REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, June 15, 2010

2:00 P.M.

1. CALL TO ORDER, ROLL CALL, DETERMINATION OF QUORUM

President Morgan 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

Toni Bailey, Business Manager

Susan Basham, as District Counsel

Lois Werner, Recording Secretary

Guest Present

David Strauss, District Customer

Marty Moore, Birnam Wood Golf Club

2. PUBLIC FORUM

Mr. Strauss made some comments and suggestions on the issue of Birnam Wood attempting to install a new well. He suggested that neighboring well owners would want to know about the possible effect on their well.

3. CONSENT CALENDAR

The minutes of the meetings of May 18, 19 and 24 and June 1 and 9 were set aside to be dealt with separately. Following discussion it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to approve items A & B of the Consent Calendar as amended. It was moved by Director Frye, seconded by Director Wilson and carried with Director Shaikewitz abstaining to approve items C&D as presented. It was moved by Director Shaikewitz, seconded by Director Frye, and unanimously carried to approve the minutes of June 9 as presented.

Director Shaikewitz requested that certain payments for legal fees related to the Ortega litigation be held until he had an opportunity to review the invoices.

Motion to approve 3-F Director Abel, second Director Frye, carried on roll call

AYES: Abel, Frye, Morgan

NOES: Shaikewitz, Wilson

Motion to approve 3-G, Director Frye, seconded Director Abel, unanimously carried.

4. LEGAL MATTERS

A. Report out of closed session: Litigation Settlement Meeting June 9, 2010 – pursuant to Government Code section 54957.1(3)(B), Montecito Water District Et Al vs. Penfield & Smith Engineers et al; Santa Barbara Superior Court Case Number 1303752

Mr. Mosby reported on the settlement of the Ortega Reservoir litigation, which has now been approved by both the MWD and CVWD Boards. In closed session on June 9 the MWD Board of Directors voted with three in favor and two opposed to accept the settlement offer of $2.9 million with stipulations as noted in the staff memo on this item.

The roll-call vote on accepting the settlement was:

AYES: Abel, Frye, Morgan

NOES: Shaikewitz and Wilson

The CVWD Board, at a June 9 meeting subsequent to the MWD meeting, voted unanimously to accept the settlement offer.

Ms Basham noted that the report out of closed session could not take place on June 9 because the CVWD closed session meeting had not taken place.

5. Cachuma Matters

A. Cachuma Conservation and RElease Board meeting of May 24, 2010

Director Morgan reported on the subject meeting.

B. CACHUMA OPERATION AND MAINTENANCE BOARD meeting of May 24, 2010

Director Morgan reported on the subject meeting.

6. District Business Report

A. Budget Appropriations for Ortega Legal Expenses

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Abel, and carried on a vote of three to two to authorize an appropriation from Operating Reserves in an amount not to exceed $220,000 for legal expenses associated with the Ortega Project litigation.

B. Meter Connection Fees and Capital Cost Recovery Fees

Ms Bailey presented this item and answered Directors’ questions. Following discussion, it was moved by Director Shaikewitz, seconded by Director Frye, and unanimously carried to approve the schedule of Capital Cost Recovery and Connection fees as presented, to be included in the 2010/11 budget .

C. MWD 2010/11 Budget

Ms Bailey presented the Budget for FY 2010/11 and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to adopt the FY 2010/11 Budget as amended, applying the rates and charges previously adopted in Resolution No. 2047.

D. Budget Resolutions

1. Resolution No. 2069 – Establishing Employee Classification and Salary Range Schedules

2. Resolution No. 2070 – Determining that Charges, Rates and Fees Are Not Proceeds of Taxes"

3. Resolution No. 2071– 2010/11 Investment Policy

4. Resolution No. 2072 – Setting Capital Cost Recovery Fees and Meter Connection Fees

Ms Bailey presented the Budget Resolutions and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Shaikewitz, and carried by the following roll-call vote to approve Resolutions No. 2069:

AYES: Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

It was moved by Director Frye, seconded by Director Shaikewitz, and carried by the following roll-call vote to approve Resolutions No. 2070:

AYES: Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

It was moved by Director Frye, seconded by Director Shaikewitz, and carried by the following roll-call vote to approve Resolutions No. 2071:

AYES: Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

It was moved by Director Frye, seconded by Director Shaikewitz, and carried by the following roll-call vote to approve Resolutions No. 2072:

AYES: Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

E. 2010/11 COMB Budget

Director Morgan, District COMB representative, presented this item and a supplemental recommendation and answered Directors’ questions.

Following discussion it was moved by Director Frye, seconded by Director Shaikewitz and carried by the following roll-call vote to direct the COMB representative to request the removal of the added 50% of the CCRB single position administrative salary and the 25% of the CCRB general manager salary from the FY 2010/11 COMB budget.

AYES: Frye, Morgan, Shaikewitz, Wilson

NOES: Abel

Director Morgan, District representative to COMB, received comments from the Board regarding his vote on the COMB budget.

F. Monthly Revenue & Expense Report

Ms Bailey presented this report and answered Directors’ questions.

G. Monthly Water Sales Report

Ms Bailey presented this report and answered Directors’ questions.

7. district Operations Report

A. EAST VALLEY RANCH (BIRNAM WOOD) – Water well development proposal

Mr. Mosby presented this item and answered Directors’ questions. Mr. Moore presented some points and questions from Birnam Wood. Following discussion, it was moved (subject to review and approval by Counsel) by Director Frye, seconded by Director Shaikewitz, and unanimously carried to direct the Operations Committee to propose a cost-sharing arrangement with Birnam Wood to develop a new MWD water well for golf course irrigation, with the stipulation that the new well will be dedicated to the District, with the District taking on full ownership and responsibility for the operation, maintenance and delivery of water to Birnam Wood at the appropriate MWD rates and charges, and that any such arrangement will not impact MWD’s preserved groundwater rights.

B. proposed water purchase agreement with the goleta water district

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to purchase 400 acre-feet of Goleta Water District State Water at $175/acre-foot as a supplemental “bank” water supply, execute the Agreement to Purchase State Water, subject to review and approval by Counsel, and appropriate funds for this purpose in the amount of $70,000 from the Revenue Stabilization and Water Purchase Reserve.

C. COMB SECOND PIPELINE PROJECT – STATUS AND COST ESTIMATE

Mr. Mosby presented this item and answered Directors’ questions. The Board provided direction to the COMB representative.

D. barker pass pump station upgrade – proposal from david thomas for structural engineering design services

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Shaikewitz, seconded by Director Frye, and unanimously carried to approve the structural engineering proposal for the Barker Pass Pump Station submitted by Thomas and Beers in the amount of $4,720.

E. COMB SCC Lateral Meter Change-out — MWD Reach

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to replace the Office and Barker Pass Pump Station and Ortega Lateral One turnout SCC COMB meters with new Mag meters and deduct all costs from MWD’s FY 2010/11 COMB budget payment.

F. Water Works Operation Report

Mr. Mosby distributed this report at the meeting and answered Directors’ questions.

8. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

Mr. Mosby reported on District operations not covered elsewhere in the agenda.

9. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. Central Coast Water Authority Meeting Of May 27, 2010

Director Shaikewitz reported that there had been no meeting.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF May 24, 2010

Director Wilson reported on the subject meeting.

C. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the water quality newsletter is completed and was scheduled to mail well before the deadline. The next newsletter will come out in the fall between the start of school and Thanksgiving.

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.

10. AGENDA ITEM REQUESTS

Director Shaikewitz requested that a possible closed session item be added to discuss a personnel matter. There were no other requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for July 20, 2010.

11. ADJOURNMENT

There being no further business to come before the Board, the meeting was adjourned at 5:15 p.m.

Approved:

_____________________________

W. Douglas Morgan, President

Attest:

__________________________________

Tom Mosby, Secretary