SLVWD Board Meeting Summary
March 17, 2022
Mark Dolson
Highlights:
Fall Creek Fish Ladder construction contract
District Manager Annual Review
Cross-country Pipeline Constructability Study
Revised project list for Certificates of Participation projects
Next Board meeting is at 6:30 PM on April 7th.
Preliminaries
There was no Closed Session meeting to report on.
There was no President’s Report.
There was no general public comment.
New Business
Resolution of Appreciation for Lois Henry
District Secretary Holly Hossack read a resolution of appreciation for former director Lois Henry who resigned effective March 1st. President Mahood moved to adopt the resolution, and Director Fultz seconded.
Two members the public offered comments. Larry Ford said Lois was an inspiration and a teacher about how to be a good member of a public body like the Board. He thanked her for everything she did and said she will be missed by all. Cynthia Dzendzel echoed these sentiments and said she appreciated Lois’s many years of service.
Director Smolley said he appreciated his interactions with Lois, particularly the historical perspective, the insightful comments and questions, and the humor that she contributed.
Director Ackemann thanked Lois for her service and for being straightforward and honest, genuine and witty.
Director Fultz commented that public service is very demanding and that Lois had chosen to shoulder this responsibility for many years after her retirement. He wished her the best.
President Mahood seconded all the comments of those who preceded her and said she would miss Lois’s feistiness.
The motion passed 4-0.
Speaking as a member of the public, Lois Henry shared some reminiscences of her years on the Lompico Water Board and then the SLVWD Board. She thanked the SLVWD Staff including Director of Operations James Furtado and, especially, District Manager Rick Rogers. She thanked her fellow Board members, especially Gail Mahood, and also the Friends of San Lorenzo Valley Water. She said she knew she annoyed people at times, but she appreciated everyone that she worked with.
Rick Rogers said one of the perks of being District Manager is that, over the years, he got to work with the best people of the SLV on a wide range of issues. He said he didn’t believe the Lompico merger would have succeeded without Lois’s strong will, as she overcame multiple setbacks and pushbacks. He also appreciated working with her as an SLVWD Board member.
Fall Creek Fish Ladder Award of Contract for Construction
Engineering Director Josh Wolff introduced this agenda item. The Fall Creek Fish Ladder Rehabilitation Project includes modification to the existing Fish Ladder weirs, construction of two new weirs, refurbishment of the existing raw water intake pump system, and additional associated work. The District solicited bids a year ago and received none. In 2022, four bids were received ranging from $1,982,580 (CRW Industries, Inc.) to $2,813,358 (Anderson Pacific, Inc.). The two lowest bids were reviewed by District Staff and found to be complete. The District has had no previous experience with CRW Industries, but feedback from other agencies who have worked with them was uniformly positive, and their bid was more than $300,000 lower than the second lowest bid. Staff therefore recommended award of the bid to CRW Industries. Construction must be performed between mid-June and mid-October to conform to environmental constraints.
Director Smolley confirmed that the Engineering and Environmental Committee discussed this and supported the Staff recommendation. He noted an incorrect numerical figure deep in the bid, and it was agreed that the Board motion would specify the correct figure to eliminate any possible confusion.
Both Directors Smolley and Fultz had questions about the funding of this project, as the budgeted amount was only about $1.3 million. Rick Rogers explained that the increase in cost is likely a by-product of the fact that this project has been outstanding for 5-7 years. This, in turn, is a by-product of the fact that five different regulatory agencies became involved and introduced numerous delays. The Staff proposal is to add this project to its list of those funded via its Certificate of Participation (COP) loan, taking advantage of the fact that another project on that list (the Quail Hollow Pipeline) ended up costing significantly less than anticipated.
Director Fultz sought two specific assurances. First, he wanted to be sure that the District could legally revise its COP project list. Rick said he believed that it could, but he cautioned that the District had not specifically contacted its bond counsel about this. Gina said she was comfortable with this, but Director Fultz said he would be more comfortable with a second opinion.
Second, Director Fultz wanted to know whether the proposed funding plan for this project would jeopardize any potential grant applications. Environmental Programs Manager Carly Blanchard said a grant application was pending, but the District had phased the project so that the demolition portion was outside the award window.
Director Ackemann requested that Staff try to routinely include two additional pieces of information in the agenda to identify: (1) the source of funding, and (2) any relevant institutional history to provide context for Board members.
President Mahood agreed that this would benefit not only Board members but the public as well. She also agreed that the District needed to move forward rapidly with the Fish Ladder project, as the cost would likely only increase further with additional delays.
There was no public input.
District Counsel Gina Nicholls offered a revised version of the motion to approve the contract which noted that the handwritten total in the bid was a typo. She further explained that there was minimal risk in adding this project to the COP list. The loan documents allow for various levels of changes to be made, each with differing requirements. She said this particular change would arguably not substantially alter the nature of the project, and bond counsel would merely confirm that there was some ambiguity in the wording. She therefore advised that the District proceed while providing notice of this change to relevant parties. They would have 30 days to object, and very little money would have been spent within this time window.
The motion passed 4-0.
District Manager Annual Review and Compensation Adjustment
District Counsel Gina Nicholls introduced this agenda item. Each year, the District conducts an annual performance review for the District Manager as provided in his employment contract. In December, he received a satisfactory assessment which automatically entitles him to a Cost-of-Living Adjustment (COLA) of 2.5%. He is also eligible for up to an additional 5% merit increase at the discretion of the Board.
There was some initial confusion as Director Ackemann sought to determine how a 5% increase would compare to the increase being provided to the District’s best-performing regular employees. Rick explained that under the current MOU, employees are eligible for a step increase which provides a 5% increase in compensation. Director Ackemann said she just wanted to be sure that the available percentage increases were similar. Neither Directors Fultz nor Smolley had any immediate comment.
President Mahood said, in view of everything that Rick has had to do, she felt that he deserved the 5% increase. She said he was working a lot more than 40 hours per week, and he had done a good job of getting the District through the challenges of the CZU Fire. She also felt that Rick had been extraordinarily good at talking to the press and the public and at representing the District effectively in these venues. She moved to offer Rick a COLA of 2.5% and a merit increase of 5%. Director Ackemann seconded.
Director Fultz dissented. He said he believed that Rick was doing a very good job, as was the Staff in general. His concern was that the local community is in a very difficult situation which he expects will only get worse with drought and inflation. He said operating costs were skyrocketing, and the District needed to focus its spending on infrastructure rather than on operating expenses. He understood that others would not share this view.
President Mahood confirmed that she did not share this view, but she said she understood and respected it.
One member of the public offered a comment: Larry Ford said he supported the increase in compensation as moved by President Mahood.
The motion passed 3-1 with Director Fultz opposed.
Unfinished Business
Cross Country Pipeline Constructability Study
District Engineer Josh Wolff introduced this agenda item. He reminded the Board that the constructability report explored options for restoring the Peavine and Five Mile raw water pipelines. This report was reviewed and discussed at the February 17th Board meeting. The Staff recommendation for this evening’s meeting was that the Board: (a) accept the report as complete, and (b) authorize Staff to move ahead on the environmental side.
Rick Rogers elaborated on this. He said Staff was recommending that the replacement pipelines be buried to better protect them from fire, but that substantial environmental study and community engagement would be needed to ensure that both the cost and environmental impact of this proposed solution are adequately understood and broadly endorsed. Staff also still has concerns about ongoing maintenance costs for the completed pipeline (e.g., in the event of disruptions due to heavy rainfall events). He said the District was basically looking at cutting a single-lane road (8-10 feet wide with retaining walls) across seven miles of Ben Lomond Mountain while removing seven acres of trees in the process. Also, the District is still waiting for FEMA to determine what fraction of the total cost it will cover. Rick’s desire was for the District to keep moving forward while gathering and sharing additional information.
Director Smolley said the Engineering and Environmental Committee had discussed this in detail. The committee agreed to hold off on endorsing the report’s favored alternative (3B: buried HDPE pipe) and to begin by accepting the study and starting to develop an RFQ for an Environmental Report. First, though, he sought to resolve some discrepancies in the report.
Director Smolley’s first concern was that the total pipeline length was variously cited as 36,100 and 40,000 lineal feet. Josh said the 36,100 figure was correct. The District employed multiple data sources, and the Engineering team is currently pursuing a long-term project to unify these into a single consistent dataset.
Director Smolley’s other concern was that he understood option 3B to be based entirely on below-grade stream crossings, but some parts of the report did not reflect this. Josh said the District expected this not to be feasible. They conservatively assumed that only half the crossings would ultimately be below-grade.
The ensuing discussion was lengthy and multifaceted, but the Board ultimately agreed that while the constructability study performed by Freyer & Laureta was well done, it still left some important questions unaddressed. Also, it provided a valuable engineering perspective, but the final decision would need to incorporate other perspectives as well.
Two key questions that the Board still wanted answers to were: (1) what were the comparative costs and benefits of simply reverting to an above-ground HDPE pipeline solution? (2) what were the comparative costs and benefits of abandoning some of the smaller water sources in order to decrease the total length of replacement pipeline? These questions were important to consider because the estimated $60 million cost of replacement option 3B was roughly five times the amount the District had previously estimated.
With regard to the first question, Josh explained that above-ground HDPE pipe would no longer meet American Water Association (AWA) standards. The AWA standards do not have the force of regulations, but the State Water Board has determined that they will enforce this standard. Fire-hardening above-ground HDPE pipe would involve encasing the pipe in concrete and would be completely impractical. Also, Josh estimated that the cost savings of the above-ground HDPE approach would likely only be in the range of $3-4 million. Via an offline text message, Jeff Tarantino of Freyer & Laureta agreed to include a more accurate cost estimate among F&L’s deliverables. F&L will also provide an appendix that assesses ongoing operating cost for each option. President Mahood said she would approve the report with these additions. Director Ackemann made a motion to this effect, and Director Fultz seconded it. Rick Rogers added that there are other experts that he would want to further review the options, looking at environmental concerns, operational concerns, and ongoing maintenance.
With regard to the second question, President Mahood argued that the District needed every gallon of surface water that it could access. Surface water is inherently cheaper and requires less treatment. Also, future constraints on taking groundwater from the Santa Margarita Basin will come into play. Josh added that the electricity cost of pumping groundwater is likely to increase considerably in the years ahead. Director Fultz estimated that Foreman Creek provides 40% of the District’s surface water, while Peavine Creek adds 10%, Clear Creek adds 35%, and Sweetwater Creek adds another 10%. Only Foreman Creek is currently being utilized. He noted that even if the District is reimbursed for 75% of the estimated $60 million cost, it will need to borrow the remaining $15 million, most likely at a higher interest rate. Director Ackemann stressed that the community would need to understand not only the cost and environmental impact of the replacement pipeline but also the consequences of opting not to build it.
There were two public comments. Larry Ford said he was impressed with the quality of the discussion and wanted to share an additional perspective based on his expertise in fire management. He said there were a number of different elements to consider. For instance, there will likely be an increase in lightning strikes. Also, the fire hazard is probably at least as severe after a fire. Therefore, the risk to an unprotected pipeline is probably very high. He asked whether the District might face liability concerns if it deliberately opted not to follow the AWA standard. He also asked what other agencies were doing.
Cynthia Dzendzel asked if there were any innovative new construction technologies that might be applicable. She also worried about the need to dig the pipe back up if it needed to be replaced, and she wondered if there was any way to address this.
Director Fultz commented that boring technology has advanced in recent decades. President Mahood said the engineers were believed to have explored all known solutions. She also noted that the SLV faces unique geological challenges due to the combination of very steep terrain and the need to excavate into bedrock. In addition, Ben Lomond Mountain is prone to landslides.
The motion to accept the report (with the agreed revisions) passed 4-0.
Director Smolley reported that the Engineering and Environmental Committee discussed next steps, including the question of whether to seek a single unified Environmental Impact Report (EIR) or two separate ones. He recommended that the District first ask consultants for relevant schedules and costs. He proposed that the Board’s immediate next step should be to authorize a Request for Qualifications. This would not entail any cost expenditure and would likely take the next two months.
Directors Ackemann and Fultz advised against making any choices that might prematurely preclude possible grant and/or FEMA reimbursement options. Rick said these considerations would be part of upcoming discussions.
One member of the public had a question. Timothy Carboni asked whether it might be cheaper to get water from the coastal side of the mountain. President Mahood explained that the District lacks water rights for those sources. Director Fultz added that this would probably require some sort of deal with the City of Santa Cruz (at an unknown cost).
Director Smolley moved that the Board direct Staff to release an RFQ for environmental impact of the proposed pipelines. The motion passed 4-0.
Revised Project List for Certificates of Participation (COP) Projects
Rick Rogers introduced this agenda item. As discussed earlier in the meeting, he recommended that the existing project list for the $14.5 million COP loan be revised to reflect the District’s updated plans. Five of the nine listed projects are now complete, and the Quail Hollow Pipeline came in significantly below estimated cost. The District would like to reallocate $1.3 million to the Fall Creek Fish Ladder and move the remaining $1.1 million to the Lyon Zone Pipeline project.
President Mahood moved to adopt the proposed resolution, and Director Fultz seconded. There was no public comment. The motion passed 4-0.
Remote Meeting Authorization Under AB 361
President Mahood moved to adopt the resolution extending the authorization for remote meetings for another month. Director Ackemann seconded. The motion passed 4-0.
District Reports
Rick Rogers noted that the Operations Status report was omitted from the agenda packet and would be included in the next agenda packet.
Director Ackemann asked if the increase in the number of customers in arrears was due to the end of the state-funded relief program. Finance Manager Kendra Reed said this was probably the case, but there were also normal fluctuations.
Director Smolley said he wanted to recognize the exceptional customer service provided by Taylor that led to an email of appreciation. Director Fultz concurred.
The meeting was adjourned at 9:00 PM.