SLVWD Board Meeting Summary

February 20, 2025

Prepared by Mark Dolson for FSLVW

NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.

Highlights:

  • FEMA Status Portal

  • APTIM Proposed Agreement Modification

  • Quail Hollow Pipeline Replacement Payment

  • Peavine Raw Water Pipeline Replacement Survey

  • Annual Audited Financial Statements for FY23-24

  • Santa Margarita Groundwater Agency (SMGWA) Agreement

  • Next Board meeting will be at 6:30 PM on March 6, 2025

Preliminaries

All five Directors were present, Director Fultz attending remotely.

There was no report from the preceding Closed Session.

There were no changes to the agenda.

There were five public comments on topics not on the agenda.  Paula from San Lorenzo Park called attention to three dilapidated redwood storage tanks on Echo Lane that are leaking and scheduled to be replaced.  She wanted to know if the new steel tank would be installed prior to the upcoming fire season and whether the current platform would be adequate to support it.  She also suggested that the District might be interested in acquiring the surrounding property, as the home was destroyed by a falling tree and was unlikely to be rebuilt.  President Smolley asked her to share her contact information with Interim General Manager John Kunkel.

Lani Faulkner of Santa Cruz introduced herself to the Board.  She is one of five candidates who have submitted applications to fill two LAFCO seats that will become vacant in May.  SLVWD is one of twenty LAFCO voting districts in Santa Cruz County that have until March 26 to submit their ballots.  Lani described herself as having extensive experience in agriculture, health, medicine, and scientific research (she has a BS and MS from UC Davis).  She said she was passionate about protecting agricultural land and water, and was a former resident of Boulder Creek.

Matthew Ledford of Ben Lomond asked about SLVWD’s role in fire-fighting preparedness (e.g., flushing and painting of fire hydrants, placement of accompanying blue reflectors on roadways, availability of online maps with associated status reports).  President Smolley said the District had an annual flushing program and maps of all the hydrants.  He asked Matthew to share his contact information with Interim General Manager John Kunkel.  Director Hill added that the Fire District installs the blue reflectors.  Director Fultz asked for this information to come back to the Board in the form of a formal report.  He added that the SLVWD system is engineered to fight house fires; it plays only a support role in fighting wildfires.

Mark from Ben Lomond reported that he was being prevented from building a house due to insufficient water pressure for firefighting.  He said the street currently has only a 1” line, and – even though he had found District Engineer Garrett Roffe to be very helpful – nobody was offering any solutions.  He suggested that he might be forced to litigate this matter.

President Smolley said the District is limited by its available funds.  He said the Board was unable to discuss non-agendized items, and that a Staff member would be in touch.  Director Hill added that the District is in the midst of a long-term capital upgrade.

Another member of the public asked how the District prioritizes its pipeline upgrades.  Director Fultz said the District’s highest priority is its major backbone pipelines.  He said neighborhood pipes have typically been prioritized in areas with heavy leakage.  He added that insufficient pressure and insufficient flow are two separate issues.  Pressure depends upon elevation whereas flow depends on pipeline diameter.

 

Presentations

FEMA Status Portal

The presentation was given by Brandon Kanatani from APTIM.  He showed an online portal that had been developed for the District to facilitate tracking of FEMA reimbursements.

Directors Largay, Layng, and Fultz all reported concerns or problems accessing the website.  They were therefore not prepared to comment further on the tool itself.

Director Hill said the Budget and Finance Committee had already received the presentation and provided feedback.  He described the new tracking tool as light years ahead of where the District was previously.

Director Fultz said he was a big believer in dashboards for project tracking.  He asked if this tool was custom-created for SLVWD and at what cost.  Brandon said the tool was specifically devised for SLVWD and that it cost very little to develop.  He also confirmed that the District now owned the tool and was free to use it on its own.

Director Fultz said his larger concern was that there was a lot of attention to process, but he wasn’t yet seeing much in the way of results.  He asked if APTIM was shortening the FEMA payment cycle in any significant way.  His concern was that, if it takes SLVWD five to seven years to be reimbursed, this will dramatically affect the District’s budgeting process.

President Smolley said APTIM had helped the District a lot in getting organized, but he wanted to know how it was affecting reimbursement time.  Brandon said he didn’t have this information immediately on hand.  President Smolley also wanted to know what Staff members, other than Finance Consultant Heather Ippoliti, would use this tool.  Environmental Planner Chris Klier said he would use it occasionally.

There was no public comment.

Unfinished Business

None.

 

New Business

APTIM Proposed Agreement Modification

Interim General Manager John Kunkel introduced this agenda item.   The memo in the Board packet said that APTIM Environmental & Infrastructure, LLC (APTIM) has provided Public Assistance and Disaster Recovery Services to SLVWD since October 12, 2023.  As the scope of grant management activities has expanded, additional funds are necessary to ensure continued compliance, financial oversight, and project execution. This contract modification will cover the extended services required, including:

  • Grant Compliance & Administration: Ongoing support to meet FEMA regulations, reporting requirements, and documentation needs.

  • Financial Management: Additional assistance with budget tracking, reimbursement processing, and financial reporting.

  • Project Coordination & Support: Continued oversight of procurement, eligibility reviews, and required project submissions.

  • Closeout Activities: Ensuring all required documentation is completed and submitted for grant closeout.

The scope of the original contract was significantly more limited.  Currently, SLVWD FEMA grants total over $25 million, and FEMA allows for 5% administration fees to be reimbursed to the applicant.  This modification to add $525,000 in additional funding to the agreement, increasing the not-to-exceed value from $365,121 to $890,121, will allow APTIM to continue providing essential administrative support, ensuring grant activities remain compliant and progress smoothly.

The Directors expressed varying degrees of concern about the proposed increase.  Director Fultz said he couldn’t vote for this until he had a much clearer understanding of the tangible returns and the projected timeline for receiving FEMA reimbursement.  Directors Hill and Layng agreed that it wasn’t clear to them what the District was getting in return for the increased spending.

Director Largay said he wasn’t surprised by the contract or the dollar amount or the Staff recommendation to approve this.  He said dealing with FEMA is extraordinarily burdensome, and it is a valuable service to have specialists working on this.  He viewed this as a cost of doing business with FEMA.

President Smolley noted that the District has already paid APTIM $365,000.  He asked how much of this FEMA had reimbursed the District for and whether APTIM would be willing to wait for FEMA reimbursement before being paid.  Brandon said the District has received $1.7 million from FEMA to date, meaning that it has been reimbursed for $85,000 of its payment to APTIM.

President Smolley asked if the District should consider doing this in-house.  Interim General Manager John Kunkel said he would look into this, but he was skeptical.  He saw this as such a specific skill set that it might be extremely difficult to find an employee who can do this.   Alternatively, the District might try to find another vendor.

Director Hill said his issue was that the memo essentially recommended that the budget should be increased because more money had become available.  It didn’t clearly say what the District would get in return for the additional $500,000, particularly since the current contract only runs until October 25, 2025.  Brandon said this was a not-to-exceed number.

President Smolley said he thought it would be appropriate for Finance Consultant Heather Ippoliti to be directly involved in the next Board presentation on this.  He didn’t think there would be a motion this evening.

There was no public comment.

 

Quail Hollow Pipeline Replacement Payment

District Engineer Garrett Roffe introduced this agenda item.  The Board awarded a $2 million contract to Granite Rock Company in October of 2021 for 7455 feet of new 12” ductile iron water main under Quail Hollow Road with associated fittings, valves, services, and hydrants, abandoning the existing 6-inch water main in-place. Typical roadway restoration within the County of Santa Cruz right-of-way includes slurry seal of the full lane width.  Staff subsequently negotiated with the County to eliminate the slurry seal requirement from the Granite Rock contract and to simply pay the County $59,608 directly.  The County completed the pavement surface treatment on Quail Hollow Road in August 2023.

The Directors were unanimously pleased with the Staff’s money-saving work on this.   Director Fultz added that he had expressed concern in the past about SLVWD doing paving on roads that haven't been adequately maintained.  He cited this is a great example of what the District needs to be doing with the County to minimize its overall cost.

There was no public comment.

President Smolley moved to authorize payment of the invoice to the County.  Director Hill seconded this.

The motion passed 5-0.

 

Peavine Raw Water Pipeline Replacement Survey

District Engineer Garrett Roffe introduced this agenda item.  He reported that the California Conservation Corps crews had completed their hazardous tree removal along the Peavine Pipeline Replacement route (including cutting in a bench along the alignment and cutting in an access trail from Camp Krem).  The next step will include getting a topographic survey done of the area, so that design work can begin on the new pipeline.  A site visit with Staff was required for bidders, given the rough landscape and unusual accessibility.  Each of the three bidding firms produced high quality proposals that represented an understanding of the project and requirements.  Sandis submitted the lowest bid ($44,230) and the shortest timeline (four weeks).  Towill submitted the next lowest bid ($48,882.00) and the next shortest timeline (seven weeks).  Staff was happy with previous work performed by Sandis and recommended that the contract be awarded to Sandis.

There was some detailed (and somewhat confused) Board discussion about whether Towill’s methodology would be preferable.  President Smolley said that, rather than demanding further clarification (and thereby delaying the contract award for two more weeks), he would be comfortable awarding the contract to Towill.  Garrett was fine with this.

There was no public comment.

President Smolley moved to award the contract to Towill.  Director Fultz seconded this.

The motion passed 5-0.

 

Annual Audited Financial Statements for FY23-24

Finance Consultant Heather Ippoliti introduced Jonathan Abadesco of C.J. Brown and Company to present this agenda item.  Jonathan briefly walked the Board through the results of his audit.  He explained that the audit involved testing of relevant controls, analysis of key relationships, and interviews with the Board and Staff.  Revenues increased due to the 2024 rate increase, and expenses increased due to rising personnel and CalPERS (pension) costs.  There were no material weaknesses or significant deficiencies.  The end result was an unmodified CLEAN opinion.

Directors Layng and Fultz each had some detailed questions about specific numbers.  Director Fultz expressed concern about the possible implications of some of these numbers, and he suggested that the Budget and Finance Committee might want to cross-check these with the Raftelis projections used in developing the 2024 rate structure.  At a certain point, President Smolley attempted to refocus the discussion on the audit itself.

There was no public comment.

President Smolley moved to approve the financial statement, and Director Layng seconded.

The motion passed 5-0.

 

Consent Agenda

There were two items on the Consent Agenda:

a.     Santa Margarita Groundwater Agency (SMGWA) Agreement

b.     Board Minutes from 2.6.25

The Minutes were deemed to be adopted by unanimous vote.   Director Fultz requested that the SMGWA Agreement be pulled for further Board discussion.

The agreement specified that SLVWD would assume ownership of three SMGWA monitoring wells located within the District’s jurisdiction.   SMGWA would continue to conduct monitoring activities and be responsible for the costs associated with ongoing operation and maintenance of the wells.  Costs to the District resulting from assuming ownership would include additional incremental insurance coverage costs of $960 annually and the depreciation expense that is accounted for on the District’s overall financials.

The agreement was reviewed and received preliminary approval by legal counsels of both SMGWA and the District. The SMGWA Board approved the Agreement template in August. The well agreement template was sent to DWR for review, which is required because a DWR grant funded the well construction; DWR reviewed and had no comments.

Director Fultz was concerned about what he regarded as insufficient indemnification for SLVWD.  Director Largay said he supported the agreement as a routine part of SLVWD’s participation in SMGWA.  Director Hill asked if SLVWD had conducted an inspection to ensure that there were no hidden issues with the wells.

Tim Carson of SMGWA said the draft agreement went to SLVWD Legal Counsel in August, 2024, and this issue was not flagged.  He said the wells were constructed relatively recently, and he believed SLVWD Staff would already have detected any issues with the wells.

Jesse Guiver, SLVWD’s Manager of Water Quality and Treatment, said he had seen the wells a couple of times, and they were in good condition.  Director Fultz said this was irrelevant.  District Legal Counsel Barbara Brenner pointed to a different section of the Agreement in which SMGWA accepted responsibility, but Director Fultz remained concerned about conflicting verbiage elsewhere in the Agreement.

There was no public comment.

President Smolley moved to approve the Agreement, and Director Largay seconded this.

The motion passed 4-1 with Director Fultz opposed.

 

Written Communications

The Board responded to a document submitted by the Friends of San Lorenzo Valley Water (FSLVW) which focused on reasons and possible strategies for expanding the District’s Ratepayer Assistance Program (RAP).

Director Layng said there was clear community interest in these kinds of suggestions, and this was further reflected in discussions at the most recent Administration Committee.  She recommended that the document be referred to a committee.

Director Largay said the RAP was broadly popular, and he thought the RAP was appropriate given the broad disparity in income in the SLV community.  He said he didn’t have opinions about the specific proposals in the document.

Director Hill agreed, saying that the document contained good ideas and that he thought it would be appropriate for these to be examined more closely by a committee.

Director Fultz said he thought it was great that people in the SLV community want to help others.  He suggested two possible paths.  One would be to expand the use of District revenue that is not subject to Proposition 218 restrictions, but he noted that this would diminish the funding available for capital improvement.  The other would be to facilitate charitable donations in a way that did not directly involve the District.  He suggested that FSLVW could set itself up as a 501c or they could partner with some other established organization.  He said he didn’t know that the Board needed to spend a lot of time on this.

President Smolley said he found the ideas in the document to be valid, and his focus was on how to proceed.  He said he thought this should be driven by the public and the Board rather than by Staff.  He said he would like to see this on a future Administration Committee agenda.

There was one public comment.  Jim Mosher of Felton (and the FSLVW Facilitator) said he appreciated the Board’s discussion.  He said he deferred to the Board with regard to next steps, and he looked forward to further discussion.

 

The meeting was adjourned at 8:25 PM.