SLVWD Board Meeting Summary

February 5, 2026

Prepared by Mark Dolson for FSLVW

NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.

Highlights:

  • 2026 Debt Financing

  • Board of Directors Administration Committee Appointment

  • FEMA Grants Update

  • Bear Creek Wastewater Essential Operations Contract

  • Brookdale Tank Coating

  • Water System Consolidation Project Contract Change Orders

  • Next Board meeting will be at 6:30 PM on February 19, 2026

Preliminaries

All five directors were present, with Director Layng attending remotely.

President Russ reported that the Board took no reportable actions in the just-concluded Closed Session.

There was one change to the agenda.  General Manager Jason Lillion announced that item 11d (Raftelis Comparison) was being deferred to the next Board meeting.

There were no public comments on non-agendized topics.

Legal Counsel Barbara Brenner introduced Gage Marchini who will provide the District’s primary legal support going forward.   Gage said he was looking forward to working with everyone.

 

Presentation

2026 Debt Financing

Finance Manager Cheri Freese introduced Ken Dieker of Del Rio Advisors.  Ken walked the Board through an updated presentation in which he shared his recommended strategy for the District to pursue in issuance of 2026 Water Revenue Certificates of Participation (COP) that will net $16.5 million for projects.   He noted that the District also expects to pursue a separate issuance in 2028, though pending FEMA reimbursements could reduce the need for this.  Ken’s presentation was a follow-on to his presentation in December where concerns were raised about the backloading of principal for both the Series 2026 COPs and the Series 2028 COPs.

For FYs 26-27, the District’s projects are expected to be funded through a combination of grants, fire surcharges, pay-as-you-go “PAYGO” sources, and $16.5 million in bond proceeds. For FYs 28-30, the projects are expected to be funded through additional bond issuance and PAYGO sources.  Ken presented a revised recommendation based on updated financial projections based on the actual numbers from FY 2025.  He recommended a 24-year public offering for Series 2026 and a 22-year public offering for Series 2028.  He said this would result in a debt service coverage of 1.5 (still above the required threshold of 1.25) and an adequate cash balance.  Ken said he would seek final Board approval March 19th.

Director Largay appreciated the presentation and said he liked the reliance on PAYGO and the plan to pay off the debt early (i.e., by 2050).  He got Ken to confirm that it would be possible to pay off the debt even earlier, if financially feasible.  Director Layng similarly appreciated that having everything maturing in 2050 would ultimately save the District $40 million.

Director Smolley asked Cheri if the financial projections were based on the work done by Raftelis in 2024.  Cheri said they were, and Director Smolley said he hoped that the Board would have the opportunity to review the projections based on actuals.  Jason commented that the actual revenues are better than those in the budget but not better than the Raftelis projections.  Ken added that his calculations assumed a 2.9% annual increase in rates.

Director Fultz restated a concern that he has raised on multiple occasions: the Raftelis numbers underestimate the District’s actual ongoing increases in Operating Expenses (because using more realistic numbers would have resulted in a rate increase that might have been too high for the community to accept).  Director Fultz also argued that the District should anticipate taking a sizable loan every four years (to maintain adequate ongoing maintenance and infrastructure replacement), and that Ken’s calculations ignored the cumulative longer-term financial impact of this recurring debt issuance.  Ken said it was extremely difficult for him to predict overall financial scenarios beyond about five years in any event.  His assignment was to figure out the best way to pay for the District’s current 5-year Capital Improvement Program.

President Russ agreed with Director Fultz that it would be highly desirable to take a closer look at the District’s longer-term financial situation under various plausible assumptions.  Jason said salaries should increase by 5.4% over the next three years.  Director Fultz said other costs are increasing much faster than inflation.  Director Smolley urged President Russ and Director Fultz to get together with Jason, Cheri, and Ken outside of the Board meeting in order to pursue the more in-depth assessment that they were seeking.  Ken said this would require a number of additional hours beyond his current contract.  Director Fultz suggested that Staff could handle this.  Ken said the debt service formulas are proprietary, but he could share most everything else.

Despite Director Smolley’s recommendation, President Russ and Director Fultz continued to try to probe more deeply into longer-term financial assumptions.  Director Fultz asked if he was allowed to meet with Staff (presumably because he has already been removed from all committees specifically to prevent him from interacting with Staff), but President Russ brushed this concern aside.

The Board also spent some time discussing the consequences of a delay in their approval, together with possible strategies for minimizing this delay.  In the end, they agreed that a more robust long-term financial analysis would be worth incurring a small delay for.  They agreed to have President Russ and Director Fultz meet with Jason and Cheri as soon as feasible.

There was no public comment.

 

Unfinished Business

None.

 

New Business

Board of Directors Administration Committee Appointment

General Manager Jason Lillion introduced this agenda item.  He reminded everyone that, at the previous Board meeting, two Directors were appointed to each of the District’s standing committees except for the Administration Committee.  Director Smolley said he realized after the meeting that he should have volunteered to be the second Director on this committee.

Director Layng said she appreciated and supported this, but she was disappointed that there wasn’t more conversation at the previous meeting.  She said she felt unheard at that meeting.

President Russ moved to nominate Director Smolley, and Director Layng seconded.  There was no public comment.  The motion passed 4-1 with Director Fultz abstaining.

 

FEMA Grants Update

Management Analyst Jen Torres introduced this agenda item.  She asked if the Directors had any questions on her presentation included in the Board packet.  This presentation showed the status of the District’s various grants.

The general sense of the Board was that Jen has been doing an outstanding job in this area, particularly in managing the complexities of FEMA reimbursement.  There was concern, though, that it was difficult to translate the information in her presentation into accurate projections of the District’s future financial status and corresponding plans.  Also, it was sometimes difficult to connect the grant titles to the District project names.

Director Fultz began by asking about FEMA reimbursement.  Jen said $3.4 million was still in the pipeline.  However, the District has yet to bill FEMA for the Peavine and Five Mile pipeline replacements.  Much of the cost is yet to be determined, but the total is estimated to be around $19 million.

Director Fultz also asked about the $6 million earmarked for tank replacements.  Garrett said this would cover four of the five targeted tanks.  The District will have to make up the difference for the last tank.  The South Tank and the Felton Heights Tank will only be receiving plans.

Director Fultz also had concerns about funds earmarked for a possible future Bracken Brae and Forest Springs consolidation.  Currently, there is no active consolidation plan because substantial further funding is needed to pursue the intended projects.  Jason mentioned that he recently met with Senator Laird about this.  Garrett commented that all expenses could be roughly cut in half if the District had its own construction crew.

For example, $959,752 has been congressionally earmarked for the Consolidation Tank at the top of Forest Springs.  Garrett said the total estimated cost was $2.5 million.  This would require a cost share and Forest Springs buy-in.  Director Smolley said another $15 million would actually be needed for everyone to benefit as originally intended.  Director Fultz said the presentation didn’t communicate this, and he urged the District to be honest about where it is with these things.  If Big Basin isn’t getting much help, he didn’t see how Forest Springs and Bracken Brae will get much help.  Jason said he didn’t want to rush into withdrawing from these opportunities, and Director Largay said it was fairly routine to initiate projects before all the funding was in place.

Director Smolley said the District had potentially $18.4 million more coming from FEMA.  However, $6.2 million of this is for the Lyon Slide Access, and the District isn’t planning to do the full Lyon Slide project.  He had the same concern with the $3.4 million for the Bennett pipeline.  He worried that feeding this information into the financial projections being prepared by Ken Dieker was painting an inaccurate picture.

Director Smolley’s other question was about FEMA’s current posture.  He said the $1 million reimbursement for the work on Quail Hollow Road made him less pessimistic today than he was six months ago.  Jen said she still thought there would be delays.

Director Layng asked about the Fall Creek Intake.  Jen said this was quite old, and she had to do a lot of clean-up on it.  Director Layng also called attention to a current Fisheries Restoration Grant Program, and Environmental Programs Manager Chris Klier said there was some ongoing discussion about this.

 

Bear Creek Wastewater Essential Operations Contract

Operations Manager Jesse Guiver introduced this agenda item.  SLVWD’s Bear Creek Wastewater Facility continues to face operational and regulatory compliance challenges, most notably the District’s inability to meet the 50% total nitrogen reduction requirement mandated by the California Regional Water Quality Control Board.  District staff has evaluated available internal and external resources and determined that professional onsite consultation and technical services are necessary to restore effective operations and achieve long-term regulatory compliance at the facility.  Staff is therefor recommending the SLVWD contract with Essential Operations for $77,260 over a two-year period.  Essential Operations will first restore the plant to its original engineered operational design. It will then conduct a comprehensive assessment to identify and recommend additional improvements needed to ensure long-term operational stability and continued regulatory compliance.

Staff has determined that Essential Operations is the sole provider qualified to perform this work:

  • Essential Operations’ specialized expertise with Orenco-modified trickling filter systems; and

  • There is limited availability of other wastewater consultants in the region with the capability to perform the required scope of work.

The proposed service agreement includes:

  • ·Initial Term: One year.

  • Extension Option: One additional year, at the District’s discretion.

  • San Lorenzo Valley Water District’s Services Agreement.

This recommendation was first brought to the Board on October 2, 2025, but the Board took no action at that time due to some unresolved concerns.  The Board subsequently held a workshop on January 12th of 2026.

Director Smolley said there were several questions from Board members after the workshop, and he was glad that these had now been addressed.  He asked Jesse to document some of this in a future memo.  Meanwhile, he said he was in favor of moving ahead, but he would still like to see an interim assessment of Essential Operations’ contributions in 3-4 months.

Director Fultz asked how long it might take to begin seeing positive results, and Jesse said he might expect to see some improvement in 3-6 months.  Director Fultz asked when the District might opt out of its agreement, and Jesse said this would depend on the assessment.  Director Fultz also reminded everyone that the 50% nitrogen reduction wasn’t the end goal, and that the District had yet to consider all possibly available technologies.  He asked when this issue would be revisited.  Jesse said he didn’t want to see another engineering assessment without better understanding the system in light of the District’s work with Essential Operations.

Director Layng said she was happy to see a one-year contract (rather than a two-year contract).  Director Largay said he thought it was a good idea to proceed.  He said getting an old system to run will take a lot of finesse and troubleshooting.  He encouraged Jesse to designate staff members who want to come up to speed on this, and Jesse said Essential Operations would train District staff.  Director Largay said a dry-weather solution will involve getting a lot of oxygen into the system, but this could create a smell issue.  It remains to be seen if the system starts to falter during the next wet season.

There was no public comment.  Director Largay moved to approve the contract with Essential Operations, and President Russ seconded this.  The motion passed 5-0.

 

Consent Agenda

There were four items on the Consent Agenda:

a.     Bear Creek Wastewater Special Board Workshop 1.12.26

b.     Board Meeting Minutes 1.15.26

c.      Contract Award for Brookdale Tank Coating Consultant

d.     SLVWD Water System Consolidation Project Contract Change Orders

Items (a) and (b) were approved without Board comment.  Items (c) and (d) were pulled by Director Fultz.  Item (c) was pulled by Director Smolley.

Brookdale Tank Coating

The Brookdale Tank is a critical part of the District’s potable water distribution system, centrally located between the Lyon Water Treatment Plant and the District’s Quail Zone Wells.  The Brookdale Tank was constructed in 1971 and provides over 650,000 gallons of water storage with a diameter of 62’ and height of 32’. The welded steel tank is currently protected with an interior coating of coal tar with epoxy patches and an exterior coating of urethane.  The District has deferred the maintenance of Brookdale Tank and will now expedite the work of recoating this critical part of the potable water distribution system.

The District will isolate Brookdale Tank from the system, temporarily drain the tank for the selected coating consultant to access the interior of the tank for a condition assessment and development of the scope of work for repairs. The Brookdale Tank will be put back in service after the consultant has completed the field work for the condition assessment. The Brookdale Tank will be in service during the bidding process and award of the recoating contract to a qualified coating contractor. The selected coating will assist the District with the evaluation of bids and the presentation to the Board of Directors for the coating contract award.

Since the Brookdale Tank is centrally located in the District’s potable water distribution system, the recoating work will be completed as quickly as possible. The selected coating consultant will assist the District with developing the technical specifications, and contract documents, that indicate an appropriate amount of contract time for the tank repairs and recoating work. The selected coating consultant will provide daily inspection reports of the recoating contractor’s activities and verify conditions are suitable for the protective coating application, as determined by the coating manufacturer requirements. The consultant will verify dry film thickness of the recoating contractor’s applied coating is in the manufacturer’s published allowable range. The selected coating consultant will verify the recoating contractor’s coating application is free from defects with high voltage holiday detection.

The District published the Request for Proposals (RFP) in November of 2025, and received two responses.  Staff recommended that the District execute a contract with Bay Area Coating Consultants, not to exceed $67,711.

Director Fultz had a question about exactly what the $67,711 would cover, and he was satisfied with the explanation provided by District Engineer Garrett Roffe.  Director Smolley had a question about the ranking criteria for assessing the two bids and also about the references for Bay Area Coating.  Operations Manager Jesse Guiver said all neighboring water districts work with Bay Area Coating and really like them.

There was no public comment.  Director Smolley moved to direct the General Manager to execute a professional services agreement with Bay Area Coating no to exceed $67,711.  President Russ seconded this.  The motion passed 5-0.

Water System Consolidation Project Contract Change Orders

In 2021, the District received $3.2 million from the Department of Water Resources  (DWR) for consolidation interties with Bracken Brae and Forest Springs.  The initial plans for construction included connecting to the District’s existing system at Boulder Brook and Highway 236, a new pump station and new water mainline through each of the mutuals. The engineer’s estimate for this work totaled $12.8 million.

District staff developed a reduced scope of work with DWR that would allow the project to complete a portion of the proposed work utilizing the available funds.  The reduced scope of work begins by connecting to the new 12-inch Lyon Pipeline at the intersection of Boulder Brook Drive and Highway 236 and ends at the intersection of West Park Avenue and Ridge Drive. Additionally, the temporary intertie with Bracken Brae will be replaced with a new pipeline on Caltrans Bridge 36-0009; thus making the connection with the District’s existing system at Brook Lane and connecting to Bracken Brae’s existing water main in Hazel Brake. Anderson Pacific Engineering Construction (APEC) was awarded the contract and issued the Notice to Proceed on December 5th, 2024. APEC has completed the new mainline installation except for the Caltrans Bridge Crossings which is scheduled for completion in February 2026.

There were three Change Orders requiring Boad approval, totaling $94,103.10.  Director Fultz had two detailed questions which were answered by Garret.

There was no public comment.  Director Fultz moved to execute the three change orders.  Director Smolley seconded.  The motion was approved 5-0.

 

District Reports

None.


Written Communications

There was one written communication.  This was another letter opposing the Haven housing development.

 

Board Comment

None.

 

The meeting was adjourned at 8:45 PM.