REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, California

TUESDAY, July 17, 2007

2:00 P.M.

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

President Abel 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:

Bob Roebuck, General Manager

Tom Mosby, Engineering Manager

Toni Bailey, Business Manager

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

David Strauss, District Customer

Mr. and Mrs. Pres Hotchkis, District Customer

Connie Harvey, District Customer

Mr. and Mrs. Peter Limonick

2. PUBLIC FORUM

Mr. Strauss addressed the Board on the subject of meter charges and conservation pricing.

Mr. Hotchkis requested information on District supplies and pricing.

Ms Harvey requested information about the causes of increasing rates and encouraged cutting costs.

3. CONSENT CALENDAR

Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to approve Consent Calendar items B through E as revised. It was moved by Director Frye, seconded by Director Wilson and carried, with Director Shaikewitz abstaining, to approve Consent Calendar item A, the minutes of June 19, 2007.

4. Time Certain Item; 2:05 p.m.

A. PUBLIC HEARING: PROPOSED WATER DISTRIBUTION SYSTEM AND FIRE FLOW UPGRADE PROGRAM, PROPOSED Funding, AND ANY OBJECTIONS OR PROTESTS TO THE PROPOSED CHARGE AND REPORT

Status Report on Water Availability Charge Program and 1998-A Bond Capital Projects

President Abel opened the public hearing. Mr. Mosby briefly reviewed the Water Availability Charge (WAC) Program. Mr. Wullbrandt discussed the purpose of the hearing. No protests, written or oral were received by the District.

There being no other public input, President Abel closed the public hearing.

1. Resolution No. 2034 Establishing Water Availability Charge for 2007/08 to Finance Water Distribution System and Fire Flow Upgrade Program and Consideration of Report Establishing Water Availability Charge for 2007/08

Following discussion, it was moved by Director Shaikewitz, seconded by Director Wilson, and carried by the following roll-call vote to adopt Resolution No. 2034:

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

Noes: None

Absent: None

5. Cachuma MATTERS

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF June 25, 2007

Director Abel reported on the subject meeting.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF June 25, 2007

Director Abel reported on the subject meeting.

6. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt reviewed recent legal and legislative matters of interest to the Board.

7. District Business Report

A. Water Sales Report for June 2007

Ms Bailey presented this report and answered Directors’ questions.

B. May 2007 Revenue and Expense Report

Ms Bailey presented this report and answered Directors’ questions.

8. district Operations Report

A. Ortega Reservoir Project Status Report

Mr. Roebuck brought the Board up to date on the current status of the Ortega Reservoir Project.

B. Coast Village Road / Hot Springs Road Roundabout – Water Main Relocation

Mr. Mosby presented this item to the Board and answered Directors’ questions.

C. SAN YSIDRO RESERVOIR – PROPOSED ABANDONMENT AND QUITCLAIM

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

D. Water Supply Report

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Wilson, seconded by Director Shaikewitz, and unanimously carried to authorize the General Manager to negotiate with the City of Santa Barbara for the cash purchase of the annual 300 AF Cachuma transfer water.

E. Miramar Hotel Renovation Update (Oral)

Mr. Roebuck discussed with the Board various aspects of the Miramar Hotel renovation and other renovations and construction in the District which could affect District supplies and facilities. The discussion centered around whether the District could impose certain water-conserving landscaping requirements via ordinance or through the County permitting process.

9. GENERAL MANAGER’S REPORT

A. Ongoing Projects Update

Mr. Roebuck presented his update on the status of ongoing projects which were not covered elsewhere in the agenda. The Board requested that the research into upgrading the financial and utility billing software be tracked via this report.

B. RESOLUTION No. 2033 Regarding Groundwater and Groundwater Supplies

The public hearing on Resolution No. 2033 was opened at 4:30 p.m. Mr. Roebuck presented the staff report to the Board. There being no members of the public present who wished to speak on this matter, the hearing was closed at 4:31 p.m. Following discussion, it was moved by Director Shaikewitz, seconded by Director Frye, and carried by the following roll-call vote to approve Resolution No. 2033 as presented:

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

NOES: None

ABSENT: None

C. Cater Water Treatment Plant — Advanced Treatment Solution Pilot Study Results (Oral)

Mr. Roebuck presented this item to the Board and answered Directors’ questions.

D. Water Works Operation Report

Mr. Roebuck presented this item to the Board and answered Directors’ questions.

E. Notice of Retirement

Mr. Roebuck formally presented his notice of retirement, effective December 31, 2007. The Board will discuss the procedure for finding a new General Manager at the August Board meeting.

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10. DIRECTOR AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF June, 2007

Director Wilson reported on the subject meeting where the speaker was 2^nd District Supervisor Wolfe.

11. COMMITTEE REPORTS/RECOMMENDATIONS

A. OPERATIONS COMMITTEE

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

B. FINANCE COMMITTEE

Directors Wilson and Morgan stated that the Finance Committee had asked Ms Bailey to investigate the historic proportions of fixed and non-fixed costs.

C. PUBLIC INFORMATION COMMITTEE

President Abel reported that the Committee will be meeting in late August or early September to begin work on the next newsletter.

12. AGENDA ITEM REQUESTS

Director Morgan requested that the Public Information Committee look into the concept of a “Customer Academy” and bring an item to the Board when ready and that they consider running regular features in the newsletter on District operations and developing a comprehensive packet of information on District structure and operations and the water situation in general. Director Shaikewitz requested that the Board discuss the prospect of declaring a water emergency at the next regular Board meeting scheduled for August 21, 2007.

13. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:08 pm.

Approved:

__________________________

Jan E. Abel, President

Attest:

__________________________________

Robert L. Roebuck, Secretary