SLVWD Board Meeting Summary
November 7, 2024
Mark Dolson
Highlights:
Vandersteen Invoice Approval
Multiple Variances Report
Finance Status Report
FEMA Grant Update
Quarterly Status Reports
Next Board meeting will be at 6:30 PM on November 21, 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. Nicole Launder Berridge of Bracken Brae thanked Interim General Manager John Kunkel for meeting with her today about the consolidation, Director Smolley for the detailed agenda, and Engineering Manager Garrett Roffe for all of his effort over the past two months – she appreciated the shift and the openness of the discussion today and felt welcomed into the process. The Bracken Brae president and a Bracken Brae board member participated, and they look forward to the next meeting and to making progress.
Bruce Holloway of Boulder Creek congratulated the two appointed incumbent board members (Directors Layng and Largay) who were elected this week.
Unfinished Business
None.
New Business
Vandersteen Invoice Approval
Interim General Manager John Kunkel introduced this agenda item. He reported that VanDerSteen Engineering had invoiced the District for work on the Bull Creek raw water pipeline performed and completed in late August and early September as part of the 2023 storm damage covered by FEMA.
There was no public comment. Director Smolley moved to approve the invoice to VanDerSteen engineering in the amount of $32,205.32 for work performed on the Bull Creek raw water pipeline. President Hill seconded.
The motion passed 5-0.
Director Largay added that it would be helpful in the future to reference the applicable District policy and procedure in the Staff memo.
Multiple Variances Report
Finance Consultant Heather Ippoliti introduced this agenda item. She said the Customer Service Department completed its annual review of the accounts given a variance from Multiple User Status, as provided in Ordinances 43 and 47. Those who qualify for the exemption are charged the $48.04 monthly basic fee (5/8” meter), while those without a multiple user variance are charged a $72.56 monthly basic service fee (1” meter). Seven accounts were removed from the variance list as a result of the Staff review.
Director Largay said he was assuming that this was a routine matter, but it would be helpful in the future to reference the relevant standard policy or procedure in the Staff memo.
There was no public comment. Director Layng moved to adopt the resolution approving the one-year variance for multiple user status for the listed accounts. President Hill seconded.
The motion passed 5-0.
Finance Status Report
Finance Consultant Heather Ippoliti introduced this agenda item. She said the report contained financial information for the year ending June 30, 2024 and for the month of July 2024. She said most of this information was previously included in the last Quarterly Report, but she still expected some further revisions, particularly since the Fiscal Year 2023-24 audit is not complete, and auditor prepared closing entries are anticipated.
Director Fultz said he appreciated the information, but he noted that it was now November, and he hoped that, going forward, information would be able to be provided more promptly. He said he was particularly concerned about loan and cash status.
Director Smolley noted that unspent debt proceeds were shown as being just under $3 million, and he asked when these were expected to be spent. Heather explained that there are three projects in progress that will do this. She said she had a plan to maximize the debt proceeds for the allowed projects and also to use the Fire Surcharge funds. She was balancing these to avoid using reserves when other funds could be utilized. She expected these projects to be fully closed out by the end of November. She said there were four or five projects that will use 100% of the debt proceeds, but there was about a 30-day delay before these could be paid out.
There was one public comment. Karen Vitale of Forest Springs recalled that $1.4 million approved to be spent for consolidation in July 2024 was to come from debt proceeds. She asked if Heather was now planning to spend down this money and not reserve it specifically for the consolidation project. Heather said Karen was referring to new debt proceeds that the District had decided not to move forward with. The consolidation project needs to be paid for from reserves. Karen said she wanted assurance that the $1.4 million would still be available if needed. President Hill said there wasn’t yet sufficient information available to address this.
FEMA Grant Update
Finance Consultant Heather Ippoliti introduced this agenda item. She said she just wanted to provide an introductory report based on a conversation she had with APTIM, the FEMA claim consultant that the District hired in October 2023. Officially, FEMA is the grantor, CalOES, or the State of California is the grant recipient, and the District is the applicant, or sub-recipient. Once CalOES receives and approves a reimbursement package it usually takes up to six months to receive payment.
FEMA distinguishes between “small” and “large” projects based on their total eligible cost, with the dividing line typically somewhere around $1 million. Small projects typically use simplified procedures, which can streamline the application and funding process, reducing the administrative burden on applicants. Large projects require more detailed documentation and are funded based on actual costs as the project progresses. For large funded and approved large projects, all support, invoices and proof of payment must be provided prior to reimbursement, and there are multiple conditions to comply with, including environmental and historic preservation, hazard mitigation, and insurance considerations.
Project Stages include the following:
• Obligated - FEMA obligates funds to the Recipient based on the eligible total of an approved project. The Recipient then disburses funding to the Applicant / Sub-Recipient (SLVWD).
• Pending EHP Review – review of all documentation to ensure document integrity, quality assurance, and compliance with all laws and regulations including for duplication-of-benefits from insurance or other Federal Agencies.
• Pending Final FEMA Review – review of the project application to ensure completeness, eligibility, and compliance with all applicable laws, regulations, and policies on items such as contracting.
• Pending Initial Project Development – development of the damage description and dimensions (for work completed / fully documented projects only), scopes of work (if not provided by the Applicant), including hazard mitigation proposals, and costs for each project.
• Pending PDMG Scope & Cost Routing – Program Delivery Manager review.
• Pending Recipient (CalOES) Final Review – Final review by grant recipient.
The District has 25 projects valued at almost $16.7 million in various stages of approval. Fifteen projects valued at $1.4 million are at the “Work Completed / Fully Documented / Obligated” stage. Of these, the District has received full payment on four projects totaling $860,286, with an estimated $486,000 outstanding.
On Monday, October 21, 2024, APTIM reached out to CalOES as to the status of the outstanding payments, and received the following response in return, “Due to the unusually high volume of obligations received from FEMA, the Financial Processing Unit has been experiencing delays in processing time. We are working to process all obligations as quickly as possible in the order they have been received. Unfortunately, because of this we are currently unable to give any estimates as to when processing will be complete.”
Director Fultz suggested that it would be really helpful if the report could also show next steps for the projects that are not yet “Obligated,” and who is responsible for each. He said the District was essentially being asked to serve as the State’s banker by waiting six months to get paid, and it wasn’t clear what it was going to take to actually receive the funds. He recommended that the District request legislative assistance, and he recommended that Interim General Manager John Kunkel treat this as a high priority. President Hill agreed but noted that the District had previously had even less information on this front.
Director Smolley agreed. He also wanted additional information to help the District to understand how long it was going to be carrying these costs, and to plan accordingly. It appeared that the District was sometimes waiting for three years. The District should also be cognizant of this risk before taking on any new FEMA projects. He was also concerned about the potential for claims to be denied.
Directors Largay and Layng both appreciated the report. Director Largay suggested that a glossary would be helpful for decoding acronyms and specialized terms. He agreed that a clear description of the workflow would also be valuable.
Quarterly Status Reports
With regard to the Engineering Report, Director Smolley commended Staff for completing the work on Brookside Drive using internal resources. He recently walked this area and saw three new fire hydrants. Director Fultz agreed and asked for further details on various tank projects. Engineering Manager Garrett Roffe explained that Geotech drilling had been completed at all sites and that full reports had been received for Eckley and Highland. He said tank rehabilitation refers to sandblasting, recoating, and repairs. Some of this work is on hold for budget reasons. In other cases, there are still pending design issues. Director Fultz reiterated his longstanding concerns about tank maintenance.
With regard to operations, Director Fultz noted that the ability to use Fall Creek water in other parts of the District was proving highly beneficial. He had a quibble with separate reporting for Lompico. He also appreciated that the District was in compliance with regard to flow requirements. Director Layng was happy to see that bypass requirements were being met at Fall Creek. She also had a question about outlier data; this turned out to be due to measurement error. Director Largay suggested that it would be helpful to show the correspondence between these projects and those in the 2021 Master Plan. He also requested further detail regarding the Huckleberry Island project.
There were three public comments. Bruce Holloway of Boulder Creek asked if engineering plans for the Peavine Pipeline were being done in-house. Garrett said he would like to do this all in-house if it proves feasible. He thought work might be able to start this coming summer. Director Largay reminded everyone about the potential for trees to continue falling over the course of the project.
Nicole Launder Berridge of Bracken Brae asked if the FEMA 2021 Project in the Eckley Zone was the same one that was being discussed in conjunction with Bracken Brae. She said if this project was still being pursued with FEMA, that grant could be used to support an alternate plan, enabling the money to be reallocated toward a pump station. Garrett said he had seen the Sandis plans for the design of the mainline, but he hadn’t seen any plans for the pump station or any improvements at the tank site. His understanding was that if the District builds a pump station for the consolidation project, then neither a pump station nor a tank would be needed at the Eckley Zone. Hence, the money was actually going to build the mainline.
Karen Vitale of Forest Springs echoed Nicole’s comments with regard to how to utilize the available funding, given that there was such an overlap with the consolidation project. She offered her vote of confidence on trying to find a way forward that allowed the pump station to be built.
Consent Agenda
There were five items on the Consent Agenda:
a. Board Minutes from 10.17.24
b. Board Minutes from Special Meeting 10.22.24
President Hill moved to approve the Consent Agenda. Director Layng seconded.
The motion passed 5-0.
Written Communications
There was a letter from Debra Loewen seeking to initiate a conversation on two areas for improved communication: the Ratepayer Assistance Program (RAP) and fire-fighting readiness. Her complaint about the former was that the District was not being forthright about having hit its budget ceiling for enrollment in the RAP. Her complaint about the latter was that fire-fighting readiness had improved since the 2021 Master Plan was written, and public comments during the recent campaigns failed to take this into account.
Director Fultz took this opportunity to suggest that speculative statements by Board members about inadequacies in the District’s fire-flow capabilities could have an adverse impact on home insurance. Director Largay pointed out that the 2021 Master Plan states that the majority of the fire hydrants in the system are unable to meet pressure requirements under fire flow conditions, and there are almost 30 miles of substandard pipelines, only a small fraction of which have been replaced. He described this as very disconcerting and not at all speculative.
President Hill said he would introduce a resolution at the next meeting to amend the budget to allow the RAP to continue to serve new applicants.
The meeting was adjourned at 7:25 PM.