MINUTES - TUESDAY, AUGUST 19, 1997

MINUTES OF A REGULAR MEETING
of the
BOARD OF DIRECTORS OF THE MONTECITO WATER DISTRICT
held at the
DISTRICT BOARD ROOM

583 SAN YSIDRO ROAD, MONTECITO, CALIFORNIA
at 3:00 p.m. on TUESDAY, AUGUST 19, 1997

Present:	Directors Abel, Campbell, Muller, Puddicombe and Wilson
Absent:	None
Also Present:	C. Charles Evans, General Manager/Secretary Chip Wullbrandt, District Counsel Tom Mosby, Engineering Manager Evalyn Kerman, Business Manager Cathy Muneio, Secretary Robert Jones

A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to approve the minutes of August 5, 1997. A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to approve the minutes of August 11, 1997.

The General Manager reported that water sales for July were up 15.7% from July 1996, and that strong sales were continuing for the month of August.

The Board discussed the bills for the month of July. A motion was made by Director Puddicombe, seconded by Director Abel and unanimously carried to approve the bills for payment for July.

During the Montecito Association report Director Wilson stated that a meeting had been held the previous Wednesday with Caltrans regarding the US 101 Freeway project and that 115-120 people had attended. He said that what is being proposed are auxiliary freeway lanes from Montecito through Summerland .

The Board reviewed the 1996-97 annual financial statement and budget report showing the District had a net gain of $1,706,000 for the year. This was in part due to higher sales and reduced expenses. The Board commended the staff for an outstanding report. The Board also reviewed the investment report showing a $470,000 transfer to LAIF which will be placed on the next agenda for approval.

The General Manager stated that the Quarterly Investment Report shows that the District has adequate funds to meet its expenses for the next six months period.

The General Manager reviewed the information for the continuing disclosure requirements for the SWP 1996 revenue bonds. This showed a coverage ratio of 3.10, which is much higher than the required coverage ratio of 1.25. A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to approve the continuing disclosure requirements for the SWP 1996 Revenue Bonds.

Director Campbell reported that the California Chapter of the S.B. County Special Districts Association of California is not in favor of Senate Bill 712 unless some revisions are made to this bill. Counsel Wullbrandt, who is on the Legislative Committee at ACWA, stated that ACWA is in favor of this bill. Director Campbell said the Board should not support this bill until all revisions have been made to it. After a lengthy discussion Director Puddicombe made a motion to table this item, unless a request is made to bring this item back to the Board when substantial additional information is available. It was seconded by Director Wilson. The motion carried unanimously.

The General Manager said that there was nothing to report at this time on the sale of the Summerland State Water entitlement.

The Board reviewed the updated long range revenue enhancement plan. It was noted that funds have been received for the soil remediation work, and storm damage funds have been received for Fox and Alder Creeks.

The Board reviewed the cost savings and revenue enhancements for the 1997-98 budget. The total anticipated savings and enhancements is $457,419, some of which have already been received and some which are hoped for. He said that the District properties that were sold were above and beyond what the District has budgeted for.

The Engineering Manager said that the District has had a number of recent breaks on its waterline on East Valley Road and Toro Canyon. Letters from six District customers have been received requesting that the main be replaced immediately. The Engineering Manager said that pressures in that area have been lowered to 40 psi less than normal because of the fragility of the main. He said that bids had been received for replacing this main, and that the cost of the project was estimated at $76,750. Director Campbell made a motion to reschedule and move the fiscal year 1998/99 East Valley Water Main Replacement project at Toro Canyon Road to priority number one and to fund this from the revenues from the Water Availability Charge program. It was seconded by Director Puddicombe. The motion carried unanimously.

The General Manager explained that the District received from County Counsel a letter regarding Proposition 208 and that Montecito Water District is affected by this proposition. This proposition modifies state law on the financing of campaigns for state and local elections and places controls on campaign activities, including contributions.

Counsel Wullbrandt reported on Senate Bill 919 which clarifies that Proposition 218 does not affect the District’s Water Availability Charge program and that it does not affect the District’s tiered water rates.

The General Manager explained that the sale of the Yaggy property had been previously approved by the Board for $175,000, and that escrow instructions had been written and accepted by the prospective buyers of the property and that the District has a backup offer for the same amount. A flood study is currently being completed for the District by an engineering consulting firm to see if the property may be developed. Mr. Sonnino, the resident next door, has presented to the County Flood Control pictures of previous flooding on this property, and the County Flood Control is providing this information to the Consulting Engineer and has agreed to wait on the decision of determining whether the property is buildable until that report is completed. It was reported that the offer has 30 days for full disclosure.

The General Manager indicated that the Buell/Blitz sale is almost complete. He also reported that the District is waiting to determine access to the property before proceeding with the lot line adjustment/lot split of the rest of the Buell property. Pat Yochum is working with the District regarding this.

Director Abel gave the COMB report. She said that there had been a discussion of the status on the water quality safety on the Lauro Reservoir watershed. It was determined that the County Department of

Health is responsible for this. It was decided that a letter should be written to the County Department of Health asking it to be responsible. She also said a resolution amending the ACWA medical coverage had been approved. She said that there had been a discussion on the available water from Cachuma but was tabled after Mr. Wignot requested more time for further studying. The Bureau O & M budget for 1998 was reviewed. The COMB Board also discussed the construction of a new office building and FEMA funding.

Director Abel reported that the seismic work was proceeding as planned. Placement of Zone 5 material is almost completed, and the dewatering can then be shut off.

Director Abel said there was nothing new to report on the Lompoc lawsuit against the USBR regarding the Cachuma renewal EIR/EIS.

Director Abel said there was nothing to report on the status of the SWRCB Board Order 94-5 studies since CCRB had not yet met.

Director Abel reported that steelhead had been listed as endangered on August 11, 1997, and that the S.B. News Press, the Independent and LA Times had articles regarding this. She also stated that Region 5 and 8 would be meeting together at the Monterey Marriot on September 29 and that Region 5 was holding a panel on consensus based approaches to fish management. Director Abel said that Counsel Wullbrandt would be moderator of this panel, which will also be given at the ACWA fall conference.

Director Abel said that the Lompoc lawsuit against the USBR regarding water quality damages would be discussed at the next CCRB meeting.

Director Abel reported on several articles regarding water in Southern California. She also said that Price, Postel & Parma had included Montecito Water District in an advertisement in Time, US News and World, Newsweek and Sports Illustrated.

The Water Marketing Committee had not yet met. Counsel Wullbrandt did report that a potential buyer had been represented by an attorney who was suppose to prepare a draft contract two weeks ago. He had received a call from Steve Amerikaner, who is now representing that buyer for the purchase of this water. Counsel Wullbrandt said it was not a legal conflict but that there may be a potential problem if Mr. Amerikaner also represents Santa Ynez River Water Conservation District ID #1 in the sale of surplus water. He has assured us that he does not.