SLVWD Board Meeting Summary
November 21, 2024
Mark Dolson
Highlights:
Bracken Brae and Forest Springs Consolidation Status
Rate Assistance Program Budget Increase FY 24-25
Monthly Finance Report
Board of Directors Meeting Schedule for January 2025
Next Board meeting will be at 6:30 PM on December 5, 2024
Preliminaries
All five Directors were present.
There was nothing to report from the just-concluded Closed Session.
There were no changes to the agenda.
There were two public comments. Rae Spencer-Hill of Boulder Creek said that, after the CZU Fire, one of the issues raised to the District by the community concerned fire access locks that had to be cut through. There was a presentation as to what universal access locks would cost, and Rae asked the Board to factor an updated cost estimate for this into the upcoming budget. Director Smolley asked Engineering Manager Garrett Roffe to take a note to follow up on this.
Jim Mosher of Felton said Board members had received a letter from 24 ratepayers with the message that the recent election provided a clear mandate to address infrastructure issues. This, in turn, requires that critical open staff positions be filled. Jim said the letter signers urged that this happen as soon as possible and that the District adopt competitive salaries. President Hill said the Board would take this to heart.
Unfinished Business
Bracken Brae and Forest Springs Consolidation Status
Engineering Manager Garrett Roffe introduced this agenda item, beginning with a lengthy review of relevant background.
In 2022, the District learned that the planned development work in support of the intended consolidation with Bracken Brae and Forest Springs would cost $12.8 million, far more than initially estimated. Staff developed a reduced scope of work with Sandis that would allow a portion of the proposed work to be completed utilizing available funds. Initially, the reduced scope of work connected to the new Lyon and Big Steel Zone Pipeline Improvements project at the intersection of Boulder Brook Drive and Highway 236 and ended at the intersection of West Park Avenue and Ridge Drive. The reduced scope of work replaced existing undersized District pipelines that can supply both the consolidating mutuals and also Big Basin Water.
This new proposal had an estimate of approximately $3 million (to be covered by remaining DWR funding and a contribution from the District). The District submitted a letter to DWR requesting approval of the reduced scope of work and a time extension to December of 2025 to complete the construction. DWR said the requested time extension and reduced scope of work would be acceptable if the District included the proposed permanent connection with Bracken Brae in the base bid documents. This connection includes installing the proposed large-diameter transmission main on Caltrans Bridge 36-0009, making the connection to the District’s existing water main at Brook Lane, and connecting to Bracken Brae’s existing water main in Hazel Brake.
On September 27th, Sandis provided updated plans for Phase 1 construction that included the DWR requested permanent connection with Bracken Brae and a bid alternate scope of work to utilize Bracken Brae’s $1.2 million in FEMA funds. The District sought construction bids on October 1st. Three bids were received (for $3,253,580, for $3,293,580, and for $3,494,110). All three prices for the bid alternate exceeded $2 million. Since the Bracken Brae FEMA money is only $1.2 million, the entire bid alternate cannot be included in the contract.
Furthermore, Sandis has indicated the Caltrans encroachment permit has not been issued for the project due to review comments on the proposed bridge crossings. Caltrans has indicated that the District must provide load ratings for the existing bridges with the added water main attached. Sandis has provided a preliminary cost of $200,000 to evaluate the existing bridges and has indicated this effort could take up to a year to complete.
Sandis also suggested that an alternative lightweight steel structure for the water main to span the entire creek without connecting to the Caltrans bridges might expedite the approval process and cost less money.
The District should also consider the additional expenses of construction phase support by Sandis, a labor compliance consultant, a special inspection consultant, District staff time, and potential change orders.
Garrett explained the District’s current options. He said the DWR Regional Manager is okay with the proposal to construct portions of pipeline up to the bridges and to have Sandis proceed with engineering analysis of the bridges at the same time using Small Community Drought Relief Program funding. The District can discuss a funding increase for the additional Sandis costs after they provide their findings. Garrett met with Sandis November 19th to discuss options. The District has an existing 4” water main on one of the bridges. It might install new transmission up to the bridge and connect to the existing main for now. DWR is okay with this.
All of this left the Board with five possible actions:
· Award the construction contract and additional service request to Sandis
· Award the construction contract without the bridge crossing scope of work
· Reject all bids, award an additional services request to Sandis, rebid plans
· Reject all bids, revise plans, rebid new plans
· Reject all bids, stop work
Director Smolley said Sandis is offering two options. He asked if they have given any feel for timing to get to a no-go on either option. What is the dealbreaker on these? Cost, feasibility, permitting? Director Smolley went on to summarize the two available options: (1) add the 12” main to the existing 100-year-old bridge (which would require a lot of assessment to satisfy Caltrans), or (2) construct an independent lightweight structure (which would not require Caltrans approval but which would instead require approvals from four other agencies that regulate stream crossings). He asked when it would be possible to arrive at a go/no-go conclusion on one or the other of these options.
Jeff Setera of Sandis said the analysis required by Caltrans would probably take a month. However, the age of the bridge means there is no documented pathway for approvals. It might be possible to get close to an approval in four months. Alternatively, with a brand-new structure, it would likely take four months to get comments from all four overseeing agencies. Garrett confirmed that $2.5 million of the DWR grant funding has yet to be spent. He said the DWR response indicated that the reduced scope of work can proceed as long as the temporary connections continue to function. They are writing the grant amendment today to extend the time and reduce the scope of work.
Director Fultz predicted that the District could be tied up in bureaucracy for 2-to-3 years. He said he had experience with this, and it was a nightmare. He didn’t see how the District could put the project at any risk of regulatory barriers, and President Hill agreed. Director Fultz clarified that he wasn’t saying not to do any work, just that the District needed to be realistic and anticipate the need for a separately funded project. Garrett agreed that this was possible.
Legal Counsel Barbara Brenner cautioned that revising the plan could necessitate a fresh bidding process. The alternative is to move forward with the identified uncertainties. Director Fultz predicted that the District would not yet have a final answer on the bridge crossing before starting work in April or May. His conclusion was that the District should proceed.
Director Layng asked about the current state of the bridges and the impact of attaching the pipeline. Jeff Setera and Garrett provided technical details. Jeff said there is no indication that Caltrans is considering replacing the bridges. Director Layng speculated that the four regulatory agencies might be willing to fast-track the alternate crossing. She wished it was possible to pursue both options simultaneously, but she recognized that this would be costly.
Director Largay asked if attaching to the bridge was the less expensive option. Jeff said yes. He also said the added load would not be an issue for the bridge itself. It’s just that Caltrans will need to issue a revised load rating for traffic. They may be using the District to fund the acquisition of relevant data that they currently lack.
President Hill asked Garrett for his recommendation. Garrett advised awarding the construction contract and the additional services contract with Sandis to show that the District can use the existing Caltrans bridge. This will allow the District to use the DWR grant funding and get pipe in the ground. If this approach turns out not to be viable, the District can still utilize the existing crossing.
Barbara Brenner advised that the wording of the agenda item did not allow the Board to approve a bid award this evening. She said the Board could direct Staff to continue working in this direction. Director Smolley and then President Hill advised Staff to provide specific documented proposals at a future meeting so that the Board can vote to proceed. Director Fultz and President Smolley praised Garrett for his clear description of available options and his recommendation.
There were two public comments. Karen Vitale of Forest Springs said it seemed like the project had reached a tipping point, and it was now time for action. She endorsed the recommended course of action, as the District would potentially obtain about $4 million of benefit, and it would also be a win for the community, as it builds capacity and helps both Bracken Brae and Forest Springs. In contrast, going out for new bids would be risky. Bracken Brae and Forest Springs very much want to lock in the current pricing.
The President of the Bracken Brae HOA echoed this sentiment. President Hill said the Board would take action when it had a contract proposal in front of it.
Director Fultz said this also raised the question of where Bracken Brae is in the consolidation process. He was hopeful that this could occur before the pipeline is installed. He said the Staff and Board needed to determine what requirements need to be met for the consolidation to be finalized, either fully or with qualifications. He said he didn’t think they wanted to wait until after construction. He thought this would be a great opportunity to come up with specific criteria and options for this and for future consolidations as well. President Hill said he would meet with the Interim General Manager, and Director Smolley said he was already doing so.
Director Largay added that Prop 4 gives DWR $1 billion which it will issue through grants for drinking water and climate resilience projects. Consequently, this is the time to get grant proposals organized. He said there was a backlog due to the state budget disarray over the past year or two. He encouraged the District and committees to engage promptly (and to escalate construction cost estimates because it may take two years to get the money).
New Business
Rate Assistance Program Budget Increase FY 24-25
Finance Consultant Heather Ippoliti introduced this agenda item. She explained that the Ratepayer Assistance Program (RAP) increased in January from $15 to $20 per month. This caused enrollment to max out at 104 customers, given the $25,000 budget limit. Increasing the budget ceiling by $3000 would allow an additional 22 customers to sign up and participate in the remainder of the current fiscal year. She noted, though, that supporting 126 customers in the next fiscal year would require a budget of over $30,000. She said she would bring this issue to the Budget and Finance Committee in December so that the budget ceiling could be revised.
There were four public comments. Rae Spencer-Hill of Boulder Creek said the proposal seemed fine to her. She agreed with the extra step of revising the budget ceiling for the next fiscal year. She also thought more could be done. For example, renters aren’t currently eligible. She recommended an expanded conversation to establish how many customers are eligible, how many are in need, how many know about the program, how accessible the program is, and how much assistance is needed per month. She said the recent election saw widespread agreement that affordability is important and needs to be addressed.
Joni Martin echoed this. She agreed that it might be appropriate to have community examination of this issue, beyond the Budget and Finance Committee discussion.
Jim Mosher of Felton agreed as well. He said he thought the recent election provided a strong mandate for revisiting this issue. He thought this was sufficiently important for it to be examined beyond the Budget and Finance Committee – he recommended either an ad hoc committee or a community assessment convened by the Interim General Manager. He said the Friends of San Lorenzo Valley Water had long advocated for this idea because affordable water is a human right, and SLVWD can be a leader in pursuing this agenda.
In a subsequent comment, Cynthia Dzendzel said she would like the Interim General Manager to hold a public meeting to discuss options. She thought it was important to get input from affected people about what could actually help them, as there are many obstacles to using the current program. She thought the District should start addressing these as soon as possible. She also believed there could be other ways to fund this including fundraising from ratepayers.
President Hill reminded everyone that the issue on the agenda this evening was just to step up the program in the current fiscal year as a stop-gap. He said the larger issues could be explored in the upcoming budget cycle.
Director Layng pointed out that there is a provision for renters buried in the current plan. [However, this provision may be outdated and no longer applicable.] Director Layng said she supported the stop-gap solution, given that water is a human right.
Director Fultz said the original funding for the RAP was specifically from cellular tower income. The Board did not want to tap into property tax revenue which was being used to fund loans. He asked what account the $3000 would come out of. Heather started to explain that, since Prop 218 prohibits the District from using ratepayer revenue, the money would come from unrestricted reserves. The specific source is not specified.
Before Heather could finish her explanation, Director Fultz interrupted her, leading Director Layng to raise a Point of Order in which he said it was important to him that Directors not interrupt Staff when they are speaking, as it impaired his ability to hear their response.
Director Smolley asked how much property tax revenue was available, and Heather said this was much more than $25,000.
Director Largay said he thought this was a great idea. He said it was important to understand the full opportunity to serve members of the low-income community at prices they can afford in advance of the budget process.
Director Fultz offered a statement of principle. He said PG&E has millions of subscribers. SLVWD doesn’t have the scale to offer large rate subsidies. SLVWD should leave this to the State which has so far refused to fund their declaration of water as a human right. He said he had no problem with people getting assistance at this level, but he had a problem with the District providing funding at the level that he expected would be requested by the Friends of San Lorenzo Valley Water.
Director Smolley moved to approve the additional $3000 of funding, and President Hill seconded this. The motion passed 4-to-1 with Director Fultz opposed.
Monthly Finance Report
Finance Consultant Heather Ippoliti introduced this agenda item. She said this report contained financial information as of and for the two-month period ending August 31, 2024, and as of and for the three-month period ending September 30, 2024. It includes cash balances, how funds have been spent, and proceeds as of September 30th.
Director Fultz appreciated the report. He asked what the District does with the Lompico Assessment District funds, given that all projects except for service lines have been completed, and the District unilaterally withdrew support for the service lines saying it was out of funds. Heather said there were still certain projects that this fund contributed to, but she said she would report back with more complete information. Director Fultz said he would like to complete the service line work if funds were available.
Director Smolley asked about a discrepancy between revenue (which was at 24% of budget) and expenses (which were at 30%). Heather said this was due to the annual insurance payment in July. Director Smolley suggested that the District should then explicitly budget for this payment to occur in July.
Board of Directors Meeting Schedule for January 2025
District Secretary Jen Torres introduced this agenda item. She noted that the Board’s first regularly scheduled January meeting falls on the second day of the month, and she suggested that the Board might want to cancel or reschedule this.
Director Smolley asked if Staff was working on January 2nd, and Jen said they were. Director Smolley said he was available.
Director Largay suggested that the Board decide this matter in December. President Hill agreed and tabled this agenda item.
Consent Agenda
There was one item on the Consent Agenda:
a. Board Minutes from 11.7.24
Director Largay moved to approve the Consent Agenda. Director Layng seconded.
The motion passed 5-0.
The meeting was adjourned at 8:00 PM.