MINUTES - TUESDAY, APRIL 15, 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 15, 1997

Present:	Directors Abel, Campbell (arrived 3:10 p.m.), Muller, Puddicombe and Wilson
Absent:	None
Also Present:	C. Charles Evans, General Manager/Secretary Chip Wullbrandt, District Counsel Evalyn Kerman, Business Manager

The General Manager stated that Cathy Muneio, Secretary to the General Manager, would be leaving as of April 18, 1997.

A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to approve the minutes of April 1, 1997.

The Board discussed the water sales report. It was noted that the sales for the month of March were 67% over budget. However it was observed that total sales for 1996-97 likely will be less than the budgeted amount.

The water works report was discussed. Production for March was 458 AF. It was noted that the difference between water sales and water production was not as great as first observed because the number of days in each period was different.

A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to ratify the April 9, 1997 transfer of $130,000 from the District’s Montecito Bank & Trust Operational Account to LAIF.

The Board discussed the March bills. A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to approve the bills for the month of March.

Director Wilson said that the General Manager had given an excellent and informative presentation on the District’s pending Vista del Montecitos annexation.

The Board discussed the 1997-98 preliminary budget. Staff proposed an increase to the capital cost recovery fees that would increase revenues by $57,300. Director Wilson proposed an increase to the capital cost recovery fees which would result in an increase in revenues by $150,000, and a 40 percent increase in the monthly service charges that would provide increased revenues of $400,000. He also proposed a minimum reserve fund balance of $2,600,000. Director Campbell proposed an increase in the capital cost recovery fees the same as the staff proposal, a 23 percent increase in the monthly service charges which would provide an additional $235,500 in revenues and an elimination of the first tier domestic water rate leaving the second domestic tier rate of $2.70 per hcf, which would also be the domestic tier to recreational and agricultural accounts, resulting in increased revenues of $214,400. Director Campbell proposed a minimum reserve fund balance of $2,400,000. After discussion Director Puddicombe moved to adopt staffs proposed 1997-98 District Budget and to reexamine the budget in six months. It was seconded by Director Abel. After additional discussion a roll call vote resulted as follows:

The Board thanked the Engineering Manager for his excellent work on this project.

Director Campbell made a motion to award the bid and contract in the amount of $89,077 to Lash Construction for the replacement of about 1545 feet of 6 inch 1923 pipeline on Hill Road and Butterfly

Lane to be funded from Water Availability Charge Funds. The motion was seconded by Director Puddicombe and carried unanimously.

Director Puddicombe moved to approve in concept the proposed new South Coast Conduit turnout at Lambert Road and the Romero Reservoir pump station for the distribution of State Water, and to authorize the request for funding this work from the District’s excess State Water contingency funds at CCWA in the amount of $255,000. This amount is in addition to the previously requested and approved $500,000 from the District’s remaining contingency funds. The motion was seconded by Director Muller and carried unanimously.

RESOLUTION NO. 1833 APPOINTING SMITH BARNEY, INC. AS INVESTMENT UNDERWRITER FOR POSSIBLE RESTRUCTURING - CAPITAL DEBT PAYMENTS

The General Manager said that he had requested that Dave Houston attend the Board meeting to present a more detailed discussion on the possible restructuring of the District’s capital debt payments but that he was unable to attend. Director Puddicombe made a motion to approve Resolution No. 1833 appointing Smith Barney, Inc. as investment banker and underwriter for financing, refinancing, and restructuring the Montecito Water District’s outstanding debt. It was seconded by Director Campbell. A roll call vote resulted as follows:

The General Manager reported that the District is continuing to work with the Forest Service regarding the Alder and Fox Creek diversions. The Fish and Wildlife Service has requested that the Fox Creek diversion be turned off because it has been dry so long and because it is after the target date of April 1. The General Manager said that the Forest Service had observed tadpoles in the large pond of the Santa Ynez River at Fox Creek and that Maeton Freel of the Forest Service thought they were not the endangered Arroyo Toad. Sam Sweet, a biologist specialist, is going to observe these tadpoles. If it is determined that they are not the Arroyo Toad, then the Fox Creek diversion can continue for several more weeks.

District Counsel reported on County Counsel’s letter regarding the Water Availability Charge. He said that County Counsel now agrees with the earlier opinion about the ability to reimpose the fee annually.

Director Muller said that at the COMB meeting the USBR budget had been discussed. He also said that several representatives of COMB had gone to Fresno to meet with the USBR, and the USBR has a new appreciation of the importance that COMB places on the $800-850,000 budget. The USBR will be coming to the COMB Board to brief them. Bud Girard has been hired to oversee the seismic work and he has already made three or four inspections of the work. Director Muller also stated that Gary Ricks was no longer with Price, Postel & Parma and that he had applied to be Counsel for COMB. The City of Santa Barbara is objecting to this because Gary Ricks is representing Ambassador Laundry in a lawsuit against the City of Santa Barbara. Director Abel said there may be a question as to whether Gary Ricks should continue as counsel on the Lompoc lawsuit.

Director Abel said that a written report was included in the packet and that there was no additional information to report until after the next CCRB meeting.

Director Campbell reported that annexation issues were discussed at the LAFCO meeting held on March 27, 1997. He said that LAFCO has included in their budget paying the Directors for attending the meetings.

President Muller requested that a response be prepared to the article in the Santa Barbara News Press regarding desalt. Director Campbell will be providing information on this matter.

When the Board returned to open session at 6:52 p.m. it was stated there was nothing to report.

Note: The agenda was posted at the front counter and outside front wall at the Montecito Water District on April 11, 1997.