SLVWD Board Meeting Summary
September 18, 2025
Prepared by Mark Dolson for FSLVW
NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.
Highlights:
Public Member for Budget and Finance Committee
Peavine Raw Water Pipeline Replacement Survey Services
DWR Tanks Additional Survey Services
Reserve Policy
Endowment Fund
Next Board meeting will be at 6:30 PM on October 2, 2025
Preliminaries
Director Fultz was absent.
There were no reportable actions taken in the just-concluded Closed Session.
There was one public comment on non-agendized topics. Bruce Holloway of Boulder Creek suggested that the District might want to increase the standard fee that it charges for each new connection to its system. He pointed out that the current fee is based on a 2017 study by a consultant that blended two different assessment methodologies to arrive at the current figure. A key factor in this assessment is the District’s capital investment. Since this investment has increased significantly in the ensuing eight years, Bruce speculated that it might be appropriate to increase the connection fee by perhaps 50% and that this might also have an impact on the financial viability of the proposed Haven Development.
Unfinished Business
None.
New Business
Public Member for Budget and Finance Committee
General Manager Jason Lillion introduced this agenda item. He reminded the Board that its Budget and Finance Committee currently had a vacancy for a public member. The District advertised from July 28th through August 28th for applicants to fill this position, and it received one response: Jenni Gomez is a Felton resident who currently serves on the County’s Fish and Wildlife Advisory Commission and is an alternate on the County Planning Commission. Jenni stated that she enjoys serving her community and said she previously served on the District’s Environmental Committee. She said she was most deeply interested in the environment, but she had a personal goal to learn more about budgets and finance and matters relating to fiscal responsibility. She also noted that she has professional Geographic Information Science (GIS) skills.
All four directors thanked Jenni for being willing to serve and indicated that they expected her to be a valuable addition to the committee. Director Largay said he had formed the impression that Jenni had a very independent and analytical mindset.
There was no additional public comment. President Smolley moved to appoint Jenni to the Budget and Finance Committee, and this motion was promptly seconded.
The motion passed 4-0.
Peavine Raw Water Pipeline Replacement Survey Services
Engineering Manager Garrett Roffe introduced this agenda item. He explained that Staff was recommending a small amendment to the existing topographic mapping contract with Towill, Inc. to allow for a maximum of $4500 in additional services. These services are needed because Towill’s initial survey identified two locations where the District’s existing trail alignment passes onto neighboring parcels of land. The additional survey scope of work will provide the District with necessary legal descriptions and plots required to obtain utility easement from the adjoining property owners.
Directors Layng, Largay, and Russ had brief questions about details of the work performed by Towill. President Smolley asked if the District had yet contacted the property owners. Garrett said one property owner was open to an easement and the other was new and had not yet been contacted. He said the terrain in question was very rugged and not developable. Consequently, it should not be seen as a significant loss of value.
There was no public comment. President Smolley moved to amend the contract as recommended, and Director Layng seconded.
The motion passed 4-0.
DWR Tanks Additional Survey Services
Engineering Manager Garrett Roffe introduced this agenda item. The District’s DWR Tank Replacement Project aims to replace six separate storage tanks in order to protect and increase the District’s water storage capacity. This project is being funded by a $4.5 million grant from the Department of Water Resources (DWR) together with a $1.5 million District match.
Currently, Blue Ridge Tank design and construction is complete. The engineering design is complete for Highland Tank, and construction documents are published on the District website for contractor bids. A combined set of bid plans for Redwood Park Tank and Echo Tank are scheduled for completion in November 2025 by the design engineer. The District has made an offer to the Felton Heights (Lost Acre Drive) land owner to purchase a portion of the parcel proposed for the new tank site. Additional survey services are required for the Felton Heights and Echo Tank sites to complete the engineering design.
The Felton Heights site is adjacent to a residential neighborhood on steep terrain. Additional 50’ x 196’ of topographic mapping will allow the drainage for the site to be routed away from the neighbor’s existing culvert.
Additional topographic mapping is also required for Echo Tank to understand the slope behind the proposed retaining wall and establish an easement for tiebacks through the neighboring parcel. The surveyor will also provide construction staking to identify the proposed cut into the hillside for the arborist to determine impacts to existing trees.
Staff therefore recommended a contract amendment for additional survey services with GV Land Surveying in the amount of $9,700.
Directors Layng and Russ again had brief questions about details of the work. In response to a follow-up question from Director Layng, Garrett said the District had made an offer to the Felton Heights landowner and was still awaiting a response. President Smolley suggested that the survey be put on hold until negotiations are complete. Garrett initially expressed a preference for not introducing any further delays, but he subsequently agreed that the survey could wait until the District has received the land.
There was no public comment. President Smolley moved to approve the recommended contract amendment, and Director Layng seconded.
The motion passed 4-0.
Reserve Policy
Newly hired Finance Manager Cheri Freese introduced this agenda item. She briefly reviewed relevant background previously shared with the Board and then made a specific recommendation.
On June 17, 2021, the Board adopted a reserve fund policy based on GASB 54. GASB 54 applies to governmental funds, not enterprise funds. Because the District operates as an enterprise fund, it is appropriate to adopt a reserve policy that follows Government Finance Officers Association (GFOA) best practices and emphasizes working capital.
The current policy includes six categories: Operating, Capital, Compensated Absences, Fire Surcharge, Debt Service, and Assessment District balances. After review of GFOA and American Water Works Association guidance, and comparative analysis of peer agencies, Staff recommended simplifying the structure to three categories:
Operating Reserve – 50% of annual operating expenses, so about $5 million (to provide liquidity during revenue shortfalls, delays in rate collection, or emergencies)
Emergency Reserve – $4 million (to provide immediate support to the District while other funding sources are located)
Capital Reserve – $2 million, based on annual depreciation (to ensure funding capacity for asset replacement)
This structure was reviewed by the Budget and Finance Committee and was viewed as providing greater clarity, aligning with enterprise best practices, and ensuring adequate protection against revenue shortfalls, infrastructure needs, and emergencies such as wildfire or storms. Director Largay said the committee sought to establish a floor that was as low as possible (in order to minimize the amount of borrowing required to fund capital improvement) while still providing an adequate buffer for coping with emergencies. The committee thought it was unlikely that the District would face a more expensive series of emergencies than it experienced over the past ten years.
President Smolley asked Cheri to share some additional information that she provided to him earlier in the week. She said the District’s reserve fell from around $5.4 million before the August 2020 CZU Fire to just under $2 million in February of 2021. It was back up to $7.3 million in December 2022, $10 million in June 2024, and $12 million in April 2025. It gained $10 million over four years.
There was considerable confusion as to how this occurred (because the CZU Fire predated the four Board members who were present along with all of the District senior staff). Eventually, people realized that the District obtained a $15 million loan in 2021.
There was also a lack of clarity about the relevant numbers for determining the capital reserve target. This was further complicated by the fact that different categories of infrastructure have different expected lifetimes and/or ongoing maintenance schedules. For example, Garrett estimated that tanks should be recoated every 20 years (at a cost of about half a million dollars per tank), and he said that 14 of the District’s roughly 50 tanks are currently past due. Garrett estimated that it would cost the District about $450 million to replace all of its pipeline, but he qualified this estimate by saying that the work could be performed much less expensively if it were done in-house, and he didn’t indicate the time scale on which this replacement should occur.
The Board also briefly considered the potential for some of this work to be grant-funded. President Smolley was pessimistic because the state doesn’t want to pay for maintenance or operations. However, Director Largay suggested that significant grant funding could be obtained if proposals were framed in terms of fire preparedness and drought resilience.
There was one public comment. Bruce Holloway of Boulder Creek called attention to a few specific details of previous financing.
President Smolley said his general sense of the discussion was that the Board was not yet prepared to act on the Staff recommendation, and he requested that the proposal go back to the Budget and Finance Committee for further review.
Endowment Fund
General Manager Jason Lillion introduced this agenda item. He reminded the Board of its discussion at the previous Board meeting at which the Directors requested further information relating to the District’s agreement with the Community Foundation to establish a charitable endowment for the sole purpose of funding habitat management and monitoring activities within the designated habitat set-aside located at the Olympia Watershed.
On July 23, 2025, District staff reinvested an accumulated payout of $55,307 into the endowment fund, with the intent of allowing the fund to continue growing so as to fully support future conservation management activities. Alternatively, the District could have elected to spend the $55,307 on the designated habitat management. The question before the Board this evening was whether or not to request that the Community Foundation return this amount.
Jason stated that the Community Foundation was willing to return the $55,307 if the District requested it to do so. He said the Community Foundation legally owns the remainder of the endowment, and it would take action on the part of their Board to return this to the District.
Environmental Programs Manager Chris Klier said that Jodi McGraw, the consultant performing the habitat management work for the District, has been deliberately restricting her efforts to the minimum viable level (around $11,000 per year) so as to allow the endowment to grow to a level where it can support the full annual effort in the habitat management plan (estimated to be at least $15,000 per year without accounting for inflation).
The memo in the Board packet reported that the endowment had generated investment earnings of $139,581 since its inception in 2018. This was based on cumulative contributions of $337,238 (mostly in the first three years and not counting the $55,307). Over this same time period, the Community Foundation charged a total of $26,245 in fees. Based on these figures, Staff calculated that the investment return was about 5% per year (compounded) whereas the management fee was around 0.65% per year (which aligns with standard nonprofit endowment fund fees).
These figures were a little confusing because the Community Fund contract indicated that their management fee would be 1.5% and that the interest rate would be 4%. It was the presentation of these latter figures at the September 4th Board meeting that caused the Directors to question whether the Community Fund was the best home for the District’s endowment fund. Unfortunately, the ensuing Board discussion this evening provided very little further illumination.
Director Largay argued that, if the Community Fund was the best home for the endowment, then it made sense to keep the $55,307 in the fund so that the total could grow as quickly as possible to a level that would permanently sustain the habitat management work. He guessed that $450,000 might be an appropriate level.
Director Russ and President Smolley were inclined to reclaim the $55,307 so that the District could use it for habitat management and potentially seek a different home for its endowment. Director Largay said the District’s options might be limited. Jason said he could work with Finance Manager Cheri Freese to assess this.
There was one public comment. Bruce Holloway of Boulder Creek urged the District to reclaim the $55,307. He then returned to questions that he had raised at previous meetings about the accuracy of the District financial reporting and the legality of contributing District funds to a charitable foundation. There were no comments from the Board.
President Smolley moved to direct the General Manager to return the $55,307 from the Community Foundation, and Director Russ seconded this.
The motion passed 3-0 with Director Largay abstaining.
Consent Agenda
There was one item on the Consent Agenda:
a. Board Meeting Minutes from 9.4.25
The minutes were adopted without Board comment.
District Reports
Finance Status Report for July 2025. There was no Board discussion of this report.
Written Communications
There were three written communications, all urging the District not to serve the proposed Haven Development on Graham Hill Road. The Board has yet to consider this matter.
Board Comment
None.
The meeting was adjourned at 8:00 PM.