MINUTES - TUESDAY, OCTOBER 7, 1997

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, OCTOBER 7, 1997

Present:	Directors Abel (arrived at 4:45 p.m.after jury duty), Campbell (arrived at 5:10 p.m.), Muller, Puddicombe, and Wilson
Absent:	None
Also Present:	C. Charles Evans, General Manager/Secretary Chip Wullbrandt, District Counsel Tom Mosby, Engineering Manager Evalyn Kerman, Business Manager Cathy Muneio, Secretary Adrianne Gallarza, SBCC Student Jane Russell, MacFarlane, Faletti & Co. Diane Wondolowski, MacFarlane, Faletti & Co.

Several suggested changes were made to the minutes. A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to approve the amended minutes of September 16, 1997.

1996-97 DISTRICT AUDIT AND REPORT TO MANAGEMENT
AND RESPONSE TO MANAGEMENT REPORT

Diane Wondolowski and Jane Russell, auditors for MacFarlane, Faletti & Co. reviewed with the Board the audit report for fiscal year ended 6/30/97. Ms. Wondolowski reported that the current assets to current liability ratio of 3.8 was almost two times higher than the prior year, equity was 15% higher than last year, operating income was up 75%, and generally the District was in a very healthy financial position. She also said that there were no negative conditions to report. A motion was made by Director Wilson, seconded by Director Puddicombe and unanimously carried to accept the 1996-97 independent Audit and Report to Management letter performed by McFarlane, Faletti & Company and to approve the response to the Report to Management letter prepared by District staff.

Regarding the Crane School appeal, the Engineering Manager said he had met with Crane School in June regarding the installation of a larger meter in order to provide fire service serving the school’s new facility. He said the only issues discussed were strictly related to flow and pressure requirements for the new fire service system. No formal meter application was made until August 20, 1997, after the meter Capital Cost Recovery fees had been increased. Crane School stated they were not aware of the rate increase that became effective with the new budget on July 1, 1997, and were therefore appealing to the District for a reduction in meter Capital Cost Recovery fees equal to the prior year fee. The Business Manager said that the District had advertised, held public meetings, and properly noticed this fee increase. The Appeals Committee and District staff had met recently with Doris Cottam at Crane School and Rick Girard of Melchiori Construction Company regarding their appeal and did not feel that Crane School could provide enough justification to be charged the prior meter fee. A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to deny the appeal of Crane School for a reduced meter fee.

The Board reviewed the Water Production Report for September, 1997. The District had produced 694 acre feet of water, which was 194 acre feet more than was estimated.

A motion was made by Director Wilson, seconded by Director Puddicombe and unanimously carried to ratify the October 3, 1997 draw request of $100,000 on the Santa Barbara Bank & Trust Distribution System Construction Loan.

The Board reviewed the report on the Distribution System and Fire Flow Upgrade Program and Water Availability Charge Funds. Director Puddicombe asked that the replacement of the pump stations be placed as top priority.

President Muller opened the public hearing at 3:30 p.m. to hear public input regarding Ordinance No. 81. Hearing no public comment the hearing was closed at 3:35 p.m.

After reviewing the staff report on the status of the District’s current and future water supplies Director Puddicombe made a motion to adopt Ordinance No. 81 terminating the Water Shortage Emergency that was originally declared in January 18, 1973. It was seconded by Director Wilson. A roll call vote resulted as follows:

NOTICES OF EXEMPTIONS AND 65402(c)s FOR WATER DISTRIBUTION. SYSTEM IMPROVEMENTS

A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to ratify the Notices of Exemption and 65402(c)s for the Water Availability Charge District projects to be completed during the fiscal year 1997/98.

The Board discussed the memorandum from ACWA regarding the appointment of Board members to the various ACWA committees. The General Manager said that this was an option if the Board wished to be considered for any of them.

A motion was made by Director Wilson, seconded by Director Puddicombe and unanimously carried to vote for Robert Puddicombe of CCWA for the National Water Resources Association (NWRA) Board and Robert W. Puddicombe as the NWRA Board alternate.

The Board discussed the schedule for participating in Montecito Beautification Day on November 1, 1997. A motion was made by Director Muller, seconded by Director Wilson and unanimously carried to have the District participate in Montecito Beautification Day.

The General Manager explained that Christmas falls on a Thursday this year and that since staff has responded effectively to the unprecedented heat wave and kept the water flowing to the community they are deserving of a one-time holiday on Friday, December 26, 1997. A motion was made by Director Wilson, seconded by Director Puddicombe and unanimously carried to approve a one-time holiday for District employees for Friday, December 26, 1997.

The Board discussed the letter that was sent to the US Forest Service regarding the proposed Alder Creek diversion modifications. These modifications are in response to the requirements of the USFWS Biological Opinion that was issued due to the discovery of endangered species in the Alder Creek streambed. The Engineering Manager indicated that proposed diversion modifications were submitted to USFS in December of 1996 and requested revisions to the plans by the USFS were considered unreasonable and would not enable the District to operate the diversion. The District believes that its proposed changes are reasonable and will enable the District to have complete control of any water being diverted to Jameson Lake. The proposed changes will also strengthen the structure of the facilities to avoid any structural failure that may be caused by the forecasted heavy rains later this year. The General Manager has scheduled to meet with the USFS on Friday, October 10th, and the results of this meeting will be discussed with the Board at the next scheduled meeting. District Counsel said that since no response has been made to the District’s requests to begin work on the Alder Creek modifications the District should just go ahead and begin, but should get permission to divert any water. A motion was made by Director Puddicombe, seconded by Director Wilson and unanimously carried to ratify the letter to the Forest Service.

President Muller said there was nothing new to report regarding Cachuma seismic safety. Counsel Wullbrandt reported that the USBR has determined that the Member Units do not have an agricultural "ability to pay", and so a basis of negotiation is being prepared based on the Member Units willingness to pay the 15% for the seismic safety work.

The General Manager reported that the 94-5 Water Quality Workplan had begun. He also reported that USGS had been hired to do the modeling of this work. He said that the Vegetation Monitoring report has not yet been completed and the fish studies are progressing.

The General Manager reported that a Governor’s Watershed Protection and Restoration Council had been established and that District Counsel Chip Wullbrandt was on an advisory committee for the WPRC. He also said that a MOU between the State and NMFS concerning the affect of WPRC actions would not be executed until 10/31/97. Most of the implementation of the WPRC actions will be at the Regional Water Quality Control Board level.

Director Abel arrived at 4:45 p.m. She indicated that if she would have been present to vote for Ordinance No. 81 she would have voted aye.

The General Manager said that the City of Lompoc has stated that the Cachuma member units have degraded their water quality. CCRB was requesting a study and budget augmentation for a water exchange study in preparation for the future water rights hearings. The General Manager explained that this study would be on the possible exchange of State Water for water from Lake Cachuma for Below narrows water account and that it would benefit the quality of water deliveries to the Lompoc area from the Cachuma Project, and is an important study in the preparation for the Order 94-5 water rights hearings in 2000.

Director Puddicombe made a motion to approve this budget augmentation if the study included a comparison study on putting state water right into the Lompoc system. It was seconded by Director Wilson. The motion carried unanimously.

Director Campbell arrived at 5:10 p.m. He indicated that if he had been present to vote on Ordinance No. 81 he would have voted aye.

Director Campbell reported on the CCWA meeting of September 24, 1997. He said that the Reserve Policy and the issue of what balance to keep in reserve was discussed.

Director Abel reported on the ACWA Region 5 meeting that was held on September 29, 1997. She said that the panel on "Achieving Consensus Based Approaches" that was put together was the focus of the meeting, and that this panel would probably be at the ACWA Spring Conference. Director Abel complemented Counsel Wullbrandt who served as the moderator on his excellent job. This panel discussed finding alternatives to state and federal regulatory approaches. Director Abel reported she has been nominated to be a single-slated candidate for the Chair of ACWA Region 5, and would then be a member of the ACWA Board.

Director Campbell reported on the Special Districts Association meeting of September 29, 1997. He said that there was over $3,000 in their account. He also said Phil Demery, Director of Public Works, was the speaker at the meeting.

Director Muller said that there had been no Operations Committee meeting so there was nothing new to report.

The Finance Committee had met on October 2, 1997 and there was nothing new to report other than exceptional water sales. The General Manager did point out that the Board had been provided with the Cash Flow Report which included expenses through August and sales for September.

There had not been a Public Information Committee meeting but Director Abel did report on Montecito Beautification Day. It was suggested to the Public Information Committee that the General Manager’s appointment to the State Regional Water Quality Board be put in the next newsletter.

Director Puddicombe moved to hold a workshop November 25, 1997 at 10:00 a.m. to review the current District Budget and study restructuring of District debt. The motion was seconded by Director Campbell and unanimously carried.

Note: The agenda for this meeting was posted at the front counter and outside front wall at the Montecito Water District on October 3, 1997.