REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, California

TUESDAY, June 17, 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 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

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

Kate Rees, General Manager, Cachuma Operations & Maintenance

David Strauss, District customer

Kelly Mahan, Montecito Journal

2. PUBLIC FORUM

Mr. Strauss asked the Board if the District’s new computer and software system had already been installed and if it had been programmed with the proposed rate structure. President Shaikewitz responded that system had been received but was not yet online and would not be programmed with a new rate structure until the new structure was finalized and approved by the Board in August.

3. CONSENT CALENDAR

Following discussion, item 3-D was removed from the Consent Calendar for confirmation of apparently conflicting numbers. It was moved by Director Morgan, seconded by Director Wilson, and carried with two abstentions to approve the minutes of May 20. It was moved by Director Abel, seconded by Director Frye, and unanimously carried to approve the remainder of the Consent Calendar as corrected. The Board received a corrected Item 3-D and it was moved by Director Frye, seconded by Director Morgan and unanimously carried to approve the item as amended.

4. Time Certain Item; 2:10 p.m.

A. Presentation of 2008-09 COMB Budget

Ms Kate Rees, COMB Manager, presented the Cachuma Operations and Maintenance Board budget for 2008/09 and answered Directors’ questions. The Board gave direction to their representative to COMB, Director Abel. It was moved by Director Frye, seconded by Director Morgan and carried unanimously to approve the amount of $401,558 for this line item in the MWD Budget.

B. UPDATE ON THE INTEGRATED REGIONAL WATER MANAGEMENT PLAN (IRWMP) AND PROP 50 FUNDING

Ms Rees and Director Abel presented this item and answered Directors’ questions.

5. Cachuma MATTERS

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF May 19, 2008

Director Abel called Directors’ attention to the materials provided in their agenda packets. She did not attend the subject meeting. Director Frye, who attended as alternate, reported on the meeting.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETINGs OF May 19, 2008

6. LEGAL MATTERS (This section was taken later in the meeting)

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt reported on legal matters of interest to the Board.

B. CLOSED SESSION – Pursuant to GOVERNMENT CODE SECTION 54956.9 (C) –Consider Initiation of Litigation (Two Cases)

The Board adjourned to closed session at 5:10 p.m.

The Board reconvened to open session at 5:45 p.m. President Shaikewitz announced that no reportable action had been taken by the Board.

7. District Business Report

A. Proposed 2008/09 Budget

Ms Bailey presented the FY 2008/09 Budget. Following discussion it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to approve the Budget as presented.

B. Proposed 2008/09 Budget Resolutions

Resolution No. 2040 — Employee Classification and Salary Schedule

It was moved by Director Abel, seconded by Director Wilson, and carried by the following roll call vote to approve Resolution No. 2040 as presented:

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

NOES: None

ABSENT: None

ABSTAIN: None

Resolution No. 2041 — Charges, Rates and Fees are not “Proceeds of Taxes under Article XIIB”

It was moved by Director Abel, seconded by Director Wilson, and carried by the following roll call vote to approve Resolution No. 2041 as presented:

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

NOES: None

ABSENT: None

ABSTAIN: None

Resolution No. 2042 — Investment Policy for Fiscal Year 2008/09

It was moved by Director Abel, seconded by Director Wilson, and carried by the following roll call vote to approve Resolution No. 2042 as presented:

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

NOES: None

ABSENT: None

ABSTAIN: None

Resolution No. 2043 — Setting Capital Cost Recovery Fees and Charges

It was moved by Director Abel, seconded by Director Wilson, and carried by the following roll call vote to approve Resolution No. 2043 as presented:

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

NOES: None

ABSENT: None

ABSTAIN: None

C. Water Sales Report for May 2008

Ms Bailey presented this Report and answered Directors’ questions.

D. April 2008 Revenue and Expense Report

Ms Bailey presented this report and answered Directors’ questions.

E. Third Quarterly Budget Report

Ms Bailey presented this report and answered Directors’ questions.

F. 1998A Bond Fund Withdrawal

Ms Bailey presented this item and answered Directors’ questions.

G. long term supplemental water supplies – Authorize Contract Negotiations and Appointment of Ad Hoc Negotiation Committee

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Abel, seconded by Director Morgan, and unanimously carried to: authorize the General Manager to negotiate the purchase of supplemental State Water from Santa Ynez ID #1 according to the stipulations set down in the staff memorandum; authorize the General Manager to negotiate a CMOU with ID #1 to reserve the right to 500 AF of supplemental water; and approve the formation of an ad hoc committee to deal with the search for supplemental water.

President Shaikewitz appointed Director Morgan and himself to serve on an ad hoc “Supplemental Water Acquisition Committee” for the purpose of finding and purchasing supplemental water for the District.

8. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

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

B. report on the montecito water district june 10, 2008 presentation to the montecito association

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

C. discussion on june 19, 2008 public meeting

Mr. Mosby led a discussion concerning the Public Meeting on the current water supply condition and proposed conservation rate structure to be held at Montecito Union School on June 19.

D. possible declaration of Water Shortage Emergency and discussion on Stages, Planning & Implementation

Mr. Mosby introduced this item and the Board discussed the possible declaration of a water shortage emergency and the planning and implementation of conservation measures for the three stages of a potential water shortage emergency.

E. Water Works Operations Report

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

F. Discussion on District Staffing and Use of Consultants / Attorneys

President Shaikewitz presented this item and led a Board discussion on their expectations and requirements for the various consultants hired by the District.

G. Possible Reopening of Ortega Reservoir Cover Project sTATE rEVOLVING fUND construction Loan

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Abel, seconded by Director Frye, and unanimously carried to authorize the General Manager to reopen the Ortega Reservoir Cover Project State Revolving Fund Loan to help cover possible additional costs for repair of damage possibly incurred during the construction project.

H. Resolution No. 2044, Expressing Appreciation for the Services of Daniel Rodriguez

Mr. Mosby introduced this item. Following discussion, it was moved by Director Morgan, seconded by Director Frye, and carried by the following roll call vote to approve Resolution No. 2044 expressing appreciation for 25 years of service by Distribution Superintendent Daniel Rodriguez.

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

NOES: None

ABSTAIN: None

ABSENT: None

The signed and framed resolution will be presented to Mr. Rodriguez at the next Board meeting.

9. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. Central Coast Water Authority Meeting Of May 22, 2008

Director Shaikewitz reported that the subject meeting did not take place.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF May 19, 2008

Director Wilson reported on the subject meeting.

C. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the PI Committee has been meeting to plan the public outreach associated with the scheduled public meetings, proposed conservation rate structure, and the water supply situation.

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 Operations Committee had been covered elsewhere in the agenda.

10. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for July 15, 2008.

11. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:48 pm.

Approved:

__________________________

Richard Shaikewitz, President

Attest:

__________________________________

Tom Mosby, Secretary