REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, November 20, 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

Alexis Nagle, Computer/Finance Specialist

Chip Wullbrandt, District Counsel

Lois Werner, Recording Secretary

Guests Present

Bill Palladini, President, Montecito Association

Cathy Taylor, City of Santa Barbara Water Systems Manager

Susan Thomson, City of Santa Barbara

Rebecca Bjork, City of Santa Barbara

Charles Hamilton, Carpinteria Valley Water District

Mark Poindexter, Poindexter & Company

2. PUBLIC FORUM

Mr. Palladini spoke to the Board on the importance of educating the Montecito Board of Architectural Review and Montecito Planning Commission on water issues. He expressed the appreciation of the Association for District’s recent presentation to their board.

3. CONSENT CALENDAR

Following discussion, it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to approve the Consent Calendar as amended.

4. Time Certain Items

A. Time Certain 2:10 p.m. — Advanced Treatment SOLUTIONS at Cater Water Treatment Plant

Cathy Taylor, City of Santa Barbara Water Systems Manager, gave a presentation to the Board on studies and plans for upgrading the treatment processes at Cater Treatment Plant and answered Directors’ questions.

B. Time Certain 3:00 p.m. — Fiscal Year 2006/07 Financial Audit

Ms Nagle introduced this item. Mark Poindexter, Poindexter & Company, presented the FY 2006/07 financial audit and he and Ms Nagle answered Directors’ questions. Following discussion, it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to accept the FY 2006/07 Audit, and authorize the General Manager to send the letter response from the General Manager to the Auditor.

5. Cachuma MATTERS

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF October 22, 2007

Director Abel reported on the subject meeting and called the Board’s attention to the materials contained in their agenda packets. She and Mr. Wullbrandt answered Directors’ questions on this item.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF October 22, 2007

Director Abel reported on the subject meeting.

6. Legal MATTERS

A. Recent and Pending Legal Matters REview

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

7. District Business Report

A. First Quarterly Investment Report as of September 30, 2007

Ms Nagle presented this report and answered Directors’ questions.

B. Formation of Audit Committee

Ms Nagle presented this item and she and Mr. Poindexter answered Directors’ questions. Following discussion, it was the consensus of the Board to continue this item to a later meeting, due to different guidelines which had conflicting recommendations. The item was referred to the Finance Committee for further review

C. Water Sales Report for October 2007

Ms Nagle presented this report and answered Directors’ questions.

D. September 2007 Revenue and Expense Report

Ms Nagle presented this report and answered Directors’ questions.

8. district Operations Report

A. Ortega Reservoir Project Status Report

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

B. Ortega Reservoir – Notice of Completion Phase 3

Mr. Mosby presented this item. Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to approve signing and recording the Notice of Completion for Phase 3 of the Ortega Reservoir Project.

C. 2008 Water Transfer Agreement

Mr. Roebuck presented this item and answered Directors’ questions. Following discussion it was moved by Director Shaikewitz, seconded by Director Frye, and carried, with four votes in favor and Director Wilson abstaining, to authorize the General Manager or Engineering Manager to send a letter to the Central Coast Water Authority confirming the District’s desire to participate in the transfer agreement in an amount up to 8,000 acre feet of State Water for 2008; to execute appropriate documents necessary to participate in the 2008 Water Transfers, and appropriate funding in the amount up to $120,000 to secure the right to call on up to 8,000 AF until February 2008; and to return to the Board prior to February 15, 2008 with a status report on the program and a final recommendation of the exact amount and cost of water that will be needed from the program.

D. JAMESON LAKE –ACCELERATED PURCHASE OF REMAINING LAKE LOG BOOM

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to approve the purchase of the remaining section of the Jameson Lake log boom and board gate in the amount of $26,119.50 from Worthington Products per their quote, number PM1103-1 dated 11/2/07; and appropriate funds in the amount of $26,119.50 from the 1998A Bond for the purchase of the log boom materials. Installation will be done by District personnel.

E. 2006/07 water year report on unaccounted water

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

9. GENERAL MANAGER’S REPORT

A. Professional Services by Rauch Communication Consultants

Mr. Roebuck presented this item and answered Directors’ questions. Following discussion it was moved by Director Shaikewitz, seconded by Director Abel, and carried by a vote of four to one to authorize the General Manager to increase the existing $20,000 purchase order with Rauch Communication Consultants by $39,900 to a total not to exceed $59,900 and appropriate an additional $39,900 from unrestricted /undesignated operating reserves to fund the Water Conservation And Conservation Rates Public Outreach Plan.

B. Ongoing Projects Update

Mr. Roebuck presented this report.

C. Water Works Operations REport

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

---------------------------------------------- Legal Counsel Departs----------------------------------------------

10. DIRECTOR AND STAFF MEETING REPORTS

A. Central Coast Water Agency Meeting of October 25, 2007

Director Shaikewitz reported on the subject meeting.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF October 22, 2007

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

11. COMMITTEE REPORTS/RECOMMENDATIONS

A. OPERATIONS COMMITTEE

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

B. FINANCE COMMITTEE

Directors Wilson and Morgan reported that the activities of the Finance Committee had been covered elsewhere in the meeting.

C. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the presentation that was given to the Montecito Association is up on the MWD website. The Public Information Committee is considering the last week in January to schedule a public meeting on the water conservation program. The dates being considered are January 29, 30, or 31. Director Frye asked that the PI Committee consider placing agendas for all committees on the website.

12. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for December 18, 2007.

13. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:34 pm.

Approved:

__________________________

Jan E. Abel, President

Attest:

__________________________________

Tom Mosby, Secretary-elect