REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, December 15, 2009

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

Chip Wullbrandt, District Counsel

Toni Bailey, Business Manager

Lois Werner, Recording Secretary

Staff Present for Presentation of Resolution

Alex Michael Ayala, Fleet Technician / Distribution Operator 2

Danny Rodriguez and Distribution staff

Chad Hurshman and Treatment staff

Office staff

Guest Present

Bob Roebuck, District customer

Linda Ayala (for presentation of resolution)

Mark Poindexter, Auditor

2. PUBLIC FORUM

There were no members of the public present who wished to speak on items not on the agenda.

3. reSOLUTION No. 2063 — Resolution OF aPPRECIATION FOR Alex mICHAEL aYALA

With Distribution, Treatment and office staff present, the General Manager read the Resolution of Appreciation for Alex Michael Ayala on the occasion of his retiring after 39 years of service. It was moved by Director Abel, seconded by Director Frye, and carried by the following roll-call vote to approve Resolution No. 2064 as read.

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

NOES: None

ABSENT: None

Mr. Ayala and Distribution and Treatment personnel left the meeting when this item had been concluded.

4. tIME cERTAIN iTEM

A. tIME cERTAIN 2:30 P.M. – 2008/09 Audited Financial Statements

Mr. Poindexter discussed the results of the audit and Ms Bailey presented the Audited Financial Statements. Mr. Poindexter and Ms Bailey answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to accept the FY 2008/09 Audited Financial Statements and authorize the General Manager to send the response from the General Manager to the Auditor regarding the audit comments.

5. CONSENT CALENDAR

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

6. Cachuma matters

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF November 23, 2009

Director Abel reported on the subject meeting and called Directors’ attention to the materials provided in their agenda packets.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETINGs OF November 23 and December 11, 2009

Director Abel reported on the subject meeting and called Directors’ attention to the materials provided in their agenda packets.

C. COMB 2^nd Pipeline Project: Report on Final Documents / Agreements

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

7. Board of Directors

A. Report from Board President (Oral)

President Shaikewitz expressed his appreciation for the support of the Board during his presidency and the hard work of both Board and staff. He and Director Morgan reported on the ACWA/JPIA Fall Conference which they attended November 30-December 4.

B. 2010 District Reorganization

President Shaikewitz announced that an election would be held for President and Vice-President. Director Wilson nominated Director Morgan as president and was seconded by Director Frye; the motion carried unanimously.

Director Abel nominated Director Frye for vice-president, and was seconded by Director Wilson; the motion carried unanimously.

It was moved by Director Abel, seconded by Director Frye, and unanimously carried to appoint the General Manager as Board Secretary; retain the firm of Price, Postel and Parma as District Counsel; appoint the Business Manager as Assistant Board Secretary and auditor; continue the $2,000,000 employee fidelity policy; designate Montecito Bank and Trust and Santa Barbara Bank and Trust as depositories for District funds; and designate the Montecito Water District offices as the place for all regular meetings of the Board of Directors, to be scheduled at 2:00 p.m. on the third Tuesday of every month, and on such additional Tuesdays as the Board President and/or Secretary determine to be necessary based on the demands of District business.

C. Request for input Regarding Various Board/Committee Assignments for 2010

President Shaikewitz asked all Directors to consider their participation on Board Committees and MWD representatives to regional agencies and let incoming President Morgan know their preferences within the next few weeks.

8. District Business Report

A. Water Sales Report for November 2009

Ms Bailey presented this item and answered Directors’ questions.

B. October 2009 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

C. District Purchase Order Policy

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Abel, seconded by Director Frye, and carried on a vote of four to one to approve the changes to the District’s purchase order policy as presented.

D. Employee Dental Benefits

Mr. Mosby and Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Morgan, seconded by Director Wilson, and unanimously carried to authorize staff to contract with Met Life insurance for the District employee dental benefits to begin in 2010 with a two-month overlap period with the existing self-funded plan.

9. district Operations Report

A. Unaccounted Water and Action Status Report

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

B. Distribution System Water Quality – Sampling Results for 2009 Fourth Quarter Trihalomethane and HAA5

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

C. Initial DWR 2010 State Water Allocation

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was the consensus of the Board that the District will not participate in the 2010 DWR Dry Year Water Purchase Program.

D. Water Works Operations REport

Mr. Mosby distributed a revised report for this item and answered Directors’ questions.

10. GENERAL MANAGER’S REPORT

A. Ongoing Projects Update

Mr. Mosby reported on ongoing District projects not covered elsewhere in the agenda.

11. DIRECTOR AND STAFF MEETING REPORTS

A. Central Coast Water Authority Meeting Of November 26, 2009

Director Shaikewitz reported that the subject meeting had been cancelled.

B. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF November 23, 2009

Director Wilson reported on the subject meeting.

C. OPERATIONS COMMITTEE

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

D. FINANCE COMMITTEE

Directors Morgan and Wilson reported that the Finance Committee has been looking at alternative ways of refinancing the 98A bonds.

E. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the PI Committee had not met since the last Board meeting.

F. Ad Hoc Water Supply Committee

Directors Morgan and Shaikewitz reported that the Ad Hoc Water Supply Committee had not met since the last Board meeting.

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 January 19, 2010.

13. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:15 p.m.

Approved:

_____________________________

W. Douglas Morgan, President

Attest:

__________________________________

Tom Mosby, Secretary