REGULAR MEETING MINUTES

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, CAlifornia

TUESDAY, July 21, 2009

2:00 P.M.

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

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

Directors Present:

Directors Jan E. Abel, Samuel Frye, W. Douglas Morgan, and Larry Wilson

Directors Absent:

Director Richard Shaikewitz

Staff Present:

Tom Mosby, General Manager

Chip Wullbrandt, District Counsel

Toni Bailey, Business Manager

Lois Werner, Recording Secretary

Guests Present

Molly Rosecrance, District customer

Betsy Newman, District customer

2. PUBLIC FORUM

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

3. Time Certain Item — 2:00 p.m.

A. PUBLIC HEARING: PROPOSED WATER DISTRIBUTION SYSTEM AND FIRE FLOW UPGRADE PROGRAM, PROPOSED Funding, AND ANY OBJECTIONS OR PROTESTS TO THE PROPOSED CHARGE AND REPORT

Status Report on Water Availability Charge Program and 1998-A Bond Capital Projects

1. Resolution No. 2058 Establishing Water Availability Charge for 2009/10 to Finance Water Distribution System and Fire Flow Upgrade Program and Consideration of Report Establishing Water Availability Charge for 2009/10

Vice President Morgan stated the purpose of the public hearing and requested that Mr. Mosby present the staff report.

Following the staff report, Mr. Wullbrandt explained the purpose of the public hearing and suggested some changes to Resolution No. 2058 to indicate that properties that had been reclassified from recreational or agricultural would remain at the FY 08-09 rate for the FY 09-10 assessment. Vice President Morgan opened the hearing for public comments and protests at 2:10 p.m. Mr. Mosby indicated that no written protests had been received.

Mrs. Rosecrance had some comments on the Water Availability Charge. She asked if a sliding scale could be instituted for properties under an acre and suggested that with recreation no longer being a classification of service in the District, new public hearings should be held. Counsel addressed Mrs. Rosecrance’s questions.

There being no further public comment, Vice President Morgan closed the public hearing at 2:24 p.m. and asked if the Board wished to take action on Resolution No. 2058.

It was moved by Director Abel, seconded by Director Wilson, and carried by the following roll-call vote to approve Resolution No. 2058 as revised:

AYES: Directors Abel, Frye, Morgan, and Wilson

NOES: None

ABSTAIN: None

ABSENT: Director Shaikewitz

4. CONSENT CALENDAR

Director Abel requested that the Minutes of June 16, 2009 be voted separately from the remainder of the Consent Calendar, as she would abstain due to her absence from that meeting. Following discussion, it was moved by Director Frye, seconded by Director Wilson, and carried with one abstention to approve the Minutes of June 16 as presented.

It was moved by Director Frye, seconded by Director Abel, and unanimously carried to approve the Consent Calendar as presented.

6. LEGAL MATTERS

These items were covered following section 9 on the agenda

A. Recent and Pending Legal Matters REview – Oral Report

Mr. Wullbrandt reviewed legal 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: Conference with Legal Counsel Relative to Existing Litigation: Pending STate Water Resources Control Board Cachuma Project Water Right Hearing on Water Right Permits 11308 and 11310, Pursuant to Government Code Section 54956.9(a)

The Board adjourned to closed session on the above items at 4:10 p.m.

The Board reconvened to open session at 4:33 p.m. Vice President Morgan reported that the Board heard reports from legal counsel on both items and gave directions to staff on item 6-B.

7. Cachuma MATTERS

A. CACHUMA CONSERVATION RELEASE BOARD MEETINGs OF May 25 and June 22, 2009

Director Abel reported on the subject meetings and called Directors’ attention to the materials provided in their agenda packets.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETINGs OF May 25 and June 22, 2009

Director Abel reported on the subject meetings.

8. District Business Report

A. Water Sales Report for June 2009

Ms Bailey presented this item and answered Directors’ questions.

B. May 2009 Revenue and Expense Report

ms Bailey presented this item and answered Directors’ questions.

C. 2008-09 First Nine Months Quarterly Financial Statements and Budget Report

Ms Bailey presented this item and answered Directors’ questions.

9. District Operations Report

A. Proposed MWD / CVWD Service ARea REorganization

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was moved by Director Frye, seconded by Director Abel, and carried with a vote of three to one to authorize staff to begin formal proceedings for the proposed service area reorganization.

B. Distribution System Water Quality – Stage 2 Disinfection Byproduct Rule IDSE Report – Selection of Compliance monitoring Site Locations

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

C. Water Works Operations REport

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

11. GENERAL MANAGER’S REPORT

A. Monthly Operations Report (Oral)

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

12. DIRECTOR, COMMITTEE AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF June 22, 2009

Director Wilson reported on the subject meeting.

B. PUBLIC INFORMATION COMMITTEE

Director Abel reported that the Public Information Committee met in June to approve the water quality newsletter. There was also some discussion on future public information efforts.

C. OPERATIONS COMMITTEE

Director Fry 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 Finance Committee will be discussing the new Agricultural verification requirements, and balance of income and water sales.

E. LONG-TERM WATER SUPPLY AD HOC COMMITTEE

Director Morgan reported that the activities of the Long-Term Water Supply Ad Hoc Committee had been covered elsewhere in the agenda.

13. AGENDA ITEM REQUESTS

There were no requests from Directors for items other than regular agenda items for the next regular Board meeting scheduled for August 18, 2009.

14. ADJOURNMENT

There being no further business to come before the MWD Board of Directors, the meeting was adjourned at 4:40 p.m.

Approved:

_____________________________

W. Douglas Morgan, Vice-President

Attest:

__________________________________

Tom Mosby, Secretary