Tuesday, June 23, 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, JUNE 23, 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 Chip Wullbrandt, District Counsel Tom Mosby, Engineering Manager Evalyn Kerman, Business Manager Jerry Paley, Financial Specialist Cathy Muneio, Secretary Joan Wells Carolee Krieger Connie & Peter Harvie Tom Dickson Maria Herold

During public forum Tom Dickson asked about the status of the desalt plant. President Puddicombe stated that the desalt plant had been mothballed, and was now being salvaged, and that the City of Santa Barbara did not foresee using the plant for at least ten years. There were several questions asked about the costs associated with State Water and why interest had been capitalized on the CCWA bonds. Joan Wells inquired why the District had projected selling 39 meters next year when the Growth Management Plan states that only 19 properties could be developed. The General Manager said that the District has been averaging 43 new meters per year. Counsel Wullbrandt said that the District extends beyond the Montecito Growth Management Plan area, and includes the Summerland area and Toro Canyon. Ms. Wells also asked who would be buying the 800 AF of excess State Water. The General Manager said that he did not have a buyer at this time. Joan Wells also asked whether the budget was realistic. The General Manager said yes. Carolee Krieger and Joan Wells said they would be satisfied if the budget showed clearly the District’s debt and income, and projected District costs and sales realistically.

Director Wilson suggested several changes to the minutes of June 3, 1998. A motion was made by Director Wilson, seconded by Director Abel and unanimously carried to approve the minutes as amended of June 3, 1998. A motion was made by Director Campbell, seconded by Director Abel and unanimously carried to approve the minutes of June 11, 1998.

The Board reviewed the water sales report for May. The General Manager said that 290 AF of water had been sold, which was under budget due to a wet month.

The Board reviewed the water works operations report for May. Director Wilson inquired about the 55 AF difference between sales and production. The General Manager said that originally it was thought that the South Portal meter was not registering properly, but that this was refurbished and the District still showed a substantial difference between sales and production. He said that the District may have to do a study on meter sizes in order to see whether the flow of water at some properties is not being recorded accurately because the meters are too large. He said that he would come back with a recommendation soon.

A motion was made by Director Campbell, seconded by Director Wilson and unanimously carried to ratify the June 11, 1998 transfer of $13,094,000 from the 1998 A Bond Financing to a separate Montecito Water District/LAIF account controlled by the U.S. Trust Company of California, N.A. Carolee Krieger requested that the District name this fund to make it very clear that this is the Capital Project financing fund.

A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to approve the bills for payment for May 1998. Director Wilson inquired about the $3,000 reimbursement to CCRB for McCormick, Kidman. This was stated to be the District’s share.

Director Wilson reported that the Architectual Review Board has been very busy and meets twice a month. The General Manager reminded the Board of the Montecito Association July 4th festivities next week.

The item regarding the analysis of cost of the District water service was continued until the next Board meeting.

The General Manager said that the budget for 1998-99 was reviewed with the public at the June 18th meeting and that this budget was in accordance with the 30 year plan that was approved. He said that a 2 1/2 percent water rate increase and a 15 percent service charge increase to begin January 1, 1999 were included in the budget. They will be the subject of a public hearing in November or December 1998 for formal Board adoption. There was a discussion on raising rates for private fire hydrants. This was referred for discussion to the Finance Committee.

Director Campbell made a motion to adopt Resolution No. 1858, Employee Classification and Salary Range. The motion was seconded by Director Abel and carried with a roll call vote as follows:

Director Campbell made a motion to adopt Resolution No. 1859, Concerning the Levying of Taxes for the 1998-99 Fiscal Year.The motion was seconded by Director Wilson and carried with a roll call vote as follows:

RESOLUTION NO. 1860 - DETERMINING THAT CHARGES, RATES
AND FEES ARE NOT PROCEED OF TAXES

Director Campbell made a motion to adopt Resolution No. 1860, Determining that Charges, Rates and Fees are not Proceeds of Taxes. The motion was seconded by Director Wilson and carried with a roll call vote as follows:

Director Campbell made a motion to adopt Resolution No. 1861, District Investment Policy for 1998-99. The motion was seconded by Director Wilson and carried with a roll call vote as follows:

The Board discussed the proposed budget for 1998-99. A motion was made by Director Abel, seconded by Director Wilson and carried 4-1, with Director Campbell opposed, to adopt the 1998-99 Budget, and for the Finance Committee to provide a recommendation at the second Board meeting in September regarding the proposed rate and service charge increases scheduled for January 1, 1999.

The Engineering Manager explained that the District had received bids for the East Mountain Drive area pump station and that Lash Construction had submitted the lowest bid. He explained that this project will be paid out of the Water Availability Charge funds. A motion was made by Director Wilson, seconded by Director Puddicombe and unanimously carried to approve and award the bid to Lash Construction for the East Mountain Drive area pump station subject to the Burden Trust agreeing to provide an additional $70,000 for costs not included in the bid contract. The District will fund the emergency generator at a cost of $40,000.

A motion was made by Director Wilson, seconded by Director Campbell and unanimously carried to approve the cooperative mutual aid for emergency response of personnel, equipment, and use of facilities between the Montecito, Fire, Sanitary and Water Districts. The General Manager said that the District can now submit to the Fire District FEMA claims for work done through MERRAG.

The Engineering Manager explained that the District had completed its 1998 groundwater monitoring survey and with the high amount of rainfall there was special interest in collecting data which may establish the new recorded highest water table elevation benchmark.

Director Campbell made a motion to conceptually approve the proposed relocation of the District’s Highline at 2303 Bella Vista Drive and establish a cost in the amount of $50,000 for this proposed relocation. Costs for the relocation, including the procurement of easements, shall be borne by either the current or future owner, with the District providing engineering and inspection at its own cost estimated in the amount of $5,000. The motion was seconded by Director Wilson and carried unanimously. The Engineering Manager said that a pipeline was running through a property owner’s backyard. He said that the property has fallen out of escrow, and thus is not certain how this will be resolved.

The proposed relocation of the District Edison service and East Valley Ranch Well No. 4 discharge line at 2125 Birnam Wood Drive was continued until additional information is received.

The Board reviewed the letter to Charles Hamilton from the City of Santa Barbara regarding the Sheffield Reservoir and Southcoast Conduit issues. The District and Carpinteria need to resolve whether the Sheffield Reservoir changes will impact the District’s supply.

The Board reviewed the notice from the USBR regarding the continuation of negotiation sessions with the USBR on seismic safety cost repayment.

A motion was made by Director Wilson, seconded by Director Campbell and unanimously carried to approve depositing $80,513 into the Rate Coverage Fund at CCWA, and to appropriate $80,513 from the General Capital Repair and Replacement Reserve Fund. The amount needed in the rate coverage fund increased because the debt obligation increased.

Director Abel reported on the public meeting on fish alternatives of June 10 and 11, 1998. She said that by popular demand another meeting will be held on July 8 in Buellton regarding alternatives for fish management. She said that Jean Baldrige had given this same presentation at the Regional Water Quality Control Board.

Director Abel reported on the COMB meeting of June 15, 1998. She reported that Don Vickers is being considered to be the attorney for COMB, and that the individual districts may be able to provide legal assistance as needed. Director Jones reported on the COMB budget and the proposed office building. The budget was approved with the understanding that the building construction not be undertaken until a strategic plan for the joint powers authorities be prepared. Steve Mack volunteered to do a scoping paper with the other managers and to present it to COMB and CCRB. Both agencies agreed that a strategic plan was necessary. She said there was certain resistance in hiring a consultant to prepare a plan.

Director Abel reported on the CCRB meeting of June 17, 1998. She said at the next meeting Counsel Kidman will be presenting a strategic plan for preparing for the 2000 hearings. CCRB will be having a special meeting on July 8 to review the bioassessment for the steelhead management plan and discuss alternatives of the plan.

Director Abel gave the Public Information Committee report. The Board discussed the public meeting that was held on June 18, 1998.

Director Puddicombe reported that there were no additional items to discuss regarding the Operations Committee meeting.

Director Campbell reported there was no additional information to report regarding the Finance Committee.

The Board went into closed session at 6:30 p.m. When the Board returned to open session at 6:57 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 June 12, 1998.