRB budget totaling $448,900 for 1997-98. It was seconded by Director Wilson. The motion carried unanimously. It was noted that a substantial portion of these funds may be provided by the Cachuma renewal fund.

There was nothing to report in addition to the CCWA written progress report for the CCWA meeting of 3/27/97.

Director Campbell was absent so there was no LAFCO report for the meeting held on 3/27/97.

The General Manager explained that the Operations Committee had met and discussed the Doulton Reservoir foundation repair project. He also reported that the 250,000 gallon reservoir had been taken out of service during the repair work to the foundation. Last week the chlorinator developed an air lock which was overlooked by the treatment plant operator for a four to six hour period. The chlorine residual during this period was about .25 parts per million and the low chlorine residual affected approximately 50 customers in the upper Toro Canyon Road area. The District has sent a letter to the State Health Department indicating why this problem occurred and what steps are being taken so that it does not reoccur. The State Health Department has indicated that they will send the District a citation regarding violation of the surface water treatment rule; however, there will be no fine associated with this.

Director Abel reported that the newsletter was currently being mailed to District customers.

Note: The agenda was posted at the front counter and outside front wall at the Montecito Water District on March 14, 1997.