SLVWD Board Meeting Summary
July 2, 2026
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Variance for 462 Lockewood Lane
System Consolidation Policy
Water Donation In-Kind Policy
Highland Tank Engineer of Record Construction Support
Delinquent Water Charges to be Placed on County Tax Roll
Next Board meeting will be at 6:30 PM on July 21, 2026
Preliminaries
Four directors were present. Director Largay was absent.
President Russ said 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 the first item, Contract Review for General Manager, was being pulled and deferred to a future meeting.
There were no public comments on non-agenda topics.
New Business
Variance for 462 Lockewood Lane
District Engineer Garrett Roffe introduced this agenda item. He reported that the District was contacted by the City of Scotts Valley on May 16, 2025 regarding a proposed project at Lockewood Lane. The project was described as the conversion of the existing structure into an attached ADU and a junior ADU (no larger than 500 sq. ft.), with associated bathroom and laundry modifications, all within the existing footprint. Following plan review, the District notified the City on May 20, 2025 that the existing 5/8-inch meter would need to be upgraded to a 1-inch meter, and that the District was otherwise able to serve the project.
The property owner contacted the District the same day requesting additional information. The District explained that meter sizing is governed by the California Plumbing Code's fixture count methodology. Based on the proposed scope, the project's fixture count required a 1-inch meter. The District quoted a meter upgrade fee of $7,052, plus a $3,000 installation deposit for a new 1-inch service line if needed. Following submission of the District Meter Review Form, the District issued a formal approval letter on June 3, 2025 confirming total connection charges of $10,052 and outlining next steps.
The property owner contacted the District on May 29, 2026 to discuss the possibility of a variance that would allow the existing 5/8-inch meter to remain in service. The District provided a Request for Variance – Water Meter Size form on June 19, 2026, which the property owner returned with attachments on June 23, 2026.
The owner argued that they were not observing any pressure drop under representative use conditions, so their modification did not involve any significant changes. Staff recommended denying the request, arguing that this house should actually have had a 1” meter when it was originally built a few years ago.
Legal Counsel Gage Marchini confirmed that the District is not prohibited from charging an upgrade fee in this particular situation.
Director Fultz said he was concerned about penalizing an existing customer by making them pay to correct a past District mistake (which, it turned out, occurred in 2021). He suggested a compromise. Garrett noted that the District would have to install a 1” service lateral to the meter from the main (in place of the current ¾” line). Director Fultz proposed that the District charge only for the installation fees, given that the District erred when it replaced the meter in 2024 and didn’t flag it at that time). He added that the District issues variances every year for people with multiple dwellings who say they aren't using these more than 90 days.
There was no public comment. Director Fultz moved to reject the variance request, charge the owner $3000 for installation of a 1" service line and meter, and waive the $7000 connection fee. Director Smolley seconded. The motion passed 4-0.
System Consolidation Policy
General Manager Jason Lillion introduced this agenda item. Staff has developed a proposed Water System Consolidation Policy to establish a consistent, transparent, and legally compliant framework for evaluating and implementing requests by outside entities for consolidation of their public water systems into SLVWD. Jason noted that the majority of the work on this was done prior to his joining the District. Directors Smolley and Fultz played a major role.
The policy is intended to protect the interests of existing District ratepayers while ensuring the District can respond appropriately to consolidation requests—whether voluntary or state-mandated—in a structured and defensible manner.
The proposed policy addresses the following key areas:
· Initiation and screening of consolidation requests
· Request for Information (RFI) requirements
· Pre-Consolidation Agreement terms and cost reimbursement
· Technical and financial evaluation criteria
· LAFCO and jurisdictional requirements
· Funding and cost allocation
· Water Rights & Environmental Benefits
· State-mandated consolidation under Health & Safety Code §116682
· Consolidation Agreement terms and Board approval process
· Decision criteria and termination provisions
Key policy principles include:
· The District does not proactively seek consolidations but will evaluate requests
· Consolidations will only be approved if technically feasible, financially neutral or beneficial to existing ratepayers, and compliant with all regulatory requirements
· All costs associated with evaluating and completing a consolidation shall be borne by the Requesting Entity, with 100% reimbursement required under a Pre-Consolidation Agreement
· Nothing in the policy obligates the District to approve any consolidation
Director Smolley said the Administration Committee approved this draft. The one question that he raised was whether it was really wise to mention the possibility of a state-mandated consolidation. Jason said it was difficult to avoid this.
Director Fultz said this was a really good policy, but he still saw some room for refinement. In general, he thought this document would help to avoid unnecessary misunderstandings and associated drama and emotion. He also noted that the District lacks the benefit of being wealthy but also the benefit of being officially economically disadvantaged.
More specifically, Director Fultz recommended including hot links for specific references, given that this is a customer-facing document. He said he wanted more time to reflect on some late additions to the document. He had a brief discussion with Director Smolley about the hypothetical circumstances in which the District would stand to benefit from a consolidation. He raised concerns about the District’s expectations for infrastructure compatibility, as he noted that requiring 8” mains could be problematic. He also worried about adequately protecting the District from unintentionally subsidizing a consolidation.
Gage pointed out that the Directors were discussing a different version of the document than the one in the Board packet. Technically, people in the meeting room had access to the latest version, but no members of the public were present, and there was no public comment.
After some further discussion, the Directors agreed to send additional comments to Jason.
Water Donation In-Kind Policy
Operations Manager Jesse Guiver introduced this agenda item. The background is as follows: The District occasionally receives requests from nonprofit organizations, schools, and community groups for water service support at community events. Currently, there is no formal policy governing how these requests are evaluated and approved.
The proposed In-Kind Water Service Policy establishes clear guidelines for providing in-kind water service donations, including eligibility requirements, approval authority, monetary limits, application procedures, and reporting requirements. The policy is intended to ensure that District resources are used consistently, transparently, and in a manner that provides public benefit while protecting the District's operational and financial interests. Adoption of the policy will provide a standardized process for evaluating requests and ensure appropriate oversight of in-kind water service donations.
The proposed policy was presented and discussed at the Administration Committee meeting on June 15, 2026. Recommended revisions from that discussion have been incorporated into the revised policy being presented this evening for Board consideration.
Directors Smolley and Layng said they were part of the Administration Committee review process. Director Layng recommended a minor further revision.
Director Fultz has multiple suggestions. He recommended using a consistent style for all public policies. He clarified that this policy does not apply to disaster situations such as the water service that the District provided following the CZU Fire. He also had questions about non-profit status. He recommended that the GM evaluate evidence of insurance on a case-by-case basis, and he recommended that the Board should review the required indemnification form.
Some directors expressed surprise at the $25,000 annual limit (as did members of the Administration Committee). Jesse explained that he was trying to future-proof the policy. Actual costs have not exceeded $5000 per year. President Russ said he would okay with a limit of $5000 per occurrence. He suggested maybe $20,000 a year maximum subject to Board review of the indemnification agreement, a quarterly reporting requirement, and a shorter form.
There was no public comment. Director Smolley moved to adopt the policy with changes as noted by Board members during discussion. Director Layng seconded. The motion passed 4-0.
Highland Tank Engineer of Record Construction Support
District Engineer Garrett Roffe introduced this agenda item. His memo in the Board packet stated that the engineering design for the Highland Tank was awarded to Mesiti-Miller Engineering in the summer of 2024. The construction of Highland Tank was awarded to Corcus Construction, Inc. at the October 16, 2025 Board meeting in an amount not to exceed $1,033,099. Mesiti-Miller Engineering was awarded the construction phase support contract at the November 6, 2025 Board meeting in an amount not to exceed $25,570. The tank supplier is in the process of erecting the new bolted steel tank and construction is scheduled for completion in October of 2026. The additional compensation will allow Mesiti-Miller Engineering to continue to provide construction phase support for the remainder of the project as the Engineer of Record.
Garrett recommended the Board authorize a Contract Amendment for $19,671 to be billed to Mesiti-Miller on time and expenses, increasing their total to $45,241. However, the information he provided in the Board packet did not explain why it was appropriate for the Board to approve this. Garrett therefore read a very long and detailed additional explanation prior to the beginning of Board discussion. Unfortunately, it was not feasible to capture this information from his live presentation, and all four Directors expressed unhappiness with this approach. They requested that Garrett include this kind of supplementary information in the Board packet so that they would have an opportunity to read and process it in advance of the meeting.
The ensuing discussion was lengthy and probably frustrating for all. The Directors said they understood the logic of Garrett’s overall approach, which was intended to prevent consultants from submitting excessive charges. However, they wanted to understand in this specific case why Mesiti-Miller was suggesting that they might need an additional 80% of their original bid when it appeared that only two remaining months of the project would not be covered by the original award at the current burn rate. They wanted to understand why Garrett considered this to be reasonable, and they wanted to more generally assess the effectiveness of Garrett’s current cost-management strategy. Garrett’s responses did not enable them to resolve their concerns.
Director Layng asked if Mesiti-Miller would stop working if the Board failed to approve this contract amendment this evening, and Jason said they would continue to work. Director Smolley said he expected the Board to eventually approve some portion of the requested amendment, but he worried that approving the entire amount this evening would fail to resolve the Board’s deeper concerns.
President Russ said he would be happy to spend time with Jason and Garrett to clarify what the Board needs from a presentation.
Delinquent Water Charges to be Placed on County Tax Roll
Finance Manager Cheri Freese was not present, so General Manager Jason Lillion introduced this agenda item. The California Water Code allows the District to collect delinquent and unpaid charges for water by referring them for collection through the County tax rolls once the balance remains outstanding for 60 days or more. The District adopted this policy in 2021, viewing it as both more cost-effective and more socially responsible than shutting off water.
Today, 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 sent out the first round of letters on 4/23/26 and sent a final notice on 5/26/25. The District will be sending a total of 146 accounts to the County tax roll for a total of $281,735.86. 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. Last year, the District placed 167 accounts on the County tax roll for a total of $341,585.73.
President Russ asked how many of the same accounts are referred year-after-year. Jason said there were about 80 of these.
Director Fultz asked how much money the District actually receives from the County, given all the money it sends them for property taxes. The Board’s original understanding was that the District would receive the money from the County immediately, but this didn't happen.
Director Smolley suggested that Staff should figure out how much money the District has netted over the past five years via this approach. He asked if it was time-critical to approve this resolution this evening, and Jason said it was.
There was no public comment. Director Layng moved to approve the resolution, and President Russ seconded. The motion passed 4-0.
Consent Agenda
There was one item on the Consent Agenda:
a. Board Meeting Minutes 6.18.26
The 6.18.26 Board Meeting Minutes were approved by unanimous consent.
The meeting was adjourned at 8:25 PM.