REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, May 20, 2008

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 W. Douglas Morgan, Richard Shaikewitz, and Larry Wilson

Directors Absent:

Directors Samuel Frye, and Jan E. Abel

Staff Present:

Tom Mosby, General Manager

Karl Meier, Engineering Manager

Toni Bailey, Business Manager

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

Mr. David Strauss, District customer

Kelly Mahan, Montecito Journal

2. PUBLIC FORUM

Mr. Strauss spoke to the Board about the high water use of new development in the District.

3. CONSENT CALENDAR

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

4. Consideration of a Water supply Shortage Emergency condition: Potential for Significant Water Supply shortage in 2008/09

Mr. Mosby introduced this item and he and Mr. Wullbrandt answered Directors’ questions. Following discussion it was the consensus of the Board that the General Manager should move ahead with drought contingency planning — defining drought stages and specific actions of the District for each stage; and prepare for the declaration of a drought shortage emergency.

5. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt had no matters of legal interest to report to the Board.

6. Cachuma Matters

A. Ratification of CCRB budget

Director Morgan, speaking for the Finance Committee, introduced this item. He and Mr. Mosby answer Directors’ questions. Following discussion it was moved by Director Shaikewitz, seconded by Director Morgan, and unanimously carried to ratify the District’s $211,220 share of the CCRB 2008/09 annual budget and include this amount in the MWD 2008/09 Budget.

B. Cachuma Conservation and RElease Board meeting of April 28, 2008

Director Abel was absent, but Mr. Mosby called the Board’s attention to the materials included in their agenda packets and Mr. Wullbrandt commented on the subject meeting.

C. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF April 28, 2008

Director Abel was absent, but Mr. Mosby called the Board’s attention to the materials included in their agenda packets. He and Mr. Wullbrandt commented on the subject meeting and answered Directors’ questions regarding the quagga mussel situation at Lake Cachuma. Director Shaikewitz requested that the Board and staff, at a scheduled special meeting before June 10, draft a letter to the First District Supervisor and the Bureau of Reclamation stating the District’s position that boating/fishing should be prohibited at Cachuma to prevent quagga infestation.

7. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

Mr. Mosby reported on various ongoing District projects which were not covered elsewhere in the agenda packet.

B. Water Supply and Demand Update

Mr. Mosby presented this report and answered Directors’ questions.

C. Ordinance No. 89 Follow-up Report

Mr. Mosby presented this report and answered Directors’ questions.

D. Review of Draft Resolution Making the commitment and Publishing the Report Required by CCWA REsolutions 92-2 and 92-11 (For Action at July Meeting of the Board)

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson and carried unanimously to approve posting the draft resolution, as revised, 30 days prior to the July meeting of the Board, and to vote on the adoption of the resolution at that meeting.

E. Water Works Operations Report

Mr. Mosby presented this report and answered Directors’ questions.

Legal Counsel left the meeting at this point.

8. District Business Report

A. Central Coast Water Authority Fixed Cost Invoice

Ms Bailey presented this item and answered Directors’ questions.

B. March 2008 Monthly Revenues and Expenditures

Ms Bailey presented this item and answered Directors’ questions.

C. Water Sales Report for April 2008

Ms Bailey presented this item and answered Directors’ questions.

D. Nine Month Investment Report

Ms Bailey distributed some pages of this report that had been inadvertently omitted from the agenda packets received by the Board. She presented the report and answered Directors’ questions.

E. Proposed CCWA Budget

Ms Bailey presented the 2008/09 CCWA Budget and discussed its use in the preparation of the MWD Budget. Following discussion, it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to approve the amount of $5,268,596 as MWD’s revised estimated share of the CCWA budget to be used in the preparation of the MWD 2008/09 Budget.

F. Annual Cost of Living Adjustment

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to approve a 3.9% cost of living adjustment (COLA) increase for all District employees (except the General Manager) effective with the FY 2008/09 Budget and approve the use of a 3.9% COLA for projecting expense increases in the 2008/09 Budget.

G. Proposed Annual Dues

Ms Bailey presented the list of annual dues paid by the District, to be included in the 2008/09 Budget. Following discussion, it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to approve the list of annual dues for use in the 2008/09 Budget.

H. Proposed Capital cost Recovery and Connection Fees

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to approve as presented the schedule of Capital Cost Recovery and Connection fees to be included in the 2008/09 Budget.

I. Proposed Capital Projects List

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Shaikewitz, seconded by Director Morgan, and unanimously carried to approve the 2008/09 capital improvement program as presented.

J. Salary Adjustment and Contract Labor

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Wilson, seconded by Director Morgan, and unanimously carried to approve the salary adjustment for the District’s Distribution Superintendent and authorize the inclusion of the increased cost of $3,054 in the 2008/09 Budget; and approve the use of contract labor as needed in the Treatment Department and include the cost not to exceed $30,000 in the 208/09 Budget.

K. Draft FY 2008/09 District Budget

Ms Bailey presented the draft budget for FY 2008/09 and answered Directors’ questions. The Budget will be presented for approval at the June 2008 Board of Directors’ meeting.

9. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. Central Coast Water Authority Meeting Of April 25, 2008

Director Shaikewitz reported on the subject meeting.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF April 28,2008

Director Wilson reported on the subject meeting.

C. PUBLIC INFORMATION COMMITTEE

Director Shaikewitz reported that the PI Committee completed an informational letter on Ordinance 89 which has started arriving in customer’s mailboxes. The Montecito Journal will be printing a column on the pending water shortage emergency. Mr. Mosby distributed a work products and meetings schedule.

D. OPERATIONS COMMITTEE

Director 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.

10. AGENDA ITEM REQUESTS

A special meeting will be scheduled in the near future, Mr. Mosby will be contacting Directors. There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for June 17, 2008.

11. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:10 pm.

Approved:

__________________________

Richard Shaikewitz, President

Attest:

__________________________________

Tom Mosby, Secretary