SLVWD Board Meeting Summary
July 17, 2025
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Sandhills Habitat Conservation Plan
Haven Housing Development
Committee Appointments
Budget Amendment for Fiscal Year 2025-26
Investment Policy
CA-9 Meter Abandonment and Trench Repair Construction Contract Award
Bennett and Lompico Pipelines Survey Contract
Long Service Line Agreement
Delinquent Utility Bill Accounts Sent to Tax Roll
Next Board meeting will be at 6:30 PM on August 7, 2025
Preliminaries
All five directors were present.
There was nothing to report from the just-concluded Closed Session, but this session resumed at the end of the Open Session.
General Manager Jason Lillion requested that the agenda items 11c (Rate Assistance Program) and 11g (Hazardous Tree Mitigation) be deferred to a future meeting. President Smolley explained that this was motivated by a desire to shorten what already promised to be a long Board meeting. There were no Board objections.
There was one public comment on (now) non-agendized topics. Jim Mosher of Felton said failure to address the Rate Assistance Program this evening would delay the onset of both the increased rebate and efforts to expand public awareness of the program. President Smolley said he expected this agenda item to be addressed at the next Board meeting.
There was some Board discussion about reordering the agenda so that item 12b (Haven Housing Development) could be discussed earlier in the meeting, in deference to a number of public attendees who wished to comment on this. The Board agreed to pull item 12b from the Consent Agenda and to address it immediately following the opening presentation.
Presentations
Sandhills Habitat Conservation Plan
Environmental Planner and Special Projects Manager Chris Klier introduced consultant Jodi McGraw, who presented this agenda item. Jodi’s full presentation is available as a PowerPoint document on the District’s website:
https://www.slvwd.com/board-directors/agenda/board-directors-meeting-34
Jodi’s main points were as follows:
The Santa Cruz Sandhills is a unique ecosystem of uplifted marine sediment in Santa Cruz County. The Sandhills includes two endemic plant communities and six endemic species. Since some of the District’s infrastructure is situated within the Sandhills, and since impacts to some of the listed insects require a ‘take permit’ under the Federal Endangered Species Act, the District has obtained infrastructure permits on a project-by-project basis. Superseding this approach with a programmatic Habitat Conservation Plan (HCP) will reduce permitting timelines and costs, and it will facilitate habitat management at the Olympia Wellfields.
The HCP under development will cover the four species listed as federally endangered and will have a requested lifetime of 25 years. It covers capital improvements, operations and maintenance, vegetation management (defensible space, fuel breaks, and hazardous tree removal), and conservation strategy (habitat management, invasive plant management, revegetation, and surveys).
Development of the plan is currently about half complete. Next steps include submitting a draft HCP to US Fish and Wildlife in March 2026 and submitting a final HCP in September 2026, with permit issuance expected in 2027.
Director Layng said she was happy to see this moving along. She also thanked Jodi for the District’s sandhills tour this past Saturday and for all of her hard work for the District.
Director Fultz thanked Jodi for her presentation and said he was told in 2018 that this project would be completed in a couple of years. He asked if this evening’s schedule was something the District could count on. Jodi said she couldn’t guarantee this. Director Fultz also called attention to the District’s recent agreement with the Valley Gardens development to provide 10 acres of habitat offset, and he expressed concern that this had a timeline of 18 months. He said the Valley Gardens developer still had a possible alternative offset solution, so the District could lose a substantial amount of money if its current agreement fell through; he asked if the Valley Gardens people were aware of the current HCP schedule and okay with it. Jodi said they were.
Director Largay disclosed that he worked for the Land Trust of Santa Cruz County which has a Sandhills Conservation program in proximity to this site (and with which he has minimal involvement). He asked, for purposes of comparison, how long it would typically take to get a permit in the absence of this HCP. Jodi said the Probation Tank took nearly two full years. President Smolley followed up by asking what the basis was for expecting reduced permitting timelines and costs, and which agencies would recognize this programmatic approach. Jodi said this was being encouraged by Fish and Wildlife, and that they would be completely satisfied. She couldn’t guarantee the response of other agencies.
There were two public comments. Former Board member Rick Moran of Ben Lomond asked how populations of the four native species have changed over the past twenty years. He also expressed concern that invasive species management might be stepping back from the District’s policy banning the use of glyphosate. Jodi said the status was much improved over twenty years ago, but there was no long-term quantitative data to support this.
Bruce Holloway of Boulder Creek said he wanted more detail about the history and current status of the Watershed Endowment funds, and he said he would submit a public records request if necessary. (The District’s Watershed Endowment is a restricted account whose funds are dedicated to watershed maintenance.) President Smolley asked Jason to follow up on this, and Heather said Chris Klier was fully aware of the funds that have been received and has a plan for their use.
Unfinished Business
None.
New Business
Haven Housing Development
General Manager Jason Lillion introduced this agenda item (pulled from the Consent Agenda). The Haven is a controversial proposed 157-unit housing development along Graham Hill Road across from Henry Cowell Park. The developer is currently presuming that the District will provide the necessary water, and local residents opposed to the development are urging the District to decline. The District’s official position at this time is that, since it has not yet received a formal water service application for the currently proposed development, any deliberation by the Board would be premature and could constitute an unlawful prior restraint or pre-judgment under California law. Therefore the Board cannot comment.
In general, the District is required to issue a Will Serve letter (confirming that it will provide water) for any new development within its boundaries whenever an engineering analysis determines that the District has the capacity to fulfill the relevant water and fire-flow requirements. This was the case in 2024 when the District issued a Will Serve letter to the Valley Gardens project in Scotts Valley. For the Haven Housing Development, there are two additional twists.
First, the District received a meter review application in June 2024 from a landowner for a single-family home to be built on each of the four separate parcels along Graham Hill Road. None of the parcels have frontage on a street with a District water main, but service could be theoretically provided through a Long Service Line Agreement or a Main Extension. Four Will Serve Letters were provided to the property owner in August 2024, with conditions developed by staff and with the understanding that a single home would be built on each of the four parcels.
Second, the developer subsequently included the District’s Will Serve letters in its application to the County for the dramatically expanded Haven Housing Development concept later in 2024. In a letter to the County in early 2025, the District noted that this proposal would require a fresh analysis before the District could determine whether or not to issue the appropriate Will Serve letter. In addition, the District called attention to two jurisdictional confounds: one of the four parcels is within SLVWD’s LAFCO (Local Agency Formation Commission) Sphere of Influence but NOT within its Jurisdictional Boundary whereas another is currently NOT within either boundary. This would have to be rectified through a LAFCO boundary change prior to service.
President Smolley reiterated that the Board would not be able to make any public comment at this time and that the District would ultimately be legally compelled to supply water if this was deemed (via a presumably pending analysis) to be feasible. Director Fultz was confused by the assertion that the Board would be participating in a quasi-judicial decision, particularly since this issue never arose in the 2024 discussion of the Valley Gardens project. District Legal Counsel Barbara Brenner maintained that the Board’s pending discretionary decision-making would count as a quasi-judicial process. This discussion continued, and President Smolley ultimately asked Jason and Barbara to undertake a further review.
President Smolley further noted that the Board had already received substantial public comment over the past six months, all of it highly critical of the Haven project. He therefore urged members of the public to be as concise as possible with their statements.
A number of local community members spoke to the Board, explaining why they are strongly opposed to the Haven Housing Development and why they hope the District will ultimately decline to issue a Will Serve letter. Many concerns centered around the potential impact of the project on the valley’s water supply and on traffic and emergency response in addition to the devious behavior of the developer. One commenter pointed to a discrepancy between the District’s efforts to protect the Sandhills and its potential support for a massive development on a Sandhills site. Another asked how the District’s analysis would be paid for, and Jason said the developer would be billed upon completion. A separate commenter suggested that the developer was currently involved in multiple court cases and might never pay his bills. One final commenter disagreed; he argued that new housing is essential to address the County’s housing crisis and that the previous commenters were offering purely self-serving arguments.
Committee Appointments
The resignation of Director Hill in May left the District with open Director seats on the Budget and Finance Committee and on the Administration Committee. In the absence of any Board or public comment, President Smolley moved to appoint Director Russ to fill both vacancies. Director Russ indicated that he was open to this, and Director Layng seconded the motion.
The motion passed 5-0.
The appointment of Bob Russ to fill Director Hill’s Board seat in June left the Budget and Finance Committee with an open seat for a member of the public. President Smolley asked if the Board felt that it was worth filling this seat for September through December. The Board was in favor of trying to recruit a new public member, and President Smolley directed Staff to proceed.
Budget Amendment for Fiscal Year 2025-26
Finance Consultant Heather Ippoliti introduced this agenda item. She noted that the Board approved two resolutions at its June 5th meeting. One resolution approved the 2025-26 budget, and the other approved an employment agreement for General Manager with Jason Lillion that exceeded the budgeted amount by $65,811. Therefore, Staff recommended that the Board approve a budget amendment increasing the amount budgeted for the General Manager and decreasing unrestricted net assets by the same $65,811.
There was one public comment. Bruce Holloway of Boulder Creek said he was a little surprised to see two mutually contradictory resolutions passed at the same June Board meeting. He also criticized the District for not having the budget discipline to slash $65,811 from other parts of its budget.
President Smolley moved to adopt the resolution, and Director Layng seconded. The motion passed 5-0.
Investment Policy
Finance Consultant Heather Ippoliti introduced this agenda item. The Investment Policy establishes formal policies for the prudent investment of the District’s surplus cash. It also calls for the appointment of a Treasurer and indicates that the same person should not serve as both the General Manager and Treasurer of the District, simultaneously.
On June 16, 2022, the Board of Directors adopted a resolution approving an investment policy, effective for the fiscal year ending June 30, 2023. With that resolution, the Board also delegated the responsibilities of Treasurer to the Director of Finance and Business Services. There was no investment policy approved for fiscal years ending June 30, 2024, and June 30, 2025, nor were the responsibilities of Treasurer delegated.
Staff recommended that the Board adopt a resolution approving the Investment Policy for fiscal year 2025-26. The Budget and Finance Committee has endorsed this. Heather also noted that two more resolutions will eventually be needed: to appoint a Treasurer, and to authorize signatories on the Local Agency Investment Fund (LAIF) account.
Director Fultz asked why the Board couldn’t deal with the two pending resolutions this evening. Heather explained that the District doesn’t currently have a Finance Manager. She can’t serve in this position, and neither can the accountant nor the General Manager. Consequently, she didn’t know who the Board could appoint. With regard to signatories, she said the District’s Legal Counsel had approved the approach that she was recommending. The General Manager could be a signatory, but two signatories are required on the account.
There was one public comment. Bruce Holloway of Boulder Creek pointed to potential problems in the detailed wording of the proposed resolution (e.g., a discrepancy between references to code sections 53600 vs. 53607 and use of the word “quarterly” in contradiction to state law). He also asked for an explanation of an issue that was identified in May and reportedly resolved in June: the District had $6 million in a Wells Fargo account that was not earning interest because it lacked a Treasurer with the authority to transfer the funds; however, it was subsequently reported that the funds had been transferred. Who had the authority to do this?
President Smolley asked General Manager Jason Lillion to follow up on this.
President Smolley moved to adopt the resolution approving the investment policy. Director Fultz asked about the use of the word “quarterly,” and District Legal Counsel Barbara Brenner said she would have to look at this. President Smolley advised that the phrase “at least quarterly” should be removed; Director Fultz seconded the motion. The motion passed 5-0.
CA-9 Meter Abandonment and Trench Repair Construction Contract Award
District Engineer Garrett Roffe introduced this agenda item. The District was informed by Caltrans that SLVWD will have to shut off and abandon the services connected to three homes along CA-9 in Felton. These homes are to be removed as part of a project to install a sidewalk from Graham Hill Road to the SLV High School.
The District has also been directed by Santa Cruz County to make repairs to a lateral trench at Felton Empire Road at Ashley Street, two blocks from the Caltrans work. This repair includes milling and replacement of existing asphalt, as well as raising the iron for a nearby hydrant valve.
These projects are slightly beyond the District’s capacity to complete internally, especially given the traffic control requirements in this busy location. As a result, they have been grouped together as one small contracting project. The District received proposals from Lewis & Tibbitts for $155,291 and from Corcus Construction for $181,500. Staff recommended Lewis & Tibbitts and noted that the project was originally budgeted for $300,000.
Director Layng asked about the District’s inability to handle this project solely with Staff. Garrett explained that he first consulted with Operations and was told that this intersection was too busy for them to manage the traffic control. Director Fultz asked why the meter abandonment couldn’t be handled in-house, and Garrett explained that it was located in the road. President Smolley agreed that the District needed a company experienced with traffic control.
Director Largay asked why the District doesn’t receive compensation along with the homeowners whose property was taken via eminent domain. Garrett said the District was subject to Caltrans direction because its infrastructure was installed in their right-of-way. Director Fultz said he wanted to see the District get better at coordinating with Caltrans.
President Smolley said he wanted to discuss the liquidated damages provision in the contract at an Engineering Committee meeting so that he could understand why it was being included.
There was no public comment. President Smolley moved to direct the General Manager to execute the notice of award document to Lewis & Tibbetts. Director Layng seconded.
The motion passed 5-0.
Bennett and Lompico Pipelines Survey Contract
District Engineer Garrett Roffe introduced this agenda item. The District has received a CalOES grant for fire hardening critical infrastructure. The grant allocates $200,000 (of which $193,194 has not yet been spent) for protecting the Bennett Pipeline (3000 feet in length), which transports raw water from Bennett Springs to the Kirby Water Treatment Plant in Felton, and $150,000 (of which $143,449 has not yet been spent) for protecting the Lompico Pipeline (1000 feet in length), which is the only pipe connecting the Lompico neighborhood with the rest of the system.
As a first step toward possibly burying these lines, the District will need a topographic survey of both areas. The District issued a request for quotes and received two proposals: Towill submitted a bid of $52,282 for a six-week project, and Dudek submitted a bid of $59,150 for a five-week project. Both bids demonstrate an understanding of the project and an experienced staff. Staff recommended that the contract be awarded to Towill.
The Board had only two minor questions. Director Fultz commented that he didn’t expect the grant to come anywhere close to paying for the actual construction.
There was no public comment. President Smolley moved to direct the General Manager to award the Professional Services Agreement to Towill. Director Layng seconded.
The motion passed 5-0.
Long Service Line Agreement
District Engineer Garrett Roffe introduced this agenda item. He explained that this matter involved a current District customer with a current agreement for a line (for which he had an easement from a neighbor). However, the customer was being forced to relocate this line due to the actions of his neighbor.
There was no Board or public discussion. President Smolley moved to approve the attached resolution, and Director Russ seconded. The motion passed 5-0.
Director Largay asked why this required a Board decision, and Garrett explained that a formal resolution was needed because of the easement.
Delinquent Utility Bill Accounts Sent to Tax Roll
Finance Consultant Heather Ippoliti introduced this agenda item. The California Water Code allows the District to collect delinquent and unpaid charges for water and other services by referring them for collection through the County tax rolls and thereby establishing a lien on real property, once the balance remains outstanding for 60 days or more. In June 2021, the Board of Directors adopted a resolution approving a utility billing policy establishing the County tax roll as the District’s primary collection method for past due balances greater than 90 days delinquent. The Board slightly revised the criteria for selecting accounts in May 2025: the District is pursuing accounts that have past-due balances delinquent as of March 31 greater than $500 or delinquent for more than six consecutive months.
Staff recommended sending a total of 167 accounts to the County tax roll for a total of $341,585.73. Once placed on the County tax roll, the balance will be written off the customer’s account and placed into a receivable account on the balance sheet. As the payments from the tax roll are received, the District’s cash account will increase, and the receivable account will decrease. Last year, the District placed 124 accounts on the County tax roll for a total of $181,727.80. (The County collects a 1% administrative fee.)
Director Fultz asked how much of the $181,727 the District has actually received. Heather said, “only a fraction.” The County sends a little each quarter, but the District mostly gets paid only when people pay their property tax or when the property sells. Director Fultz said the policy was initiated with the understanding that the County would give the District the money up front. With nearly half a million dollars at stake, Director Fultz suggested that the policy should be revisited in order to update the assessment of the resulting Return On Investment. He also noted that the District’s old approach of shutting off water for delinquent accounts was very expensive and partially superseded by more recent State law.
President Smolley said this should go back to the Budget and Finance Committee for additional Staff review. He also wondered whether it was really necessary for the Board to formally approve this each year. Heather said the County required this.
Director Largay suggested that it might make sense to segment overdue accounts into those above and below, say, $10,000.
There was no public comment. President Smolley moved to have the Board adopt the resolution approving the delinquent water charges to be submitted to the County. Director Russ seconded. The motion passed 5-0.
Consent Agenda
There were three items on the Consent Agenda:
a. Lead Service Line Inventory Information
b. Haven Housing Development
c. Board Minutes from 6.26.25
The Haven Housing Development was discussed earlier in the meeting.
Director Fultz pulled the Board Minutes from 6.26.25 so that they could be revised to properly reflect the fact that there were actually two votes taken, not just one, to fill the open seat on the Board. President Smolley added that Bruce Holloway had privately pointed him to another inaccuracy in the minutes. He asked Staff to revise the minutes.
There was one public comment on this item. Bruce Holloway of Boulder Creek criticized the District at length for publishing minutes that failed to completely record Board votes.
Director Layng did not pull the Lead Service Line Inventory Information, but she commented that she never received the District’s letter.
District Reports
There were no Board comments on the May Finance Report nor on the recent committee meeting minutes.
Written Communications
There was one written communication regarding the District’s Lead Service Line Inventory letter. There was no further discussion of this.
Board Comment
None.
The Open Session was adjourned at 8:40 PM. The Board returned to Closed Session.