Tuesday, July 21, 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, JULY 21, 1998

The meeting was called to order by Second Vice-President Abel at 3:00 p.m.
Those in attendance were:

Present:	Directors Abel, Jones, Wilson
Absent:	Directors Campbell & Puddicombe
Also Present:	Evalyn Kerman, Business Manager/Assistant Secretary Chip Wullbrandt, District Counsel Tom Mosby, Engineering Manager Cathy Muneio, Secretary Mike Ledbetter, Santa Barbara County Jim Laponis, Santa Barbara County Frances Weismiller

Counsel Wullbrandt suggested several changes to the minutes of July 7, 1998. Director Wilson asked that the item regarding the repayment of the SBB&T loan be clarified by adding an additional explanatory sentence. A motion was made by Director Wilson, seconded by Director Jones and unanimously carried to approve the minutes of July 7, 1998, as amended. Director Jones stated that more information on the changes to the minutes needed to be provided.

PUBLIC HEARING ON PROPOSED WATER AVAILABILITY CHARGE
AND CAPITAL IMPROVEMENT PROGRAM AND
ANY OBJECTIONS OR PROTESTS

Director Abel opened the public hearing at 3:10 p.m. to take public comment on the Water Availability Charge program and to hear any protests or objections concerning reimposition of the Charge for 1998-99. The Business Manager reviewed the staff report with the Board and the public. She stated that all the appropriate notifications about the meeting to the public had been done, that no increase in the amount of Charge or change in the methodology is proposed and that a report detailing the proposed charges to each parcel has been available at the front counter for public inquiry. She said that the program includes pipeline replacements, pumping improvements and fire hydrant replacements. She reported that the entire District benefits from this program because it provides improved system reliability, increased water pressure, and improves fire protection within District boundaries, including for properties not currently taking District water service. The Business Manager further explained that the District intends to replace approximately 11,600 feet of pipe and will spend about $2.8 million under the program this year. Counsel Wullbrandt reviewed with the Board the history of the Charge, which was imposed pursuant to Water Code § 31032.1 in 1996, and is reimposed annually by the District, and explained the annual notice and protest procedure under the Water Code. He also reviewed the exception for the Charge as an existing assessment for purposes of the Right to Vote on Taxes Act (Proposition 218).

Director Abel reported two written protests to the reimposition of the Charge had been received by the District. The first protest was from Mr. Gottsdanker concerning a parcel on West Mountain Drive. Mr. Gottsdanker requested an exemption because he indicated there is no water main or fire hydrant within a half mile from his property. The Business Manager reported that the District had heard similar protests from the Mountain Drive Community Association and other property owners in Mr. Gottsdanker’s area in 1996, and as a result, the District added a project to the Upgrade Program, an upgraded pump station at Terminal Reservoir to provide increased pressure and improved flows during high demand periods to that portion of the District. The District had also determined that there are no other public water systems within close proximity to the West Mountain Drive properties and, with the upgraded pump station, property owners could provide for a main extension and receive District service. In addition, District mains and fire hydrants are close enough so that, in the event of a fire, they would be used to fill pumper trucks and water tenders. The charge would clearly benefit Mr. Gottsdanker in the same way as those other properties.

The second written protest was from the County of Santa Barbara, relating to various County claims that the fee is inapplicable to County owned property based on procedural grounds. Mr. Ledbetter, Counsel for the County, and Mr. Laponis, Deputy County Administrator, appeared on behalf of the County, and provided additional written material. Mr. Ledbetter stated that the County Administrator’s office had not received notice of the District’s 1996 or 1997 imposition of the Charge and of the County’s right to protest, and so the Charge had not been previously imposed. He further stated the County’s procedural objections to imposition of the Charge, noting the County would be satisfied if the District followed the Ballot Procedures under the Right to Vote on Taxes Act as to the County parcels, thus providing the County an opportunity to veto imposition of the Charge on its properties. The Business Manager stated that Notices had been mailed to the County in 1996, 1997 and 1998 to the addresses on the property tax roll provided by the County Assessor’s office to the District. Counsel Wullbrandt explained his office’s disagreement with the County Counsel analysis, stating that, based on the Notice information from staff, he believes the Charge was properly imposed on the County, and could be reimposed for 1998 without further procedural action. In response to a question from Mr. Laponis, the Business Manager provided the listing of Notices for County property, and confirmed that the County had in part paid the Charge in 1997. Counsel Wullbrandt noted that his office had not researched whether the District could collect back Charges from the County for 1996, and so that was still an open issue. Based on the complexity of the issue and the small amount involved for that one year, he did not suggest the District pursue such back collection. Mr. Laponis asked that in the future copies of Notices also be provided to the County Administrator. The other issue raised by the County was a request for exemption for flood control basins as they do not receive any benefit from the program. Counsel Wullbrandt stated that the District should consider whether or not there is a special benefit to those properties, and if not, it may be appropriate for the District to provide an exemption from the Charge. The Business Manager explained that the current report lists $715 for flood control basin parcels. Mr. Ledbetter and Mr. Laponis provided further testimony concerning the use of those flood basins, including the fact that they are to be kept clear of all vegetation and structures, are strictly limited in use, and have a number of other characteristics which indicate that they could receive no benefit from water availability. No other protests were presented, and Director Abel closed the public hearing at 4:00 p.m.

CONSIDERATION OF RESOLUTION NO. 1863 ESTABLISHING
WATER AVAILABILITY CHARGE FOR 1998-99 TO FINANCE
WATER DISTRIBUTION SYSTEM AND FIRE FLOW UPGRADE PROGRAM

A motion was made by Director Jones to deny the request for exemption to the Water Availability charge by Mr. Gottsdanker since his property benefits from the District’s investment in the Water Availability program. The motion was seconded by Director Wilson and carried unanimously.

A motion was made by Director Jones to exempt from the 1998 Charge the County flood control basins for so long as they are limited to such use, and to deny the request from the County for an exemption from the Water Availability Charge on its remaining parcels. The motion was seconded by Director Wilson and carried unanimously.

A motion was made by Director Wilson to approve Resolution No. 1863, Establishing Water Availability Charge for 1998-99 to Finance the Water Distribution System and Fire Flow Upgrade Program and Consideration of Report Establishing the Water Availability Charge for 1998-99 as amended for the exemption of the County flood control basins. A roll call vote resulted as follows:

The Board reviewed the water sales report for June. The District sold 4,309 af as compared to 4,840 af budgeted, a difference of 531 af.

The Board reviewed the water works operation report for June. It was noted that there was 18 af of unaccounted usage. It was agreed that the continuing unaccounted usage should be referred back to the Operations Committee for review. The Board would like a report back to the Board explaining why this unaccounted water was occurring and what the solution will be to eliminate this unaccounted usage.

A motion was made by Director Wilson, seconded by Director Jones and unanimously carried to ratify the July 13, 1998 transfer of $400,000 from the District’s LAIF/General Capital Repair & Replacement/Operations fund account to the District’s Santa Barbara Bank and Trust Operational account.

A motion was made by Director Wilson, seconded by Director Jones and unanimously carried to approve the bills for payment for June 1998.

Director Wilson said there was nothing new to report regarding the Montecito Association.

A motion was made by Director Wilson, seconded by Director Jones and unanimously carried to appropriate funds in the estimated amount of $5,000 from the Capital Operations and Maintenance Fund for the review of the Arroyo Southwestern Toad Recovery Plan.

The Engineering Manager reported on the status of the East Mountain Drive pump station. He reported that a letter had been received from the Burden Trust indicating that the Trust would fund $55,000, or half of the additional costs for the pump station and that the District had issued a Notice of Award/Notice to Proceed. The Engineering Manager stated the District would need to invoice the Burden Trust for its share.

A motion was made by Director Wilson, seconded by Director Jones and unanimously carried to appoint Director Abel as the second alternate representative to the CCWA since Directors Puddicombe and Campbell were out of town and unable to attend the CCWA Board meeting on July 23, 1998.

Director Abel reported on the CCRB meeting of July 8, 1998. She said that they had met to discuss the draft Bio-Assessment Executive Summary. She said the Strategic Management Plan relative to CCRB and COMB had been discussed. She said that CCRB discussed adding Scott Engblom, CCRB project biologist, to the Employee Services Agreement. She said that CCRB was reviewing the strategy for the SWRCB 2000 hearings.

Director Jones gave the COMB report. He stated Larry Mills had been elected President. It was also decided by COMB that Don Vickers would perform personnel legal work for COMB, and that COMB will hire attorneys to perform specific tasks. The Board and Manager will have the capability to hire Counsel as needed.

There was no Water Marketing Committee meeting so there was nothing new to report.

Director Abel requested that the conceptual issue on the minutes and the USFS Cost Share Challenge Agreement be placed on the next agenda.

Note: The agenda for this meeting was posted at the front counter and on the front wall at the Montecito Water District on July 17, 1998.