REGULAR MEETING Minutes

BOARD OF DIRECTORS

MONTECITO WATER DISTRICT

583 San Ysidro Road, Montecito, California

TUESDAY, December 18, 2007

2:00 P.M.

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

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

Directors Present:

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

Directors Absent:

None

Staff Present:

Tom Mosby, Engineering Manager

Toni Bailey, Business Manager

Chip Wullbrandt, District Counsel

Guests Present

Roger Null, District Consultant, Kennedy-Jenks, (via telephone)

Lynn Rodriguez, District Consultant

Jack Ruskey, Customer of Goleta Water Distric

Bert Bertrando, Goleta Water District Board member but not a GWD or MWD customer

David Strauss, District customer (joined the meeting during item 4A and left the meeting shortly afterwards.)

Charles Hamilton, General Manager of Carpinteria Water District (joined the meeting for item 5B and left shortly after the item was discussed.)

2. PUBLIC FORUM

There were two members of the public present who wished to speak on items not on the agenda.

Jack Ruskey, Goleta Water District customer, addressed the Board regarding the fact that Price, Postel & Parma serves concurrently as legal counsel for Goleta Water District, Montecito Water District and Carpinteria Valley Water District.

Bert Bertrando, member of the Goleta Water District Board of Directors and not a Goleta Water District or Montecito Water District customer, addressed the Board requesting it affirm its acceptance that Price, Postel & Parma also represents Goleta Water District.

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. Cachuma matters

A. CACHUMA CONSERVATION RELEASE BOARD MEETING OF November 19, 2007

Director Abel reported on the subject meeting and called the Board’s attention to the materials provided in their agenda packets. She and Mr. Wullbrandt answered questions on this item.

B. CACHUMA OPERATION AND MAINTENANCE BOARD MEETING OF November 19, 2007

Director Abel reported on the subject meeting.

5. Time Certain Items

A. Time Certain 3:00 p.m. — Water Efficient Landscape Ordinance, REsolution, and, and Guidelines

Mr. Mosby introduced Lynn Rodriguez, District Consultant, who presented her draft documents and answered Directors’ questions. Following discussion, the Board requested that a special meeting be held in January regarding this item.

B. Time Certain 3:30 P.m. —Water Conservaton Program

Mr. Mosby introduced Roger Null, District Consultant with Kennedy Jenks (via telephone) who presented this item. He and Mr. Mosby answered Directors’ questions. The Board requested that an additional special meeting be held in January regarding this item. It was the consensus of the Board to postpone the January 31, 2008 public meeting and hold a special meeting in January to further discuss the program.

6. Board of Directors

A. 2008 District Reorganization

President Abel announced that an election would be held for President and Vice-President. Director Morgan nominated Director Shaikewitz for president and was seconded by Director Wilson, and the motion carried with four votes in favor and one abstention.

Director Wilson nominated Director Morgan for Vice-President and was seconded by Director Frye, and the motion carried with four votes in favor and one abstention.

Mr. Wullbrandt noted that he had advised the Board at its January and June 2007 Board meetings of Price, Postel & Parma’s representation of Goleta Water District. Copies of the representation agreement, which includes waiver by Goleta Water District of any potential future conflict concerning Upper Santa Ynez water rights issues were reviewed, along with the fact that Price, Postel & Parma could not represent either District if some other legal conflict were to arise between the Districts unless both provided knowing written waiver based on the facts of such conflict. The Board and counsel further discussed that there are not such current or reasonably foreseeable adverse matters between the Districts, other than the addressed Upper Santa Ynez water rights.

It was moved by Director Frye, seconded by Director Wilson, and unanimously carried to appoint the General Manager as Board Secretary; retain the firm of Price, Postel and Parma as District Counsel; appoint the Business Manager as Assistant Board Secretary and auditor; continue the $2,000,000 employee dishonesty policy; designate Santa Barbara Bank and Trust as depository for District funds; and designate the Montecito Water District offices as the place for all regular meetings of the Board of Directors, to be scheduled at 2:00 p.m. on the third Tuesday of every month, and on such additional Tuesdays as the Board President and/or Secretary determine to be necessary based on the demands of District business.

B. Request for input Regarding Various Board/Committee Assignments for 2008

Ms Abel requested input in regard to current Board/Committee assignments be provided by Directors to President Shaikewitz before the January 2008 regularly scheduled Board meeting.

7. District Business Report

A. Water Sales Report for November 2007

Ms Bailey presented this item and answered Directors’ questions.

B. October 2007 Revenue and Expense Report

Ms Bailey presented this item and answered Directors’ questions.

C. Quarterly Budget Report

Ms Bailey presented this item and answered Directors’ questions.

D. Quarterly Capital Projects Report

Ms Bailey presented this item and answered Directors’ questions.

E. Formation of Audit Committee

Ms Bailey presented this item and answered Directors’ questions. Following discussion it was moved by Director Frye, seconded by Director Shaikewitz, and unanimously carried that the Finance Committee fulfill the role of an audit committee and be re-titled Finance Committee/Audit Committee.

F. 98 Bond Fund Withdrawal

Ms Bailey presented this item and answered Directors’ questions.

G. Resolution No. 2036 – Annual Inventory of District Lands and Air Space

Ms Bailey presented this routine annual item and answered Directors’ questions. Legal counsel suggested a change to the wording in section 3 of the resolution. Following discussion it was moved by Director Frye, seconded by Director Morgan, and carried by the following roll-call vote to approve Resolution No. 2036 with the requested change:

AYES: Directors Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

8. Resolutions

A. Resolution No. 2037 – Resolution of Appreciation

Mr. Mosby presented this item. Following discussion it was moved by Director Morgan, seconded by Director Shaikewitz, and carried by the following roll-call vote to approve Resolution No. 2037 as presented:

AYES: Directors Abel, Frye, Morgan, Shaikewitz, and Wilson

NOES: None

ABSTAIN: None

ABSENT: None

9. GENERAL MANAGER’S REPORT

A. Engineering Manager Recruitment Update (oral)

Mr. Mosby brought the Board up to date on the status of the search for a new Engineering Manager.

B. Professional Services Contract

Mr. Mosby presented this item and answered Directors’ questions. Following discussion, it was the consensus of the Board to take no action on this matter

C. BOARD OF DIRECTORS AND MANAGERS TRAINING OPPORTUNITY

Mr. Mosby presented this item. Director Abel requested a change to the recommendation to remove the last sentence which states “If it is the Board’s desire, approve the daily compensation for those Directors who attend the conference,” as they would already be compensated under our current policy. She also requested that “registration expenses” be replaced with “conference expenses” in following the current policy. Following discussion, it was moved by Director Wilson, seconded by Director Frye, and unanimously carried to approve attendance at the Special District and Local Government Institute Governance Seminar, February 7-8, 2008 in Palm Springs, for any Director who wished to attend.

D. Water Works Operations REport

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

10. . Information Items

(Attachments of interest)

11. DIRECTOR AND STAFF MEETING REPORTS

A. SANTA BARBARA COUNTY SPECIAL DISTRICTS ASSOCIATION MEETING OF November 26, 2007