REGULAR MEETING MINUTES

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, June 16, 2009

2:00 P.M.

1. CALL TO ORDER, ROLL CALL, DETERMINATION OF QUORUM

President Shaikewitz called the meeting to order at 2:00 p.m.

Directors Present:

Directors Samuel Frye, W. Douglas Morgan, Richard Shaikewitz, and Larry Wilson

Directors Absent:

Director Jan E. Abel

Staff Present:

Tom Mosby, General Manager

Chip Wullbrandt, District Counsel

Toni Bailey, Business Manager

Karl Meier, Engineering Manager

Lois Werner, Recording Secretary

Guests Present

None

2. PUBLIC FORUM

There were no members of the public present who wished to speak on items not on the agenda.

3. CONSENT CALENDAR

Following discussion, it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to approve the Consent Calendar as presented.

4. LEGAL MATTERS

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt reported on legal and legislative matters of interest to the Board.

B. Closed Session – CONFERENCE WITH LEGAL COUNSEL--ANTICIPATED LITIGATION — Significant exposure to litigation pursuant to Government Code section 54956.9(b): one case.

C. Closed Session – Pursuant to Government Code Section 54956.9(a), Existing Litigation, Montecito Water District Et Al vs. Penfield & Smith Engineers et al; Santa Barbara Superior Court Case Number 1303752

The meeting adjourned to closed session on the above items at 2:07 p.m.

The Board reconvened to open session at 3:30 p.m.

President Shaikewitz reported that the Board had given direction to staff and Counsel on item 4-B and had received reports from Counsel and staff on item 4-C.

5. District Business Report

A. comb 2009/10 budget

President Shaikewitz presented this item and Directors gave questions and comments to staff to be passed on to Board’s representative to COMB, Director Abel, when she has returned from her vacation.

Director Morgan requested that all preceding year actual figures be provided in the budget (not just summary figures). He also questioned the disparity between the budgeted and actual figures for past years.

Director Shaikewitz questioned the 2.5% COLA figure on page 5-A 2, what is the correct breakdown for the GM salary, and why the large increase on FICA and Medicare? Also, what is the compensation being paid to COMB directors?

B. Proposed District FY 2009/10 Budget

Ms Bailey and Director Morgan presented the proposed District Budget for FY 2009/10 and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried to adopt the Budget as presented.

C. Proposed 2009/10 Budget Resolutions

Ms Bailey presented the Budget resolutions for 2009/10 and answered Directors questions. Following discussion it was moved by Director Frye, seconded by Director Morgan, and carried by the following roll-call vote to approve Resolutions 2054, 2055, 2056 and 2057:

Resolution No. 2054

Ayes: Directors Frye, Morgan, Shaikewitz, and Wilson

Noes: None

Absent: Director Abel

Abstain: None

Resolution No. 2055

Ayes: Directors Frye, Morgan, Shaikewitz, and Wilson

Noes: None

Absent: Director Abel

Abstain: None

Resolution No. 2056

Ayes: Directors Frye, Morgan, Shaikewitz, and Wilson

Noes: None

Absent: Director Abel

Abstain: None

Resolution No. 2057

Ayes: Directors Frye, Morgan, Shaikewitz, and Wilson

Noes: None

Absent: Director Abel

Abstain: None

D. Water Sales Report for May 2009

Ms Bailey presented this item and answered Directors’ questions.

E. April 2009 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

F. 1998A Revenue Bond Drawdown Request

Ms Bailey presented this item and answered Directors’ questions.

G. 2008-09 Budget Transfers for Legal Expenses

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Morgan and unanimously carried to authorize staff to make interdepartmental budget transfers of $105,000 into the Legal Expense line item to cover legal costs above that budgeted for FY 08/09.

6. district Operations Report

A. distribution system water quality – sampling results for 2009 second quarter trihalomethane and haa5

Mr. Meier presented this item and answered Directors’ questions.

B. east valley ranch well No. 6 project – final report

Mr. Meier presented this item and answered Directors’ questions.

C. juncal dam – expanded deflection study report

Mr. Meier presented this item and answered Directors’ questions.

D. CALIFORNIA DEPARTMENT OF PUBLIC HEALTH WATER SUPPLY PERMIT AMENDMENT

Mr. Meier presented this item and answered Directors’ questions.

E. Water Works Operation Report

Mr. Mosby presented this item and answered Directors’ questions.

7. GENERAL MANAGER’S REPORT

A. 580 toro canyon road; ACCOUNT NO. 16-3320-0: Reinstatement of agricultural classification

Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Morgan, and carried with one abstention to reinstate the agricultural classification of the subject property, effective June 1, 2009.

B. Supplemental Water Purchase

Mr. Mosby and the members of the Water Supply Ad Hoc Committee presented this item and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Morgan, and unanimously carried to ratify the purchase of 600 AF of CVWD Cachuma carryover water at a cost of $300/ AF, appropriate $180,000 from the Rate Stabilization and Water Purchase Reserve to fund this purchase; and ratify the purchase of 520 AF of San Luis Obispo County Dry Year Water Purchase Program water at a cost of $216.80/AF and appropriate $228,016 from the Rate Stabilization and Water Purchase Reserve to fund this purchase plus delivery cost to Lake Cachuma of $289/AF.

C. Upper Mountain Drive Water Service Area: Request to Establish Ad Hoc Committee

President Shaikewitz and Mr. Mosby presented this item and answered Directors’ questions. Following discussion it was moved by Director Wilson, seconded by Director Morgan, and unanimously carried to establish an Upper Mountain Drive Water Service Area Ad Hoc Committee for the purpose of working with a committee of the Fire District Board to evaluate existing and potential water service capabilities to those areas of the District north of Mountain Drive and west of Cold Springs Road. President Shaikewitz appointed Directors Frye and Abel to serve on this Ad Hoc Committee with Director Morgan to serve as alternate.

D. Monthly Operations Report (Oral)

Mr. Mosby and Mr. Meier reported on District projects and operations not covered elsewhere in the agenda.

8. PRESIDENT’S REPORT

There was no report.

9. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF May 25, 2009

There was no report.

B. PUBLIC INFORMATION COMMITTEE

Director Shaikewitz reported that the Consumer Confidence Report (water quality) newsletter is ready to go out, and an “On the Water Front” article should be appearing in the next Montecito Journal.

C. OPERATIONS COMMITTEE

Directors Frye and Shaikewitz reported that the activities of the Operations Committee had been covered elsewhere in the agenda.

D. FINANCE COMMITTEE

Directors Morgan and Wilson reported that the activities of the Finance Committee had been covered elsewhere in the agenda.

E. Ad Hoc Long-Term Water Supply Committee

Directors Morgan and Shaikewitz reported that the activities of the Ad Hoc Water Supply Committee had been covered elsewhere in the agenda.

10. AGENDA ITEM REQUESTS

Director Shaikewitz asked that the land use issue at the Hidden Valley Lane property be included in the next agenda. There were no other requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for July 21, 2009.

11. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 5:15 p.m.

Approved:

_____________________________

W. Douglas Morgan, Vice-President

Attest:

__________________________________

Tom Mosby, Secretary