SLVWD 4.6.23

SLVWD Board Meeting Summary

April 6, 2023

Mark Dolson

Highlights:

RFP for Executive Search Firm for Recruiting District Manager
Emergency Contract for Temporary Work on Stewart Street
Rate Study Request for Proposals
Santa Margarita Groundwater Agency Representation
Next Board meeting is at 6:30 PM on April 20th

Note: This was the second Board meeting held in the new conference room in what has been referred to as the “Johnson Building” at 2788 Highway 9 in Boulder Creek. The planned modifications to the room and audio system to make this venue suitable for hybrid meetings had still not been adequately completed. For this reason, the audio quality for remote participants was extremely poor, making most of the Board discussion unintelligible. As a consequence, this summary is less detailed than usual and may omit some minor points.

Preliminaries

There was no report from Closed Session.

There was no President’s Report.

Unfinished Business

RFP for Executive Search Firm for Recruiting District Manager

Rick Rogers’ employment contract will expire in August 2024, and he intends to retire. On February 2, 2023, the Board appointed an ad hoc Committee, consisting of Directors Ackemann and Hill, to: (a) develop a draft succession plan and recruitment process for selecting a new District Manager, and (b) prepare a draft request for a professional recruitment consultant. The goal of this agenda item was for the Board to review and comment on the committee’s draft Request for Proposal (RFP) for a professional recruitment consultant.

The draft RFP specifies that the consultant will work with the current District Manager, the committee, and the Board to accomplish the following steps:

Develop a prioritized candidate profile.
Develop a marketing plan and recruitment brochure.
Perform outreach and marketing to attract a diverse field of qualified candidates.
Work with the committee and Staff to develop structured interview questions and a rating rubric system.
Conduct a detailed background investigation of the selected candidate.
Work with the District’s contracted outreach consultant and Staff to inform customers and the community of the candidate selection process through social media, newsletters, and press releases.

The committee expects the District to interview the two leading candidates and to spend roughly $40,000 on this recruitment effort.

Director Fultz commented that the fee for such searches is usually set as a percentage of the salary. He also recommended that the final contract should include a list of local potential candidates (identified by the District at the beginning of the search) for which the recruitment consultant would not collect the full fee (should one of these candidates be hired). Lastly, Director Fultz suggested that the proposed evaluation rubric for the responses was more appropriate for a construction project than an executive search.

There was no public comment. Director Ackemann made a motion to move the RFP forward, and Director Mahood added a friendly amendment stating that this should occur after the committee had modified the RFP to reflect Director Fultz’s recommended changes. The motion passed 5-0.

New Business

Emergency Contract for Temporary Work on Stewart Street

District Engineer Josh Wolff introduced this agenda item. The District’s main connecting the below-grade main in Stewart Street to the below-grade main in Rambling Road in the Riverside Grove neighborhood was damaged by slope failure during the storms this past December and January. Ground saturation in response to heavy rain triggered renewed motion on a large pre-existing landslide that the houses on Stewart Street and Rambling Road were built on, and this led to multiple breaks in the main. Staff shut the main down and verified that no homes were left out of service.

The damaged main provides a vital loop in the District’s system in the area, leaving both the Stewart Street and Rambling Road mains as dead-ends when out of service. The District contracted with Anderson Pacific Engineering Construction, Inc. (APEC) to construct a temporary main in place of the damaged main. APEC deployed a crew immediately to accomplish this construction. The Board was being asked to approve an Emergency Services contract not to exceed $75,000 for the temporary main. This project is being submitted to FEMA for a permanent repair, estimated at approximately $700,000.

President Smolley moved that the Board should ratify the contract. There was no public comment. The motion passed 5-0.

Rate Study Request for Proposals

The District completed a rate study in 2017 that resulted in a five-year rate increase. Rate studies are usually done every three to five years, and a 2023 rate study is included in the current budget. An RFP for the 2023 Rate Study was published on February 9, 2023, and bids were solicited from seven firms. Bids were received from two: NBS ($84,600) and Raftelis ($99,035).

The two bids were discussed by the Budget and Finance Committee at its meeting on March 31st. The committee noted that NBS performed the District’s 2017 rate study. Some members of the Committee reviewed the 2017 presentation to the public and felt that NBS did an inadequate job of explaining its work to the public. Moreover, the NBS proposal seemed to assume that the 2023 rate schedule would be similar to the one developed in 2017. Staff and the Committee members agreed that it was important to take a fresh look at the rate structure. The Raftelis proposal addressed possible aspects of a new rate structure, and made it apparent that Raftelis understood the issues and concerns the District is currently facing by summarizing them in a succinct manner. The Committee addressed the $15,000 difference in price by noting that the Raftelis proposal included more support for financial modeling and one more on-site meeting than the NBS proposal, the purpose of which was to gather input from the public before the rate schedule is developed. The committee therefore recommended that the District award the contract to Raftelis.

Director Fultz questioned whether the District would receive $15,000 of additional benefit from Raftelis. He felt that NBS performed adequately in 2017, and he sought a more detailed understanding of how the District would make ongoing use of the Raftelis financial modeling tool. Director Mahood (Chair of the Budget and Finance Committee) responded that Raftelis provided more information — NBS did not address this point in their proposal — and that the Finance Manager had done some research and preferred the financial modeling tools available with Raftelis. Director Fultz continued to ask detailed questions on this point, and Director Mahood responded by saying the concerns at this level of detail would be most appropriately addressed in the language of the actual contract.

Director Mahood moved to direct the District Manager to enter into negotiations for a contract with Raftelis that would include specific language about the availability of financial modeling tools during development of the rate study and after its completion.

A member of the public, Rick Moran, commented that he hoped the rate study would investigate instituting tiered rates. Director Mahood said this would be studied, and it was specifically addressed in the Raftelis proposal.

The motion passed 4-0 with Director Fultz abstaining.

Santa Margarita Groundwater Agency Representation

President Smolley said this agenda item was jointly requested by Director Mahood and himself. Their recommendation was that Director Fultz be removed from his appointment as a District representative on the Board of Directors of the Santa Margarita Groundwater Agency (SMGWA). President Smolley said this recommendation was precipitated by an article Director Fultz published in the SLV Post which he said “called out” two other partner agencies. He said this created an antagonistic environment and made it difficult for the District to work cooperatively with these other agencies.

Director Mahood is the District’s other appointed representative on the SMGWA Board. She said she was reluctant to make this request, but she had two specific concerns about allowing Director Fultz to continue in his current SMGWA role. First, the article in question had the effect of working against SLVWD’s best interests because it prompted considerable, time-consuming, behind-the-scenes outrage and disruption, and because it undermined efforts to build effective working alliances for SLVWD within SMGWA. Since Director Fultz has indicated that he is determined to continue publishing these kinds of articles, Director Mahood said she believed the District needed to act to protect itself from further damage.

Second, Director Mahood said there was a provision within the SMGWA bylaws that allows any director from SLVWD, Scotts Valley Water District (SVWD), or the County of Santa Cruz to veto important action items such as approval of the budget and approving submittal of grant proposals, and also to effectively apply a line-item veto to any expense in excess of $50,000. She worried that Director Fultz, because of his strongly held beliefs, might conceivably decide at some point to unilaterally exercise this veto power even if there was a contrary consensus amongst other SLVWD stakeholders.

Director Fultz offered a lengthy defense of his article writing, but he did not directly address Director Mahood’s two concerns. Director Fultz reiterated the position that he articulated in his article, and he argued: (1) that his commitment to informing the community compelled him to write articles of this nature, (2) that nobody complained to him about his article (other than Director Mahood), and (3) that there were other participants in SMGWA whose behavior was far more objectionable than his.

Director Ackemann characterized the issue as predominantly one of free expression and said she could disagree with Director Fultz without feeling any need to support his removal.

Director Hill seemed to express mild agreement with Director Ackemann.

Three members of the public spoke. Former Director Rick Moran said removing Director Fultz from SMGWA would have a chilling effect on all citizens. His wife, Chris Moran, said Director Fultz was being singled out, and she didn’t see that the article presented a problem: Director Fultz has written regularly expressing his point of view, and she saw this as a freedom of speech issue. (Note: The Morans were both present in person.)

Jim Mosher said it had been impossible to follow the conversation via Zoom, but he did not see this as a free speech issue. Rather, he viewed this as a matter of strategy in delicate negotiations where the District needs to build alliances. The question is whether this is the right assignment for Director Fultz, given his tendency to be very forceful about his opinions.

It was clear at this point that the Board did not have a majority in favor of the recommendation to remove Director Fultz from SMGWA. Director Mahood offered a final clarification, saying the recommendation was not a response to Director Fultz writing articles and educating the public, but rather to the final third of his article which moved beyond information sharing and unhelpfully attributed self-interested motives to Scotts Valley and Santa Cruz.

Consent Agenda

These items are deemed adopted if nobody pulls any of them for further discussion. There was no request to pull the previous meeting minutes.

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