SLVWD Board Meeting Summary
April 18, 2024
Mark Dolson
Highlights:
Amended and Restated Agreement for Professional Services with Raftelis
2021 CIP Pipeline Replacement Project – Change Orders
Alta Via Pipeline Replacement Project – Monan Way Change Order
Alta Via Pipeline Replacement Project – Change Order
Miller Maxfield Outreach Contract Renewal
July 2024 Board of Directors Meeting
Peavine Hazardous Tree Mitigation
State Revolving Fund Application – Forest Springs Consolidation Phase II
Department Quarterly Status Reports
Next Board meeting is at 6:30 PM on May 2, 2024
Preliminaries
There was nothing to report from Closed Session.
Director Mahood participated in the Closed Session but was then unexpectedly called away to attend to a family health emergency. The Board voted 4-0 to excuse her absence from the Open Session.
There was one public comment on a matter not on the agenda. Bruce Holloway of Boulder Creek said he had attended the Administration Committee meeting on April 17th. He noted that the only item on the agenda was continued review of the Board Policy Manual, and he found the discussion not to be particularly productive. The Chair was absent without notice, and the Interim General Manager left midway through the meeting. He said the Board Policy Manual used to be fairly short and intelligible, but it was now pretty hacked up. He recommended that it be dealt with directly by the Board rather than by the Administration Committee.
Unfinished Business
Amended and Restated Agreement for Professional Services with Raftelis
Acting Finance Director Heather Ippoliti introduced this agenda item. She reminded the Board that the District entered into an agreement with Raftelis on April 21, 2023 with an expiration date of November 30, 2023 for an amount not to exceed $99,035. At the Board Meeting on March 7, 2024, the Directors reviewed a request from Raftelis for an additional $15,000 and asked Staff to engage in further discussion with Raftelis to clarify some open questions.
Raftelis responded to the Staff’s questions and updated their request for additional payment from $15,000 to $20,085. Raftelis detailed additional work completed outside the originally agreed-upon scope, including:
Participation in additional Board meetings
Consideration of additional capital improvement program scenarios
Wholesale pricing support
Assistance responding to public records request
Additional requested analyses
Preparation of additional drafts of the report
As required by the original scope of work, Raftelis provided District with a parameter-driven budgeting worksheet and suggestions for the layout of the utility bill. Raftelis further noted that the original agreement anticipated “about five” meetings with Board or Staff plus four additional meetings, whereas Raftelis ended up participating in a total of 23 Staff meetings, one Committee meeting, and seven Board meetings. Raftelis is also continuing to provide requested assistance, most recently related to the development of wholesale intertie rates. Raftelis will only bill the District for actual time spent. Based on current year-to-date expenses, there is sufficient department budget to cover the proposed increased expense of $20,085.
Interim General Manager Brian Frus added that the examination of wholesale intertie rates is still in progress, that there may still be some other special-case scenarios, and that he also wants to look into connection fees. The amended contract approval is needed to keep moving forward.
Director Smolley said he appreciated the additional information from Raftelis, and his previous questions had now been adequately addressed.
Director Ackemann moved to adopt the resolution approving the amended contract, and another Director seconded this.
There were two public comments. Bruce Holloway of Boulder Creek took strong exception to the Board’s action of placing a motion on the table prior to public comment. He described this as really inappropriate and a slap in the face to the public. President Hill apologized, saying that this was his error. Mr. Holloway further suggested that there was no value to continuing to engage with Raftelis re: wholesale prices or connection fees. He also advised against any reduction in wholesale prices.
The second public comment was unfortunately mostly inaudible, but it concerned the intertie rate.
Director Fultz said he would vote against the motion because he believed Raftelis failed to deliver a quantitative justification of the cost for tiered rates as required by state law.
The motion passed 3-1, with Director Fultz voting against it.
New Business
2021 CIP Pipeline Replacement Project – Change Orders
District Engineer Garrett Roffe introduced this agenda item. Staff was recommending that the Board approve Change Orders 17, 18, 19, 20 and 21 for payment of $73,934 to JMB Construction Inc., increasing the not to exceed contract amount from $5,143,143 to $5,217,077. The CIP Pipeline Replacement project replaces approximately 8,500 feet of water pipeline spread across four locations in the District and an aging 40,000-gallon redwood tank with a new 160,000-gallon tank.
Change Order 17 involved replacement of corroded fire hydrant parts, and this led Director Fultz to ask if the District should be checking the status of all fire hydrant connections. Garrett said he would prefer to have new fire hydrants in general.
Director Ackemann asked when the work would be complete. Garrett said paving was pending at three pipeline sites and all work should be done by the middle of June.
Director Smolley said this all looked good to him. President Hill suggested that maybe additional engineering staff would enable the District to anticipate and avoid some of these change orders and save money in the future.
There was one public comment. Bruce Holloway of Boulder Creek suggested that there should be some coordination between the District and local fire departments for annual checks of fire hydrants. He also suggested that it was inappropriate for President Hill to mention the possibility of hiring an additional engineer (both during the recent Finance and Budget Committee meeting and during the current Board meeting) since this was not on the agenda.
The motion passed 4-0.
Alta Via Pipeline Replacement Project – Monan Way Change Order
District Engineer Garrett Roffe introduced this agenda item. Staff was recommending that the Board approve Change Order 4 for payment of $205,900 to Anderson Pacific Engineering Construction, Inc., (APEC) increasing the not to exceed contract amount from $2,569,797 to $2,775,879.
Prior to the start of work in May 2023, APEC submitted a request for information regarding a significant slope failure and roadway settling along Monan Way. These conditions occurred after the plans were created and were likely the result of the January/February 2023 storms, as well as a failed culvert nearby. A temporary bridge structure of steel plates and beams was constructed for use during construction, but is not a permanent solution.
The Geotechnical Engineer on the project, Haro, Kasunich and Associates, prepared plans for a soldier pile retaining wall to correct the failing roadway, which would protect both the District water main and the access road. In response to questions raised at a previous Board meeting, District Staff acquired quotes from three entities: the project's contractor, APEC, and two other construction companies. Given that all three quotes were similar (within 12% of each other), substantial cost reductions were not achievable. APEC's quote was the highest, but Staff still recommended using APEC as they are already under contract, mobilized in the area, and able to start work at the earliest opportunity. APEC’s quote for the retaining wall installation totals $205,900 or 10% of the original contract amount.
Brian said he thought the District’s best option at this point was to install the retaining wall. He said it was unfortunate that current staff wasn't present earlier in the project to recommend an alternate solution.
Director Fultz agreed. He said this was discussed in the Engineering and Environmental Committee in 2023. In principle, the property owners along this private road should have full responsibility for maintaining it, but since none of this was done prior to project execution, and since the District needs to protect its pipeline and protect itself from possible future litigation, the District needs to expend its own (i.e., public) funds for the retaining wall. He sought assurance that this would not be a gift of public funds.
Legal Counsel Christine Pritchard said it would not be a gift of public funds because the District has an interest in, and derives a benefit from, providing this infrastructure.
Director Smolley said he had previously expressed the same angst as Director Fultz, but Interim General Manager Frus was not present when the original decision was made, and he saw no choice now that the pipeline work has been performed.
There was no public comment. Director Smolley moved to have the Board authorize the Interim General Manager to approve payment for Change Order 4. President Hill seconded.
The motion passed 4-0.
Alta Via Pipeline Replacement Project – Change Order
District Engineer Garrett Roffe introduced this agenda item. Staff was recommending that the Board approve Change Orders 10 and 11 for payment of $123,667 to Anderson Pacific Engineering Construction, Inc., increasing the not to exceed contract amount from $2,569,979 to $2,693,646.
Change Order 10 was for water service extensions necessitated by a change in the pipeline location. The old pipeline was on a ridge with service meters conveniently located in people’s backyards. The new pipeline is in front of the homes, and the District wants the service meters in front as well. The District negotiated with each homeowner and worked on their private property to make this happen.
Director Fultz noted that District policy states that the pipeline from the meter to the house is the customer’s responsibility. He was unhappy that Staff had committed the District to paying approximately $7000 per home for 15 homes without Board approval. He also asked if this could constitute a gift of public funds.
Legal Counsel Christine Pritchard said this was a justifiable deviation from policy undertaken for the District’s convenience.
There was no public comment. President Hill moved to authorize the Interim General Manager to approve the two change orders in question. Director Ackemann seconded.
The motion passed 4-0.
Miller Maxfield Outreach Contract Renewal
Environmental Programs Manager Carly Blanchard introduced this agenda item. Since July, 2022, the District has been using the local firm Miller Maxfield to perform much of its outreach to the community and customers. The initial one-year contract expired in July, 2023. Staff recommended that the Board reinstate the contract and approve a new two-year contract beginning April 1, 2024 for a maximum of $150,000 over this two-year span.
Brian said he looked at this as a little bit of housekeeping. Normally, the District goes through a competitive bidding process with a three-year horizon. The Miller Maxfield was an exception in that it was initially negotiated for just one year, and the District subsequently allowed the contract to expire. Brian said he just wanted Miller Maxfield’s work to resume.
There was one public comment. Karen Brown of Boulder Creek objected, saying that this was not a good use of the District’s money. She felt that it would be cheaper for the District to handle this with its own Staff and to focus on local publications like the Press Banner.
Director Fultz had his own objections. He described the Proposition 218 flyer as a poor piece of work and said he couldn’t justify spending this kind of money on a firm that produced such bad work; he said he couldn’t believe this was even coming before the Board.
President Hill pointed out that PR agencies use the material provided to them by their clients. The information the Director Fultz objected to was provided to Miller Maxfield by the District.
Director Ackemann added that there was nobody on Staff capable of doing this work, and it would probably cost $100,000 per year (including benefits) to handle this internally. With Miller Maxfield, the District spends $70,000 per year. Brian said the City of Salinas had a full-time PR person on staff, costing over $100,000 per year.
It was moved and seconded to approve the resolution to continue working with Miller Maxfield.
The motion passed 3-1, with Director Fultz voting against it.
July 2024 Board of Directors Meeting
President Hill introduced this agenda item. He noted that the regularly-scheduled July Board meeting was on the Fourth of July, and he agreed with the Staff recommendation that this be meeting be scheduled instead for July 18th, the third Thursday in July.
Brian said he thought a July meeting would be needed, that he would be on vacation for part of July, and that Staff preferred the third Thursday. Director Ackemann said she could not attend on this date and asked if the meeting could be scheduled for the second Thursday instead of the third. Director Fultz said he could not attend on the second Thursday, and he didn’t think meeting dates should be changed to accommodate individual Directors. Director Smolley said he was fine with the third Thursday.
President Hill moved to schedule the July Board meeting for the third Thursday in July rather than the first Thursday, and his motion was immediately seconded. There was no public comment.
The motion passed 3-0, with Director Ackemann abstaining.
Consent Agenda
The Consent Agenda had five items (any of which could be moved to the regular agenda upon request from a Director):
a. Peavine Hazardous Tree Mitigation
b. Local Hazard Mitigation Plan Contract Award
c. Mid-year Budget Review
d. State Revolving Fund Application – Forest Springs Consolidation Phase II
e. Board Meeting Minutes 3.21.24
Items (a) and (d) were pulled by Director Fultz. President Hill moved to approve the remaining items on the Consent Agenda, and Director Ackemann seconded. There was no public comment. The motion passed 4-0.
Peavine Hazardous Tree Mitigation
Environmental Programs Manager Carly Blanchard introduced this agenda item. The 1.3-mile Peavine Pipeline, which carries raw water and runs between Foreman Creek and Peavine Creek, was destroyed in the August 2020 CZU Fire and is going to be reconstructed using above-grade HDPE pipe as directed by the Board on November 2, 2023. The District must complete the environmental permitting processes prior to any work on the pipeline, and a contract with Panorama Environmental for this work was awarded at the March 7, 2024 Board meeting.
The first phase of the project will be mitigation of more than 500 hazardous trees along the existing 1.3-mile Pipeline bench. This is necessary before any other work can be completed, including survey work required to complete pipeline design. The District is pursuing a contract with the California Conservation Corps (CCC) to perform the hazardous tree mitigation work. The CCC has grant funding for an estimated $260,000 of labor. The District is only responsible for funding CCC crew lodging, food, tools, and overtime, which is estimated at $53,928. The District also plans to contract a consulting forester to supervise the project, costing an estimated $7,900. The District expects to be reimbursed by FEMA for 90% of these remaining costs. The recommended resolution directs the General Manager to enter into an agreement with CCC.
Director Fultz asked if this had gone out to bid, and Carly explained that CCC would be automatically disqualified if any other agency were to bid.
There was one public comment, by Karen Brown of Boulder Creek, but this comment was based on a misunderstanding of the situation.
Director Ackemann moved to approve the resolution, and President Hill seconded.
The motion passed 4-0.
State Revolving Fund Application – Forest Springs Consolidation Phase II
Environmental Programs Manager Carly Blanchard introduced this agenda item. She explained that Staff was seeking Board approval to take the first step in seeking further State funding for Forest Springs infrastructure improvement as part of the District’s plan to eventually consolidate two small mutual water companies north of Boulder Creek. Forest Springs (128 connections, population 385), and Bracken Brae (24 connections, population 54) were severely impacted by the 2020 CZU Lightning Complex Fire and have requested consolidation. Partial funding has already been obtained for Phase 1 (SLVWD upgrades, and construction of connecting pipelines and a booster station) and Phase 2 (upgrades to Bracken Brae distribution system). The District also recently secured a $1 million earmark via State Representative Jimmy Panetta to be used for Forest Springs and Bracken Brae storage tanks.
The Drinking Water State Revolving Fund (DWSRF) provides financial assistance for drinking water projects. Interest-free financing and grants may be available to qualifying communities with demonstrated financial hardship. Based on median household income (MHI), the Forest Springs consolidation project is eligible for up to 100% grant funding, with a maximum grant amount of $60,000 per connection.
SLVWD’s DWSRF Planning application seeks funding specifically to support Phase 2 upgrades for the Forest Springs distribution system to bring it up to current standards and allow for consolidation. Funds are requested for: hydraulic analysis, environmental review, design, and construction documents, bid support, and DWSRF Construction application development.
Director Fultz asked several questions seeking further clarification. A key concern is that these consolidations should not impose any additional financial burden on current SLVWD customers. Brian said the District has so far devoted only a small amount of Staff time to the pending consolidations. He said the $3.2 million in State funding obtained prior to 2024 was not sufficient to complete all the required improvements, so his strategy was to proceed incrementally as additional funding becomes available. Forest Springs and Bracken Brae have received draft pre-consolidation terms.
There was one public comment. Nicole Launder Berridge of Bracken Brae said she was in full support of this application for State funding for Forest Springs and that Carly had done a great job. She said Bracken Brae hasn’t been part of any meetings and is not actively working through a pre-consolidation agreement.
Director Fultz said he felt the Board needed to take a deeper dive into the status of the Forest Springs and Bracken Brae consolidations, as he was concerned that the relevant parties were not all on the same page yet. He requested that this matter be placed on the agenda for an upcoming Board meeting. Director Ackemann concurred, and President Hill agreed to take this next step.
Director Smolley moved for the Board to approve the resolution in support of the District’s DWSRF Planning application, and his motion was immediately seconded.
The motion passed 4-0.
Department Quarterly Status Reports
Interim General Manager Brian Frus delivered his quarterly status report for the District. Annual flushing is being performed March through May. The new rate structure took effect March 1, 2024, but there will likely still be some further customer reaction when the first corresponding bills are received in April. District spending is currently tracking fairly closely to the budget, and Brian and Staff have recently taken steps to update project priorities and improve efficiency. The Compensation Study had a kick-off meeting in March and should be completed in 2024. A new District Secretary has been hired to replace the retiring District Secretary, but the search for a permanent Finance Manager is still continuing. Big Basin received some money (about $900,000) to begin doing studies. Bracken Brae and Forest Springs have received draft pre-consolidation terms. Brian also mentioned that he participated in a useful disaster planning drill, and local water managers have agreed to have further discussions.
The Directors had just a few follow-up questions. Director Smolley asked if replacing the chain link fence for the Fall Creek Fish Ladder was still on the radar. Garrett said this was removed from the contractor’s scope of work, and District Staff were pursuing it.
Director Ackemann suggested that it might be nice to have some kind of FAQ summarizing emergency response planning. Director Fultz asked if cyber security was part of the discussion that Brian participated in, and Brian said it was not. There was no public comment.
Director Fultz had a few questions regarding Department Reports. He asked for an update on the Felton Heights Tank, and Garret said a site survey had been completed. The District originally contemplated building the tank on the north side of the dirt road but was now planning on the south side. A report should be ready four weeks from April 22nd.
Director Fultz asked if funding for grants was continuing to be fairly robust. Carly said state money was decreasing, but federal money was still going strong. The District is still paying $30,000 per year for assistance from a grant specialist, and this has had a huge payoff to date.
Director Fultz asked about progress on conjunctive use. Brian said they were taking a fresh look at this, given the new leadership both at the District and at City of Santa Cruz Water.
Director Fultz said he would like to potentially consider revoking the District’s Water Conservation Stage 1 status.
Director Fultz asked how much money the District was expecting to capture from the balance of past-due accounts in August via property taxes. Heather said this was not known. The balance was at $440,000 in January.
The meeting adjourned at 8:10 PM.