REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 SAN YSIDRO ROAD, MONTECITO, CALIFORNIA

TUESDAY, July 20, 2004

2:00 P.M.

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

President Drewry called the meeting to order at 2:00 p.m.

Directors Present:

President W.W. Drewry

Directors Jan E. Abel, Robert W. Puddicombe, Robert M. Edmonston, and Larry Wilson

Directors Absent:

None

Staff Present:

Bob Roebuck, General Manager

Tom Mosby, Engineering Manager

Evalyn Kerman, Business Manager

Chip Wullbrandt, District Counsel, Price, Postel & Parma (left the meeting at 5:15)

Lois Werner, Recording Secretary

Guests Present:

Richard Love, Montecito Association

Ron Merkling, Casitas Municipal Water District

2. PUBLIC FORUM

There were no members of the public present to speak on subjects not on the agenda.

3. CONSENT CALENDAR

Following Board discussion, it was moved by Director Wilson, seconded by Director Edmonston, and unanimously carried to approve the consent calendar as presented. The Board requested some changes in the format of the Consent Calendar for future meetings.

4. Time Certain Items

A. 2:00 p.m. — 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 Drewry opened the hearing at 2:05 p.m. The President briefly called upon the staff to review the Water Availability Charge program. Mr. Roebuck presented the status report on the WAC and 1998-A Bond projects. Directors had an opportunity to discuss the item and ask questions. President Drewry then opened the hearing to public comment. There were no members of the public present to comment or register an oral protest on the Water Availability Charge. The Board did not receive any written protests. President Drewry closed the protest period and closed the public hearing at 2:10 p.m.

1. Resolution No. 1984 Establishing Water Availability Charge for 2004/05 to Finance Water Distribution System and Fire Flow Upgrade Program and Consideration of Report Establishing Water Availability Charge for 2004/05

It was moved by Director Abel, seconded by Director Puddicombe, and carried by the following roll-call vote to approve Resolution No. 1984 as presented.

AYES: Directors Abel, Drewry, Edmonston, Puddicombe, and Wilson

NOES: None

ABSent: None

B. 3:00 P.M. — Public Hearing: Adoption of Ordinance No. 85 Repealing Ordinance No. 84 Relating to Directors’ Compensation

President Drewry introduced this item. President Drewry then opened the hearing for public comment at 3:15. There being no members of the public present to speak on this matter, President Drewry closed the comment period and closed the public hearing at 3:16 Following discussion it was moved by Director Edmonston, seconded by Director Wilson and carried by the following roll call vote to approve Ordinance No. 85 as presented.

AYES: Directors Abel, Drewry, Edmonston, and Wilson

NOES: Director Puddicombe

ABSENT: None

5. district Operations Report

A. Ortega Reservoir Project (Oral)

Mr. Roebuck reported on the status of the Ortega Reservoir Project with respect to the preparation of the Draft Environmental Impact Report and answered Directors’ questions.

B. MWD Water Supply Status Report

Mr. Roebuck reported on District water supplies and answered Directors’ questions.

C. MWD Water Supply Evaluation Proposal

Mr. Roebuck presented a proposal from Dr. Steven Bachman to perform a water supply evaluation for the District. Following Board discussion it was moved by Director Puddicombe, seconded by Director Edmonston, and unanimously carried to approve Dr. Bachman’s professional services proposal in an amount not to exceed $46,822 to evaluate the District’s water supplies and recommend a program to enhance supply reliability.

D. Agreement for the Purchase of water Between the Carpinteria Valley Water District and the Montecito Water District

Mr. Roebuck introduced this item and answered Directors’ questions. Mr. Merkling was present from the Casitas Municipal Water District (Casitas) to represent their interest in this item. Mr. Merkling asked the Board to consider not purchasing the water at this time, since Casitas had been negotiating to purchase this water and felt that their need was greater. Following Board discussion, it was moved by Director Abel, seconded by Director Edmonston, and unanimously carried to authorize the General Manager to negotiate and execute an agreement for the purchase and delivery of up to 500 acre feet of water from the Carpinteria Valley Water District, and to appropriate the funds for this purchase from reserves.

E. West Mountain Drive Water Main Extension Project

Mr. Roebuck introduced this item and answered questions from the Board. Following Board discussion, it was moved by Director Puddicombe, seconded by Director Wilson, and unanimously carried to approve the recommendations in the staff memo on this item.

1. Resolution No. 1985 Specifying Terms and Conditions for the Repayment of Funds for the Construction of the West Mountain Drive Water Main Extension Project

It was carried by the following roll call vote to approve Resolution No. 1985 as presented:

Ayes: Directors Abel, Drewry, Edmonston, Puddicombe, and Wilson

Noes: None

Absent: None

F. Ivydene Water Main Extension Project

Mr. Roebuck introduced this item and answered Directors’ questions. Following Board discussion it was moved by Director Puddicombe, seconded by Director Wilson, and unanimously carried to approve the recommendations in the staff memo as presented.

G. MWD Distribution System MAPPING – Sage Consultants, Inc. Proposal

Mr. Roebuck and Mr. Mosby presented the proposal from Sage Consultants and answered Directors’ questions. Following Board discussion, it was moved by Director Abel, seconded by Director Puddicombe, and unanimously carried to approve the Sage Consultants proposal dated June 17 2004 in the amount of $30,000 for services in the electronic mapping of the MWD distribution system and approve the RBF Consulting proposal dated June 7, 2004 in the amount of $8,050 for oversight consulting services in the electronic mapping of the MWD distribution system.

H. USGS / MWD 2005 Cooperative Water REsources Program at Jameson Lake

It was moved by Director Abel, seconded by Director Edmonston, and unanimously carried to approve the 2004/05 budgeted expenditure of MWD’s share of costs for the 2005 water resources cooperative program at Jameson Lake and execute the Joint Funding Agreement between the USGS and MWD.

6. Business and Finance

A. Review of Water Use and charges Study

Mr. Roebuck presented this item to the Board and answered Directors’ questions. Following Board discussion, it was the consensus of the Board to establish a Customer Classifications and Rate Study Team to develop a scope of work for a water use and charges study to be performed by an outside consultant.