SLVWD Board Meeting Summary
June 18, 2026
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Big Basin Letter of Intent (LOI)
Urban Water Management Plan (UWMP)
Public Records Act Policy
Grant Reimbursement Policy
Conjunctive Use Consulting Contracts
Accounts Payable Listing
Next Board meeting will be at 6:30 PM on July 2, 2026
Preliminaries
Four directors were present. Director Fultz was absent.
President Russ said the Board took no reportable actions in the just-concluded Closed Session. The Board originally intended to resume the Closed Session at the conclusion of the Open Session, but the Open Session ran too late for this to be feasible.
There were no changes to the agenda.
There were no public comments on non-agenda topics.
Thomas Remlinger of White Brenner was present in place of Legal Counsel Gage Machini.
New Business
Big Basin Letter of Intent (LOI)
General Manager Jason Lillion introduced this agenda item. He said he has been meeting with Sen. Laird and county officials re: Braken Brae and Forest Springs. In the course of these discussions, an idea arose to use Small Community Drought Relief Grant funding to connect to Big Basin Water Company (BBWC). There was a preliminary meeting in May to explore funding via the Expedited Drinking Water Program.
On May 11, 2026, the District was contacted by Bryan Escamilla of the State Water Resources Control Board (SWRCB) regarding the potential consolidation of BBWC into the District’s service area, as well as available funding and incentives through the Division of Financial Assistance. A representative of this division, Emma Blankenship, was present this evening to answer Board questions. Staff was seeking Board approval of a draft Letter of Intent (LOI) that expresses the District’s interest and readiness to explore this further without any binding commitment.
Specifically, the LOI addressed the following points:
· The District’s readiness to serve as the public operator for BBWC customers, given its geographic proximity, existing operational intertie, institutional capacity, and demonstrated consolidation history (Lompico County Water District and Felton Community Water System);
· A request that the State commit available funding through the Division of Financial Assistance for application upon commencement of the annexation process;
· A request for State coordination among the court-appointed receiver, the CPUC, and LAFCO to streamline the regulatory pathway; and
· A request for technical assistance through the Division of Drinking Water to support engineering assessment and transition planning.
Emma briefly summarized the current situation. She said technical assistance for consolidation was assigned in September, 2025 to Sanbell, a multi-disciplinary engineering, community planning, and surveying firm serving clients throughout the Western United States. Sanbell can help with the development of an engineering report, an environmental report, and design. An initial feasibility study has been completed and is documented in an attached report from GEI Consultants. An LOI is the next step in moving forward. BBWC and SLVWD would have to attend monthly meetings and provide feedback as the design progresses. An Expedited Drinking Water Grant is a possible source of funds, but this first requires an Engineering Report and an Application Package. The first step after the LOI would be development by Sanbell of an Engineering Work Plan. No agreement would be needed until the Construction Application is in and the project is better defined. Construction would follow execution of a Construction Agreement.
President Russ opened the Board discussion with a few preliminary questions. He asked how many years this consolidation might take. Emma said it would probably take five years to get to construction. A feasibility study has been completed, but this needs to be further developed into an engineering report. President Russ asked if the District would be expected to participate monetarily. Emma said the District would only need to participate in monthly meetings. She said consolidation projects are a priority and would be eligible for 100% funding. This money would have to be fronted and then reimbursed.
President Russ next asked how much money would be available for the next step. Emma said technical assistance cost would not need to be fronted by SLVWD. She said the funding applicant is responsible for invoicing when the consolidation enters the construction phase. In response to further questioning about how much work Sanbell could be expected to do, she said there was no limit, but $500,000 was typical.
Director Smolley pressed Emma on a number of concerns. He said he spent a lot of time four years ago in a lot of meetings with various state representatives on the topic of Big Basin consolidation. After ten months, he recommended that the District step away because it wasn’t making any progress in these discussions. His initial question was simply: what has changed? Emma said she wasn’t knowledgeable about past activities. She said the current program has been in place for about five years.
Director Smolley next asked about the demands that this would place on SLVWD Staff. He said this demand might be limited in the first year, but it would ramp up substantially after that. He asked if this will be covered, given that SLVWD Staff is already maxed out on current commitments. Jason affirmed that current projects are the District’s top priority. Director Smolley asked if the state can fund someone at SLVWD on a half-time basis. Emma said staff costs for the funding applicant are an eligible expense, though it would be some time before these are reimbursed because they would have to go into the construction agreement. Director Largay sought further clarification, and Emma said planning phase costs could be reimbursed but only under the construction agreement. She said Sanbell would be doing the bulk of the work, but Director Smolley said the District will need to provide Sanbell with a lot of information about its existing system.
Director Smolley next turned his attention to the GEI report (paid for by the County for its own purposes). He noted that this only assesses getting a mainline from SLVWD’s system to BBWC. It doesn’t consider the BBWC system itself. He asked if Sanbell would do a full assessment. Emma said it would. President Russ said it sounded to him like GEI was only addressing a back-up in case BBWC’s Well #4 fails. The GEI report only addresses two miles of pipe, whereas BBWC has 19 miles. He asked if the goal would be full consolidation, and Emma said it would be. She said an aged pipeline won’t necessarily be covered, but it can be included if there is documentation that it needs to be replaced. Director Largay asked if meeting water pressure and fire flow requirements could dictate replacement, and Emma said yes, but she also said this might take more discussion (because the focus is on drinking water).
Director Smolley asked how much money the state can grant. He said it can cost $80,000 per household, and BBWC has over 500 households. Emma said $80,000 is the current cap for systems of this size. She agreed that this could end up costing $40 million.
Director Smolley said he had two recommended revisions to the LOI. First, instead of “we are very interested,” he said he would prefer, “we are willing to participate.” This was based on his prior experience. Second, he would like to see the District’s recently drafted Consolidation Policy included as an attachment. This has been reviewed by the Administration Committee but not yet by the Board.
Director Largay said the Consolidation Policy will help the District to organize the information it collects. He thought attaching it would be helpful as well. There is a planning phase and a construction phase. There are various payers: the state, BBWC, BBWC customers. He said the LOI might have some framing around the cost structure that the District anticipates being successful so there can be some effort to begin transparently apportioning these costs.
Director Largay asked if BBWC was a party to this. Emma said an LOI from BBWC would be required to move forward. There seems to be interest there. Jason said the law firm representing the BBWC receiver wants to be out of the water business. Director Smolley said this was true of the receiver as well. He has the authority to sign the LOI, but it’s appropriate for the first LOI to come from SLVWD.
President Russ asked about the time frame for the LOI. Emma said the sooner the better. She said they would like to a work plan executed as soon as possible. President Russ asked how soon they might see some progress if the Board approves the LOI within a month. Emma said probably a few months. Sanbell isn't working on this yet.
Director Layng said she was very concerned about inheriting a failing system. She asked if there would be leak detection on the BBWC system. Emma said she didn’t know if this was initially planned, but it would be an eligible expense under technical assistance. She said they don’t want a consolidation that leads to future issues. They want a sustainable larger system.
Director Layng also had concerns about the slurry backfill referenced in the GEI report. This has caused problems for the District in the past on Highway 236 and on Quail Hollow Road. Director Smolley said he would expect any experience that the District, as the relevant expert, has had would be reflected in the eventual work plan. GEI has so far just provided a very broad brush. Director Layng also asked about upgrading to 12” mains, and Director Smolley said he would expect this to be part of the work plan and reimbursed. Lastly, Director Layng sought clarifications involving a temporary construction easement and the District’s ability to share its model.
President Russ noted that the GEI report describes a longitudinal easement over Highway 236 as a last resort. The alternative added $2 million costs. He asked how this tradeoff will be assessed. Emma said they will have to look into this. She agreed that building in a Caltrans right-of-way can introduce significant delays. President Russ asked when the District will pose its questions to Sanbell, and Emma said feedback from SLVWD will be very important. She said this would essentially be SLVWD’s project. Sanbell can get some feedback during an initial kick-off call. Typically, there will be monthly meetings with all project partners where updates can be provided and alternatives can be discussed.
Director Smolley asked if GEI’s work was complete, and Jason said it was. He said Sanbell will first sit down with Garrett, Jesse, and himself.
Director Largay said he thought there could be useful minor revisions to the LOI, but he saw this as a productive path forward, and he was OK with the current LOI if time is of the essence. President Russ was concerned about attaching any “draft” document such as the Consolidation Policy because it doesn’t yet officially exist and hasn’t been reviewed by the full Board. There was some extended discussion about the relative benefits of submitting the LOI as promptly as possible and delaying to refine the wording and include an approved Consolidation Policy. Jason said he got most of the LOI wording from a state template, and Emma said the wording wasn’t that important.
There was no public comment. President Russ moved to authorize the General Manager to execute and transmit the LOI, and Director Layng seconded. The motion passed 4-0. Emma said she was looking forward to working with everyone.
Urban Water Management Plan (UWMP)
General Manager Jason Lillion introduced this agenda item. The California Urban Water Management Planning Act requires water suppliers serving more than 3,000 connections or delivering more than 3,000 acre-feet annually to prepare and adopt an Urban Water Management Plan (UWMP) and Water Shortage Contingency Plan (WSCP) every five years, in years ending in zero and five. The 2025 UWMP and WSCP must be adopted and submitted to the California Department of Water Resources (DWR) no later than July 1, 2026. The District contracted with West & Associates to prepare this report, and Jason introduced Jake Comer of West & Associates to present it. President Russ formally opened a public hearing to fulfill associated legal requirements.
The report itself was largely consistent with the report filed five years ago. Jake noted a current population of 25, 813 (4,465 of which live in Felton) with roughly 7800 service connections and 35 pressure zones. There is only one major planned new development. The District supplies 1127 acre feet of surface water and 573 acre feet of groundwater. It is also responsible for Bear Creek Estates wastewater. It does not use or plan to use recycled water. Demand is not expected to change significantly over the next 25 years.
Staff noted the following highlights:
· Water Supply Reliability: The District’s diversified supply portfolio — surface water via creek diversions serving the Lyon and Kirby treatment plants, supplemented by Santa Margarita Groundwater Basin production — is projected to meet demands through the 25-year planning horizon under normal and single dry-year conditions. The UWMP reflects the continued reduced surface water capacity at Lyon resulting from CZU fire damage to the Peavine and Clear Creek Raw Water Pipeline; supply projections account for current and anticipated restoration timelines. Multiple dry-year scenarios identify potential supply gaps in extended drought conditions, addressed through the WSCP and ongoing capital investment.
· Demand Projections: Total water demand is projected to remain relatively stable over the planning horizon, reflecting modest service area growth and continued progress on system efficiency, leak detection, and conservation.
· SMGWA Coordination: The UWMP reflects the District’s participation in SMGWA and the ongoing implementation of the Santa Margarita Groundwater Basin Groundwater Sustainability Plan. Groundwater supply assumptions are consistent with SMGWA’s sustainable yield determinations.
· Water Loss: The District will continue to implement water loss control measures and report water loss data consistent with AWWA M36 methodology, as required by DWR.
· Demand Management Measures: The UWMP documents the District’s active conservation programs, including tiered rate structure, leak detection and repair, customer outreach, and compliance with the state’s indoor water use standard.
· Water Shortage Contingency Plan: The updated WSCP defines five shortage response stages, corresponding shortage triggers, and mandatory and voluntary use restrictions at each stage.
President Russ asked if DWR typically responds with follow-up questions. Jake said there are sometimes a few minor comments and sometimes none. There were none in 2020. President Russ asked if the District needs to follow the state’s lead if it goes to Stage 2 water restrictions, independent of local conditions. Jake said it did. President Russ also asked if there was any coordination between the UWMP and SMGWA requirements. Jake said the two were pretty independent.
Director Layng expressed a number of concerns about the overall quality of work in the UWMP report. She pointed out numerous instances of carelessness or reliance on more boilerplate material. Jake said there was some copy-pasting from the 2020 report because little had changed. He offered to make further adjustments as requested.
Director Smolley said he had already submitted some recommended changes to Jason. He called attention to some further inconsistencies, and he asked whether the District currently meets upcoming 2028 standards for water loss. Jake said it does not. Director Smolley also pointed to a report that the District did not submit. Jason said this happened in the previous year as well, and the District planned to rectify this.
There was no public comment. President Russ formally closed the public hearing. He moved to adopt the two plans (with the recommended Board edits) and Director Smolley seconded this. The motion passed 4-0.
Public Records Act Policy
Management Analyst Jen Torres introduced this agenda item. She said the goal of this policy was to align with the current California law and risk management best practices.
Director Smolley said the Administration Committee had a good discussion about this policy, and he thanked everyone who helped to develop it.
Director Layng asked if there was a master list of when the District’s new policies become due for review. Jen said she was currently working on producing a single unified policy with an associated schedule.
Director Layng moved to adopt the policy, and Director Smolley seconded it. There was no public comment, and the motion passed 4-0.
Grant Reimbursement Policy
Finance Manager Cheri Freese introduced this agenda item. The District receives certain federal grant funds on a reimbursement basis. Under this method, eligible project costs must be incurred, documented, reviewed, and approved before reimbursement is requested from the federal awarding agency or pass-through entity. The Federal Grant Reimbursement Reconciliation and Cash Management Policy has been developed to help ensure consistent compliance with these requirements.
Director Smolley commented that he had previously reviewed this policy and appreciated the work done to develop it. He said it improves overall cash flow by allowing the District to receive money as it spends it. He asked who had recommended it, and Jen said she learned about while attending some grant trainings.
Director Largay’s only comment was that the District could use its discretion to decide whether it was more cost effective to invoice quarterly or monthly.
President Russ asked if this applied to all grants, and Cheri said this policy only applies to Federal grants. President Russ asked if the District needed to routinely report its own matching spending, and Cheri said this varied.
There was no public comment. Director Smolley moved to approve this policy, and Director Layng seconded. The motion passed 4-0.
Conjunctive Use Consulting Contracts
Environmental Programs Manager Chris Klier introduced this agenda item. Chris said his goal was to provide an update on the District’s Conjunctive Use Plan (CUP) and to present a proposed contract for associated expert consulting. The District developed its CUP jointly with the County of Santa Cruz in 2021 after receiving grant funding from the Wildlife Conservation Board (WCB) under its Streamflow Enhancement Program. The basic objective is to reduce groundwater use while not impacting dry-season stream flows. This requires that the District revise its water rights so that it can transfer water between its South System and its North System on a permanent basis. The District is currently doing this under the provisions of a temporary exemption that was issued in the wake of CZU Fire damage to key raw-water pipelines in the North System.
The WCB grant work plan included the following elements:
· Winter Surface Water Availability
· Groundwater Availability
· Evaluate Flows for Fish
· Evaluate Municipal Needs
· Develop Plan
· Water Rights
· CEQA Compliance
· Public Outreach
The primary objectives of the CUP are:
· Optimizing the conjunctive use of available water resources for water-supply reliability and long-term sustainability;
· Reducing Felton system diversions during low-flow and dry-period conditions and compliance with water rights restrictions;
· Reducing the effect of North system stream diversions and groundwater pumping on dry period streamflows;
· Reducing groundwater pumping (e.g., by in-lieu recharge) to promote the recovery of groundwater storage and production in the South system and other portions of Scotts Valley
The following reports were produced:
1. Water Availability Assessment (WAA). Completed in January 2019. Compared 22 conjunctive use scenarios to the District’s actual use of surface and groundwater from 2000-2017.
2. Fisheries Resource Considerations for Conjunctive Use Plan. Completed in November 2019. Analyzed expected effects to fisheries resources of the conjunctive use scenarios.
3. San Lorenzo River Watershed Conjunctive Use Plan (CUP). Completed in July 2021. Analyzed four conjunctive use scenarios: two short-term (implemented in <5 years) and two long-term (implemented in >5 years)
4. Initial Study – Mitigated Negative Declaration (IS-MND). Released for public review in July 2021. California Environmental Quality Act (CEQA) analysis of project impacts.
The IS-MND received substantial comments and concerns regarding the potential scenarios for conjunctive use of surface and groundwater sources. After discussions with legal counsel, District staff proposed instead pursuing an Environmental Impact Report (EIR) to fulfill the CEQA analysis and potential revision to the CUP to address concerns.
The EIR approach was approved at the Board of Directors Meeting on November 4, 2021 and an updated project description was approved on August 4, 2022. A contract to complete the EIR was awarded to Rincon Consultants on August 18, 2022 and expired on January 1, 2024. An agreement with cbec eco engineering to provide modeling and data analysis to support the EIR was approved at the August 17, 2023 Board meeting and expired in August 2025.
In the time since the EIR decision, discussions with the City of Santa Cruz regarding the District’s Loch Lomond water allotment have continued. The Loch Lomond allotment has been a sticking point, preventing the conjunctive use analysis from moving forward. Considering the elapsed time, the District has decided to continue the conjunctive use process excluding consideration of its Loch Lomond water allotment.
The District is currently using its interties to move water between its systems (conjunctive use) under an emergency declaration due to the destruction of the Peavine and 5-Mile pipelines by the 2020 CZU Lightning Complex Fire. The District currently moves water in any direction based on water source, supply levels, and cost to produce and transport. Water from the North System is exported to the Felton System, North to South, Felton to North, and Felton to South; South system water can be sent to the North or Felton systems in an emergency. The District has been successfully operating in this manner since the fire, displaying the efficacy of the approach. This operational approach will be used as the project description for environmental analysis.
Chris said the District will now be re-engaging in the conjunctive use process, which will consist of the following reports:
· Updated Water Availability Assessment (WAA)
· Updated Conjunctive Use Plan
· CEQA Permitting: EIR, IS-MND, or Notice of Exemption
Staff have requested a proposal from EKI environmental, who helped prepare the original WAA, to prepare the updated WAA. Staff also requested a proposal from Mike Podlech, who developed the Fisheries Resource Consideration and the Conjunctive Use Plan, to develop an updated Conjunctive Use Plan and provide technical support for the other reports. Last, the District has kept Rincon Environmental engaged with the project; it expects to receive an updated scope and renew the agreement once there has been progress on the WAA.
The Directors were not comfortable with this proposal, most fundamentally because it wasn’t clear to them how the District was revising its approach in the wake of its past experiences. Directors also asked to be presented with the ‘big picture’ of how all of these pieces fit together (e.g. project description, WAA, CUP, advisory committee, IS-MND, EIR, etc.) and their timelines. Everyone was hoping that an EIR might not be necessary this time, but the directors wanted to see a more comprehensive strategic analysis of the possible approaches and their associated merits. They didn’t necessarily believe that it would suffice to simply have Rincon update the 2020 project description. Director Layng had reservations specifically about contracting with Mike Podlech. Director Smolley took no position on this, but he urged the District to start by contracting with an expert who could provide broader guidance on how best to negotiate the political challenges implicit in getting the CUP approved. Director Largay recommended forming an advisory committee with representatives of each entity that commented previously on the CUP. Fisheries and the City of Santa Cruz each have their own distinct concerns (namely fish and nitrate concentrations), and each will assume the worst case unless the CUP clearly addresses these concerns.
In the end, Jason said this would be an opportunity for the District to work on its process, and President Russ said the Board was sending this item back to the Staff. Director Smolley said there was no need to involve the Board in selecting an expert advisor – Staff can do this on their own.
Accounts Payable Listing
Finance Manager Cheri Freese introduced this agenda item. She explained that this was previously presented quarterly, but she wasn't used to this process. Going forward, Staff will present the Accounts Payable listing to the Board on a monthly basis for review and approval. This will provide the Board with regular oversight of District disbursements and ensure that Accounts Payable approval is incorporated into the monthly meeting process.
The Directors had only some minor questions about the identity of some of the payees. Jason reported that the District at this point has only occasional need for Miller Maxfield support.
There was no public comment. Director Layng moved to approve the Accounts Payable listing for the period of 11/14/2025-6/05/2026. President Russ seconded. The motion passed 4-0.
Consent Agenda
There was one item on the Consent Agenda:
a. Board Meeting Minutes 6.4.26
The 6.4.26 Board Meeting Minutes were approved by unanimous consent.
District Reports
Monthly Finance Status Report – April, 2026
Director Smolley commented appreciatively on the dramatic decrease in Professional Services spending.
The meeting was adjourned at 9:05 PM.