SLVWD Board Meeting Summary
August 18, 2022
Mark Dolson
Highlights:
Conjunctive Use Project CEQA Budget
2021 CIP Pipeline Project Construction Grant
Big Basin Water Company Consolidation Negotiations
Annual Disclosure Report for Employee Reimbursements
Memoranda of Understanding with Employees
Next Board meeting is at 6:30 PM on September 1st.
Preliminaries
There was no Closed Session.
There was one non-agenda related comment from a member of the public. Grover Stone followed up on an email that he sent two days earlier concerning a vacant lot that he owns on Clear Creek Road. He said the lot previously contained a residential structure which burned in the CZU Fire together with the meter. For the past two months, he has been billed $45 per month for "meter maintenance,” and he hoped that the Board could rectify this. District Manager Rick Rogers replied that the situation was a little more complicated than described. A three-year waiver was given when the structure was destroyed prior to the CZU Fire. Grover said a tenant had damaged the structure to the point that it was no longer habitable, and the waiver was to allow for repairs, which were completed. Rick said he needed to double check with legal counsel but should be able to resolve this administratively without the Board. He promised to respond by August 22nd.
President Mahood reported on two items of interest. First, she noted that the District’s response to the Grand Jury report had been submitted, and there was a striking alignment of all water district responses (even though there was no collusion). Second, she announced that Santa Margarita Groundwater Agency (SMGWA) staff had scheduled an Aquifer Recharge Workshop on Wednesday September 7th from 2:30 to 5:30 PM. Invitations will be sent to the Board, and an announcement will be placed on the District’s website. This event will be helpful in developing a common language for upcoming SMGWA projects in the range of $7-8 million. Rick asked District Counsel Gina Nicholls if there would be any Brown Act concerns if three or more Directors were to attend. Gina said it would only be problematic if the Directors actively participated in discussion. Director Fultz asked if injection wells would be one of the topics. President Mahood said there would only be general discussion about operating experiences with injection wells. The meeting will be recorded.
Unfinished Business
Remote Meeting Authorization Under AB361
The Board unanimously approved a recurring monthly resolution enabling meetings to continue being conducted remotely.
New Business
Conjunctive Use Project (CUP) California Environmental Quality Act (CEQA) Budget
Environmental Programs Manager Carly Blanchard introduced this agenda item. She reminded the Board that the District’s description of its Conjunctive Use Project was discussed at the previous Board meeting on August 4th, and Board members subsequently submitted various recommended revisions to the text. The goal of the Conjunctive Use Project is to enable the District to minimize depletion of groundwater by allowing water to be freely transferred between various parts of the District’s water system as needed. The goal of this agenda item was to secure Board approval for the District Manager to enter into professional services contracts of $132,058 with Rincon Consultants (to complete the Environmental Impact Review (EIR) document and process), $64,250 with Nossaman (for legal costs associated with completing the EIR process), and $40,000 with Mike Podlech (to provide essential support as a fisheries biologist).
Director Ackemann asked what kind of public meeting is envisioned and what kind of advertising will be needed as part of the EIR. Carly said this was within the scope of the work to be performed by Rincon. (The contract assumes that the District will handle noticing requirements and secure a venue for an in-person meeting.)
Director Fultz asked if there were any grant possibilities for funding some of the EIR. Carly said this was conceivable for the CUP project itself. Infrastructure (e.g., treatment plant upgrades) will be eligible. The District is also looking at Santa Margarita Groundwater Agency (SMGWA) Department of Water Resources (DWR) grants (possibly for the EIR).
Director Fultz noted that the Rincon project plan includes a peer review to be performed by Stillwater. He asked if there would be any advantage to going out to bid for this. Carly said it would be difficult to bring in someone else as they would have to come up to speed.
Lastly, Director Fultz took issue with the reference to “significant public concerns” (discussed at the previous Board meeting and still present in the Staff memo). He reminded everyone that no concerns were expressed by members of the public (the lion’s share were expressed by the City of Santa Cruz Water Department). He said he was disappointed that the District and the City of Santa Cruz weren't able to work out their differences without the expense of an EIR process.
Director Hill asked where the planned expenses fit into the current budget. Carly said the budget called for a smaller expenditure, but she would have to double-check on whether it was a capital expense or an operating expense. President Mahood said it should clearly be capital.
Director Smolley had a number of questions about contract details. He observed that the Nossaman budget detail makes assumption about some work to be done by "others." He wanted to be sure that these assumptions were appropriately covered by the team (so that there would be no need for an additional contract for work by “others”). When Carly said she couldn’t answer this, Director Smolley requested that proposals be circulated prior to the team kick-off meeting so that everyone can see what everyone is else is committing to and expecting, and the District can ensure that there are no gaps.
Director Smolley also noted that the Nossaman budget amount is a range between $43,000 and $64,000. He understood that it wasn’t possible to predict the precise number of hours that would be needed, but he suggested that the District initially specify a lower maximum (e.g., $50,000) while still allowing this amount to be subsequently increased. This proposal didn’t gain much Board traction, but it was agreed that the District would routinely track the budget on a monthly basis so as to spot any concerning trends early on.
Lastly, Director Smolley asked about details of the contract with Mike Podlech. He received assurances from Rick that the District would require Mike to explicitly list the anticipated number of hours that he expected to devote to the project. He also received clarification from Gina that the $13,000 previously approved by the Board would be deducted from the total.
Director Hill followed up on a question raised by Director Smolley regarding a possible future analysis of the District’s Loch Lomond Allotment. The District and the City of Santa Cruz disagree about the need for this analysis. President Mahood said the District’s position is that this is not SLVWD’s problem to solve. It is up to the City of Santa Cruz to figure out the impact when the District does what it is legally entitled to do. Director Smolley added that the District doesn’t have to fully resolve the City of Santa Cruz comments in order to complete its SLVWD EIR, and that it would be up to the DWR (not the City) to decide whether the District has adequately addressed comments. Gina said the Nossaman legal team would be taking a further look at this.
Director Smolley moved that the Board approve the recommendation to authorize the District Manager to enter into contracts in not-to-exceed amounts of $132,058 with Rincon, $64,250 with Nossaman, and $32,000 with Mike Podlech (because $8000 was previously accounted for as part of the $13,000 noted above). President Mahood seconded. The motion passed 5-0.
Awarding the Construction Contract for the 2021 CIP Pipeline
District Engineer Josh Wolff introduced this agenda item as the largest project the District has ever taken on. The District previously issued an RFP with plans, specifications, and bidding requirements for the 2021 CIP Pipeline Project. This project bundles together multiple proactive measures. First, an aging 40,000-gallon redwood tank will be replaced with a new 160,000- gallon tank fitted with level-monitoring instrumentation that will tie in to the District’s existing SCADA system. Second, approximately 8,500 feet of aging and/or undersized water pipeline spread across four locations within the District will be replaced with 8- inch ductile iron pipe. This will improve water delivery and fire protection.
Five bids were received. The low bid of $5,023,379.57 was submitted by JMB Construction. The next lowest bid was for $5,179,322.78 from Granite Rock Company. The highest bid was for $6,306,410.00 from Anderson Pacific Engineering. The original cost estimate for this project was $5.8 million, but there was also a 15% contingency. Josh said that as costs continue to escalate, the District will likely end up paying close to the originally projected $6.67 million. The money to pay for this project will come from the District’s $15 million COP loan.
Since the District has not previously worked with JMB Construction, Josh conducted extensive due diligence. He reported that the feedback was so uniformly positive that he felt comfortable recommending JMB as the District’s first choice.
Director Smolley (Chair of the Engineering Committee) commended Josh for soliciting feedback from a broader set of references than the ones recommended by JMB Construction.
Director Fultz (a member of the Engineering Committee) asked if the pipeline replacement along Zayante Road was part of the Lompico Assessment District (LAD) funding. Rick said it was, but all of the LAD funds have already been expended, so the District will be paying for this via its loan.
Director Fultz said the strategy of bundling a lot of projects together made a lot of sense. He was really happy with the number of responses. However, he noted that all of JMB's work has been performed in urban areas, and he asked about their experience in environments like the SLV. Josh said he talked with Brisbane about this. Some of JMB’s work there was up in the hills, though still not with roads like those in the SLV. Josh said his biggest concern was with traffic control, and he believed that JMB had sufficient relevant experience. Director Fultz explained that Josh was recommending an unknown entity for a relatively small savings, so he wanted the District to be thorough in its assessment. Josh said he had put extra time and effort into this. Close to a dozen people reassured him about JMB’s responsiveness.
Director Fultz asked Josh to explain the provisions in the contract for delays in obtaining required materials. Josh said there were two escalation clauses. One is for cost of materials and uses an indexed price that allows JMB to bill for changes in material cost. The other is for cost of labor and uses a prevailing wage standard. Director Fultz said he was satisfied that Josh had done a lot of due diligence, and he hoped that the project would be completed for under $6.7 million.
Director Ackemann had no questions or comments. Director Hill noted that even though the two lowest bids differed by only around 3%, there were still considerably larger variances in the individual line items. Josh said this was to be expected. Different contractors choose to emphasize different line items. Josh said he primarily looked at the line items to make sure that each bid was internally consistent and not missing anything. Then he looked at the bottom line. Some contractors are more efficient in certain areas. Others simply distribute costs differently.
President Mahood thanked Josh for his detailed presentation. She said she was very happy the District was finally making progress on capital projects that will make life better in the valley.
There was no public comment. Director Smolley moved that the Board direct the District Manager to enter into a contract with JMB Construction in the amount of $5,023,000. Director Fultz seconded. The motion passed 5-0.
Ongoing Exploration of Possible Consolidation of Big Basin Mutual Water Company
District Manager Rick Rogers introduced this agenda item. On October 26, 2021, owners of the Big Basin Water Company (BBWC) requested that the District explore possible consolidation of the Company’s water system into the District. On November 4, the District’s Board of Directors approved the request on certain conditions. Since then, a number of discussions have occurred with Jim Moore, manager and president of BBWC, and with agency partners in the effort to help the Big Basin service area, but no agreements have yet been reached. One key open issue concerns 540 acres of BBWC watershed land and a separate parcel of BBWC wastewater system land over which the District may need easements. Another important and related issue is whether funds from any sale of watershed land by the Company would be placed in escrow as security to help cover the District’s costs to facilitate consolidation and provide emergency operations assistance. The purpose of this agenda item is to enable the District Manager and Legal Counsel to enter into property negotiations and to consult with the Board in closed session.
Board discussion was fairly brief. Directors Hill and Smolley said this made sense to them. Director Ackemann sought confirmation that retention of an appraiser would be part of the discussion. District Counsel Gina Nicholls said it would. She said the key issue is whether some financial security can be obtained from the real estate.
There was no public input. Director Smolley moved to designate the District Manager and District Counsel as representatives to negotiate with BBWC regarding real property. The motion was seconded, and it passed 5-0.
Annual Disclosure Report of Employee Reimbursements
District Manager Rick Rogers introduced this agenda item as an annual bit of housekeeping. He recommended that the Board accept and file the Annual Disclosure Report of Employee Reimbursements of at least $100 for Fiscal Year 2021-2022.
Director Ackemann asked if a uniform allowance was built into the employee benefit. Rick said it was.
There was no public comment. President Mahood moved to accept and file the annual disclosure report. Director Ackemann seconded. The motion passed 5-0.
Memoranda of Understanding (MOUs) for Classified and Management, Supervisory and Confidential Employees
District Counsel Gina Nicholls introduced this agenda item. She explained that any party (the District or the union or the management bargaining unit) can give notice between September 1st and October 1st that they want to renegotiate the MOUs. This hasn't been done since the beginning of the MOUs in 2017. The District is expecting both union and management to give notice this year. Staff therefore recommended that the Board designate the District Manager and District Counsel as representatives of the District for labor negotiations.
There was no public comment. Director Ackemann moved to appoint the District Manager and District Counsel as representatives, and Director Smolley seconded. The motion passed 5-0.
Consent Agenda
There were no requests to pull any items, so the published minutes were accepted without objection.
District Manager’s Report
Rick announced that the Quail Hollow pipeline replacement (improving 6” main to 12” main for improved water transfer and fire flow) is approaching completion. All the new pipe should be installed by the end of this week.
Department Status Reports
Director Fultz asked a number of detailed questions, and Directors Smolley and Ackemann each asked one. Some of these questions were not immediately answerable by Staff. There were three responses of note:
Josh said that updating of the GIS system, which he originally estimated would take one year, was now more likely to take 18 months (meaning that it would be completed ten months from now). Josh said the GIS Specialist was pulled onto other projects to help out.
Rick said the District is currently operating with four open Staff positions. Some temporary support has proven helpful.
Rick said that it was difficult to quantify the percentage of the District’s water production that was not generating revenue (e.g., due to leaks) but that doing so remains one of his objectives. Director Smolley reminded Rick that Staff made a commitment at the beginning of the year to conduct a water-loss audit before the end of the year. The Board also recommended, following the District’s last water leak analysis in May of 2021, repeating this assessment at two-year intervals. Rick said he expected the percentage of lost water to be somewhere around 16%.
Written Communications
There were no written communications to discuss.
The meeting was adjourned at 8:05 PM.