Tuesday, October 20, 1998

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, OCTOBER 20, 1998

The meeting was called to order by President Puddicombe at 3:00 p.m.
Those in attendance were:

Present:	Directors Abel, Campbell, Jones, Puddicombe, Wilson
Absent:	None
Also Present:	C. Charles Evans, General Manager/Secretary Tom Mosby, Engineering Manager Evalyn Kerman, Business Manager/Assistant Secretary Chip Wullbrandt, District Counsel Cathy Muneio, Secretary David Gardner, Fugro West, Inc. Frank Michaelson, Pacifica Board Member Richard Monk, Legal Representatives, Lambert Road Homeowners Association Diane Wondolowski, Hilda Zacarias, MacFarlane, Faletti & Co.

A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to approve the minutes of October 6, 1998.

The General Manager reviewed with the Board the water operations report for September 1998. He noted that there was still a large amount of water unaccounted for. The Engineering Manager reported that he was working with Sensus to exchange out one percent of the District’s meters for testing. It was suggested that on the operations report there be a separate item to show the exchange of water with I.D. No. 1.

Director Wilson reported that there was a meeting of the Montecito Association to discuss Lotusland and Val Verde. He reported that nine of ten speakers were against the Val Verde expansion and that Lotusland was approved for an increase in the number of people that can visit Lotusland from 9,000 to 12,500 annually.

FURTHER CONSIDERATION REGARDING POSSIBLE GROUNDWATER CONTAMINATION FROM PACIFICA GRADUATE INSTITUTE
SEPTIC WASTE DISPOSAL

There were several representatives present representing the Pacifica Graduate Institute, along with a Legal Representative for the Lambert Road Homeowner’s Association. The Board reviewed the proposed letter to be sent to the RWQCB. There were some suggested recommendations regarding the letter by Mr. Monk, the attorney for the Pacifica Graduate Institute, and Mr. Wiener, attorney for the Lambert Road Homeowner’s Association. The Board took into consideration those suggestions and the suggestions from District Counsel. David Gardner, hydrogeologist for Fugro West, Inc. said that there are other properties in the Lambert Road area that may be contributing to the contamination of groundwater, and that this should be considered. Mr. Wiener requested that the District recommend to the RWQCB that a monitoring well be placed on the Pacifica property for testing to either confirm or refute that this property is causing groundwater contamination. A motion was made by Director Campbell, seconded by Director Puddicombe to approve sending the amended letter to the Regional Water Quality Control Board.

A motion was made by Director Campbell, seconded by Director Abel and unanimously carried to approve the payment of bills for September, 1998.

Diane Wondolowski and Hilda Zacarias, District auditors with MacFarlane, Faletti, reviewed with the Board the highlights of the 1997-98 District audit. The District auditors commented that the District has an administrative staff that would make any employer jealous, that they are informed and involved, and that they continue to improve and learn. Ms. Wondolowski also said that the District was in accordance with generally accepted accounting principles. She reported that the numbers were very different from last year and that the numbers were different due to proceeds of the bond issue. The bank accounts and accounts receivable were down due to water sales being less. She said that if sales remain low that there would not be enough income in the future to support District expenses, and she said that it was appropriate that the District was proposing an increase to water rates and water service charges. There was also a recommendation to make sure that computer problems for the year 2000 be solved. The Business Manager reported that the District computer problems for the year 2000 are expected to be compliant by July 1, 1999. There was a recommendation from the auditors that the staff continue to complete the District procedure manual as time permits. A motion was made by Director Campbell, seconded by Director Puddicombe and unanimously carried to accept the 1997-98 District Audit Report and to approve the response letter to MacFarlane, Faletti & Co.

A motion was made by Director Abel and seconded by Director Puddicombe, and carried with the following roll call vote to adopt Resolution No. 1867 authorizing new signature cards.

The Board reviewed the material on the proposed water rate and service charge changes. The General Manager explained that the Board first considered this report on October, 6, 1998, and requested that it be placed back on the agenda. A motion was made by Director Campbell, seconded by Director Jones to approve the report recommending a water rate increase of 5% and a service charge increase of 15% with full equivalency. After further discussion the motion carried unanimously. The report will be updated for the November 17, 1998 Public Hearing, and Board approval will be considered on November 23, 1998.

The General Manager reported that CCWA had indicated to the District that it had $1,239,023 in excess funds. A motion was made by Director Campbell, seconded by Director Jones and unanimously carried to apply the credit of $300,000 towards future CCWA assessments and request the balance of the amount due or $939,023 as a cash refund.

The Engineering Manager reviewed with the Board the Draft Montecito Groundwater Management Plan. He said that this would be brought before the community at the November 17th Board meeting at the Montecito Fire Protection District Board room to receive public input and, based on comments of the public and review of the draft Plan, the Board would consider adoption of the Montecito Groundwater Management Plan at a Special Board meeting on November 23, 1998. Staff was commended for the excellent detailed report.

By consensus the Board concurred with changing the November 3, 1998 Board meeting to November 4, 1998 at 3:00 p.m. to accommodate the use of the Board room for the general election, to schedule a public hearing on November 17, 1998 and a Special Board meeting on November 23, 1998 at 3:00 p.m., and to change the December 1, 1998 Board meeting to December 8, 1998.

Director Jones reported on the COMB meeting of October 19, 1998. He said that there was a discussion on the Cachuma place of use issue. There was also a discussion on operating Cachuma as a flood control project. Director Jones said that the discussion on the Strategic Management Plan was postponed to the November COMB meeting. Director Wilson requested to have an item to discuss using Cachuma as a flood control project be placed on the November 4, 1998 agenda.

There was nothing to report regarding the Operations, Finance, Public Information, and Water Marketing Committees since none of these committees had met.

The Board went into closed session at 5:30 p.m. When the Board returned to open session at 5:47 p.m. it was reported that no action was taken.

Note: The agenda for this meeting was posted at the front counter and on the front wall at the Montecito Water District on October 16, 1998.