SLVWD Board Meeting Summary
June 5, 2025
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
2024 Dry Season Streamflow and Temperature Monitoring
Lockhart Shaded Fuel Break
General Manager Employment Agreement
FY25-27 Budget and Five-Year Capital Improvement Plan Adoption
Lyon Access Road Slide Repair
Next Board meeting will be at 6:30 PM on June 19, 2025
Preliminaries
All four directors attended. Director Fultz attended remotely.
General Counsel Barbara Brenner reported that the Board agreed in Closed Session to resolve a claim for damage caused by pipe replacement in the amount of $3327.92. The Board voted 3-0 to approve, Director Fultz abstaining.
President Smolley suggested that item 10a (Tank Replacement Projects) be removed from the agenda, and the other Directors agreed. President Smolley said the agenda packet contained a lot of new information that it would be preferable to first discuss within the Engineering Committee.
There were no public comments on non-agendized topics.
Presentations
2024 Dry Season Streamflow and Temperature Monitoring
Chelsea Neal of Balance Hydrologics presented a summary of stream monitoring on Foreman, Boulder, and Fall Creeks during Water Year 2024 (roughly from the beginning of June to the first substantial rain in October or November).
Chelsea said monitoring began in 2013 with an initial five-year pilot project to understand surface water resources. More recently, there have been two components: (1) ecological monitoring in support of permit compliance, habitat conservation, and conjunctive use planning, and (2) operational gauging on Clear Creek and Fall Creek to help manage diversions.
Chelsea described Water Year 2024 as about average (45 inches in Boulder Creek). Rainfall across the SLV was at 90% of average, and streamflow was 122% of average (as a delayed consequence of heavier rainfall in 2023). Water temperatures remained below the designated 20-degree-Celsius upper limit. Bypass flows were consistently above the required minima.
Director Largay asked how the District was doing with regard to: (1) permit compliance, (2) data for conjunctive use, and (3) stewardship of water resources and watershed. He also asked if District Staff could do more when their bandwidth eventually increases. Chelsea said the District had been on top of its management throughout their history of working together. Her current focus is on minimizing the ongoing costs (which have been pared back a lot in recent years).
Director Fultz suggested that possible further cost savings should be assessed when the monitoring contract is next up for renewal. He asked about the presence of fish in some of the streams, but Chelsea said this question would be better directed to experts like Mike Podlich or Don Alley.
President Smolley noted that the 20-degree-Celsius limit was not a strict requirement, and he asked if it was ever exceeded in drought years. Chelsea said this happened briefly by a degree or two.
Director Largay thanked Chelsea. He described Balance Hydrologics as a fantastic firm with the additional benefit of being local.
The full presentation can be downloaded at:
https://www.slvwd.com/sites/g/files/vyhlif1176/f/agendas/item_9a-_slvwd_streamflow_presentation.pptx
Lockhart Shaded Fuel Break
Angie Vasconcellos of the Santa Cruz Resource Conservation District (RCD) gave a presentation about the Lockhart Shaded Fuel Break project on the District's Olympia Watershed property.
Angie said a CalFire Fire Prevention Grant was awarded in 2021 for work to be performed along 4.5 miles of ridgeline between Zayante Creek and Lockhart Gulch. The project encompasses about 90 acres, 17 of which are on SLVWD land in the Olympia Watershed (outside of the sandhills). The goal is to reduce the potential for loss, to improve the ability to fight fires, and to benefit forest health. The project went out to bid last week, and work is slated to be performed between July and October of this year. It will include selected tree and shrub removal, tree limbing, and processing of dead and downed debris. The general idea is to disconnect the forest canopy from the forest floor while respecting the resident wildlife. The District’s forester has reviewed the specifications.
Director Largay disclosed that the Land Trust of Santa Cruz County (which he works for) has multiple properties subject to the same fuel break. He asked how much the District is paying. Angie said SLVWD was not paying for anything (though Chris Klier and the District’s forester have donated some of their time). The project budget is $615,000 for implementation with some additional funds for consultants and staff. The annual RCD budget including all grants is maybe around $5 million. The County provides maybe $60,000 annually. Director Largay commented that this is a remarkable leveraging of funds.
Director Layng complimented the presentation and the project, and she asked whether there might be an opportunity to sell logs. Chris commented that the District had excess wood from its Olympia tree removal, but District policies prevented it from doing much on this front. Director Fultz emphasized the need to make sure there are no inside deals with District assets.
Director Fultz asked about the longer-term plan for maintaining the firebreak. Angie said the grant will end in March of 2026, but some maintenance funding is being held back. In general, though, there are not enough maintenance funds across the County. Director Fultz suggested that the District may need to step up and fund maintenance on the portion of the project occupying District land. Angie suggested that CCC crews might be able to help with this at state expense.
The full presentation is available at:
https://www.slvwd.com/sites/g/files/vyhlif1176/f/agendas/item_9b-_lockhart_sfb_presentation.pdf
Unfinished Business
None.
New Business
General Manager Employment Agreement for Jason Lillion
President Smolley said the District had completed a General Manager employment agreement with Jason Lillion. The agreement has a three-year initial term, beginning July 1, 2025 with a base salary of $250,000 per year. President Smolley clarified that the agreement should have specified 200 hours of annual leave.
Jason briefly introduced himself. He has 26 years of experience in the water industry and has been the Operations Manager for the Indian Wells Water District for the past 12 years. He said he was excited for this opportunity and eager to learn from everyone and to tackle the challenges ahead.
The Directors all welcomed Jason. There was no public comment.
President Smolley moved to appoint Jason Lillion as General Manager and to approve the revised employment agreement. Director Largay seconded. The motion passed 4-0.
FY25-27 Budget and Five-Year Capital Improvement Plan Adoption
Finance Consultant Heather Ippoliti introduced this agenda item. She briefly reviewed the key budget assumptions previously shared with the Board at its May meetings. The only changes were the removal of $17,000 in anticipated mobile services revenue, the removal of a vacant Field Services and Systems Coordinator position, and the addition of $19 million in debt funding.
The budget assumes about $16 million in revenue per year and about $11 million per year in expenses (based on the current org chart). There is $25 million of planned Capital Improvement Project (CIP) spending, funded by a combination of grants, debt, fire surcharge, and unrestricted funds.
In addition to recommending that the Board approve the budget, Heather recommended (as a matter of best practices) that the Board formally approve an Authorized Positions Schedule (APS). This introduces an important control mechanism that requires the Board to approve any future changes to the org chart. President Smolley said it was easier for him to understand the org chart than the APS, and the two didn’t seem to match. He suggested (and other Board members all agreed) that the APS resolution be deferred so that it could be discussed at a future Board meeting in conjunction with an updated org chart that has been reviewed by the Board committees.
Director Fultz had a lengthy comment on the budget. He repeated his arguments from previous Board meetings that operating expenses were not being adequately controlled, that infrastructure work was not being adequately funded, and that a two-year budget was incompatible with a five-year Capital Improvement Plan (CIP). He argued that the proposed budget would result in a precipitous decline in operating margins, which would make it impossible to proceed with years 3-to-5 of the CIP. He said the only rational option was for the District to raise rates perhaps by 25%. Meanwhile, he said, he would oppose the budget. He again urged the Board to go back to Raftelis to request an updated rate analysis at the conclusion of the pending labor negotiations in order to determine what rates are needed to support the planned capital projects. He said that failing to confront these brutally hard truths would be doing a disservice to the community.
Director Layng asked some questions about part-time staffing, and Heather provided corresponding explanations.
Director Largay said he thought this was a good budget and that it was important to support it in order to get the team back in action. He observed that the District has been under-resourced and operating with one hand tied behind its back, leading, for example, to a serious lack of attention to grant writing and to inadequate oversight of finances. He saw this budget as optimistic about staffing and projects but at least enabling the District to rebuild its team. He understood that there were still some open questions about debt financing, but he expected these to be responsibly addressed.
President Smolley had questions about both debt financing and project timelines. Heather said the Finance team would bring back specific financing options to the Board in July. She said that the budget needed to show 100% of the funding in the year the Board approves the work, but the funding could then be carried over into the next year.
President Smolley said Raftelis had responded to Director Fultz’s previous recommendation by saying that it would cost the District $12,000 for them to provide this analysis. Director Fultz suggested that this was a small amount to spend and that his own estimates suggested that rates should be 30% or 35% higher. President Smolley responded that he thought it would be appropriate for Director Fultz to put together a memo outlining his vision. He agreed that the current rate was not compatible with the five-year plan. Director Fultz said he would only do this if other Board members have an appetite for pursuing this. President Smolley said there might not be an appetite for another rate increase, but there might be an appetite for expanding the Board’s understanding of the current situation. Director Fultz said that if the District could only afford to borrow $19 million, then it needed to drop $20 million from its CIP, and it needed to explain to the community what it was prioritizing. He added that 80% of the budgeted revenues were going to Operating Expenses. [Note: Director Fultz declined to answer my email question about how he arrived at this figure. The actual percentage appears to be around 65%.]
Director Largay said he would be happy to consider any written analysis that Director Fultz could provide (especially since he could attend much more productively to a document than an oral presentation). He said he thought Director Fultz was very pessimistic about grant funding opportunities, and he said he was less persuaded with regard to spending more money on consultants. Director Largay said he saw the current budget as a set of stretch goals because Staff lacks the required resources to meet the current schedules, even with Heather’s 11-month grace period. He said, in terms of being honest with the community, he would be happy to characterize the current project timetable as “aspirational.”
Director Fultz objected that “aspirational” was insufficient. Director Largay replied that he was certain that not all CIP projects will be accomplished, but he was also certain that Staff would do their best. He characterized this as a process of discovery, and he said, absent adequate staffing, he didn’t think it was realistic to ask Staff what can be accomplished. He thought the Board should approve the budget and encourage Staff to do as much as possible. He said the community voted overwhelmingly in November of 2024 to invest in infrastructure.
Director Layng was open to learning more but not necessarily to spending more.
President Smolley summarized by saying the Board was interested in continuing the discussion, but it meanwhile needed a budget for the upcoming fiscal year. He requested that Director Fultz provide a one-to-two-page memo for future Board discussion. Director Fultz advocated for zeroing out the CIP beyond the initial $19 million, but Director Largay objected to this as not allowing for appropriate ongoing flexibility.
There was one public comment. Karen Vitale of Forest Springs said she was finding the discussion rather disturbing. She said she never learned about the CIP even though it was said to have involved the community. She was particularly concerned about the absence of any projects associated with Bracken Brae and Forest Springs beyond the agreed-upon Phase 1 activities. She didn’t understand how all these decisions could have been made without involving Bracken Brae and Forest Springs in keeping with the existing Letter of Intent.
President Smolley responded. He said he had put together a Consolidation Status Report and was working with Director Fultz to enable this to be presented to the Board at a future meeting. He was unable to say more this evening because this was not an agendized topic. However, he noted that the District has no funding for consolidation work beyond Phase 1.
Director Layng added that the Staff prepared the CIP list with committee reviews. Karen appreciated these explanations and the ongoing efforts of President Smolley.
Director Largay said he looked forward to a time when the new General Manager and Finance Manager could produce a document elaborating the District’s overall strategy and work plan.
President Smolley moved to adopt a resolution approving the budget. Director Layng seconded.
The motion passed 3-1, with Director Fultz opposed.
Lyon Access Road Slide Repair
Engineering Manager Garrett Roffe introduced this agenda item. Heavy winter rains in 2017 triggered a large landslide severely impacting access to the District’s Lyon Treatment Complex. The 2023 storms reactivated the slide. Over the past eight years, the District has considered two possible solutions: (1) a substantial repair project targeting the existing road and aimed at stabilizing the slide, and (2) design and construction of an alternate road. FEMA initially approved option #1 and then subsequently approved option #2. Meanwhile, District pickup trucks can access the complex by driving over the landslide, but the condition of the paving on the active landslide continues to deteriorate.
In 2021, the District awarded the Lyon Slide Road Design Project to Sandis Civil Engineers for investigation and design of a new access road. The layout of the new access road bypasses the area of the landslide, and the project does not address stabilization of the failed slope. The construction cost is estimated to be over $8 million (as opposed to maybe $15 million for option #1), but Sandis is now requesting an additional $200,000 to complete the retaining wall design. However, the proposed road has a 20% grade which exceeds the 15% maximum recommendation. Directors Smolley and Fultz, who both serve on the Engineering Committee have walked the location and doubt that the new road would be drivable.
Director Fultz said his primary concern with the original plan was the potential danger to homes if the slide reactivated. Garrett said a geotechnical analysis indicated that the slide material would most likely enter the creek and impact the waterway rather than houses. Garrett also said the District would need to get FEMA approval for returning to its original plan.
Directors Layng and Largay said they would defer to the technical experts.
President Smolley moved to direct Staff to stop work on the engineering design of a new access road for the Lyon site and to start work on the engineering design for repairs to the existing Lyon Access Road. Director Layng seconded this. There was no public comment.
The motion passed 4-0.
Consent Agenda
There was one item on the Consent Agenda:
a. Board Minutes from 5.15.25
The Minutes for 5.15.25 were deemed to be adopted by unanimous vote.
District Reports
One report was submitted: the Monthly Finance Report. Director Fultz thanked Heather for engaging in a conversation about how to present the difference between the accounting view of unrestricted funds and their actual availability for the District to spend. Her report included a note that clarifies this. The bottom line is that only about $1 million of the $12.3 million in unrestricted funds is available to spend at this time.
Written Communications
There was one written communication. This was an email from Dave McClelland urging SLVWD not to supply a water tie-in to the proposed “Haven” development on Graham Hill Road. There was no Board discussion of this item.
Board Comment
This agenda item is reserved for general comments from the Board and/or for requesting future agenda items. There were no comments or requests.
The meeting was adjourned at 8:40 PM.