SLVWD Board Meeting Summary
November 6, 2025
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Removal of Director Fultz from Committees
Neighbor Hazard Tree Policy
Reserve Policy
Del Rio Advisors Contract Extension
FEMA Withdrawal Bennett Spring and South Zone Pipeline
Construction Administration Highland Tank Contract with Mesiti-Miller
FEMA Grant Update
Next Board meeting will be at 6:30 PM on November 20, 2025
Preliminaries
All five Directors were present.
President Smolley 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
Removal of Director Fultz from Committees
Board President Mark Smolley introduced this agenda item. In his memo in the Board packet, President Smolley wrote that a staff member recently informed General Manager Jason Lillion that Director Fultz had questioned them in “an aggressive manner” and “it was disrespectful and presents a tough situation for staff to be in and have to worry about moving forward.” President Smolley wrote that Director Fultz declined to meet with Jason, but this statement was challenged and clarified during the subsequent Board discussion.
In his memo, President Smolley characterized Director Fultz as someone who has been a uniquely difficult Board member for staff to interact with. He said Director Fultz’s overly aggressive and confrontational style of addressing staff has been an ongoing issue for years. Staff have stated that he is disrespectful, demeaning, and at times insulting. In 2023, two senior staff abruptly resigned and both publicly identified Director Fultz’s behavior and demeanor as the primary reason for their resignations. He added that Director Fultz’s reputation for dealing with staff also made it more difficult to attract well-qualified candidates from nearby agencies within Santa Cruz County, in particular to replace these two senior management positions.
President Smolley said the Board publicly discussed Director Fultz’s behavior in October, 2023 in an attempt to prevent further staff departures. However, he said Director Fultz has not appreciably changed his manner or approach in dealing with staff. For that reason, President Smolley concluded that the Board has a responsibility to take further action to address the issue. In order to limit staff interactions with Director Fultz, he recommended that Director Fultz be removed from the Engineering Committee and the Environmental Committee.
In his opening remarks, President Smolley shared a few additional details. He said the Board considered this action two years ago, and he did not support that recommendation at that time. However, he was concerned that this was an ongoing problem, and he did not want to put staff in a position where they begin to consider resignation as a solution. He said he was contacted in 2024 by a staff member who reported being insulted by Director Fultz but who asked him not to take any action at that time. He said both the current General Manager and the previous Interim General Manager had independently commented on the aggressive nature that Director Fultz uses in questioning Staff.
Lastly, President Smolley requested that Board members focus their comments on Director Fultz’s interactions with Staff (as opposed to with Board members). He said he didn’t think it was appropriate to discuss the specific incident, and he wanted the focus to be on the pattern of behavior. In response, Director Fultz said he would comment only by reading a prepared statement immediately prior to the Board vote.
Jason said he received the report from the staff member directly involved, and that another staff member witnessed and corroborated the exchange. He said his hope and goal is that the District’s next General Manager will come from current staff and that everyone shared a responsibility to maintain an environment of professionalism, trust, and mutual respect. Independent of this, he said Staff will continue to uphold Board direction.
Director Largay said he doesn’t sit on a committee with Director Fultz, but this report was consistent with his experience in Board meetings where he has observed disrespectful treatment on very many occasions. He said he expected everyone to engage in courteous dialogue with no interruptions. He added that additional staff privately told him that their departure was partly due to Director Fultz. Director Largay said he saw longevity in staffing as in the District’s best interest, and he wanted to see Board and Staff work together as a team.
Director Layng said she didn't witness this particular incident but had seen many instances at Board and Committee level. She said she appreciated that the District has a General Manager who is taking this seriously, and she expressed disappointment that it has taken the District so long to act on this. She said she raised concerns both privately and publicly with President Smolley and was told that her comments were too much. She felt that something needed to change and that it shouldn’t take years for the District to respond. She said the Board was legally and ethically obligated to take formal action this evening, and stronger protections were needed moving forward. Lastly, she requested that Director Fultz be removed from the Ad Hoc Committee on Consolidations as well.
Director Russ said he hadn’t observed Director Fultz on the two committees in question. In general, he described Director Fultz as aggressive, assertive, and having great insights and great experience. He said he was glad that Staff felt they could bring this issue to Jason. He said he took this very seriously and that thought the recommended action might be the appropriate response. Had he not been constrained by the Brown Act, he said, he would have just talked directly with Director Fultz to learn more from his perspective. However, he said it wasn’t realistic to expect Staff to have a suit of armor all the time, and he was sorry that it has come to this.
There were three public comments. John Jameson from Felton said there has to be a way to preserve the system so that the organization is properly taken care of. His only question was whether any sort of off-ramp had been created that might result in a more satisfactory outcome.
Bruce Holloway of Boulder Creek said he would not want to see an employee disciplined based purely on President Smolley’s memo. He went on to recount a personal experience with Director Fultz that turned out not to be relevant. He closed by saying that previous directors had also had a habit of interrupting, and he wanted more specifics.
Cheryl Adams, a public member of the Administration Committee, praised Staff for having the courage to bring this to light, General Manager Lillion for elevating this to the Board, and President Smolley for taking this action. She said those who possess real or perceived power need to be cognizant of this and be respectful and courteous. She supported the recommended action.
President Smolley moved that Director Fultz be removed from the Engineering Committee and the Environmental Committee effective immediately. Director Layng requested an amendment to include the Ad Hoc Consolidation Committee as well. President Smolley said this committee didn’t work with Staff, but Director Layng said concerns had been expressed by a member of one of the consolidating agencies. President Smolley then accepted her amendment, and Director Layng seconded the motion.
Director Fultz read a fairly lengthy prepared statement. He said this was the second time he had been baselessly attacked. He said President Smolley’s memo incorrectly characterized his response, and he was confident that he had not engaged in any violation of Board policy and that the Board would recognize this if it followed due process. He said he couldn’t accept an investigation conducted by District Legal Counsel, and he recommended an independent attorney. He said he believed this verged on character assassination. In his view, the fact that he dissented and pointed out the history of the District's feckless behavior meant that he was, by definition, a target, and this made it easy for people to conflate dissent and skepticism. He felt that he was being subjected to an irrational process akin to that of the Red Queen in Alice in Wonderland, and he said he would never stop speaking up for the best interests of his beloved community even if he needed to stand alone.
Director Russ requested some further clarification from Jason about the exact sequence of events, and Jason detailed his interaction with Director Fultz following the incident. The two of them talked on the phone, and Director Fultz expressed frustration and said he believed this was a political attack. He told Jason that he was not going to engage in the discussion and would get an attorney. President Smolley said he had been advised by Legal Counsel not to share any further specifics.
Director Largay commented that if Director Fultz consistently employed the tone of voice and the type of expression in his prepared statement, then there would be no issue here. He noted, though, that the issue was being brought forward by Staff not by the Board, and he characterized Director Fultz’s response as akin to a stump speech.
Director Layng said she didn’t think Director Fultz recognized what people were consistently telling him.
The motion passed 4-1 with Director Fultz opposed.
Neighbor Hazard Tree Policy
Environmental Programs Manager Chris Klier introduced this agenda item. SLVWD owns approximately 2,300 acres of land, resulting in miles of shared property boundaries with neighbors. Trees that pose a hazard to neighboring property are currently managed on a case-by-case basis with guidance from a consulting Registered Professional Forester (RPF). In recent years, there has been an increase in the number of complaints from neighbors (up to perhaps a dozen per year), partly as a consequence of the 2020 CZU Fire. These complaints require both Staff and an RPF to spend hours investigating them, and decisions to date have not been guided by any standard assessment matrix, thereby leading to potentially inconsistent decision-making. Consequently, the Environmental Department has developed a Policy containing a hazard tree rating matrix and associated management strategies.
The draft Policy was first brought to the September Environmental Committee meeting where the committee recommended adding the following sections:
Approval/adoption
Modifications
Appeals
The Policy was then brought to the October Environmental Committee meeting where one further revision was made:
Removed the option for neighbors to sign an indemnity waiver allowing hazard tree to stay standing.
The Directors were generally supportive of this initiative. Director Fultz said the Environmental Committee had considered the matter pretty thoroughly, and Director Layng said it was important to reduce the District’s legal liability and Legal Counsel had provided input.
Director Russ and President Smolley sought further details about the associated cost and required expertise. Chris said the assessments could be performed by a Registered Professional Forester (currently on contract) or a Certified Arborist (and Chris is currently studying for the certification exam). Chris said about half the calls end up requiring action, and this is consistent with the current budget. Director Largay commented that removal may sometimes be cheaper than a formal assessment.
There was one public comment. John Jameson of Felton Heights said a neighbor warned of three Douglas Firs that were in danger of coming down. Chris said he was aware of this.
President Smolley moved to adopt the Staff recommended resolution, and Director Layng seconded. The motion passed 5-0.
Reserve Policy
Finance Manager Cheri Freese introduced this agenda item. The District’s Reserve Policy was last adopted on June 17, 2021. In 2024–2025, Staff conducted a comprehensive review to align the policy with Governmental Accounting Standards Board (GASB) Statement No. 54 classifications, current financial capacity, and best practices in public utility finance.
The revised policy was presented to the Board on September 18, 2025. The Board directed Staff to return the item to the Budget and Finance Committee for further refinement, specifically regarding the basis for calculating the Capital Reserve target and to include educational language explaining how reserves are managed.
On October 8, 2025, the Budget & Finance Committee reviewed the updated policy and recommended adoption with the following changes:
Reduce the Capital Reserve target from $5 million to $3 million to better reflect the District’s current financial capacity and typical annual capital spending.
Add clarifying language that capital reserves are intended to be spent and replenished as part of the District’s long-term capital funding strategy.
The $3 million target represents the average annual capital spending over the past three fiscal years (FY 2022–23 through FY 2024–25). This approach ensures that one year of typical capital project activity can be funded from reserves if necessary, without relying on debt financing or unplanned rate adjustments. Capital reserves are specifically maintained to fund major replacements, rehabilitations, or unplanned capital projects. Using capital reserves is an expected and prudent financial practice, provided that the District replenishes the funds over time—typically within three years—through future budgets or rate revenue.
The updated policy establishes the following targets:
Operating Reserve: four months of annual operating expenses ($3.6 million)
Capital Reserve: $3 million
Emergency Reserve: $4 million
Directors Russ and Largay each commented on the substantial attention that the Budget and Finance Committee (on which they serve) devoted to this, and both felt good about the result. Director Largay said the committee looked closely at various trade-offs: in general, a lower reserve increases the District’s vulnerability while a higher reserve may be unduly limiting.
Director Layng appreciated the work that went into this (three committee meetings plus a Board meeting).
Director Fultz said he had been concerned about this for a very long time, and he had a number of detailed questions and lingering concerns. He asked about the status of the Fire Surcharge and the Olympia Assessment District and also about the District’s current exposure to compensated absences. His more substantial concern was that the policy didn’t explicitly identify trigger points for tapping into the different reserves. Directors Russ and Largay said the reserves could only be tapped by a Board action. The policy states that the Operating Reserve must be replenished within two years, and the other reserves within three years. Director Fultz remained concerned that a future Board could choose to act imprudently. Director Largay pointed out that a future Board could always change the policy in any event, but Director Fultz continued to push for more specificity with regard to tapping into the Capital Reserve. He suggested that Jason should add some language about a “catastrophic event” or a formal declaration. Director Largay suggested that the Board simply approve the current policy and then subsequently amend it, but Director Russ and President Smolley were persuaded that the Board should wait for Staff to return a final document.
There was no public comment and no Board action.
Del Rio Advisors Contract Extension
Finance Manager Cheri Freese introduced this agenda item. She recommended that the Board authorize the General Manager to execute an Extended Engagement Letter to allow Del Rio Advisors, LLC to continue providing municipal advisory services through December 31, 2028. Del Rio provides long-range financial planning, and they bill only when their services are requested. There were no changes to their scope of services or fee structure.
Kenneth Dyker of Del Rio Advisors was present. He said he was hired 18 months ago to work on a particular transaction, but this was delayed for multiple reasons. He said he was currently working in contingent mode and would make a full presentation to the Board December 4th.
In response to a query from Director Russ, both Cheri and Jason said their past experiences had left them with a very high opinion of Del Rio Advisors.
The motion passed 5-0.
FEMA Withdrawal for Bennett Spring and South Zone Pipeline
Management Analyst Jen Torres introduced this agenda item. SLVWD submitted a FEMA grant application to make repairs to the Bennett Spring Transmission Main and South Zone Distribution Piping that were damaged during the 2020 CZU Fire. The District has completed all necessary work to restore water in these areas via above-ground pipelines, and Staff is now recommending that the District withdraw from the FEMA grant application process for installation of buried pipelines.
President Smolley said he had walked these areas, and getting heavy equipment in to bury the pipelines would present significant environmental challenges. He said the total cost for installing the above-ground pipeline (using 4” HDPE pipe) was only $7500. In contrast, the estimated cost for installing buried pipelines is $1.8 million and $1.6 million respectively. After seeing the complexities and costs associated with burying the Peavine Pipeline, he felt comfortable relying on the current above-ground solutions and replacing them if necessary.
Director Russ asked about the vulnerability of the above-ground solutions. Engineering Manager Garrett Roffe explained that the Bennett Spring Transmission carries raw water and is really vulnerable only to another wildfire (there is no risk due to falling trees). The above-ground replacement was contracted out to VanDerSteen Engineering. The South Zone Distribution carries treated (i.e., potable) water and is similarly vulnerable to fire. The above-ground replacement was handled by District Staff.
Directors Layng and Largay were comfortable with the Staff recommendation. Burying the two pipelines would require the District to spend on the order of $3.4 million up front and then seek FEMA reimbursement (which could amount to 90% of the total but only if FEMA would agree to pay for the below-ground replacement).
Director Fultz, on the other hand, worried about the impact of a wildfire on the 54 customers served by the South System Pipeline and also about the potential for damage to the HDPE pipes to introduce volatile organic contaminants elsewhere in the system. Garrett said the South System could be isolated in the event of a fire, but there was a lack of clarity about how readily this could be accomplished. Garret and Jason explained that a fully remote isolation capability would be expensive and still not reliable.
President Smolley requested that Staff report back on possible strategies for better separating and isolating the South Zone Transmission.
Construction Administration for Highland Tank Contract with Mesiti-Miller
Engineering Manager Garrett Roffe introduced this agenda item. Staff is recommending that the District enter into a Professional Services Agreement with Mesiti-Miller Engineering, Inc for construction support of the Highland Tank in an amount not to exceed $25,570. Garrett explained that construction of the Highland Tank Replacement project was awarded to Corcus Construction, Inc. at the October 16, 2025 Board meeting. Someone is needed to perform daily site inspections (some of which can be done remotely). In principle, the District could self-inspect, but it is safest to retain the engineer of record (which, in this case, is Mesiti-Miller). Garrett further reported that Staff had negotiated the price down to $25,570 and that Mesiti-Miller would bill only for actual hours.
The Directors were fully supportive of the Staff recommendation. Director Fultz noted that, technically, Board approval was not required for a contract under $30,000, but he appreciated that the Board was being kept in the loop.
There were no public comments.
President Smolley moved to direct the General Manager to execute a Professional Services Agreement with Mesiti-Miller in an amount not to exceed $25,570. Director Russ seconded
The motion passed 5-0.
FEMA Grant Update
Management Analyst Jen Torres introduced this agenda item and walked the Board through an associated PowerPoint presentation. She reported that she is currently working with FEMA to track five major disaster declarations by the District:
California Severe Winter Storms (FEMA-4301-DR-CA): January 2, 2017-January 12, 2017
California Severe Winter Storms (FEMA-4308-DR-CA): February 1, 2017- February 23, 2017
California August Wildfires (FEMA-4558-DR-CA): August 14, 2020 – September 26, 2020
California Severe Winter Storms (FEMA-4683-DR-CA): December 27, 2022- January 31, 2023
California Severe Winter Storms (FEMA-4699-DR-CA): February 21, 2023- July 10, 2023
28 out of 38 projects have now been closed out. The District received about a million dollars of FEMA reimbursements in 2026, and about $23 million is still outstanding. Jason noted that Jen has been very successful in establishing effective working relationships with people at FEMA.
President Smolley commented that he was very impressed with the progress that Jen has been able to make since assuming responsibility for this work (which was formerly contracted out to APTIM). In view of the lateness of the hour, he suggested that the review should be continued at a future Board meeting. Director Largay requested that this information be integrated with the District’s prioritization table.
There was no public comment.
Consent Agenda
There were two items on the Consent Agenda:
a. Board Meeting Minutes from 10.16.25
b. Caltrans House Abandonment Change Order
Director Layng pulled Item (a) so that the record could be corrected to indicate that she was actually present at the meeting.
President Smolley moved to approve the Consent Agenda with Director Layng’s correction and a fix for one other typo. Director Russ seconded.
The motion passed 5-0.
District Reports
Miller-Maxfield Quarterly Communications Report. There were no Board comments.
Written Communications
There were no written communications.
Board Comment
None.
The meeting was adjourned at 9:05 PM.