Tuesday, August 4, 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, AUGUST 4, 1998

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

Present:	Directors Abel, Campbell, Jones (arrived at 3:10 p.m.), Wilson
Absent:	Puddicombe
Also Present:	C. Charles Evans, General Manager/Secretary Evalyn Kerman, Business Manager Eric Hvolball, District Counsel Tom Mosby, Engineering Manager Cathy Muneio, Secretary

A motion was made by Director Wilson, seconded by Director Abel and carried 3-0-1 to approve the minutes of July 21, 1998, with Director Campbell abstaining because he was not present at the meeting.

The General Manager reviewed the water production report for July, 1998. It was noted that 595 acre feet of water was produced. The General Manager reported that Lake Cachuma and Jameson Lake were no longer spilling. He also said that a letter had been sent to the State Safety of Dams and that the DSOD had approved placing splashboards at Jameson Lake until the end of August.

The Board reviewed the report on the Distribution System and Fire Flow Upgrade and Capital Program. The General Manager explained that the monthly report itemizes all of the water availability charge and bond fund projects for the current year and provides a schedule of the projects planned to be completed this year.

A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to ratify the July 24, 1998 transfer of $300,000 and the July 30, 1998 transfer of $100,000 from the District’s Santa Barbara Bank & Trust operational account to the District’s LAIF/General Capital Repair & Replacement/Operations fund account.

Director Wilson reported on the Montecito Association meeting. He said that the Val Verde EIR is now available and that it will be reviewed by the Land Use Committee. He also reported that he had heard that Lotusland would like to increase its visitors from 9,000 to 21,500 per year, and that free public events are being eliminated. Director Wilson said that Westmont is working on a Master Facility Plan and that this plan does not include an increase in faculty or students. He said that the Miramar renovation is in process and that there was going to be a public hearing that night at the Miramar regarding this.

The request of the Cima Del Mundo subdivision was continued. The Finance Committee has directed that a letter be sent to the proponents requesting a clarification or addition of certain information.

A motion was made by Director Abel, seconded by Director Wilson and unanimously carried to reschedule the November 3, 1998 regular Board meeting to Wednesday, November 4, 1998 in order to allow the use of the Board room for the General Election.

The Business Manager explained that the District sold less water than budgeted during the 1997-98 fiscal year, but that the District had a $1.2 million gain because operational expenses were less than budgeted, there was an increase in property sales, and because the District had received funds from FEMA. The Vice President said that the Finance Committee had reviewed the report and he noted that director fees were lower than the prior year. Vice President Campbell pointed out that the debt coverage ratio for the District was very good. It was the consensus of the Board to accept the 1997-98 Annual Financial Statements and Budget Report.

The Business Manager reported that the 1997-98 Fourth Quarter Investment Report is provided to the Board on a quarterly basis to inform the Board of all bank balances and interest amounts that are received, and that copies of the actual reports from the banks and investment companies are required to be supplied to the Board. The Business Manager said that a reserve has been building up over a ten year period for the Bella Vista filtration plant loan with the DWR, and that all interest earned on this account reduces the payments. The Business Manager said that the prepayment for the CCWA bonds does not appear on the operating statement because these were prepaid for the 1998-99 fiscal year. She also stated that interest earned on the bonds would be used for upcoming construction projects. The Business Manager explained that less money was funded than needed because the District had taken into consideration anticipated accumulating interest for several years. There was a discussion on the necessity of the District to make sure that arbitrage amounts are to be calculated, because the District has tax free bonds and the District can not earn more interest than interest expense and costs. If this does happen, the District would have to pay the additional amounts to the government. A motion was made by Director Jones , seconded by Director Abel, and unanimously carried to approve the 1997-98 Fourth Quarter Investment Report.

A motion was made by Director Abel, seconded by Director Jones, and unanimously carried to adjust the Mechanic position from a salary range schedule 202, $1,324 to $1,610 biweekly to 210, $1,391 to $1,692 biweekly for the 1998/99 fiscal year, effective July 1, 1998 in order to be in line with other similar positions at adjacent purveyors.

A motion was made by Director Abel, seconded by Director Jones and carried to adopt Resolution No. 1858 dated June 23, 1998 and establishing employee classification and salary range schedules effective July 1, 1998 with the following roll call vote:

The Engineering Manager reviewed the 1998 Jameson Lake Silt Survey which showed the volume capacity of the Lake had a measurable increase compared to the 1994 survey. He reported that the Reservoir was full when the analysis was made and that the recent survey was a more accurate report than the previous one. A motion was made by Director Wilson, seconded by Director Abel and unanimously carried to approve and adopt the 1998 Jameson Lake bathymetric survey prepared by Martin, Northart and Spencer, and to authorize the transmittal of the 1998 survey results to the U.S. Geological Survey for use in its preparation of Jameson Lake diversion records.

Director Jones expressed concern that corrections made to the previous Board minutes were not specifically listed in the current minutes. Director Abel said that the Board would be approving those minutes twice if corrections were listed individually on the next meeting minutes. The General Manager suggested that the corrected minutes from the prior meeting could be placed on the Board table at the beginning of the next meeting for review. Director Jones said that as long as the Board is satisfied, this would be okay with him. It was the consensus of the Board that the final corrected minutes be placed at the meeting.

Director Abel reported on the CCWA meeting. She said the CCWA Board had agreed to continue negotiating the price with the owner of the current building that CCWA leases. The Board had discussed whether or not to use the condemnation process, but it was the consensus that the Board not use this method if at all possible. The General Manager reported that condemnation to obtain an office building is not considered an emergency type action that is a normal reason for condemnation. Director Abel reported that another item discussed was that a subcontractor had not carried through regarding its agreement to provide specific services and what method should be used to pursue its non-performance.

Director Wilson reported that, at the SBWPA meeting of July 24, 1998, water overdrafting and balancing water supply with demand were the topics of discussion.

Director Wilson reported on the Special Districts meeting of July 27, 1998. He said that two Republicans, Abel Moldinado and Chris Mitchum, were speakers. He said that there would be Democratic speakers at the next meeting.

Director Abel said that the Operations Committee did not meet so there was nothing to report.

Director Campbell reviewed the breakdown of legal costs through June 1998. He said that the Finance Committee was pleased that the costs had gone down. He stated that a large amount of these costs had been associated with the sale of District properties and the permit process for a lot line adjustment/lot split on the Buell Reservoir property.

Director Campbell said that the financial statements had already been reviewed but that there was a $1.76 million operating gain for the year.

Director Campbell said that the Finance Committee had discussed and plans to recommend an increase in the standby fire hydrant service charges at the time the District proposes a possible water rate and water service charge increase. He stated no action was necessary at this time but was on the agenda to inform the Board that this may be proposed.

Director Campbell reported that the staff and the Finance Committee were reviewing the District’s computer system to prepare for any year 2000 problems that may occur.

The General Manager reported that the Finance Committee had reviewed the Cima Del Mundo project that proposed District water service for the subdivision with the developer paying all of the costs but with a possible future reimbursement from the District. The Finance Committee felt there was not enough information available at this time so staff was authorized to write a letter and outline some of the questions and request additional information and then this item would return to the Finance Committee and then to the Board for future consideration.

Director Abel reported that the Public Information Committee will be preparing the fall newsletter, and will be meeting on August 28th. She welcomed any suggestions regarding the newsletter content. The General Manager said that President Puddicombe had commented that he would like to see some photos of directors in future newsletters. Director Campbell suggested that the directors may want to visit Jameson Lake when work has been completed on the walkway. Director Campbell said that he would like to see a report on the environmental work being accomplished by the District.

Director Campbell said that the Water Marketing Committee had not yet met. Director Abel reported that there was going to be a one day workshop before the beginning of the ACWA Fall 1998 conference regarding water transfers and water marketing in California.

Director Campbell reported that there was going to be a one day workshop before the beginning of the ACWA Fall 1998 conference regarding water transfers and water marketing in California. He said that Directors might be interested in attending this seminar in Ventura in the organization of the new Special District Certification Program, and that the Special Districts Education interest in attending a California Water Law Seminar in San Diego in October. Director Abel requested that the ACWA Board meeting of July 31, 1998 be placed on the next agenda. Director Campbell requested that the LAFCO meeting of August 6 be placed on the next agenda. Director Abel reminded the Finance Committee that at the second meeting in August the Finance Committee was asked to present a report regarding the proposed 1/1/99 water rate and/or water service charge increases. Director Abel requested that the items regarding the US Forest Service Cost Challenge Agreement be placed on the next agenda along with a report on what the Forest Service’s contract performance has been to date and the Service’s performance plans for the future.

Note: The agenda for this meeting was posted at the front counter and on the front wall at the Montecito Water District on July 31, 1998.