MINUTES - MONDAY, MAY 12, 1997

MINUTES OF A REGULAR MEETING
of the
BOARD OF DIRECTORS OF THE MONTECITO WATER DISTRICT
held at the
DISTRICT BOARD ROOM

Present:	Directors Campbell, Muller, Puddicombe and Wilson
Absent:	Director Abel
Also Present:	C. Charles Evans, General Manager/Secretary Chip Wullbrandt, District Counsel Tom Mosby, Engineering Manager Steve Decker Colleen Campbell

A motion was made by Director Puddicombe, seconded by Director Campbell and unanimously carried to approve the amended minutes of April 15, 1997.

Counsel Wullbrandt needed to leave the meeting early so the Board went into closed session at 3:05 p.m. When the Board went back into open session at 3:25 p.m., it was stated that there was nothing to report.

The Board reviewed the water production and sales reports for the month of April. It was noted that, with April sales of 526 af and projecting budgeted sales for May and June, District water sales would be within 1% of budget in acre feet and within 4% of budget in dollars.

Director Campbell made a motion to ratify the April 24, 1997 transfer of $200,000 and the May 1, 1997 transfer of $250,000 from the District’s Montecito Bank and Trust operational account to the District’s LAIF/General Capital Repair & Replacement/Operations fund account.

The Board discussed the water distribution system and fireflow upgrade program, water availability charge funds, and hydrant upgrade program report. The District expects to spend about $198,000 on this program in the next two months.

Director Wilson stated that the Montecito Association had not yet met so there was nothing new to report.

The Board reviewed the third quarter budget report. Director Campbell noted that he appreciated that legal costs were being reviewed and kept to a minimum. The General Manager also noted that the District has a substantial debt coverage ratio. President Muller commended the preparation of the budget report by Jerry Paley and Evalyn Kerman.

NOTICE REGARDING PROPOSED RESOLUTIONS RELATIVE TO PROPOSITION 4 SPENDING LIMITATIONS

The General Manager read into the record that a resolution will be presented to the Board for adoption at a regular Board meeting of July 1, 1997, which resolution shall establish that the District’s various user fees, rates and charges for fiscal year 1997-98 do not exceed the costs reasonable borne by the District for providing the services for which the fees, rates and charges are made.

The Board reviewed the letter to be sent to District customers informing them of the use of this year’s Water Availability charge funds for constructing main improvement projects and the need to continue these charges in 1997-98. This letter needs to be sent to District customers 45 days prior to the public hearing on June 30, 1997. Several ads will be placed in the local newspapers for notification of this meeting. Director Puddicombe moved approval of the letter to be signed by the President. The motion was seconded by Director Campbell. The motion carried unanimously. Director Wilson said that he would report on the hearing at the Montecito Association meeting.

Director Puddicombe made a motion to approve the purchase of a new four-wheel drive truck to replace the existing truck and to appropriate from the Capital Repair and Replacement Reserve Fund an amount of $21,000 to purchase the truck and accompanying tool box. The motion was seconded by Director Campbell. The motion carried unanimously. Director Campbell suggested that the District research the leasing of vehicles versus purchasing them.

The Board reviewed the CCWA third quarter fiscal year 1996-97 investment report. Director Campbell stated that CCWA showed a large loss in market value due to current market conditions.

The Engineering Manager reported that the Operations Committee had reviewed the Chelham Way Main Replacement program. He said that this project had already been approved as part of the Water Availability Charge program. Director Puddicombe moved to approve the appropriation of Water Availability Charge funds in an estimated amount of $9,900, including a 10% contingency, for the extension/replacement of the southwest portion of the 2 inch Chelham Way galvanized water main with approximately 450 feet of 8 inch ductile iron pipe. The motion was seconded by Director Campbell. Director Wilson asked if this would relieve the pressure problem in that area. It was stated that this project would not but that fixing that pressure problem was scheduled in the near future. The motion carried unanimously.

The Engineering Manager explained that the District was requesting from CCWA contingency funds for the Romero Reservoir highline pump station and the new Cachuma turnout at Lambert Road in order to provide State Water to District customers. He indicated that Bella Vista Treatment Plant needs to be relieved of its high demand. Director Campbell moved to approve the letter to Dan Masnada requesting $255,000 for the proposed Romero Reservoir pump station and Lambert Road State Water turnout. The motion was seconded by Director Puddicombe. The motion carried unanimously.

President Muller proposed to appoint Directors Campbell and Puddicombe to be on an Ad Hoc Committee to prepare a proposal for Dave Houston of Smith Barney for a possible restructuring of the District’s capital debt service.

A motion was made by Director Wilson to have the President appoint the Ad Hoc Committee to work with Dave Houston in the restructuring of the Capital Debt and that this be properly noticed.

Committee meetings will be noticed according to the Brown Act. The motion was seconded by Director Campbell. The motion carried unanimously.

Director Campbell made a motion to retain Price, Postel & Parma with C. Chip Wullbrandt as Lead Counsel for fiscal year 1997-98. The motion was seconded by Director Puddicombe. The motion carried unanimously.

The Board reviewed the status of the underground storage tank cleanup program. The Engineering Manager expressed his disappointment in the slowdown of the cleanup levels. Director Puddicombe made a motion to continue with the District’s office underground storage tank cleanup program. It was seconded by Director Wilson. The motion carried unanimously.

The General Manager recommended that the District not sell any water at this time. It was the consensus of the Board to continue to monitor usage to see if it may be appropriate to purchase or sell water in the future.

Director Campbell moved to forward the letter to the U.S. Forest Service and USFWS regarding Fox and Alder Creek diversions as amended. It was seconded by Director Wilson. The motion carried unanimously.

The General Manager explained the 1997-98 workplan for the District Water Availability charges. Funds will need to be borrowed from the bank for this project. Potential Proposition 204 projects are not listed in the proposed program for next year because the District would not get to borrow money at a low interest rate if these projects were already budgeted for. Director Puddicombe moved to approve the plan totaling $800,000. It was seconded by Director Campbell. The motion carried unanimously.

The Engineering Manager reported that a valve had been broken in the system that had caused very low pressure (10 lbs.)at Middle Road. He said that this problem had been corrected and the pressure regulating station was now operating properly. Director Puddicombe moved to approve the use of Water Availability Charge funds in the amount of $13,200, including a 10% contingency, for the emergency repair and vault modifications to the 6 inch pressure regulating station on Middle Road. This project was identified in the District’s Water Availability Charge program and these funds have been used for the immediate repair and upgrade of this station. The motion was seconded by Director Campbell and unanimously carried.

Director Campbell moved to ratify the Santa Barbara Water Purveyors Agency budget for fiscal year 1997-98. It was seconded by Director Puddicombe. The motion carried unanimously.

The COMB budget was continued until the next meeting since it was still in draft form.

Director Muller reported there was nothing new regarding the seismic safety work.

Director Muller reported there was nothing new to report regarding the Lompoc III lawsuit.

The General Manager said that there were written reports in the Board packet on the SWRCB Board Order 94-5 Studies, fishery matters other than 94-5 studies, and Lompoc lawsuit against the USBR regarding Cachuma Renewal EIS/EIR.

The General Manager said that a written report in the Board packet had covered all the CCRB meeting items.

Director Campbell reported that at the CCWA meeting of April 24, 1997 the preliminary budget was discussed. State Water is expected to be on line by June 18th. Governor Wilson is expected to be the keynote speaker at the dedication ceremonies.

Director Campbell reported that, at the SBWPA meeting of April 25, 1997, the District hosted and gave a presentation on SCADA and discussed the Worldwide Web. He thanked staff for their participation.

Director Campbell reported that, at the Special Districts Association meeting of April 28, 1997, his election was delayed because additional voting needed to be conducted. The Montecito Fire Protection District representative had voted against him. Since there was not a quorum those districts which did not participate will be asked to vote by mail. Director Campbell invited all the directors to attend the annual Special District’s Association meeting on May 23, 1997. He said that Ralph Heim, the Special Districts lobbyist, would be the speaker.

Director Campbell reported that at the ACWA/JPIA meeting held May 5-6, the necessity for "at will" language in employment contracts was discussed.

Director Campbell reported that at the ACWA conference held May 7-9, he had been appointed to a Grassroots Committee for contacting members of the Legislature. The District will only be contacted on issues that it is interested in.

The Public Information Committee had not met so there was nothing new to report.

President Muller said that Water Marketing had not met but if dry conditions continue to exist in the Valley Project there is a good chance that DWR will set up a water bank.

Director Wilson asked that a discussion on document audit trails be placed on the next agenda since it was difficult to find what the Board’s rationale for having a Tier I water rate was.

Note: The agenda was posted at the front counter and outside front wall at the Montecito Water District on May 9, 1997.