SLVWD Board Meeting Summary
July 20, 2023
Mark Dolson
Highlights:
Delinquent Water Charges on County Tax Roll
Bracken Brae and Forest Springs Pump Station Easement
District Manager Evaluation
District Manager Transition
Next Board meeting is at 6:30 PM on August 3rd
Preliminaries
There was nothing to report from the Closed Session prior to the meeting.
All Directors were present.
There were no additions or deletions to the agenda.
There was one non-agenda-related public comment. A Felton resident, Mr. Jameson, expressed condolences for the loss of Josh Wolff, who he described as a great asset to the District.
New Business
Delinquent Water Charges to be Placed on the County Tax Roll
Finance Manager Kendra Reed introduced this agenda item. She reminded the Board that the District is now in its third year of using the County tax roll as its primary collection method for past due balances. This year, the District is pursuing accounts that have past due balances from 12/31/2022 and prior with a total past due balance greater than $500. Staff mailed a first round of letters on 04/18/23 with a due date of 05/18/23. A final notice was sent on 05/23/23 with a due date of 06/23/23. The upshot is that the District will be sending a total of 128 accounts to the County tax roll with the goal of recovering $176,335.97.
Director Fultz asked what percentage of past-due invoices were captured via this mechanism. Kendra said there were roughly $227,000 in 120-day-past-due charges as of this past May. Director Fultz asked what it would take to capture more of these. Kendra said a lot of the answer came down to timing. The District is allowed to capture past-dues that have been outstanding for more than 60 days, but the District sends two notices rather than one, and it used the 12/31 date for consistency with previous years. She said moving the date to 3/31 would still have allowed for two notices and would have recovered around $245,000. She also noted that this was her first year taking full responsibility for this program.
Director Fultz encouraged Kendra to switch to the 3/31 date. He asked if there was any discernible response to the notices. Kendra said there was a decrease in past-due accounts, so it is reasonable to suspect that the notices had some impact. In response to a follow-up question from Director Hill, she said the County pays the District at multiple points throughout the year based on what it has collected.
Director Ackemann wanted to be sure that none of the past-due accounts were still dealing with the aftermath of the August 2020 CZU Fire. Kendra said all fire-damaged homes that are not using water are currently exempt from the District’s monthly basic charge. Director Ackemann also asked if the District ever proactively investigated anomalously high water use. Kendra said there was a process for this.
President Smolley asked if this collection strategy simplified things for Staff, and Kendra said it was a major improvement over the previous policy of shutting off water.
President Smolley moved that the Board adopt the agenda resolution approving the list of delinquent water charges to be submitted to the County of Santa Cruz for collection on the property tax roll. The motion was seconded, and there was no public comment.
The motion passed 5-0.
Bracken Brae and Forest Springs Pump Station Easement
District Manager Rick Rogers introduced this agenda item. In May 2022 the District contracted with Sandis Engineering for design of the piping, water storage, and pumping station that are needed to integrate the Bracken Brae and Forest Springs water systems into SLVWD. Sandis Engineering and staff located three parcels that would be suitable for the pump station, but only one of these met all the requirements: public right-of-way, constructible terrain (flat), PG&E power, required elevation, and a willing property owner (Heartmath LLC).
The market value of the easement is estimated to be $6563 based on $4.00 per square foot. Heartmath has reviewed the appraisal and has agreed to a purchase price of $10,000. Staff is seeking Board authorization for this purchase.
Directors Hill and Ackemann sought and received assurances that vehicle access would not be a problem. Director Hill also asked if the District had followed up with nearby residents who expressed concern about possible pump noise at this location. Rick said he reached out to the relevant individual but had not heard back. Sandis has hired an acoustic engineer who will make a report available probably in a month. President Smolley requested that the acoustical engineering report come back to the Engineering and Environmental Committee first. He said the report was likely to include mitigation options, and he wanted to know what these cost before talking further with the nearby homeowners.
President Smolley moved to authorize the District manager to complete this purchase, and Director Mahood seconded. There was no public comment.
The motion passed 5-0.
District Manager Evaluation
District Manager Rick Rogers introduced this agenda item. He noted that the Board voted 4-0 on November 17, 2022 to approve a satisfactory performance evaluation of the District Manager for the past year 2021-22, and this entitled him to a cost of living (COLA) salary adjustment effective as of October 19, 2022. Under the District’s Memorandum of Understanding (MOU) with management employees, the applicable COLA percentage increase is 5%. At the discretion of the Board, the District Manager may be eligible for an additional merit increase of up to 5% based on performance.
Director Mahood said, in her opinion, the Board should give Rick the full 5% merit increase in light of all the catastrophes he has had to work through over the past year. She said she really appreciated that the District has Rick on staff. President Smolley said he too believed that 5% was appropriate, given the effective response to all the disasters. Director Ackemann echoed this.
President Smolley moved to establish the District Manager’s annual compensation merit increase to be 5% effective to this past October. Director Mahood seconded this.
Director Fultz noted that this would increase Rick’s annual salary from $238,524 to $250,450. He said his focus was on the people who have to pay the bills, and things are really tough for them.
There was no public comment. The motion passed 4-1 with Director Fultz voting “no.”
Rick thanked the Board and also Staff.
District Manager Transition
District Manager Rick Rogers introduced this agenda item. He said this was being brought to the Board at the request of the Ad Hoc Committee responsible for ensuring a smooth transition around Rick’s approaching retirement. He said CAL PERS could require notification from him as much as three months in advance. His own desire is that he not retire until the new District Manager is fully ready to take the helm.
The Ad Hoc Committee is composed of Directors Ackemann and Hill. Director Ackemann said she wanted a smooth transition, but she was concerned that the new District Manager might not want to overlap with Rick. Director Hill suggested that Rick could be available as a consultant with his involvement in management tapering off across the transition period. President Smolley said the goal was for Rick to avoid any gap between his salary and his retirement income. Director Mahood said Rick could be assigned a special project so that he could continue to work full time and add full value without interfering with the new District Manager’s supervision of employees.
Director Ackemann wondered about the possibility that the new District Manager would want access to Rick for more than three months. Rick said he expected key contributors like the new Legal Counsel and the new District Engineer to be up to speed by that time.
There were two public comments. Bruce Holloway from Boulder Creek said he thought Rick could transition to a new role. He asked how the County typically handled the uncertain timing associated with CAL PERS.
Nicole Launder Berridge of Bracken Brae said they have been working with Rick since March of 2021, and they don’t want anything to be lost in transition. She thought Rick could probably find projects where he could be helpful.
Director Fultz agreed. He observed that Rick has been with the District for over four decades, and he suggested that a special project could be documentation of things that Rick knows that haven't been otherwise captured.
Consent Agenda
These items are deemed adopted if nobody pulls any of them for further discussion. The minutes for the Board’s June 21st meeting and minor changes to the memo template were adopted without comment.
Department Reports
Environmental. President Smolley asked what will be covered in the Loch Lomond Feasibility study, currently in draft stage but due for release in July. Environmental Manager Carly Blanchard said this would include City of Santa Cruz comments on the RFP for the full feasibility study.
Finance. Director Hill commented that water demand has been dropping, so the District may be getting close to the consumption level that would trigger the special drought rate. Director Fultz suggested that the District needed to work on its messaging (since improved conservation is effectively rewarded with higher rates). Director Ackemann observed that the decrease in consumption was most likely due an unusually cool spring. Director Hill noted that the District has overestimated the amount of water it would deliver for eight of the past twelve months. Director Mahood said this tendency toward overestimation had been partly corrected in the upcoming budget.
Legal. President Smolley asked about the statement that Staff has not had the bandwidth to keep up with the amount of feedback or new information associated with new Legal Counsel. Rick said they were making progress, but he wanted to make it clear that delays were not due to new Legal Counsel.
Operations. Director Fultz asked whether the District was continuing to make heavy use of surface water. Rick said Fall Creek is still producing a lot of water and feeding the North System, but it is starting to drop. Operations Director James Furtado said there was actually an increase in surface water use due to Bennet Springs coming back online this month.
This led to a public comment from Bruce Holloway. He asked how Felton water was being legally sent to the North System. Carly explained that the District is operating under an emergency exception due to many North System intakes being offline since the CZU Fire. The State is aware of this.
Mr. Jameson asked about the current status of the Felton Heights tank project. Rick said the District was focusing on the second alternative site, and a legal agreement that would allow the District to move forward with necessary geotechnical and environmental reviews was currently with the property owner.
The meeting adjourned at 7:40 PM.