SLVWD Board Meeting Summary
October 15, 2026
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Award of Professional Services Agreement for District Legal Counsel
Termination of Professional Legal Services Agreement for District Legal Counsel
Water Shortage Contingency Plan and Actions Updates
Award of Construction Contract for Big Steel Pumphouse
Habitat Conservation Plan
Olympia and Zayante Land Management
Next Board meeting will be at 6:30 PM on November 4, 2026
Preliminaries
All five Directors were present.
President Russ announced that the Board took no reportable actions in the just-concluded Closed Session.
There were no changes to the agenda.
There was no public comment on non-agendized topics.
Unfinished Business
None.
New Business
Award of Professional Services Agreement for District Legal Counsel
General Manager Jason Lillion introduced this agenda item. He briefly reviewed the relevant history: On April 2, 2026, the Board directed staff to reissue the RFP for General Counsel legal services to broaden the comparison of available firms and return with a summary of responses and a recommendation. This led to a choice between continuing to employ White Brenner and switching to Aleshire & Wynder. At the August 20th Board meeting, Directors expressed concern about the higher rate structure of Aleshire & Wynder and requested further assessment with the Board President and Vice President directly involved.
President Russ and Vice President Layng subsequently joined General Manager Jason Lillion on a one-hour Zoom call with Phillip Hall of Aleshire & Wynder. Both were favorably impressed by the depth of his responses on a wide range of topics. Mr. Hall demonstrated extensive knowledge of Proposition 218 processes and likely current litigation paths; public and private eminent domain issues and processes; appraisal and negotiation issues related to surplus property; the Brown Act; and several other legal issues the District is likely to face. If awarded the contract, Mr. Hall has agreed to attend Board meetings remotely, which eliminates travel-related billing, and to remain mindful of the Board’s tight budget constraints.
President Russ and Vice President Layng felt that, although his billing rate is higher, Mr. Hall would likely be more productive during billed time and could actually reduce total monthly billing. Mr. Hall was present (via Zoom) to answer any questions the Board might have.
The Board members met with Mr. Hall in Closed Session and had a similarly favorable impression. President Russ began the Open Session discussion by saying he felt it was time for a change, and he wanted to thank Gage Marchini and his predecessors from White Brenner.
Director Layng agreed. She said she was impressed with Mr. Hall’s knowledge of certain issues.
Director Smolley said he liked the discussion they were able to have with Mr. Hall in Closed Session.
Director Largay said he supported changing firms. He expressed gratitude and appreciation for the work of White Brenner.
Director Fultz said it was clear that Mr. Hall has a lot of knowledge, but this comes with what looks like a higher price tag. The hope is that Mr. Hall will be more productive, and the costs won't go up. He said this remains to be seen. He said his personal preference would have been for a more gradual transition in which the Board could have initially worked with Mr. Hall on a few selected projects. He was also disappointed that more firms didn’t apply. Lastly, he said he was uncomfortable with the notion of voting on this kind of change at the end of his own term on the Board. He said he would prefer to let the new Board make this decision. For all these reasons, he said he would abstain.
President Russ said a wide range of topics were discussed in the interview and in the Closed Session, and Mr. Hall seems to be very competent in most of these areas and honest enough to tell us when he doesn't know. He said he appreciated Director Fultz's comment, but thought it was worth moving forward.
There was no public comment.
President Russ moved to award the contract to Aleshire & Wynder, and Director Layng seconded. The motion was approved 4-0-1 with Director Fultz abstaining.
On behalf of White Brenner, Gage Marchini said it had been their pleasure to provide legal services. He said they would work with Mr. Hall to ensure a smooth transition, and he noted that some depositions are coming up at the end of the month for the Walker litigation
Termination of Professional Legal Services Agreement for District Legal Counsel
President Russ introduced this agenda item. There was some uncertainty about the proper procedure. Legal Counsel Gage Marchini provided direction. He said, if the intent is not to have the transition to new legal counsel be effective immediately, then the Board should defer action until there is a specific termination date. He said his firm, White Brenner, could work with the District to ensure a smooth transition. President Russ directed Staff to follow up.
Water Shortage Contingency Plan and Actions Updates
Environmental Programs Manager Chris Klier introduced this agenda item. He said this review of the District’s Water Shortage Contingency Plan (WSCP) was requested by Director Fultz. The District’s current WSCP, adopted as part of the 2025 Urban Water Management Plan (UWMP) in June 2026, was lightly revised from the 2020 version.
A draft Amendment to the 2027 Santa Margarita Groundwater Sustainability Plan (GSP) was recently published. It impacts future drought stage assessments by making changes to the groundwater level thresholds. Undesirable results will now be identified when groundwater levels fall below minimum thresholds in at least three monitoring wells for two consecutive years, compared to the previous standard of any single well as in the current WSCP.
Staff currently utilize the District’s weather station on the Operations Building in downtown Boulder Creek (13057 Highway 9 Boulder Creek, CA) for rain gauging, which is used for drought stage assessment. This weather station has been the standard for District rain gauging and has long-term rainfall information available. Director Fultz has expressed concern about the accuracy of the station and whether the location is representative of our rainfall, and thus accurate for our drought stage assessment. Staff are researching this topic.
The District received 40.08 inches of rain at its downtown Boulder Creek rain gauge in Water Year 2025-26 (October 1, 2025 - September 30, 2026), which is about 89% of the annual average rainfall.
The District remains in a Stage 1 Water Shortage due to supply reduction from the 2020 CZU Fire, which destroyed numerous surface water intakes along the Peavine and 5-Mile Pipelines.
Director Largay said he liked the new spatial and temporal averaging, and he supported the use of the District’s reference rain gauge to declare drought (i.e., by comparing the same station over time). He said this was all consistent with best practices.
Director Layng said she supported the SMGWA GSP amendment. The Environmental Committee talked extensively about the choice of weather station and concluded that this is properly a Staff decision.
Director Fultz observed that the District has been in Stage 1 since 2014. Director Smolley asked what the real-world consequences of this were (i.e., what message is the District sending, and what benefit is it deriving?). Chris said the District’s messaging was fairly light, but Jason pointed out that ending the Stage 1 status could send the message to the State that the District is no longer in an emergency, and the emergency intertie use is no longer necessary. This was sufficient for Director Smolley.
Director Fultz said he had a very different view. He didn’t see any upside in communicating to the community that the District is in a Stage 1 water shortage when it is having no current issue supplying water. He said most people interpret a water shortage to refer to a drought, and it was fundamentally dishonest to suggest that we are in a drought when we’re not. He said, in a Stage 1 water shortage, the District is supposed to be driving toward a 10% reduction. (It is unclear whether this is supposed to be compounded year over year.) Also, watering is supposed to be restricted between 10:00 AM and 6:00 PM, there are supposed to be shutoff nozzles on all hoses, it is prohibited to wash down hard surfaces, and restaurants can only serve water on demand. He asked if the District was policing this. He said the District’s message should be that it is using the intertie to bring water up from Felton. He said most people probably don’t even know that the District is at Stage 1. Meanwhile, the State knows we are not in a drought, so why should we maintain this fiction? President Russ restated the concern about jeopardizing the District’s conjunctive use, but Director Fultz insisted that policies need to reflect the actual situation.
Legal Counsel Gage Marchini said the water shortage provisions in the District’s water management plan come from statutory requirements in the water code. To some degree, these are fixed.
Director Fultz questioned whether the rain gauge was adequately calibrated. He also took exception to its location. He said the gauge should be located where the water is obtained (i.e., up on the mountain in the forest). Director Largay commented that the USGS has standard guidance that rain gauges should be located at a distance at least twice the height of surrounding trees, which could be an issue. Director Layng added that Santa Clara’s rain gauge is at the airport. She thought Staff was doing their due diligence, and the Board was over-reaching.
Director Fultz said he didn’t care what Santa Clara does. He wanted the Administration Committee to address the issues he was raising concerns about. Also, he asked whether the specific actions in the District’s Stage 1, 2, and 3 responses were reasonable, actionable, and measurable. He said the community has been really good about saving water over the years, and the District is well below the state's goal for indoor use.
President Russ supported having the Administration Committee look at this, and Director Smolley supported this as well.
Gage said there is a water code section that sets for the requirements for the District’s water shortage contingency plan. However, these have to be locally appropriate, so there is some degree of discretion in developing the policies. The stages themselves may be set by the State.
There was no public comment.
President Russ said this matter was being sent back to Staff and the Administration Committee.
Award of Construction Contract for Big Steel Pumphouse
District Engineer Garrett Roffe introduced this agenda item. His memo provided the following background information: SLVWD was awarded a grant through the DWR’s “Water Quality, Supply, and Infrastructure Improvement Act of 2014” to be used for the fire hardening of critical water infrastructure. The District has chosen to target Big Steel pump station, which currently resides in a wood-framed structure. Replacing this vulnerability (the existing wood-framed structure) with fire resistant metal roofs and a CMU block wall will harden this important infrastructure at a relatively low cost.
This project consists of the complete demolition and removal of the existing wood-framed pump station structure. The work includes construction of new reinforced CMU walls, new fire-resistant metal roof, and new perimeter grade beam foundation. Existing equipment shall remain in place and operational throughout construction.
Garrett said the grant is for $610,000 ($305,000 plus a $305,000 District match). The District received a bid of $448,500 from Corcus Construction. The pump station bid in February 2026 for Redwood Park (which is smaller) was over $500,000 for a brand-new station, but the comparable part of that bid was only $175,000. The Big Steel project is twice the size, so this implies a cost of $350,000. The temporary facility and the demolition make up the difference between this and the $448,500.
President Russ asked if Garrett was surprised by the $448,500 figure, and Garrett said he was hoping for something around $200,000. President Russ also wondered why the District received only a single bid. Garrett said this could be an unattractive project, or it could be that contractors were busy with other projects. He said Anderson Pacific attended the required pre-bid meeting but did not submit a bid. Lastly, President Russ asked if this project was too big for the District to tackle in-house. Garrett said they have a lot on their plate, and the challenge is getting this done within the time window of the grant (May, 2027).
Director Fultz said some bids go well for the District, and some do not, but this one seems way off. He said Corcus did just finish the Highland Tank. He asked when they would start and what the risk is of them missing the deadline. Garrett said his goal is to get this underway and completed as soon as possible. He said it’s up to the contractor whether or not they start before the rainy season. The District hasn’t yet received their schedule.
Chris commented that it could be challenging to get an extension on this grant. Director Fultz said it might be worth checking on this. Director Smolley asked if the deadline was for completing the work or for expending the funds. Garrett said grants usually require that the project is completed. Director Smolley said the District should put this in the contract with Corcus, even if it makes the price higher. He didn’t want the risk of the grant not being utilized. Garrett said the contract is for 150 calendar days (which probably comes to April 15th).
Director Layng asked if the mandatory in-person preview was essential, and she also asked why the District waited so long to go out to bid. Everyone agreed that the preview was necessary, and Garrett said they were just doing as many projects as fast as they can.
Director Largay said he had seen a few situations where the grant deadline is for submission of all reimbursable materials and documentation, not the completion of work. Also, he said, some grant funders obligate recipients to get multiple bids. He suggested confirming that the planned course of action will be okay.
Director Smolley said Staff should follow up on the Board’s questions. President Russ suggested that the Board could authorize the contract but direct the General Manager to investigate further first. Director Fultz asked how time-critical it was to proceed immediately. Garrett said he had a meeting scheduled on 10/19 with the grant providers.
Lastly, Director Smolley asked if the reimbursable amount is payable in one lump sum at the end, or if it is payable monthly. The answer was that it might be quarterly. Director Fultz recommended that all of the Board’s concerns should be addressed in the District’s standard protocol.
There was no public comment.
Director Smolley moved to direct the General Manager to execute the notice of award to Corcus Construction no sooner than October 20th. The motion was seconded, and it passed 5-0.
Habitat Conservation Plan
Environmental Programs Manager Chris Klier introduced this agenda item. Chris’s memo said the District is preparing its Sandhills Habitat Conservation Plan (HCP) for submittal to the U.S. Fish and Wildlife Service (USFWS). The HCP will allow the District to obtain a federal incidental take permit (ITP) from the USFWS under the federal Endangered Species Act. The HCP will help conserve the covered species and enhance the natural communities that support them as well as other native species; while also simplifying and reducing cost of District operations and maintenance in the Sandhills.
The HCP identifies the species to be covered and permit area (Section 1), the activities that will be covered by the permit (Chapter 2), the environmental setting (Chapter 3), the activities’ anticipated impacts to the species (Chapter 4), and the steps that the District will take to avoid, minimize, and mitigate the impacts of the covered activities on the covered species (Chapter 5), describes plan implementation (Chapter 6), identifies the approach to costs and funding (Chapter 7), and identifies alternatives to the proposed taking and why they were not pursued by the District (Chapter 8).
Sections 1-5 of the HCP are fully drafted. The content of sections 6-8 is dependent upon section 5, which includes an unconventional mitigation strategy. The unconventional features include providing mitigation for the Valley Gardens HCP and including future mitigation for activities of the District or other entities. Due to this, the District submitted the Conservation and Restoration Plan, which informs Section 5, to USFWS in February 2026 for review before completing section 6-8.
The District met with the USFWS in March 2026 and has since regularly followed up to check on the status of the Conservation and Restoration Plan review. Staff received the USFWS review and comments on the Conservation and Restoration Plan on October 1, 2026, and have scheduled a meeting to discuss later this month.
Director Smolley asked Chris to give the Board a sense of the comments the District received from Fish & Wildlife. Chris said they received comments about a number of things, and Dr. McGraw responded. He said some of the comments were more substantive than others, but he didn’t think they were especially negative. He said he was looking forward to meeting and discussing them further.
President Russ asked what the District gains from the HCP. Chris said the District currently has to do one-off mitigations when it does something in the Sandhills, and this isn’t very cost effective. The HCP will provide the District with its own area of mitigation that it controls. President Russ summarized by saying that this consolidates everything under one unified plan. He said this seems more efficient, but he wanted to know more about the endowment requirements.
Chris said they were estimating a cost of $100,000 per year for managing this. He said they were looking at $2.8 million in the endowment to fully fund 50 acres (40 acres for the District plus 10 acres for the Valley Gardens (Robson Homes) project). He said the endowment would be largely funded by $2.2 million in income from Valley Gardens. President Russ asked if the Valley Gardens has an inflation adjustment, and Chris said it did not.
Director Layng said she was excited to be able to have a bank and get some conservation on the District’s own land. She hoped the upcoming meeting goes well, and she asked Chris when he expected to submit the plan. Chris said the best case would be to submit potentially by the end of the year. He said Robson is still working on their HCP.
Director Fultz had concerns about the arrangement with Robson. He said the contract gives them the absolute right to terminate for convenience, and they are still talking with the Zayante Sandhills Conservation Bank. If Zayante grabs more property, the District could end up with zero. He didn’t think the District should be counting on this money.
Director Fultz also wanted Chris to explain what makes the District’s plan unconventional. Chris said, for the Olympia Conservation Area, the District is looking to protect and restore extra areas that it can use in the future. Director Fultz said this seemed to be the same thing that Zayante does. Chris said the District would not be acting as a conservation bank. Director Fultz summarized by saying the plan itself is not unconventional.
Director Fultz said he was still confused about why the plan took so long to develop, and he asked when Chris would be meeting with Fish & Wildlife. Chris said this was scheduled for November 2nd. Director Fultz asked what the outcome would be. Chris said he hoped to either get informal agreement that the District is on the right path or else specific guidance.
Director Fultz said he hoped the District’s process wouldn’t end up introducing a much longer delay. Jason said they were hoping that the meeting would tell the District exactly what it needs to do. Director Fultz asked if this was also the expectation of Fish & Wildlife. In addition, he asked what lessons the District could learn from the 7-8 years that this has been in the works and from “scope creep.” Jason said the District needs to define the parameters at the beginning and stick to these. He said he had seen the contractor diligently engaging with Fish & Wildlife but not always getting timely responses. Director Fultz said, if a consultant is not getting what they need, this should be escalated to the Board. Chris said there were a few years when this simply was not prioritized. He agreed that it would be valuable to do a post mortem.
Director Fultz said the Board needed to be better at following up on these kinds of projects. He said software should allow the District to automatically schedule follow-up reviews.
Director Largay said he had only recently realized, based on a recent email communication, that there was a possibility that he should refrain from commenting due to a potential conflict of interest involving his employer, the Land Trust of Santa Cruz County. President Russ said the email was from Chris and indicated that preliminary discussions were initiated with the Land Trust of Santa Cruz County. Gage thought there was probably no conflict, but after some deliberation, he recommended that Director Largay should err on the side of caution and refrain from participating until there is a clearer indication. President Russ said he would like to be able to take advantage of Director Largay’s expertise in future discussions on this topic.
Director Smolley said he wanted to hear more about any discussions with the Land Trust. He also wanted the Board to review any proposal to consider acreage beyond the 50 currently needed. President Russ said he understood that part of this is an adaptive long-term plan that needs to be agile in response to changing conditions. He asked if Chris was basing his projections only on projects in the District’s current Capital Improvement Plan (CIP). Chris said, since the plan is for 25 years, it includes the CIP and beyond.
There was no public comment.
Olympia and Zayante Land Management
Director Fultz introduced this agenda item. His memo stated that the District owns property on Zayante Creek that was acquired for a potential reservoir project. The land was purchased in the wake of the enthusiasm for reservoir construction after Loch Lomond dam on Newell Creek and an expectation that the City of Santa Cruz and the San Lorenzo Valley needed another reservoir for water for the then growing population.
However, during the 1970s, the focus shifted from growth to no-growth, as local opposition to growth and environmental concerns grew, and eventually those concerns were expressed in the growth limits adopted by Santa Cruz County voters in 1978. Subsequently, the focus for Zayante Creek shifted to protection and then restoration to support a possible reintroduction of coho salmon.
Clearly, water and sewer availability—or the lack thereof by preventing the expansion of urban systems into more rural areas—acted as a natural check on growth.
The District has owned that land ever since.
The Olympia site was an active sand mining operation until the late 1970s, when, as with many mines, the easiest to extract material was done and the mining had to go deeper and deeper which became economically less attractive. Combined with the same local focus on environmental protection, the mining operators recognized the end of the road for them. However, that same mining operation, and the sandhills themselves, created the perfect conditions for water infiltration which the District extracts from the shallowest wells in the Santa Margarita Aquifer (which has three layers from which water is extracted). The District’s wells are the earliest to refresh in abundant rainfall years.
After almost 50 years of District ownership and with the District’s long-delayed strategic refocus on previously neglected capital projects, there are natural strategic questions that a diligent Board must ask, including, but not limited to:
What needs to be done to preserve and conserve these lands?
Who are the best entities to handle those activities?
What is realistic for the District to do, and how much money should be allocated to these lands given other critical priorities (infrastructure, pension obligations, tank maintenance, etc.).
Do these lands pose any liabilities to the District?
Assuming that 8,000 customers cannot afford to pay for maximum remediation activities, such as complete broom removal on the Olympia property (and assuming neighboring properties don’t do the same clearing) and continued salmonid habitat restoration on the Zayante property, are there sufficient and sustainable funds available to the District for that remediation? And is the District the best entity to apply for and use those funds given its other activities?
Do these properties offer the District any strategic advantages? And does the District need to own these properties to benefit from those advantages (e.g., wells and sandhills offset)?
Director Fultz said he started thinking about this a few years back. The sandhills were described as a national jewel. But national jewels are expensive to maintain. What does this property need in order to be maintained as a jewel? How much will this cost? His question is: are we as a Water District the best stewards of this property as a whole? He said there are other organizations around here that specialize solely on conservation. The District has a very different focus. He asked if there were partnerships that can help with this. He asked, what happens if the District’s neighbors don't deal with broom on their property. Is the Zayante property better used today by someone else? He said the District was just treating it with benign neglect. He concluded by saying he would be more than happy to hear other people’s thoughts.
President Russ said the discussion was about two 180-acre parcels. Their long-term value to the District is unclear. Chris said the Zayante property parcels were purchased for $75,000 in 1960. The Olympia property was 160 acres obtained for $250, 000 in 1977 and 17 acres obtained for $300,000. He said the benefit for Olympia was in the HCP discussed in the previous agenda item, including the potential income from Robson. For the Zayante property, he said the District’s North System sources have no regulations or bypass flow, but the District doesn’t expect this to last forever. It expects the National Marine Fishery Service to one day come in and force the District’s hand. The Zayante property has a pretty pristine steelhead habitat that the District could offer as part of a negotiation. Also, the Zayante property could be forested for around $300,000 per timber harvest every 13 years, and this would benefit the ecological health of the forest system (starting now). This land was clear cut around 1970.
Director Fultz said these were interesting considerations, particularly the logging. However, he said the District doesn’t own much of Zayante Creek, so how would this affect the property’s value in the eyes of regulators? Chris agreed that the headwaters would be more valuable, but he thought there would always be room for habitat restoration.
President Russ asked about the liability associated with these properties. Chris said there was a lot of trespassing at Olympia. For Zayante, the issue is illegal dumping roadside dumping. There are also hazard trees and possible landslides. However, the District just pays a single annual bill for general liability insurance.
Director Fultz said he still thought a conversation with a specializing agency could be beneficial. He said the District should explore mutually beneficial partnerships.
Director Largay called this an interesting and important question. He said land has both value and liability. For example, the Land Trust of Santa Cruz County has 55 fee-owned properties that it regularly reassesses. It has been unable to get anyone to take unwanted land from it, even when paying them to take it. Many of these properties cost a couple thousand dollars per year, so getting rid of them would be much more expensive. The Land Trust identified 1100 environmental actions that it could take and has pursued maybe 75. For a new property, the Land Trust always assesses cost, benefit, and the question of what would happen if someone else were responsible. Director Largay said there might be other agencies that could be more enthusiastic. He said the Land Trust has 750 acres that have generated $4 million since 1980 via selective forestry every 15 years.
Directors Fultz and Smolley appreciated the quantitative assessment currently under discussion, and Director Smolley asked about getting a more thorough accounting of the District’s carrying costs. Director Largay cautioned that such assessments are expensive; they are the only thing Land Trust staff is responsible for. Director Smolley asked if the Land Trust would consult with the District. Director Largay said definitely not. He thought the District might find a consulting forester who could help with this.
Chris said Olympia is costing $55-65,000 per year (for Jodi McGraw and some land management). Zayante is costing $1000 per year (to remove a load of trash or to fix a gate). The District doesn’t pay property taxes.
Director Largay said the only other entity that might be interested in the Zayante property would be a timber company for whom it could generate income.
Director Layng said she would be against selling the property to someone who would use it for logging in a way that would fail to protect the watershed. She also agreed that it's useful to have the Zayante property in the District’s back pocket for managing salmonids. She said she would be happy to see the District investigate the logging option and also the presence of coho.
Director Smolley said there are separate issues for these two properties. Zayante seems more straightforward. If there is potential to generate revenue, the District should be looking at it. This could be a sale or it could be logging. It's not fiscally or even environmentally responsible to leave it dormant. He said Staff should assess this. With regard to Olympia, it sounds unlikely that a land trust will take it. Director Smolley supported trying to get another agency to partner with the District.
President Russ asked if there were still two operational wells on the Olympia property. Chris said yes. He said there are also two additional possible future well sites that are not within Olympia, but for which the mitigation would be in Olympia.
Director Fultz said, if the Robson transaction concludes, there will be money from it. If it doesn't conclude, we will have a different conversation. He saw these as equally likely outcomes. He said water rights are mostly a concern with the State.
There was no public comment.
Consent Agenda
There were two items on the Consent Agenda:
a. Board Meeting Minutes from 10.1.26
b. AP Listing 9.11.26 - 10.8.26
Legal Counsel Gage Marchini provided guidance on the proper procedure for handling items on the Consent Agenda: Ask if any Directors want to pull an item. Then ask for public comment. Then call for a single unanimous consent vote.
There were no pulled items, and there was no public comment. The Consent Agenda was approved by unanimous consent.
District Reports
Finance Status Report for August 2026.
In view of the lateness of the hour, the Directors agreed not to comment.
The meeting was adjourned at 9:05 PM.