Michael Burchardi via teleconference from Honolulu, Hawaii

SANTA YNEZ RIVER WATER CONSERVATION DISTRICT IMPROVEMENT DISTRICT NO. 1 DECEMBER 14, 2017 SPECIAL MEETING MINUTES A Special Meeting of the Board of Trustees of the Santa Ynez River Water Conservation District, Improvement District No. 1, was held at 3:15 p.m. on Thursday, December 14, 2017 in the Conference Room at 1070 Faraday Street, Santa Ynez. Trustees Present: Kevin Walsh Harlan Burchardi Brad Joos Jeff Clay Michael Burchardi via teleconference from Honolulu, Hawaii Trustees Absent: Others Present: Chris Dahlstrom Paeter Garcia Gary Kvistad Mary Martone Karen King Eric Tambini Penny Knowles David Jakkola I. CALL TO ORDER AND ROLL CALL: President Walsh called the meeting to order at 3:15 p.m., he stated this was a Special Meeting of the Board of Trustees. Mrs. Martone reported all five members of the Board were present, with Trustee Mike Burchardi present via teleconference from the Waikiki Beach Marriot Resort 2552 Kalakaua Avenue, Honolulu, Hawaii. II. III. IV. PLEDGE OF ALLEGIANCE: President Walsh led the Pledge of Allegiance. REPORT BY THE SECRETARY TO THE BOARD REGARDING COMPLIANCE WITH THE REQUIREMENTS FOR POSTING OF THE AGENDA: Mrs. Martone presented the affidavit of posting of the agenda, along with a true copy of the agenda for this meeting. She reported that the agenda was posted in accordance with the California Government Code commencing at Section 54950 and also pursuant to Resolution No. 340 of the District. The affidavit is filed as evidence of the posting of the agenda items contained therein. CLOSED SESSION: The Board adjourned to closed session at 3:17 p.m. to discuss agenda items IV. A. B. & C. President Walsh noted that there were no members of the public present prior to adjourning to closed session. A. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION [Subdivision (d)(1) of Section 54956.9 of the Government Code] 1. Name of Case: Adjudicatory proceedings pending before the State Water Resources Control Board regarding Permits 11308 and 11310 issued on Applications 11331 and 11332 to the United States Bureau of Reclamation and complaints filed by the California Sport fishing Protection Alliance regarding the operating of the Cachuma Project and State Board Orders WR73-37, 89-18 and 94-5; and proposed changes to the place of use of waters obtained through aforementioned permits for the Cachuma Project 2. Name of Case: Adjudicatory proceedings pending before the State Water Resources Control Board regarding Permit 15878 issued on Application 22423 to the City of Solvang regarding petitions for change and extension of time and protests to the petitions B. CONFERENCE WITH LEGAL COUNSEL POTENTIAL LITIGATION Potential initiation of litigation against the agency [Subdivision (d)(2) of Section 54956.9 of the Government Code 1 case] 1. Cachuma Operations and Maintenance Board; Membership and Assessments December 14, 2017 Special Meeting Minutes Page 1 of 11

C. CONFERENCE WITH LEGAL COUNSEL POTENTIAL LITIGATION Potential initiation of litigation by the agency [Subdivision (d)(4) of Section 54956.9 of the Government Code 1 case] V. RECONVENE INTO OPEN SESSION - TIME CERTAIN 4:00 PM [Sections 54957.1 and 54957.7 of the Government Code] The Board reconvened to open session at 4:02 p.m. Mr. Paeter Garcia, District Legal Counsel, announced the Board took no action in Closed Session and will reconvene to Closed Session to continue discussion on agenda items IV. A., B., and C. at the end of the Regular Meeting items. VI. CONSIDERATION OF THE MINUTES OF THE SPECIAL MEETING OF NOVEMBER 14, 2017: The Minutes of the November 14, 2017 Special Meeting were presented for consideration. President Walsh asked if there were any changes or additions to the Special Meeting minutes of November 14, 2017. Trustee H. Burchardi requested minor changes. It was MOVED by Trustee H. Burchardi, seconded by Trustee M. Burchardi and carried by a unanimous 5-0-0 voice vote, to approve the November 14, 2017 Special Meeting minutes as amended. VII. VIII. IX. ADDITIONS OR CORRECTIONS, IF ANY, TO THE AGENDA: Trustee Burchardi requested one correction to Agenda Item XI.B. He indicated that the agenda should be corrected to reflect the appropriate date - Cachuma Operation and Maintenance Board Extension of October 2, 2017 Tolling Agreement to March 30, 2017 2018. PUBLIC COMMENT: Ms. Penny Knowles provided comments to the Board. CONSENT AGENDA: The Consent Agenda report was provided in the Board packet. Trustee Clay MOVED to approve the Consent Agenda as presented, the motion was seconded by Trustee H. Burchardi and carried by a unanimous 5-0-0 voice vote. X. MANAGER S REPORT - STATUS, DISCUSSION AND POSSIBLE BOARD ACTION ON THE FOLLOWING SUBJECTS: A. DISTRICT ADMINISTRATION: 1. Board of Trustees Reorganization a) Selection of Officers, Reorganization of the Board President, Vice President, Treasurer and Secretary to the Board of Trustees Mr. Dahlstrom reported that each year in December elections are conducted for the seats of President, Vice President as well as appointment of the Board Secretary and Treasurer pursuant to the California Water Code. He explained that the process for electing offices is done by nomination and vote by the Board members. President Walsh called for nominations from the Board. The following nominations were made: Trustee H. Burchardi nominated Trustee Walsh as President and Trustee Clay as Vice President. Trustee Joos seconded the nominations. There being no further nominations, President Walsh closed the nominations. December 14, 2017 Special Meeting Minutes Page 2 of 11

Mr. Dahlstrom stated the Secretary of the Board and Treasurer were appointed positions to the Board. The Board concurred that the two positions remain the same with Ms. Martone as Secretary to the Board and Chris Dahlstrom as Treasurer. Trustee H. Burchardi MOVED to elect Trustee Walsh as President and Trustee Clay as Vice President; and appoint Mary Martone as the Secretary to the Board, and Chris Dahlstrom as Treasurer. Trustee Joos seconded the motion; it was carried by a unanimous 5-0-0 voice vote. b) Appointment of Representatives to participating Agencies and Organizations CCWA and ACWA/JPIA c) Determination of Board Committees and Appointments Agenda Item X.A.1. b). & c) were discussed together. Mr. Dahlstrom reviewed the current Board representatives to participating agencies, organizations and committees. He reported Trustee H. Burchardi and Mr. Dahlstrom serve as Director and Alternate respectively to the Central Coast Water Authority Board, and Trustee Walsh and Mr. Dahlstrom serve as Director and Alternate to the Association of California Water Agencies/JPIA. He explained that the Ad Hoc Committees include Trustees Clay and Walsh - City of Solvang; Trustees Walsh and Clay - Legal Services; Trustees Walsh and Joos COMB; and Trustees Clay and Joos Water Rates. He also stated that the authorized representatives to attend City of Solvang Council Meetings were Trustees Clay and Joos. Trustee H. Burchardi MOVED that the current representations remain unchanged for the participating agencies, organizations and ad hoc committees for 2018. The motion was seconded by Trustee Joos and carried by a unanimous 5-0-0 voice vote. 2. Financial Report on Administrative Matters a) Presentation of Monthly Financial Statements Revenues and Expenses The Board was provided the statement of Revenues and Expenses for the month of November in the handout materials. Mr. Dahlstrom reviewed the Statement of Revenues and Expenses for the month of November. He reported the revenues exceeded expenses by $239,378.58 for the month and the year-to-date net income was $1,417,475.75. Mr. Dahlstrom explained the revenues are down due to declining water sales with the on-set of the winter season, which reflects that water sales have dropped by 13%. He stated that expenses are also lower than anticipated since the District has not received an invoice from the USBR for the current Cachuma Water Entitlement year which began October 1 st. He noted that there will be a fairly significant cost increase beginning in January from USBR due to their reconciliation of three years of deficit revenues. Mr. Dahlstrom also reported that management will be transferring funds to the Boardapproved Debt Service Reserve to earmark funds for the annual State Water and COMB Bond payments. b) Water Rate Adjustment on January 1, 2018 Pursuant to Resolution No. 756 Adopted December 13, 2016 The Board packet included Exhibit A of Board approved Resolution No. 756 adopted on December 13, 2016. December 14, 2017 Special Meeting Minutes Page 3 of 11

Mr. Dahlstrom reported the Board packet included Exhibit A of Resolution No. 756 - Water Rate Schedule for water rates effective January 1, 2018. He explained the Water Rate Study and Resolution were adopted on December 13, 2016 which approved a fiveyear water rate adjustment schedule. He stated that the second year adjustments will go into effect on January 1, 2018, which reflects an increase in both the meter and consumption charges. He reminded the Board the first year adjustments were only applied to consumption charges, while the meter charge remained unchanged. Discussion ensued regarding the Board s option to elect not to increase rates or choose a lesser increase for a specific year of the five-year adopted plan based upon the financial stability of the District and building up the Board-approved Reserve balances which currently are significantly deficient. Mr. Dahlstrom reviewed the water rates for Domestic, Rural Residential/Limited Agriculture, Agriculture and Private Fire Protection. He explained the Board-adopted Water Rate Study included consideration of customer water conservation measures and the decreased water sales due to the Governor s Drought Mandate. He stated due to the customer conservation and the suspension of the ad valorem tax in 2010, District revenues and reserves have not rebounded. Discussion ensued, the Board consensus was to proceed with the water rate adjustments effective January 1, 2018 as described in Resolution No. 756 Exhibit A and per the December 13, 2016 Adopted Water Rate Schedule. Trustee Joos questioned why the 3 meter rate was decreasing for 2018. Mr. Dahlstrom explained that the Water Rate Consultant brought all meter charges into compliance with AWWA standards and as a result the 3 meter needed to be decreased. 3. District Rules & Regulations - Compliance Implementation and Status Update The Board packet included a December 7, 2017 Staff Report discussing District Rules and Regulations Compliance Implementation Update. a) Rural Residential/Limited Agriculture Classification ADU s, Multiple Dwelling Units and Non-Limited Ag Uses Mr. Dahlstrom gave a historical recap of the establishment of the Rural Residential Limited Rate (RR/LA) rate which was previously called an Estate rate in early 1993, noting that the definition and title was changed in 1996 during the USBR Contract Renewal. He reported the purpose of RR/LA classification was to preserve the open space or larger parcels with personal gardens or orchards, livestock; however, it was not to be used for commercial agriculture use. Mr. Dahlstrom reported that staff has been reviewing each section of the District s Rules and Regulations and working toward bringing customers into compliance where necessary. He explained that in early November staff sent letters to 39 Rural Residential/Limited Agricultural (RR/LA) customers that have two structures on their property being served by one meter. He reviewed Article 1001.4 of the District Rules and Regulations which specifically states that RR/LA classified meters shall be connected to and serve one single family residential unit only with no more than ¼ acre in aggregate of ornamental or turf landscaping. Mr. Dahlstrom informed the Board that staff has received calls regarding the letter. Staff continues to work with those customers and discuss their options for compliance. December 14, 2017 Special Meeting Minutes Page 4 of 11

b) Agricultural Classification Non-Ag Uses Including Domestic Interconnections, Turf and Landscape Uses The Board packet included a November 17, 2017 letter to District Agriculture customers discussing agriculture water use and reclassification and Article 2 Definitions and Article 9 Agriculture Use Regulations of the District Rules and Regulations. Mr. Dahlstrom reported the Board packet included a November 17, 2017 letter that was sent to 10 of the 118 Agricultural classified customers relating to specific compliance requirements for that rate classification. He explained the Agriculture classification is very specific and is to be used only for the production of commodities such as agricultural crops or livestock, watering of livestock, and growing of forage or hay crops for pasture grazing for the purpose of producing income from the sale of these products. He explained that the classification does not include turf irrigation, personal orchards, gardens, ponds or wine tasting facilities. Mr. Dahlstrom reported that the District must comply with US Bureau of Reclamation audits relating to Crop Analysis, land use and how agricultural water is applied. Mr. Dahlstrom explained the letter notified the 10 customers that effective January 1, 2018 their water use classification would be switched to the domestic rate classification based upon their specific use. He also indicated that staff continues to field calls regarding the letter and has been working with the affected customers. 1. Oak Hill Cemetery Request for Exemption District Rules & Regulations Article 20- Relief in Special Circumstances The Board packet included a November 29, 2017 letter from Mr. David Jakkola, District Manager, Oak Hill Cemetery District requesting an appeal to the water rate reclassification. Mr. Dahlstrom explained that a letter dated November 30, 2017 addressed to the Board of Trustees was received from Oak Hill Cemetery District Manager David Jakkola requesting an appeal of the change in classification from the Agriculture rate to Domestic rate for the Oak Hill Cemetery located in Ballard. Mr. David Jakkola was present at the meeting to provide comments. The Board welcomed Mr. Jakkola to the meeting. Mr. Dahlstrom reviewed the historical Oak Hill Cemetery water use which is very high. He stated that the Cemetery District has been billed at the Agriculture rate for many years; however, the classification does not comply with the definition of agriculture use. He noted that the appropriate classification for their water use would be under the Domestic classification. Mr. Dahlstrom explained that Mr. Jakkola s letter requests an appeal to the ruling and special exemption for Oak Hill Cemetery District. Mr. Dahlstrom stated the District Rules & Regulations Article 20 Relief in Special Circumstances was included in the Board packet. He explained that Article 20 is no longer in effect as it was pre-proposition 218. He stated that in order to provide the Cemetery District with a special rate classification other than the appropriate Domestic classification, the District would be required to complete another water rate study. Board discussion with staff and Mr. Jakkola ensued including how the Cemetery District is funded and the possibility of the Cemetery District raising rates to cover their water use expenses. Mr. Jakkola commented that the switching their classification to the Domestic rate would significantly impact their ability to pay the monthly cost of water. He also discussed the significant expenses related to the recent upgrades to the Cemetery District s irrigation system, as well as the recent December 14, 2017 Special Meeting Minutes Page 5 of 11

rate increase that the Cemetery District implemented to assist with covering their operational costs. Mr. Dahlstrom suggested that Mr. Jakkola contact the Cachuma Resource Conservation District (CRCD) for a free turf analysis to assist the Cemetery District with analyzing their use and possible alternate efficient watering schedules and options. Mr. Dahlstrom recommended the Board consider delaying the January 1, 2018 effective date of the change in rate classification until the results of the CRCD evaluation are received. The Board consensus was to delay the water rate classification change and provide time for the CRCD evaluation to be completed. Mr. Jakkola thanked the Board and staff for considering his request on behalf of the Oak Hill Cemetery District Board. c) Encroachment/Access Items Inability to Access District Meters, Valves and Other Infrastructure Due To Fencing, Gates, and Restrictive Structures within Easements and ROW s. The Board packet included a November 27, 2017 warning letter to District customers discussing access to District facilities. Mr. Dahlstrom reported that the District continues to experience issues related to encroachment and access to District facilities. He explained that over the years property owners have constructed structures, such as fencing, gates or walls that were either constructed within the District s easements or restrict District access to water meters and other District facilities. He explained that over the past year 76 customers were notified that their security gates restrict District access, which is in non-compliance with the District s Rules and Regulations. He reported that staff provided these customers with compliance options and to date only three customers remain non-compliant. He stated those three customers will receive warning letters and a $75.00 non-access charge for each instance of non-access (i.e. meter reading, repairs, etc.) until the issue is remedied. 4. Amendment to Rules & Regulations and Capital Facilities Charges a) Draft Resolution No. 771: A Resolution of the Board of Trustees of the Santa Ynez River Water Conservation District, Improvement No. 1 Approving the Attachment of Appendix C and Appendix D the Automatic Annual Adjustment to the Capital Facilities Charges and Meter Installation Fees into Sections 603 and 709 of the Rules and Regulations effective January 1, 2018 The Board packet included draft Resolution No. 771 and Appendix C & D and supporting documentation. Mr. Dahlstrom explained draft Resolution No. 771 amends District Rules and Regulations, Section 603 and 709 and Appendix C & D. He reported the Board was provided a draft Resolution in November of the proposed changes to the Rules and Regulations relating to Capital Facilities Charges and explained that the Board must be provided written notice of any proposed amendment or addition or change to the Rules and Regulations at least 20-days prior to any meeting (special or regular). He explained the capital facilities charge calculations and stated the only change that has been made is on Appendix C & D is related to the lot size and minimum meter size requirements for properties within District boundaries as discussed at the November meeting. He explained the change was made to the meter size/lot size requirements for 3 to 5 acres and 5 to 10 acres; these requirements were changed to more accurately reflect customers needs and conform to the Rules and Regulations for water service. Mr. Dahlstrom stated that the change was reflected on Appendix C & D of the Resolution. He explained that a minor modification is necessary on Appendix C & D to read >1 to <3 acres; >3 to <10 and > 10 acres on both schedules. Mr. Dahlstrom recommended modifying the meter size for the parcels 5 acres or greater and adopting Resolution No. 771. December 14, 2017 Special Meeting Minutes Page 6 of 11

It was MOVED by Trustee H. Burchardi, seconded by Trustee Joos, to adopt Resolution No. 771 Approving the Attachment of Appendix C and Appendix D the Automatic Annual Adjustment to the Capital Facilities Charges and Meter Installation Fees into Sections 603 and 709 of the Rules and Regulations effective January 1, 2018 as amended. There was no public comment. The Resolution was adopted and carried by the following 5-0-0 roll call vote: AYES, Trustees: NOES, Trustees: ABSENT, Trustees: Kevin Walsh Harlan Burchardi Michael Burchardi Brad Joos Jeff Clay 5. Upland Groundwater Basin Annual Non-Native Return Flow Abandonment a) Draft Resolution No. 772: A Resolution of the Board of Trustees of the Santa Ynez River Water Conservation District, Improvement District No. 1 Abandoning Return Flow Accruing in the Santa Ynez Uplands Groundwater Basin Prior to December 31, 2016 The Board packet included Draft Resolution No. 772. Mr. Dahlstrom explained that this process is done on a yearly basis to present the annual analysis related to the non-native water and return flows which are stored in the basin and the need to abandon the amount of annual return flow for prescriptive right purposes. The return flow from imported water has percolated into the Santa Ynez Upland Groundwater basin in cumulative excess of 35,234 acre-feet from 1961 to December 31, 2016. Mr. Dahlstrom recommended approval of Resolution No. 772. It was MOVED by Trustee H. Burchardi, seconded by Trustee Joos, to adopt Resolution No. 772 Abandoning Return Flow Accruing in the Santa Ynez Uplands Groundwater Basin Prior to December 31, 2016. There was no public comment. The Resolution was adopted and carried by the following 5-0-0 roll call vote: AYES, Trustees: NOES, Trustees: ABSENT, Trustees: Kevin Walsh Harlan Burchardi Michael Burchardi Brad Joos Jeff Clay December 14, 2017 Special Meeting Minutes Page 7 of 11

6. District Land and Air Space a) Draft Resolution No. 773: A Resolution of the Board of Trustees of the Santa Ynez River Water Conservation District, Improvement District No. 1 Concerning Inventory of District Land and Air Space The Board packet included Draft Resolution No. 773 and supporting documentation. It was MOVED by Trustee H. Burchardi, seconded by Trustee Joos, to adopt Resolution No. 773 Concerning Inventory of District Land and Air Space. There was no public comment. The Resolution was adopted and carried by the following 5-0-0 roll call vote: AYES, Trustees: NOES, Trustees: ABSENT, Trustees: Kevin Walsh Harlan Burchardi Michael Burchardi Brad Joos Jeff Clay B. OPERATIONS AND MAINTENANCE 1. Zone 3 Reservoir.5 Million Gallon Tank Interior Coating Removal, Preparation and Re- Coating. a) Bid Results The Board was provided handout materials which included the bid summary for the Zone 3 Reservoir -.5 Million Gallon Tank Interior Coating Removal, Preparation and Recoating. Mr. Dahlstrom gave a history on the work completed in FY 2000 to recoat the tank. He explained that it is time again to remove and recoat the tank, which entails inspection of the tank coatings, repairs due to rust, optional installation of cathodic protection and painting. Mr. Dahlstrom explained that four bids were sent out with three of the four bids being returned. He explained that based on the bid results Olympos Painting was the lowest responsible, qualified bidder at $209,240.00. Mr. Dahlstrom explained that although the bids came in above what was budgeted in the 2017/2018 budget, funds could be transferred from the budget line-item associated with Chromium 6 which will not be expended during the fiscal year to cover the expenses of the re-habilitation of the Tank. Mr. Dahlstrom reported the work will be done by June 1, 2018. b) Award of Contract Mr. Dahlstrom recommended acceptance of the bid from Olympos Painting in the amount of $209,240.00 and requested that the Board authorize him to sign the award notification and contract. It was MOVED by Trustee H. Burchardi, seconded by Trustee Clay and carried by a unanimous 5-0-0 voice vote to accept the lowest responsible bid of $209,240.00 from Olympos Painting and authorize the General Manager to sign the Notice of Award and approve the Contract. December 14, 2017 Special Meeting Minutes Page 8 of 11

XI. REPORT, DISCUSSION AND POSSIBLE BOARD ACTION ON THE FOLLOWING SUBJECTS: A. Cachuma Project U.S. Bureau of Reclamation Continuing Operations 1. Cachuma Project Water Service Contract No. I75r-1802R, Water Deliveries, Exchange Agreement, Entitlement, Water Storage, Accounting, Water Supply Projections and ESA Fisheries The Board packet included a December 14, 2017 staff report discussing the Cachuma Project, 2018 Cachuma Project Water Rates Schedule of Semi-Annual Payments and a November 13, 2017 US Bureau of Reclamation letter discussing the Endangered Species Act Section 7(a)(2) Biological Opinion for Operation and Maintenance of the Cachuma Project in Santa Barbara County. Mr. Dahlstrom reported that Mr. Paeter Garcia, District Legal Counsel, met with the US Bureau of Reclamation representatives on November 30 th to discuss a resolution to the water inequity and accounting. Mr. Garcia reported there was no resolution to the District s concerns although there will be another chance to meet with the US Bureau representatives at the Mid Pacific Regional Water Users Conference in January 2018. Mr. Dahlstrom reported the District received the 1 st & 2 nd period rates for the water year starting October 1, 2017 from the USBR through COMB. He stated on December 7, 2017 COMB forwarded the rate sheet that reflects the payment for a 40% Cachuma Project Allocation and a 30 valve repair on the outlet works for a cost of $1.2 million dollars. He reported he had requested the financial back-up for this repair. Mr. Dahlstrom reported USBR is operating under standard conditions with water to the Hilton Creek system now provided by gravity from the outlet works. He stated he attended a meeting with USBR, CCWA and the Member Units regarding the outlet works on November 27, 2017 where they discussed a draft report by HDR presenting CCWA infrastructure options. 2. 2020 Water Service Contract Process and Negotiations U.S. Bureau of Reclamation 2020 O&M Transferred Project Works Process and Negotiations U.S. Bureau of Reclamation Mr. Dahlstrom stated Mr. Paeter Garcia met with the US Bureau of Reclamation representatives on November 28, 2017 to discuss the 2020 Water Service contract options. He explained that the District has previously asked the USBR what contracting options are available, including individual agency contracts, multiple agencies signature contract, separate contract with the County, etc.; however, there has been no response to date from the USBR. He indicated that it was requested that the US Bureau explore any and all alternatives and follow up with a meeting in Sacramento or Fresno. He reported there was no new information on the Transfer of the O&M Cachuma Transferred Project Works Contract. B. Cachuma Operation and Maintenance Board - Extension of October 2, 2017 Tolling Agreement to March 30, 2018 The Board packet included an executed copy of the Extension of Tolling Agreement between Cachuma Operation and Maintenance Board and SYRWCD, ID No.1. Mr. Dahlstrom reported an extension of the Tolling Agreement between Cachuma Operation and Maintenance Board and SYRWCD, ID No.1 was approved by the District s Board of Trustees at the November Board meeting to provide for continued discussions between the District and COMB principals. He indicated that the Tolling Agreement has been executed by Legal Counsel for each agency extending the Tolling Agreement to March 30, 2018. December 14, 2017 Special Meeting Minutes Page 9 of 11

XII. REPORTS BY THE BOARD MEMBERS OR STAFF, QUESTIONS OF STAFF, STATUS REPORTS, ANNOUNCEMENTS, COMMITTEE REPORTS, OBSERVATIONS AND OTHER MATTERS AND/OR COMMUNICATIONS NOT REQUIRING ACTION: Mid Pacific Regional Water Users Conference January 17-19, 2018 Mr. Dahlstrom reported that the Mid Pacific Regional Water Users Conference is scheduled for January 17-19, 2018. He asked that any of the Board members interested in attending to contact Mrs. Martone so that registration and travel arrangements could be made. The Board packet included a December 4, 2017 letter from ACWA/JPIA including Certificates of Special Recognition for members that have a Loss Ratio of 20% or less in either of the Liability, Property, or Worker s Compensation programs. The Board packet included a November 23, 2017 letter from Mr. S. Harper. The Board packet included a December 5, 2017 letter from Santa Barbara County Fire Department regarding Andersen, Single Family Residence with Fire Protection. Mr. Dahlstrom explained the SB County Fire Department has adopted a policy that conflicts with District policy. Mr. Dahlstrom explained that he would be following up with the Fire Marshall to discuss this matter. Mr. Dahlstrom reported that the recruitment for the Operations Foreman position has been completed and the position has been filled. He reported the District has hired Mr. Richard Armstrong who has experience in working for a private mutual water company, as well as a public water utility. He explained that Mr. Armstrong s start date is January 15, 2018. The Board packet included the Family Farm Alliance Monthly Briefing for November 2017. XIII. APPROVAL OF ACCOUNTS PAYABLE: The Warrant List was provided in the handout material for Board action. The Warrant List covers warrants 21048 through 21110, for the time period of November 15, 2017 through December 14, 2017 in the amount of $396,840.32. It was MOVED by Trustee H. Burchardi, seconded by Trustee M. Burchardi, and carried by a 5-0-0 unanimous voice vote, to approve the Warrant List as presented. XIV. XV. XVI. REQUESTS FOR ITEMS TO BE INCLUDED ON THE NEXT REGULAR MEETING AGENDA: There were no requests from the Board. CORRESPONDENCE: GENERAL MANAGER RECOMMENDS THE ITEMS NOT MARKED WITH AN ASTERISK (*) FOR FILE: The correspondence list was received by the Board. NEXT REGULAR MEETING OF THE BOARD OF TRUSTEES: Mr. Dahlstrom stated the next Regular Meeting of the Board of Trustees is scheduled for January 16, 2017. Discussion ensued regarding the availability of the General Manager due to the Mid- Pacific Regional Water Conference and rescheduling the date of the Board Meeting. The Board determined the Regular January 16, 2017 meeting will be cancelled and rescheduled to a Special Meeting on January 15, 2018 at 3:00 p.m. December 14, 2017 Special Meeting Minutes Page 10 of 11

XVII. CLOSED SESSION: The Board reconvened to closed session at 6:20 p.m. to continue discussing agenda items XVII. A. B. & C. A. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION [Subdivision (d)(1) of Section 54956.9 of the Government Code] 1. Name of Case: Adjudicatory proceedings pending before the State Water Resources Control Board regarding Permits 11308 and 11310 issued on Applications 11331 and 11332 to the United States Bureau of Reclamation and complaints filed by the California Sport fishing Protection Alliance regarding the operating of the Cachuma Project and State Board Orders WR73-37, 89-18 and 94-5; and proposed changes to the place of use of waters obtained through aforementioned permits for the Cachuma Project 2. Name of Case: Adjudicatory proceedings pending before the State Water Resources Control Board regarding Permit 15878 issued on Application 22423 to the City of Solvang regarding petitions for change and extension of time and protests to the petitions B. CONFERENCE WITH LEGAL COUNSEL POTENTIAL LITIGATION Potential initiation of litigation against the agency [Subdivision (d)(2) of Section 54956.9 of the Government Code 1 case] 1. Cachuma Operations and Maintenance Board; Membership and Assessments C. CONFERENCE WITH LEGAL COUNSEL POTENTIAL LITIGATION Potential initiation of litigation by the agency [Subdivision (d)(4) of Section 54956.9 of the Government Code 1 case] XVIII. RECONVENE INTO OPEN SESSION [Sections 54957.1 and 54957.7 of the Government Code] The Board reconvened to open session at 7:15 p.m. Mr. Paeter Garcia, District Legal Counsel, announced that there was no reportable action as a result of the Closed Session. XIX. ADJOURNMENT: Being no further business, it was MOVED by Trustee Joos, seconded by Trustee Walsh and carried by a unanimous 5-0-0 voice vote, to adjourn the meeting at 7:15 p.m. THE DECEMBER 14, 2017 SPECIAL MINUTES WERE APPROVED AT THE SPECIAL MEETING ON JANUARY 15, 2018. December 14, 2017 Special Meeting Minutes Page 11 of 11