SLVWD Board Meeting Summary
July 18, 2024
Mark Dolson
Highlights:
Valley Gardens Housing Development Will-Serve Letter
Valley Gardens Housing Development Offsite Sandhills Mitigation
Phase 1 Pipeline Project for Bracken Brae and Forest Springs Consolidation
Surplus Policy – Equipment and Supplies
Next Board meeting will be at 6:30 PM on August 1, 2024
Preliminaries
All four directors were present.
President Hill reported that, in the just-concluded Closed Session, the Board provided direction to Staff on how to handle an item being discussed by the Board and Legal Counsel.
President Hill proposed a change to the agenda. He suggested deferring Item 9b “Nomination of Board Vice President” until the upcoming August 1st Board meeting at which time an additional Board member will be appointed to fill the seat left vacant by former Vice President Jayme Ackemann. President Hill felt that an interim meeting chair could be identified if necessary. This proposal was subsequently rephrased as a motion with Director Smolley seconding it.
Interim General Manager Brian Frus recommended that the Board appoint a Vice President this evening to ensure that the position is filled in advance of any imminent need for a Vice President. Director Fultz pushed back, arguing that a two-week delay would not cause any problems, and it would be fairer to everyone to wait. There was no public comment; the motion passed 4-0.
Director Fultz noted that this was a Special Board Meeting, but the agenda was that of a typical Regular Board Meeting. He expressed annoyance that a full agenda was being proposed with only 48 hours advance notice. He therefore proposed that Items 8c, 9a, 9b, 10a, 10b, 10c, 10d, and 10f be deferred until the August 1st Board Meeting. He said the community and the Board needed more time to absorb the supporting information, and he formalized his proposal as a motion.
Two members of the public spoke to the urgent need for the District to engage with Bracken Brae, given that over a million dollars in FEMA grant money is at risk of disappearing toward the end of August. In particular, Nicole Launder Berridge of Bracken Brae issued a lengthy plea for the District to make the consolidation a priority. She said discussions have been at a standstill since October, 2023.
Director Fultz offered to withdraw his motion with respect to Item 8c. He said he would then offer another motion to expand the discussion around Item 8c to encompass the full range of strategic issues surrounding the consolidations. Legal Counsel Christina Pritchard advised that the agenda item could only be expanded if the Board voted to find that this was an emergency situation that couldn’t wait for the August 1st Board meeting. She said the legal code did not specifically define “emergency circumstance,” so it would be up to the Board to define this for itself. The ensuing discussion was somewhat jumbled and included a sharp exchange between Brian and Director Fultz about not talking out of turn.
Director Fultz withdrew his motion and moved to defer only Items 9a, 9b, 10a, 10b, 10c, 10d, and 10f. Nobody was willing to second this (presumably because they attached a higher priority to enabling the business of the District to proceed). Director Fultz then moved to expand the discussion around Item 8c, and Director Smolley seconded this. This was followed by another round of public comment.
Paige Moorhead (Bracken Brae HOA President) emphasized the urgency of the current situation. A Bracken Brae community member hoped that the collaboration with the District could move forward. Another speaker emphasized that Bracken Brae is ahead of Forest Springs in its consolidation timetable and facing an imminent deadline.
Karen Vitale (a Forest Springs community representative) echoed this. She said the current Forest Springs water system was on life support, requiring $5,000 to $10,000 per month just to patch it back together. She said this cannot be kicked down the road any further. The proposal in the agenda at least would get things started. A Bracken Brae community member urged progress. Nicole Conan (a Forest Springs Board Member) said she thought it was very appropriate to consider this an emergency situation. A former Forest Springs resident and a current one each provided further detail.
Brian said Staff had invested a lot of time in preparing for the agendized item, and this item constituted the most urgent next step. Christina cautioned the Board not to take any actual action on a non-agendized item. However, she said the Board could still pursue an expanded discussion if it was in the interest of public health or uninterrupted service.
President Hill argued that the agendized Item 8c provided the Board with a clear opportunity to proceed with a concrete action. Director Fultz argued that this was insufficient, given the long delay in broader community engagement. Separately, he questioned whether the Department of Water Resources (DWR) would accept the use of the grant money being proposed in Item 8c.
President Hill called for a vote on the motion to expand the discussion of Item 8c. Christina requested that the motion be rephrased to clarify the emergency situation. The revised motion stated that the Board finds that an emergency circumstance exists justifying broadening the discussion under Item 8c to encompass the entire consolidation.
Directors Fultz and Smolley voted in favor of the motion. Director Largay and President Hill voted against it. The motion therefore failed to pass.
Since it was now clear that the expanded discussion was not on this evening’s agenda, members of the public were free to comment yet again, and a number of people stepped forward to do so. Much of what they had to say, though, essentially duplicated previous public input.
Nicole Launder Berridge of Bracken Brae provided a more extensive summary of her current situation. She said there was a high likelihood that Bracken Brae would lose its FEMA money at the end of August. She emphasized that Bracken Brae has been waiting for SLVWD for many months now, and representatives have come to the Board monthly since March. She said the Board signed a Letter of Intent with Bracken Brae in 2022, but it was failing to take this seriously. Bracken Brae is unable to give the Governor’s office the information needed for an extension because District Staff has been told not to talk with her, and the Sandis engineering firm will not talk with her because SLVWD is the lead agency. This has left her paralyzed, and she implored the Board to help her remove the barriers to progress. She said the consolidation with Bracken Brae could have been completed with the available funds, had the District been willing to meet with her and work with her.
Bruce Holloway of Boulder Creek offered some unrelated comments on matters of concern to him. He said the Board clearly needed to meet more often than once per month. He said he was disappointed to hear that Carly Blanchard had resigned, and he speculated as to why she did so. He also said he had discovered at least three voters in Felton who are not within the District.
Unfinished Business
Valley Gardens Housing Development Will-Serve Letter
General Manager Brian Frus introduced this agenda item. He reminded the Board that this item was presented and discussed at the June 6th Board meeting and that there were no open questions at that time. The Board merely needed to find that the conditions are reasonable, and that the District is therefore legally compelled to issue a will-serve letter assuring Robson Homes and the City of Scotts Valley that the District will supply water to this new development within its established sphere of influence. He said the District cannot impose requirements other than connection costs, and the District’s engineer has concurred with the developer's engineering findings. Brian also noted that a development of this type is far more efficient than the current norm in the valley. He discussed some of the complications of using both potable and recycled water. The current estimate is that the development will consume 42 acre feet of water, 2% of the District's current usage.
Director Largay had no questions. Director Smolley said he was satisfied that the District had done what it needed to do. Director Fultz agreed that, absent any compelling reasons not to do this, the District had no alternative but to approve it.
Director Fultz then asked a number of detailed questions aimed at assuring that nothing had been overlooked in the design plan. He had questions about pipe diameter that were ultimately answered by the Robson representative. He also had questions about the impact on the District’s surplus storage capacity. The response was that the capacity was determined to be adequate, but Director Fultz worried that some future change in Scotts Valley zoning might undermine this assessment.
Director Smolley moved that the Board found the conditions to be reasonable and consistent with District rules and regulations and therefore authorized the will-serve letter to be issued. President Hill seconded this.
There was no public comment. The motion passed 4-0.
Valley Gardens Housing Development Offsite Sandhills Mitigation
Interim General Manager Brian Frus introduced this agenda item. He reminded the Board that this item was initially discussed at the June 6th Board meeting, but there was an unresolved issue as to exactly how much Robson Homes would pay the District per square foot to mitigate 10 acres of land in addition to the 40 acres the District is already obligated to mitigate. This issue was subsequently resolved with a compromise total fee of $2.3 million (based on $5.20 per square foot). From the District’s perspective, this is a good deal because it will allow the District to cover the costs of its own 40 acres of mitigation without tapping into its existing revenue stream.
Director Largay said his understanding was that Robson Homes was doing its own Habitat Conservation Plan (HCP) but that there might still be some costs incurred by the District associated with onboarding this additional land. He sought assurance that the fee was intended to cover these additional costs along with any others. Brian said it was.
Director Smolley said he appreciated that the District had been able to negotiate what he considered to be a more appropriate fee. He had a detailed question about the precise amount of acreage, and Brian explained that this would be determined by a final assessment of the exact condition of the land.
Director Fultz pointed out that Jodi McGraw was still named in the agreement and that he had previously requested that the identity of the consultant for SLVWD be left open. He then asked a series of questions identifying a potential oversight in the drafting of the agreement which could expose the District to additional costs if Robson Homes were to unexpectedly withdraw. Brian agreed that it was possible that the nonrefundable $7500 fee would not entirely cover these.
Director Largay said he saw this as a fantastic opportunity for the District, for Scotts Valley, and for the sandhills habit. It was as if the District (specifically, Carly Blanchard and Jodi McGraw) had found $2 million lying on the sidewalk. He said it was unfortunate that Carly was no longer with the District, and he reported that part of the reason she left, according to her, was due to the toxic environment of the Board meetings and the disrespect shown by certain participants. His hope was that everyone could be respectful, and that the District wouldn’t lose any more staff members.
Director Largay further explained that Jodi McGraw was listed in the agreement because she was working for Robson Homes to develop the plan for Valley Gardens. With regard to Director Fultz’s concern, he proposed that any and all costs incurred by the District in support of adding the agreed-upon 10 acres should be billed to Robson Homes under their contract with Jodi McGraw. Lastly, he thought it would be appropriate for the agreement to ensure that any Staff and Legal costs in excess of the $7500 be covered by Robson so that the District would not be subsidizing the mitigation for a third party. Brian Frus said he would appreciate improved wording in the contract.
Director Fultz said Jodi McGraw’s dual role could potentially be viewed as a conflict of interest.
President Hill suggested that the Board should send the agreement back to Staff for some further refinement. Director Largay recommended instead that the Board approve the measure with instruction to Staff to adjust the terms of the agreement. Legal Counsel Christina Pritchard said the requested changes were sufficiently substantive that the Board could not simply trust Staff to work them out. She also identified related points that Robson might want to weigh in on.
President Hill concluded that both parties need to work through the remaining details. There was no public comment.
Phase 1 Pipeline Project for Bracken Brae and Forest Springs Consolidation
Interim General Manager Brian Frus introduced this agenda item. It concerned the Bracken Brae and Forest Springs consolidations, and it was initially presented to the Board at its meeting on May 2nd. Brian essentially repeated his May argument: he proposed that in light of the unanticipated $12 million of infrastructure investment required to support the pending consolidations, the District’s best option was to spend the remaining $2.5 million of its Department of Water Resources (DWR) consolidation-support grant on a $3.9 million upgrade of existing District pipelines as an essential first step. His update was that this project would be funded by the grant and a forthcoming loan as part of a pending revision to the District’s list of planned capital improvement projects.
Director Smolley noted that Staff had failed to act on the Board’s two May 2nd requests: (1) get a contractor estimate, and (2) schedule a work-study session. Brian argued that he wasn’t comfortable taking these steps at this time, and he didn’t want to involve the Board and/or public in planning details. He said asking for a contractor’s estimate for a project that was not shovel-ready would damage the District’s reputation with local contractors. He said a lot of what Staff does is tedious and requires Legal Counsel. He only wanted to involve the Board in tangible proposals that were ready for a Board decision. He didn’t see the benefit of bringing the public into the making of the sausage.
Director Largay said he was comfortable with this opportunity to make incremental progress based on currently available information and funds.
Director Fultz repeated his complaints about Staff’s unwillingness to engage more broadly with the Board and the community. He saw this as being at odds with the Board’s responsibility to set policy and with the community’s stake in this particular issue.
Director Fultz then turned his attention to the question of whether DWR would accept the Staff proposal as fulfilling the grant expectations. Brian said the District was working closely with DWR; there have been many meetings, and DWR is okay with the revised project scope. Director Fultz argued that the Board needed to see this in writing, and Brian said he was comfortable moving forward based on the established relationship with DWR. He said the District has an agreement with DWR that provides a certain amount of latitude in how the money is spent. He said that once he has Board approval, he can get bids, and once he has bids, he can go back to DWR and get further assurance. The exchange grew increasingly combative with people speaking over one another and points being repeated multiple times. Director Fultz asked again what the exact agreement was, and Brian said, “Don’t do this to me, Bob. Stop it, stop it, stop it, stop it, stop it, stop it.” Director Fultz continued to push his argument that the Board didn’t know exactly what the DWR was agreeing to. Brian said the District wouldn’t be spending money until the bid was awarded two or three months from now, and he would bring the matter back to the Board at that time. Director Fultz appeared to say something under his breath to President Hill, and Brian interjected, “Do you want to f***ing mock me you f***ing asshole?” President Hill’s response was, “Calm down.”
Director Fultz switched gears and asked which Capital Improvement Plan projects were being displaced by this. President Hill said this obviously wasn’t known at the present time. Director Fultz said the Board didn’t have any answers; he wanted to consolidate, but no progress was being made.
Director Largay moved to approve the proposal as written. Director Smolley offered to make the motion instead. He moved to direct the General Manager to fund the project using a combination of the remaining DWR grant money and debt financing. President Hill seconded.
This led to yet another round of public comment. Nicole Launder-Berridge read some of the text from the grant. She said there had been very productive meetings in the past, but those discussions had ended. The goal of the grant fund was to consolidate small water companies. She wanted to discuss a revised handwritten estimate she obtained from Sandis. She argued that there was an alternate possibility via which $700,000 of the DWR grant would be used differently so that the Bracken Brae consolidation could be completed in Phase 1. President Hill interrupted to say that she was out of time, and it was very difficult to respond to a lengthy oral presentation such as she was making. Nicole requested a one-week delay so that the District could meet and discuss her alternate plan. President Hill said Staff needed to find a way to schedule the requested meeting. Director Fultz pushed for a meeting next week as well.
Director Largay said his understanding was that the single best thing the Board could do to advance the consolidation was to approve the agenda item as moved.
Bo Jenson of Bracken Brae said there was enough funding for the Bracken Brae consolidation within the Phase 1 if the DWR grant would be used as originally intended.
Karen Vitale said there were disagreements about the intent of the grant and whether funds were earmarked and whether changes of scope occurred and who gets the money and who sits on the sideline. She thought the critical thing was to move forward. She didn’t see how further study sessions would help resolve this.
James Furtado of SLVWD said he had worked diligently on this project for a long time. He said everything stopped in October. He said the action that he just saw by the Interim General Manager toward the Board was absolutely uncalled for, and that’s how Staff is treated as well.
Director Fultz reiterated his concern about Bracken Brae potentially losing their money.
The Vice President of Bracken Brae asked the Board to delay the decision so as to reconsider the consolidation strategy. She asked that a meeting be scheduled. She closed by saying the consolidation just needed to be moved forward.
Matt Dunston of Bracken Brae seconded this and offered his own speculation about how the pipeline could be run.
Steven from Forest Springs encouraged the Board to move forward in some capacity. He supported the General Manager’s plan and also urged further meetings.
Nicole Launder-Berridge reiterated her plea for an additional week to allow for the meeting she previously requested. President Hill said he would try, but he couldn’t promise this.
Bernard Garcia of Forest Springs said he was curious about the abrupt halt in October. He just wanted to make sure that this keeps on moving forward for everyone.
The motion passed 3-1 with Director Fultz opposed.
New Business
Surplus Policy – Equipment and Supplies
This agenda item was introduced by Heather Ippoliti, the consultant acting as Interim Finance Manager. In 2020, the Board adopted a policy for the disposal of surplus real property, but it didn’t address the disposal of surplus supplies and equipment. A supplemental policy was drafted and reviewed in June by the Budget and Finance Committee. This policy prioritizes obtaining the highest value for a functioning item rather than just disposing of it when no longer needed. At the same time, it avoids overly burdening Staff with the administration of disposal if the item has little or no value.
This policy made sense to everyone, and Director Smolley moved to adopt it. President Hill seconded, and there was no public comment. The motion passed 4-0.
Consent Agenda
The Consent Agenda had ten items (any of which could be moved to the regular agenda upon request from a Director):
a. Fall Creek Fish Ladder Change Order.
b. Alta Via Change Orders
c. Loch Lomond Feasibility Study
d. Meter Review Fee
e. Delinquent Water Charges
f. Budget Amendment FY 24-25
g. Cure and Correct
h. Quarterly Status Reports
i. Corrected Board Meeting Minutes: May 2, 2024
j. Board Meeting Minutes: May 21, June 6, June 13, and June 27, 2024
Director Fultz pulled items (a), (b), (c), (d), (e), (f), and (h).
Bruce Holloway of Boulder Creek commented on items (g), (h), (i), and (j). On item (g), he said that he watched the meeting on video and thought it could have been part of a Brown Act blooper real. He identified numerous people who he thought should have intervened to prevent an item from being added to the agenda, which is what necessitated the “Cure and Correct” item (g) on this evening’s agenda.
On item (h), Bruce had a comment about the Quarterly Financial Report. He identified a calculation that was no longer necessary with the new rate plan. He also complained that status of the loans was reported as of April 30th, when the June 30th status seemed to be already available. In addition, he noticed that bank statements from February through April were included, but May and June statements were not. He had the same comment with regard to bill lists.
On item (i), Bruce appreciated the “Corrected Board Meeting Minutes” but reiterated his complaints with the “Board Meeting Minutes” in item (j). He offered a lengthy analysis of what should have been reported instead of what actually was reported. District Secretary Jen Torres said she simply reported what was said at the meeting. Christina confirmed that minutes reflect what was said, not what should have been said.
On item (a), Director Fultz had a quick question, and the Board voted 4-0 to authorize payment for the Change Order.
On item (b), Director Fultz sought further detail on the construction in question. The Board then voted 4-0 to authorize the payment for the Change Order.
On item (c), Director Fultz wanted to know what the City of Santa Cruz was proposing to charge the District for raw Loch Lomond water and for treated City water. Brian said Staff was just asking the Board to approve the chosen consultant for the project in question. A 2010 study had examined the technical feasibility and established the costs of developing two alternative plans for utilizing the District’s Loch Lomond Reservoir allotment. The District was now seeking a comprehensive update of this study including additional elements listed in the scope of services. Two consultants responded with proposals, and Staff was recommending Carollo Engineers. Director Fultz objected to spending $99,588 to update the 2010 feasibility study without finding out what the City of Santa Cruz would charge for the water itself. The motion to approve the consultant contract was made by Director Smolley, and President Hill seconded.
There was one public comment. Cynthia Dzendzel asked if there was any alternate use for Loch Lomond water other than potable water, since there appear to be significant negatives to this latter use. She wondered about using it for passive recharge of the aquifer or for irrigation. Brian essentially declined to comment. He said this was all to be analyzed as part of the study.
The motion passed 3-1, with Director Fultz opposed.
On item (d) Director Fultz, noted that the proposed charge would simply cover some of the costs currently being incurred by the District due to people requesting meter reviews at no charge. President Hill added that other Districts all charge for this. Director Fultz moved to approve the motion. Director Smolley seconded. There was no further discussion, and the motion passed 4-0.
On item (e), Director Fultz asked about the $181,000 in past-due charges being referred to the County. He wanted to know why the District couldn’t refer more of the $600,000 in currently outstanding charges. Heather explained that the present policy required three separate letters to be sent out first. Heather volunteered to return to the Board with a revised policy. She said the District had no other good options for trying to recover these charges. Director Fultz moved to approve the submission as proposed. President Hill seconded. There were no comments from the public. The motion passed 4-0.
On item (f), Director Fultz had a question about the intent of the Budget Amendment. Heather said she was trying to bring the revenue projection up to agree with the adopted rate study. She was similarly trying to update FEMA reimbursements. Director Fultz moved to adopt the resolution as proposed. President Hill seconded. There were no comments from the public. The motion passed 4-0.
On item (h), Director Fultz had questions on multiple department reports, mostly aimed at expanding his understanding of various operating details. District Engineer Garrett Roffe explained some of the details of ongoing tank replacement and fire-hardening projects. Operations Director James Furtado said the District was still making good use of surface water, primarily due to its continued utilization of Fall Creek.
Director Smolley moved to approve items (g), (i), and (j). President Hill seconded. There was no further discussion. The motion passed 4-0.
Written Communications
There was a contested exchange regarding a letter from Debra Loewen. Brian claimed that her question had been answered and that the $40,000 legal expenditure that she was questioning was based on customary cost, not actual spending. Bruce Holloway of Boulder Creek said Debra was correct in claiming that Brian had originally described the $40,000 as already having been spent.
The meeting adjourned at 10:30 PM.