REGULAR MEETING MINUTES

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, May 19, 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:

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

Directors Absent:

None

Staff Present:

Tom Mosby, General Manager

Chip Wullbrandt, District Counsel

Toni Bailey, Business Manager

Karl Meier, Engineering Manager

Lois Werner, Recording Secretary

Guests Present

Kate Rees, General Manager, CCRB/COMB

Janet Gingras, Administrative Manager, COMB/CCRB

Tim Robinson, Senior Resources Scientist, CCRB

David Brodsly, COMB Independent Financial Advisor, KNN Public Finance

2. PUBLIC FORUM

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

3. TIME CERTAIN ITEMS

A. 2:00 P.M. — APPEAL BY MR. SAM GERARD / ACCOUNT NO. 0312452

Director Abel, as a member of the Appeals Committee, introduced this item.

Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to apply the SFR block #1 rate to all water used in the March billing period for this account, and issue Mr. Gerard a credit in the amount of $573.61.

B. 2:15 P.M. — COMB BOND FINANCING – BRIEFING

Director Abel introduced COMB Independent Financial Advisor David Brodsly, from KNN Public Financing, as well as Ms Rees, Mr. Gray, and Ms Gingras. Mr. Gray, COMB Operations Supervisor, and Ms Rees, COMB General Manager, delivered a presentation on COMB SCC reliability projects & funding. Mr. Brodsly presented a briefing on the proposed COMB Bond Financing and answered questions from the Board.

C. 2:45 P.M. —CCRB 2009/10 Budget Presentation

Kate Rees, CCRB General Manager, Janet Gingras, CCRB Administrative Manager, and Tim Robinson, CCRB Senior Resources Scientist, presented the 2009/10 CCRB Budget and answered Directors’ questions. Following discussion, it was moved by Director Abel, seconded by Director Morgan, and carried on a vote of four with one abstention to ratify the District’s $198,820 share of the CCRB/ID#1 2009/10 budget of $1,872,047 and include it in the District’s annual budget for 2009/10.

4. CONSENT CALENDAR

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

5. LEGAL MATTERS

A. Recent and Pending Legal Matters REview

Mr. Wullbrandt stated that he had no legal matters of interest to report.

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

The meeting adjourned to closed session on the above item at 3:38 p.m.

The meeting reconvened in open session at 4:07 p.m. President Shaikewitz reported that the Board had received a report from District Counsel.

6. Cachuma Matters

A. Cachuma Conservation and RElease Board meeting of April 27, 2009

Director Abel reported on the subject meeting and called Directors’ attention to the materials provided in their agenda packets.

B. CACHUMA OPERATION AND MAINTENANCE BOARD meeting of April 27, 2008

Director Abel reported on the subject meeting.

7. district Operations Report

A. East Mountain Drive & Ashley Road Main Replacement Project – Final Report

Mr. Mosby and Mr. Meier presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to approve the execution of the Notice of Completion for the East Mountain Drive and Ashley Road Main Replacement Project.

B. Torito Road Main Replacement / Extension Project – Final Report

C. Water Works Operation Report

Mr. Mosby presented the Water Works Operation Report and answered Directors’ questions.

8. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

Mr. Mosby reported on the projects and activities of the District not covered elsewhere in the agenda. He reported that District has received a letter of resignation, effective July 2, 2009, from Engineering Manager Karl Meier.

B. Report on MWD Jesusita Fire Activities (ORAL)

Mr. Mosby reported on District involvement in the Jesusita firefighting effort.

9. District Business Report

A. 2009/10 CENTRAL COAST WATER AUTHORITY (CCWA) BUDGET

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Abel, and unanimously carried to approve $5,646,115 for MWD’s share of the CCWA annual budget to be included in the MWD 2009/10 annual budget.

B. DISTRICT CAPITAL COST RECOVERY AND CONNECTION FEES FOR APPROVAL

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Morgan, seconded by Director Frye, and unanimously carried to approve the schedule of Capital Cost Recovery and Connection fees to be included in the MWD 2009/10 Budget as presented.

C. PROPOSED MWD ANNUAL DUES FOR 2009/10

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Abel, seconded by Director Frye and unanimously carried to include the list of MWD Annual Dues for 2009/10 in the 2009/10 Budget as presented.

D. THIRD QUARTERLY INVESTMENT REPORT as of March 31, 2009

Ms Bailey presented this item and answered Directors’ questions.

E. Water Sales Report for April 2009

Ms Bailey presented this item and answered Directors’ questions.

F. March 2009 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

10. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. Central Coast Water Authority Meeting Of April 24, 2009

Director Shaikewitz reported on the subject meeting.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF April 27, 2009

Director Wilson reported on the subject meeting.

C. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the Public Information Committee had completed work on the Spring Newsletter, and it has been mailed. The Committee will meet soon to discuss the consumer confidence report (water quality report). Bob Rauch has moved to the Bay Area to be closer to his family, but will continue working and will continue to be available to the District if desired.

D. OPERATIONS COMMITTEE

Directors Frye and Shaikewitz reported that the activities of the Operations Committee had been covered elsewhere in the agenda.

E. FINANCE COMMITTEE

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

F. Ad Hoc Water Supply Committee

Directors Morgan and Shaikewitz reported that the Ad Hoc Long-Term Water Supply Committee had met and directed the GM to investigate water purchase deals with SB & CVWD.

11. BOARD OF DIRECTORS

A. Closed Session Pursuant to Government Code Section 54957(b)(1) – General Manager’s Performance Evaluation

The Board adjourned to closed session on the above item at 5:12 p.m.

The Board reconvened to open session at 5:45 p.m.

B. General Manager’s Salary & benefit REview

Following discussion, it was moved by Director Morgan, seconded by Director Frye, and carried unanimously to increase the General Manager’s salary to $162, 500/yr. Effective July 1, 2009.

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 June16, 2009.

13. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 6:08 p.m.

Approved:

__________________________

Richard Shaikewitz, President

Attest:

__________________________________

Tom Mosby, Secretary