SLVWD Board Meeting Summary
February 18, 2021
Mark Dolson
Highlights:
Fire Management Plan under development.
Redwood Tank property acquisition hits snag.
Board Policy Manual update proving contentious.
Multi-year budgeting process initiated.
Grand Jury response refined.
Next Board meeting is at 6:30 PM on March 4.
Preliminaries:
There were no actions to report from closed session and no non-agenda-related public oral communications. Agenda Item 11a (Appointing Members to the Lompico Assessment District Oversight Committee) was deferred to the upcoming March 4th meeting so that a last-minute applicant can be included on the list of potential appointees.
Old Business
Fire Management Plan
Environmental Planner, Carly Blanchard, introduced Jason Moghaddas of Spatial Informatics Group and Caitlin Gilleran and Tania Treiss of Panorama Environmental. SLVWD Staff began working with Panorama in March 2020 on a Fire Management Plan to expand mapping, create fuel reduction projects, identify funding sources, improve road access for fire personnel and improve communications with Fire Prevention Agencies. The initial draft was targeted for September 2020, but emergency response to the August CZU Fire took precedence. Panorama provided invaluable support during the fire, helping Staff to minimize water contamination by providing real-time fire mapping overlaid on District infrastructure and creating an efficient way to coordinate with CALFIRE, the County, and various state agencies. The Fire Management Plan is currently under development, and Staff and Panorama are seeking feedback from the Board and the public before moving forward.
Jason said the worst-case scenario for the SLV is now a fire coming from lower down and moving uphill from east to west. He said the CZU Fire impacted the forest most severely west of the crest of Ben Lomond Mountain. A lot of the District’s land was on the eastern, less intense edge of the fire. There were some high-severity patches north of Clear Creek, mostly involving tan and scrub oak. In some of the low-intensity areas, such as near Bennett Springs and Felton, the fire could be considered beneficial, as it removed fuels but left the canopy. There are still high levels of fuel load outside the CZU burn zone in areas served by SLVWD east of the San Lorenzo River. Moving forward, he said the focus should be on lessening unnaturally high fuel loads (to reduce fire intensity and potential impacts) and on increasing fire resilience.
The draft Fire Management Plan will discuss post-fire recovery treatments (hazardous tree assessment and removal; revegetation and reforestation; debris flow and other erosion-control work), future-fire mitigation steps (creating defensible spaces near infrastructure and neighbors, along roads, and via prescribed burns; structural improvements to water tanks, pump houses, and above-ground pipelines), and long-term management options (coordinating with the state on voluntary carbon management and exploring commercial timber harvesting, though the latter is probably not practical due to fee restrictions and access issues). The Plan will also discuss environmental compliance strategies (both at the individual project level and more broadly for suites of projects) and teaming and funding opportunities (including the Santa Cruz Mountain Stewardship Network, the Santa Cruz County Resource Conservation District (RCD), the Santa Cruz Fire Safe Council, and CAL FIRE).
The Panorama presentation was followed by an initial round of comments and questions from Board members. Director Henry wondered what individuals can do to help clear their property and how they can team up with others, as many people lack the knowledge and/or funds to take action. Jason advised looking to the local Fire Safe Council and RCD. In the next year, the state is pushing more money toward local organizations. Groups of 3-5 homeowners working together can be more effective for seeking support. Also, the County will be taking down hazard trees for the next 2-10 years. Carly added that the Fire Safe Council and RCD have received funding and are helping. Links are on the District’s website.
Director Smolley asked when the Plan will be completed. Jason said they are looking for a solid draft by the end of April but are trying to proceed incrementally with interim review. Director Smolley also asked whether Carly needed help seeking funding? Carly said she is on the Fire Safe Council Board, and the District is a member of the Mountain Stewardship Group. This keeps it aware of opportunities. Actual grant writing is more time consuming. The District is hoping to take projects directly from the Panorama Report. There is also an RFP out for a consulting grant writer. Director To said Director Smolley’s questions were the same as hers.
Director Fultz said he was glad Panorama had been able to help during the fire, and he also applauded former Directors Farris and Moran for their role in promoting the partnership with Panorama. He also had a number of questions. First, he asked for the latest status on the voluntary carbon market. Jason said the voluntary market is forming in response to the complexity of the compliance market. The voluntary market lets multiple smaller landowners aggregate into one project. Landowners are still responsible, though, for managing their own carbon.
Second, Director Fultz agreed that commercial timber harvest was not likely, but he asked Jason for his assessment of the overall health of our forest. Jason described it as incredible. He said the fire did a lot of good on the ground. The redwood forest is in good shape, but Douglas Firs were affected by the fire, and Tan Oaks have significant disease.
Lastly, Director Fultz asked how long funding would be good for, and he also wanted to know more about forest improvement. Tania and Caitlin said funding would last a long time. A CAL FIRE Forest Improvement Grant allows a proposal to be submitted based on an established checklist of measures. Defensible space is not covered, but thinning is. Director Fultz said he would welcome the inclusion of more specifics about this in the Plan. He said he particularly cares about protecting critical infrastructure and helping the District’s neighbors.
Two members of the public commented as well. Larry Ford was highly impressed with Panorama’s work and thrilled that they were able to help during the fire. He congratulated Carly, Rick, and other staff for pulling this together and said he would like to be on a review committee for the Plan as it is completed. He noted that he didn't hear mention of water flow (to hydrants in neighborhoods) or staff readiness, and he also reinforced the distinction between what is important to the District and what is needed in the valley as a whole. There is a lot of fear for the east side of the river when the fire season starts. Evacuation is a County responsibility so the District needs to reach out to them. Landscape-scale fuel reduction is also a County responsibility. Jason said Panorama lacks hydrology expertise. He advised the District to work with Zonehaven on evacuation.
Former Director Lew Farris observed that the District has a number of dirt roads and asked if these could be converted to effective firebreaks or access routes. Jason said the first step is to get these to where fire engines can drive on them (but this must be balanced with increasing potential for undesired use for recreation). The second step is clearing alongside the road. In general, the idea is to work outward from existing infrastructure (rather than building a fuel break in the middle of nowhere).
The discussion concluded with a few final comments from Board members and Staff. Director Smolley agreed that the priority is to focus on existing infrastructure and things that can be done quickly with limited funds. Director Fultz emphasized the need to be very focused in spending. District Manager Rick Rogers added that Larry Ford, Lew Farris, and Rick Moran all should be commended for doing a lot of work to get this planning process started. He said satellite imagery maps made a huge difference in limiting contamination during the fire because the smoke was far too thick to see where the fire was.
Naccari Property Purchase
This agenda item concerned a piece of property that the District agreed to purchase from Nick Nacarri in the spring of 2020 so that the District would have a superior location to construct the Redwood Park Tank to replace the leaky and inadequate Swim Tank along Dundee Avenue in Ben Lomond. The District valued the land at $9,500, but Mr. Nacarri attached a much higher value to it. The District settled on a purchase price of $88,000 and justified this partly on the belief that the neighborhood urgently needed a superior water supply and partly on the expectation that there would be no further significant costs or delays.
The environmental review was successfully completed, but title diligence revealed there was no written agreement for the property transfer to Mr. Nacarri, meaning the District would not be able to obtain title insurance and would be potentially exposed to future litigation. District Counsel Gina Nicholls confirmed this was a serious issue and that the District has been unsuccessful in facilitating any agreement between the prior owner and Mr. Nacarri. The purchase and sale agreement expires this month. Before giving notice that the agreement has terminated, Gina proposed that the District make one final written offer partitioning the $88,000 between Mr. Nacarri and the previous owner. Otherwise, the District might turn to eminent domain.
Mr. Nacarri was in the audience, and Directors Fultz and Henry each made individual pleas for him to take responsibility for the lack of clear title and to be more flexible in working with the District on behalf of his neighbors. Director Fultz noted that he had objected in 2020 to the premium price, but the Board had justified this based on the savings due to a quick purchase.
Mr. Nacarri said his interest from the beginning was in benefitting his community, and that the lady who sold the land to him is refusing to sign anything, ostensibly out of a concern for the trees. He said he had offered her a few thousand dollars, and the District was free to offer her much more, but that the District still needed to pay him his $88,000. He was also highly critical of District Manager Rick Rogers in a manner that President Mahood and, subsequently, Director Henry reproved him for.
The Board was generally unhappy with the situation and did not offer any alternative to Gina’s proposed next steps.
Board Policy Manual Update
Legal Counsel, Gina Nicholls, explained that this agenda item is coming back to the Board for the third time. The first discussion (December 16, 2020) culminated in a plan to obtain Board feedback and input. At the second discussion (January 21, 2021), Directors were asked to comment individually in writing on the proposed revised text so their input would be publicly available and convenient to act on. The purpose of the current discussion is to provide Staff with Board direction on the consensus modifications and to check for any others. The resulting text will come back to the Board a fourth time for final approval.
President Mahood first sought to clear up some confusion concerning the responses by Directors To and Smolley to items #22 and #23. This was quickly resolved.
Director Fultz had already read a lengthy statement on January 21st in which he argued against prioritizing efficiency over thoroughness in the Board’s deliberations. He now expanded further on this theme with a particular emphasis on community involvement. He said the policy changes introduced after the 2018 election reflected a community consensus that the Board had been treating the community inappropriately. This impression was reinforced by the contemporaneous Grand Jury Report (which focused especially on the Lompico situation). The Board empaneled at the end of 2018 made it clear that it considered the Brown Act requirements as the floor in terms of transparency. It increased the time limit for individual public comment to five minutes in order to communicate that the public, the Board’s bosses, would be given ample speaking time rather than being routinely cut off. He described the newly proposed revisions as basically rolling back the post-2018 innovations and the associated promise to the community. He argued that “an arbitrary notion that meetings can be no longer than X, Y, or Z runs afoul of letting everyone be heard from on contentious issues,” and he described rolling this back as abhorrent to him. In his view, having a time clock sends the wrong message to the community as 99.99% of the people that the Board hears from don’t take that long. He strongly urged Board members to reconsider and not move forward with the recommended changes on these items. He added that, in his opinion, some changes attempted to restrict the degrees of freedom that a Board member may take in serving the community. He characterized this as the wrong thing for the Board to do in an attempt to micromanage Board behavior. Instead, he suggested that the Board should understand that all members will occasionally make mistakes and should forgive this. His position was that the Board should not be trying to stop legal Board activity.
President Mahood responded, saying she understood the post-2018 changes, but more recent meetings have not exhibited the issues that prompted these. She suggested that it is perfectly possible to listen to everyone and to also be efficient and further said she would let someone exceed three minutes if they were in the midst of meaningful input. She noted that many other boards have three-minute limits as well. Also, really long meetings are hard on Staff, on Board members, and especially on younger members of the public with families. She agreed with going ahead on the changes but suggested that it will be easier to address some of the wording when the Board gets the new version to review.
Public input mostly focused on supporting the objective of making meetings shorter. Joni Martin said a three-minute time limit actually helps people to prepare their public input. Jim Mosher noted that some of the people who lengthen the meeting by going on excessively and repeating themselves are Board members rather than the public. Elaine Fresco said lengthy meetings had sometimes prevented her from being able to comment on agenda items that only came up toward the end of the meeting after she had already had to leave.
Former Director Rick Moran read a statement relating to the Ethics and Conduct portion of the Board manual. He noted that the Board paid almost $10,000 in July 2002 for a 7-hour training, and he cited a few take-away messages: the Board Policy Manual has many rules relating to managing contentious issues, and the Board should annually review good governance practices.
Director Fultz drew a distinction between private-sector boards (which, he said, value efficiency) and public-sector boards (which, he argued, are not intended to be efficient). He further suggested that allowing exceptions to time limits on public input could be interpreted as favoritism and that removing or extending the limit would prevent this. Lastly, he urged the Board not to be influenced by the behavior of other boards, saying that “innovation is not doing what everyone else does; we [innovated] pretty well for a couple of years, and I'm sorry to see that we won't be doing this going forward.”
President Mahood responded that many of Director Fultz’s arguments are hypotheticals. She urged the Board to focus on what actually happens, and she agreed with a comment by Director Henry that Board meetings have become much less contentious since 2019. Directors Smolley and To concurred with the public input above.
Lastly, President Mahood asked if any Director would like to see additional changes. Director Smolley requested one minor clarification about who takes the minutes for committee meetings. After some confused discussion, the Board agreed that the Committee Chair should have formal responsibility for the minutes but should be free to delegate the task.
New Business
Budget Process for Fiscal Years 2021-2023
Finance Manager, Stephanie Hill, explained that the District is transitioning to a multi-year budget beginning with a two-year budget for the upcoming fiscal year and its successor (FY 2021 runs from July 1, 2021 through June 30, 2022). This can reduce the total amount of time devoted to budget preparation and also encourages more strategic thinking. A lot of agencies prefer to start these cycles in odd years so as to avoid elections. This new process does take more effort in the first year, though, and there is also a risk that too much time may be devoted to mid-cycle reviews and adjustments.
Stephanie provided a brief overview of the revised process: Ideally, the Strategic Plan guides a five-year plan which guides the biannual budget. The District is still working on its Strategic Plan (and Capital Master Plan), so it will have to initially base its budget planning on the District Manager’s approved goals and objectives. Budgets may be assembled and validated using a combination of four standard methods: (a) incremental adjustments to the figures from previous years, (2) bottom-up estimates of required expenditures for new initiatives, (3) top-down allocations based on previous experiences and goals, and (4) cost-benefit calculations for various value propositions. For the 2021-2023 budget, Staff is likely to assume a 2% reduction in water consumption (based on historical trends) and increased expenses related to PG&E Public Safety Power Shutdowns and CZU Fire recovery. Staff headcount and opportunities to reduce unfunded employee benefit liability ($4.2 million for pension and $2 million for Other Postemployment Benefits) are still being assessed. The full scope of deferred maintenance is also still being determined. Stephanie is expecting reviews to take place in March and April with a draft to be completed in May and adopted in June.
All the Directors appreciated the transition to a multi-year budget. Director Fultz reiterated many of his previously-stated concerns about the importance of better quantifying the District’s capital obligations.
Directors Smolley and To both wanted to better understand how the process would move forward in the absence of the Strategic Plan. Director To also asked about the 2% assumed reduction in consumption. Stephanie explained that this was similar to what the District has seen in recent years. She also said there would be a small reduction (due to the fire) in number of homes served (about 100), but the impact on the budget should be less than $100,000 (as many of the home sites have been reconnected and will be using water in the future).
District Manager Contract Review
Legal Counsel, Gina Nicholls, introduced a proposed contract addendum to extend the contract of the District Manager, Rick Rogers, by three years and to discuss a possible transition at the end of the third year. The options for the Board were either to approve or it to appoint a negotiator.
The Board was unanimous in wanting to retain Rick Rogers for as long as possible, and there was no public input. The motion to approve passed 5-0.
Grand Jury Response
Legal Counsel, Gina Nicholls, explained that the District went through a Grand Jury process in 2017-2018 resulting in a report in the summer of 2018. In its response, the District accepted the Grand Jury’s recommendations and indicated that it was in the process of implementing these. The District received a follow-up inquiry in 2019 asking for status, and the District responded in detail in June 2019. The Grand Jury is now requesting a further update, due by February 25, 2021, and a draft response has been prepared. Gina asked the Board to either approve this, revise it, or direct Staff to request an extension for the purpose of bringing a revised draft back to the Board for further consideration at a subsequent Board meeting.
The Board expressed concern about the minimal response to the first item in the report, “R1,” recommending “Lompico Assessment District Oversight Committee (LADOC) should produce an annual report detailing the status of Assessment District revenues and expenditures.” There was some dispute about when the next LADOC annual report is due and whether it would continue to produce one. There was also a question about “R6,” “The District should provide formal training about assessment districts to LADOC members and all others involved in the administration of the Assessment District.”
Director Henry explained some of the difficulties LADOC encountered in the past year. Further elaboration was provided during public comment by Toni Norton, the LADOC Chair. Toni said the committee had a difficult beginning due to problems with the District Manger who preceded Rick Rogers. After this was resolved, LADOC established plans to be on time, but these were disrupted by Covid and the CZU Fire. She said the committee should now be able to complete the report relatively quickly. Also, it was very difficult to find anyone to deliver the suggested training. Rick Rogers finally found a provider, but then Covid hit. She thought the Grand Jury would want to know this and would then want the committee to move forward.
Rick Rogers noted that LADOC membership will be brought to the Board at the next meeting, and the Board will consider applications from four people.
President Mahood summarized the Board’s sentiment, directing Counsel Nicholls to request an extension from the Grand Jury and make revisions to the response to be considered at a later meeting.
Consent Agenda
Director Fultz had a question about item 12a relating to the choice of a provider for Audit Services. He asked if the recommended company, Fedak and Brown, submitted the lowest bid. Finance Manager, Stephanie Hill, said they were the second lowest of the five bids. The Budget and Finance Committee ranked all five bids, and Fedak and Brown was ranked first by all committee members because the lowest bidder had no water district experience, and the small difference in cost ($10,000 over five years) would be more than exceeded by extra staff time to bring on a new company. Director Fultz suggested that it would be helpful to include a summary table to make the decision process more transparent. He said one of his concerns is trying to get new people into the process unless there is some compelling reason not to. Stephanie responded by noting that continuity is beneficial and that this agency will also handle the Santa Margarita Groundwater Agency (SMGWA) work, which they have already been doing.
Director Fultz had a question about item 12c (Board Meeting minutes for January 7, 2021). He wanted to know where the District stood in fulfilling its commitment to ensure that all committee members receive Brown Act and Ethics training. Rick Rogers said no answer was available at this time. Director Fultz asked that this be brought back to the Board.
Director Fultz asked the Board to remove item 12e (Board Meeting minutes for February 2, 2021) until he can listen to the recording. He wanted to make some amendments so that the minutes would more accurately capture what he was saying about the Fire Recovery Surcharge. President Mahood agreed to remove it.
The Board voted 5-0 to approve the Budget Committee’s recommendation of Fedak and Brown.
The Board voted 5-0 to approve the January 7, 2021 Board Meeting minutes.
District Reports
Director Smolley had a question for Engineering Manager Josh Wolff. Secretary Holly Hossack explained that Josh had been inadvertently omitted from the Board meeting. Rick Rogers said Josh would be happy to answer any questions directly via email.
Director Smolley asked what level of activity triggers the CEQA Mitigated Negative Declaration as opposed to just declaring an exemption. Environmental Planner, Carly Blanchard, explained that the District made an exception and did not declare an exemption for the Quail Hollow pipeline project (discussed at the previous Board meeting) because they wanted to be extra careful in view of the sensitive Sandhills habitat.
Director Fultz said he considered what Carly is working on to be very strategic. He encouraged her to modify her current report format to bring more emphasis to her top 3-5 priorities via a table for the Board. For other things, the current format is fine. He also recommended mentioning that Lois is the alternate Board member for participating in SMGWA. He said his top priority is getting capital improvements in the ground as soon as possible.
Director Fultz asked Finance Manager, Stephanie Hill, about a spike in consumption in January. Stephanie said there were a lot of main breaks the week before the storm, and there was a subsequent dip during the evacuation.
Director Fultz asked Finance Manager, Stephanie Hill, about accounts in arrears for 30-60 days. He wondered why the number in December climbed back up to the October number. Stephanie said the holidays routinely lead to higher numbers. The District actually saw a jump in people paying off accounts that were more than 120 days in arrears. Director Fultz also suggested a relabeling to improve the clarity of the report.
Committee Reports
Director Mahood read an email she received from Mark Dolson, a public member of the Administration Committee. Mark wrote, “The Brown Act mandates that the Board Meeting Packet be made publicly available in advance of Board meetings, but the descriptions and back-up material in this packet have historically been targeted primarily at Board members with the goal of enabling them to come to Board meetings adequately prepared to productively discuss agenda items. In our modern world, as illustrated by the public response to the February 4th Board Meeting Packet, this information release can also trigger viral reactions on social media where misinterpretations and speculations about pending agenda items can rapidly assume a life of their own. It might be worthwhile for the District to develop updated guidance for the preparation of Board Meeting Packets in order to minimize the potential for unnecessary public confusion and alarm.” President Mahood concurred and proposed that the Administration Committee agendize updated guidance for preparation of Board Packets.
Director Fultz (Chair of the Administration Committee) said this was part of a broader issue. He said it could be agendized, but asked what priority it should be assigned. President Mahood said it was possible for the Committee to work on more than one issue at a time, but how he wanted agendize it was up to him.
The meeting was adjourned at 9:40 PM.