Tuesday, October 6, 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 6, 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 Gary Ricks, Counsel Cathy Muneio, Secretary Frank Michaelson, Pacifica, Board President Steven Aisenstat, Pacifica, Provost Charles Asher, Pacifica, Provost Ben Wiener, Legal Representative, Lambert Road Homeowners Association Sam Frye, Petan Company

Director Wilson suggested an addition to the minutes. A motion was made by Director Campbell, seconded by Director Wilson and unanimously carried to approve the amended minutes of September 22, 1998.

The General Manager reviewed with the Board the water production report for September 1998. He noted that production was 554 acre feet and that Doulton Tunnel was still a large producer. He also noted that the meters were read three days earlier than usual to accommodate the meter readers vacation, and so there would be a 10% variance.

The Board reviewed the water sales reports for September 1998. It was noted that sales were below budget by 150 acre feet.

A motion was made by Director Campbell, seconded by Director Wilson, and unanimously carried to ratify the October 2, 1998 transfer of $300,000 from the District’s Santa Barbara Bank & Trust operational account to the District’s LAIF/General Capital Repair & Replacement/Operations fund account.

The General Manager reviewed with the Board the status of the projects that are being completed with the water availability charge funds.

Director Wilson reported that a Land Use - Montecito Association joint meeting is going to be held next Tuesday at the Presbyterian Church regarding Lotusland and Val Verde conditional use permits.

POSSIBLE GROUNDWATER CONTAMINATION FROM PACIFICA INSTITUTE SEPTIC WASTE DISPOSAL

The General Manager explained that the agenda item regarding possible contamination of groundwater from the Pacifica Institute was continued from the last meeting. Mr. Wiener, legal representative for Lambert Road Homeowners Association, had appeared before the Board at its last meeting to request that the District write a letter to the Regional Water Quality Control Board asking that this problem be resolved. The proposed letter was included in the Board packet. Counsel Wullbrandt suggested several additions to the letter. The General Manager said that he had reviewed the reports from Dames & Moore and Michael Hoover, and that they do conclude there is septic waste discharge into the groundwater. Frank Michaelson, Pacifica Board Member, stated that he was made aware of the Board meeting agenda item that morning and therefore was requesting an additional two weeks before the District sends its letter to the Regional Water Quality Control Board. It was the consensus of the Board to continue this item until the October 20, 1998 Board meeting.

AWARD OF WATER MAIN CONSTRUCTION CONTRACT FOR HERMOSILLO RD., SOUTH JAMESON LANE, ROMERO CANYON RESERVOIR ROAD, PARRA GRANDE LANE AND EAST MOUNTAIN DRIVE

The Engineering Manager reported on the five Water Availability Charge projects that bids were received on. Lash Construction was the lowest bidder on the total five projects for $308,882.50. A motion was made by Director Campbell, seconded by Director Wilson and unanimously carried to approve the award of bid to Lash Construction, subject to the execution of the District’s standard contract/agreement and satisfactory compliance with insurance requirements, and to appropriate funds in the amount of $333,200 from the District’s 1998 Bond A funds for this work, including $18,820 for a bid alternate for individual service line replacements, if need, and $5,500 for District’s purchase of pressure regulator materials. The General Manager complimented the Engineering Manager on an excellent bid.

Director Campbell left the room and did not participate in the discussions or action regard this agenda item. President Puddicombe said that the Operations Committee had reviewed the Cima Del Mundo proposal several times. Cima Del Mundo was requesting a reimbursement agreement for their proposed water distribution system for the District to provide water and fire protection. The General Manager explained that this was a 15 lot subdivision, and that these lots were very large. They would like the District to provide full water service along with fire protection to these large estates and they would agree to deed restrict to not use any creek diversion or groundwater. The District had proposed an agreement with six points which Cima Del Mundo would need to agree to. Cima Del Mundo initially only agreed to four of them, but probably would accept the other two. President Puddicombe said that he was concerned that this proposal would set a precedent for other similar requests. After discussion it was decided to not enter into a reimbursement agreement because it would set a Precedent. Cima Del Mundo also requested that the District construct the pipelines which they had already obtained bids on, with one a very good one. It was stated that this contractor would need to be approved by the District and an agreement drawn up that holds the District harmless. Counsel requested that the bid be awarded prior to January 1, since bid requirements will become more stringent. The Engineering Manager said that if the pipeline is not built according to District standards, then the District would not accept the facilities. He also said the contractor will be required to post completion bonds and pay prevailing wages. Director Wilson made a motion to approve the District constructing, at the property owner’s expense, the proposed Cima Del Mundo water distribution system, which will then be dedicated to the District, and to advise the property owner that the District does not wish to enter into a reimbursement agreement with them. The motion was seconded by Director Abel, and unanimously carried.

The Engineering Manager reported on the differences between production and sales numbers in the District. He reported that the District had initiated Sensus testing of 1% of the District’s customer meters. The results of that testing will be reported to the Operations Committee, followed by a recommendation to the Board. Mr. Mosby said that the District would possibly do a leak detection survey. He said several things are being done to ensure that the District does not lose water. He said that the COMB meters are either going to be replaced or repaired, the office meter has already been replaced, and the large water user meters will be replaced. It was also suggested that the District look into whether or not water may be stolen.

The General Manager explained that Glen Annie Reservoir was out of service and that COMB has said that they would like to use the reservoir for reclaimed water. The Operations Committee discussed this and came to the conclusion that the District would not be interested in using this reservoir in the future if adequate financial arrangements can be made. It was the consensus of the Board to advise the Cachuma Operations & Maintenance Board and the Goleta Water District that the District does not wish to use Glen Annie Reservoir in the future.

SCHEDULE PUBLIC HEARING REGARDING RESOLUTION RELATIVE TO USE OF DISTRICT STATE WATER TO OFFSET GROUNDWATER BASIN OVERDRAFT

The General Manager reported that the District needs to hold a public hearing, and provide a report, relative to the use of State Water to offset any groundwater basin overdraft on an annual basis. A motion was made by Director Wilson, seconded by Director Abel and unanimously carried to schedule a Public Hearing for November 17, 1998.

The General Manager stated that Sam Holroyd had requested the District to pay a portion of the cost of a 375 foot main extension near Coyote Road and Banana Road with an estimated cost of $33,500. The Engineering Manager stated that the Operations Committee discussed this item and agreed that participation in a main extension is dependent upon there being a community benefit to District customers. In this case the Banana Road area does not have a water main or any available fire protection. This area is essentially fully developed and the extension of a water main would provide a definite benefit to the District and its customers. The Engineering Manager also said that the portion the District agrees to pay for will come from the Water Availability Charge program funds. A motion was made by Director Puddicombe, seconded by Director Abel and carried 3-0-2, with Director Campbell and Wilson abstaining, to pay 50% of the cost to install 375 feet of 8" ductile iron pipe and the granting of an easement to the District.

The Engineering Manager reported that the Picacho Lane main replacement had been scheduled for 1999-2000 under the Water Availability Charge program. He said that it had come to the District’s attention by a District customer, Nevill Cramer, that the road was scheduled to be paved this year. He requested that arrangements be made so that the road does not have to be torn up twice. A motion was made by Director Campbell, seconded by Director Puddicombe and unanimously carried to schedule the replacement of the Picacho Lane waterline for the Spring of 1999.

The Engineering Manager reported that a draft of the Groundwater Management Plan had been completed and that a Public Hearing needed to be scheduled for public comments and input. A motion was made by Director Wilson, seconded by Director Campbell and unanimously carried to hold a public hearing on November 17, 1998.

The Engineering Manager said that the Barker Pass Pump station improvements were nearly complete except that walk-in access needs to be constructed to eliminate the confined space designation. He said he would bring a finished plan back to the Board for review before implementing and that no action was necessary at this time.

The Engineering Manager reported that the Ennisbrook 3 well, which was fairly new and a good producer, had developed a serious sanding problem. The District contacted geologist, Mike Hoover & Associates, to see what could be done to fix this problem. He recommended that the pump be raised 60 feet into the blank portion of the well casing. This was done and sanding has continued to occur, at a lesser amount. The Engineering Manager said this needs to be investigated further to find out what the problem is. A motion was made by Director Wilson, seconded by Director Campbell and unanimously carried to approve the proposal from Hoover and Associates in the amount of $5,000 for investigative work to determine sanding problems in the well, and to appropriate funds in the amount not to exceed $5,000 from the 1998 A Bond fund for this work.

Director Campbell reported that the Finance Committee had met on October 5, 1998 and had approved a water rates and service charges schedule. He said that there was concern that the District was under budget and that 300 acre feet of water budgeted to be sold had not sold. He said that 37% of water sales for the year have been completed . He said that it will be difficult for the District to make up for the low sales. The Finance Committee was recommending a 5% rate increase on 1/1/99 except for commercial and an increase to agriculture to $1.29/hcf, plus a 15% service charge increase with full equivalency. The General Manager explained the reasons staff was recommending going to full equivalency plus a 5% service charge increase, and with a 2 1/2% water rate increase except for commercial. He said that in the past the Board had stated that they would like to make smaller increases, which is what his recommendation was. He stated that even though the District was below budget for the revenues that the expenses would be less because water would not need to be treated. It was the consensus of the Board to hold a Public Hearing at 3:00 p.m. at the regular Board meeting on November 17, 1998 and to place this report on the District counter for public review. It will be brought back to the Board at the next meeting to possibly select one alternative to go to the public with.

Director Puddicombe said he had nothing further to report regarding the CCWA Board meeting of September 24, 1998.

ACWA BOARD MEETING OF SEPTEMBER 25, 1998 AND
REGION 5 MEETING OF SEPTEMBER 28, 1998

Director Abel reported on the ACWA Board meeting of September 25, 1998 and the ACWA Region 5 meeting of September 28, 1998.

Director Abel reminded the Board about the Staff event at the Big Yellow House on October 8, 1998 at 5:00 p.m. The General Manager asked the Board about going to Juncal Dam to see the work being done. It was tentatively scheduled for October 30, 1998.

Note: The agenda for this meeting was posted at the front counter and on the front wall at the Montecito Water District on October 2, 1998.