President Abel requested that the Minutes of the December 18, 2001 Board meeting be removed from the Consent Calendar for discussion and revision. A motion was made by Director Puddicombe seconded by Director Wilson, and unanimously carried to approve the December 18, 2001 Minutes as amended and the Consent Calendar as presented.

After Board discussion, a motion was made by Director Puddicombe, seconded by Director Bachman and unanimously carried to deny the appeal of Mr. Edwin Quackenbush for relief of water charges for water lost through his distribution system during the month of August, 2001. The Board directed staff to notify Mr. Quackenbush of its decision.

President Abel called to the Board’s attention the updated list of the MWD regional boards and committees assignments, effective as of this meeting.

The Board of Directors were asked to provide their travel schedules for 2002 to facilitate the scheduling of committee and Board meetings.

After discussion, a motion was made by Director Puddicombe, seconded by Director Bachman and unanimously carried to (1) accept the bid in the amount of $132,740 from Tierra Contracting, Inc. for phase one construction of the Upper Toro Canyon Road Water Main Replacement Project, and (2) to direct staff to complete engineering and contract bidding for phase two work to coincide with phase one construction.

After discussion, a motion was made by Director Puddicombe, seconded by Director Bachman, and unanimously carried to approve offering MWD’s 2002 State Water entitlement available for purchase in excess of the delivery request to the CCWA’s Pool A or the DWR’s Turnback Pool A or B.

After Board discussion, a motion was made by Director Puddicombe, seconded by Director Bachman and carried, with Director Wilson dissenting, to ratify the actions taken by Manager Adjarian in the sale of 500 AF of MWD’s 2001 State Water Project entitlement carryover water to the City of Santa Maria for $24/AF and 100 AF of MWD State Water Project entitlement carryover water to the City of Buellton for $24/AF.

Manager Adjarian and Counsel Wullbrandt updated the Board on the Bradbury Dam Safety of Dams Contract repayment options, answered Board members’ questions, and received Directors’ comments and input on this matter. The general consensus of the Board was to concur with the $45.28 million "hard cap" and to pursue the longest possible repayment term option on the irrigation portion of the project. Consensus of the Board on the repayment options for the M&I portion of the the project was to seek a term of 25 years with no pre-payment penalty.

The MWD Board of Directors adjourned to the annual meeting of the Montecito Water District Financing Corporation at 3:45 p.m. The Minutes of this meeting will be reviewed at next year’s annual meeting.

The Board reconvened at 3:55 p.m.

2. ACWA-JPIA 2002, EXECUTIVE COMMITTEE ELECTION NOTICE

President Abel called the Board’s attention to the ACWA-JPIA 2002 Executive Committee Election Notice included in the Board packet.

President Abel called the Directors’ attention to the State Water Resources Control Board Technical Issues Update and the Member Unit Legal Issues Update found in their Board packets.

President Abel reported to the Board on the subject meeting. She reported that COMB is having its first-ever employee appreciation luncheon, scheduled for January 18. A special subcommittee has been formed to explore the issue of COMB employee salary parity. The bid period for the new COMB office building has been extended until the end of January; the option of buying or leasing an existing building is being further explored by staff.

Director Puddicombe informed the Board that the subject meeting did not take place.

Director Wilson reported to the Board on the subject meeting which featured a barbershop octet.

Director Puddicombe reported that the Operations Committee items had all been covered.

Director Wilson reported that the Finance Committee had not met since the last Board meeting.

President Abel called the Board’s attention to the news articles in the Board packet and informed the Directors that the Public Information Committee will be meeting next month to begin work on the next issue of the MWD newsletter.

Mr. Adjarian briefed the Board on the General Manager’s Plan for FY 2002/03 which will be presented in detail at the May 2002 meeting of the Board of Directors.

2. pending issues update

Mr. Adjarian briefly updated the Board on the Sycamore Canyon Road Main Replacement Project, the Black & Vetch Water Rates Survey for 2001, the City of Santa Barbara’s Cater Water Treatment Plant Upgrade Project budget over-run, the Joint MWD/MFPD Fire Hydrant Replacement Program and the Hosmer Lane Project. Mr. Adjarian commended District staff for vigorously pursuing safety training in all aspects of MWD’s operations. As a result, MWD was recognized by ACWA/JPIA with certificates of commendation in three different categories.

1. recess to closed session pursuant to government code section 54956.9 (a); conference with legal counsel—existing litigation: ocean view estates homeowners association v montecito water district, et. al.; case no. 1067147

The Board recessed to closed session at 4:40 p.m.

President Abel reconvened the Board in open session at 5:15 p.m. President Abel reported that the Board had given direction to Counsel Wullbrandt and Manager Adjarian on the pending litigation with Ocean View Estates Homeowners Association.

2. DISTRICT COUNSEL REPORT

Counsel Wullbrandt had nothing further to report to the Board.

Director Wilson requested that a report on the Jones hydrant appurtenances lawsuit for a future meeting, after review by the Operations Committee.

Attest:

____________________________
Frederick J. Adjarian, Secretary