SLVWD Board Meeting Summary

September 4, 2025

Prepared by Mark Dolson for FSLVW

NOTE: Provided purely as a public service — NOT the official SLVWD Meeting Minutes.

Highlights:

  • Hazard Fuel Reduction Agreement

  • Highway 236 Slurry Removal

  • Olympia Wellfield Habitat Endowment Fund

  • Board Policy Manual

  • Next Board meeting will be at 6:30 PM on September 18, 2025

Preliminaries

All five directors were present.

There were no reportable actions taken in the just-concluded Closed Session.

General Manager Jason Lillion announced that Agenda Item 10a, “Public Member for Budget and Finance Committee,” was being deleted and would be placed on the agenda for the next Board meeting on September 18th.

There were no public comments on non-agendized topics.

 

Unfinished Business

None.

 

New Business

Hazard Fuel Reduction Agreement

Environmental Programs Manager Chris Klier introduced this agenda item.  The District has $171,125 in grant funding for Hazard Fuel Reduction as a sub-grantee on the Fire Safe Council of Santa Cruz County’s CAL FIRE Fire Prevention grant ending in March 2026. The Hazard Fuel Reduction treatments will create defensible space around 37 government-provided water supply infrastructure sites and will remove ladder fuels on 20 acres of natural vegetation surrounding infrastructure facilities to reduce the risk of crown fires.

This item was discussed at length in the previous Board meeting on August 21st, and the Board asked Chris to return with additional information that would allow for a clearer comparison of the three highest-rated bidders: Powers Forestry, Ecological Concerns, and Lewis Tree Service.  Chris reported that Ecological Concerns and Lewis Tree Service were requested to provide the costs of a seven-member crew for a day of work and a Registered Professional Forester for periodic project oversight.  Availability was also confirmed to ensure that these candidates could complete the work before the grant deadline.

Chris said it was still not possible to perform a full apples-to-apples comparison, but he continued to recommend Powers Forestry.  However, he added that an offline discussion with Director Fultz had led to the identification of a possible hybrid alternative: it might make sense to split the workload between Powers and Ecological Concerns with the former assigned to new sites (at a cost of $71,000) and the latter assigned to maintenance sites (at a cost of $99,000).

Director Fultz elaborated on this proposal, saying that Powers had greater expertise (including a Professional Forester as opposed to a Certified Arborist) that could be appropriate for the new sites, whereas Ecological Concerns was quoting a lower daily cost and could handle maintenance sites.  This could produce a better end result for everyone and also allow the District to diversify its vendors.  Chris said a Professional Forester would make him more comfortable, but this individual wouldn’t be out there every day and would be less necessary for maintenance.

The other directors were open to this.  Director Largay said he liked the idea of two contracts, so long as it didn’t create a significant additional management load.  He asked if Powers was local, and Chris said Powers was in the Bay Area whereas Ecological Concerns was based in Santa Cruz.  Director Largay added that he was expecting an additional $3 million in grant funding for fire preparedness and water protection to become available soon, and this might help the District to complete this project (as the full cost will exceed the available $171,125).

There was no public comment.

Director Fultz moved to direct the General Manager to enter into a contract with Powers for the new treatment sites and Ecological Concerns for the maintenance sites (total of $171,000 with $71,670 to Powers and $99,455 to Ecological Concerns).  President Smolley seconded this.

The motion passed 5-0.

Highway 236 Slurry Removal

Engineering Manager Garrett Roffe introduced this agenda item.  His recommendation was that the Board approve a change order to a current contract with Anderson Pacific Engineering to address a messy situation that had its origins in an early 2023 contract with Monterey Peninsula Engineering for the construction of the Lyon and Big Steel Pipeline Improvement project.  The project replaced approximately 12,000 feet of water pipeline with new 12-inch ductile iron pipe installed in public right-of-ways and backfilled with 2-sack slurry per Caltrans standards.  Project paving was completed in July of 2024.

On February 28, 2025 Caltrans emailed the District as follows, “The pavement surface is unravelling at approximate postmile 0.2 of the northbound lane of Highway 236. Water is coming up through the surface of the pavement near the slurry backfilled trench location, causing the pavement to deteriorate and creating a pothole. Caltrans forces have been filling the pothole on a daily basis. You have previously indicated to us that the water is not from SLVWD pipelines. It is our understanding that groundwater is being forced to the surface due to its direction of flow being blocked by the presence of the recently constructed 2-sack slurry filled trench which contains the new SLVWD water pipeline. It is the State’s position that this was not a previously existing condition. This condition has arisen as a result of the pipeline construction project and will need to be addressed by the SLVWD. I will let you know what we need from you as soon as I get some additional information. For now, and for the safety of the travelling public, I am requesting that SLVWD place a steel plate with cold mix tapers over the pothole location.”

The District continued to question the rationale that groundwater mitigation repairs would be the responsibility of the District because the recently installed pipeline had followed Caltrans Standards.  Caltrans eventually installed the steel plate with cold mix tapers over the pothole location and repaved the pothole. After meeting with District Legal Counsel, it was determined that the District is responsible for mitigating the groundwater and pothole issue on Highway 236 as directed by Caltrans. The District contacted Caltrans to explore the possibility of partnering on the installation of subsurface drainage improvement project to collect ground water and convey to nearby storm drains. Caltrans provided a response letter declining to contribute monetarily, or by other resources, towards the repair.

On April 18, 2025 the District entered into a contract with Schaaf & Wheeler to develop repair plans for the slurry removal. On June 11, 2025 the Schaaf & Wheeler slurry removal repair plans were sent to Caltrans for review and approval.  On July 10, 2025 Caltrans issued an encroachment permit allowing the proposed removal of slurry backfill in Highway 236 between Redwood Avenue and Azalea Drive. The approved repair plans were provided to the contractors currently active on District projects, Anderson Pacific and Lewis & Tibbits, for pricing as a change order. Anderson Pacific provided pricing of $218,242, and Lewis & Tibbits provided pricing of $282,800.

Director Russ asked why the project was so expensive, and Garrett explained that a lot of the cost had to do with mobilization, traffic control, and things like that.  Director Layng suggested that this was fundamentally a storm drain issue, but Garrett said Caltrans wasn’t willing to work with the District on this.

Director Largay asked whether, in the future, a high water table might be identified during construction.  Garrett said this was the District’s second recent issue with a slurry backfill conforming to Caltrans standards.  On Quail Hollow Road, the District had to repair 1000 feet (for around $900,000).  Director Largay noted that the San Lorenzo Valley has a very high frequency of slope instability and landslides, much of it due to funky water table situations.  He asked what would happen if the pothole remains after the District’s fix is complete.  Garrett said Caltrans would try to hold the District responsible.  He said his own first reaction was to resist, but Legal Counsel did not support this.

President Smolley said he thought there was a lesson to be learned here that should be incorporated the District’s specifications.  He supported the Staff recommendation.  Jason added that there had been some discussion about applying to Caltrans for a variance for their specifications in these situations.  Garrett said this would be brought to the Engineering Committee in October.  President Smolley requested that the committee be informed of the Staff recommendation with input from outside consultants.

Director Fultz said it was annoying beyond belief that the District had twice followed Caltrans standards and ended up getting blamed.  He said a lot of these issues were due to County and State negligence in terms of failure to maintain culverts, and he advocated for calling this to the attention of local elected representatives.

There was no public comment.

President Smolley moved to direct the General Manager to execute the Change Order per the Staff recommendation.  Director Layng seconded this.

The motion passed 5-0.

Olympia Wellfield Habitat Endowment Fund

General Manager Jason Lillion introduced this agenda item.  He explained that the District entered into an agreement with Community Foundation in 2018 to establish a charitable endowment fund.  The District made an initial contribution of $116,667, with possible subsequent contributions totaling $786,000.  Under the agreement, all monies held within the endowment and any resulting payouts are restricted for the sole purpose of funding habitat management and monitoring within the designated habitat set-aside located at the Olympia Watershed.

On July 16, 2025, Staff informed Jason that the fund had accumulated a payout balance of $55,307.  Staff advised that the monies could either be applied toward the District’s ongoing project with Jodi McGraw—already accounted for in the current budget—or reinvested into the endowment fund to generate higher future payouts.  Based on that guidance, and under the understanding that such a transfer fell within the authority of the General Manager, Jason directed Staff to reinvest the payout into the endowment fund.

At a recent Board meeting, a member of the public (Bruce Holloway) expressed confusion about the nature of this transaction and questioned whether the General Manager had the authority to authorize this reinvestment.  To ensure full transparency and adherence to the Board’s direction, Staff was now requesting formal Board guidance on this matter. The Board may elect to allow the transferred funds to remain in the endowment fund or request the Community Foundation to return the transferred funds for immediate use on eligible District projects.

Director Largay said he had no strong opinion, but he noted that the purpose of the endowment was for it to be able to generate a 4% annual return in perpetuity, and for it to grow to a size where this would cover the cost of the work to be done each year.  He added that the 1.5% annual fee seemed high.

The ensuing discussion was difficult to follow.  Directors Layng and Russ were comfortable with the action taken to date.  So was President Smolley, but he was open to reassessing next steps.

Director Fultz was also okay with Jason’s previous action, but he had a much broader set of concerns.  He had issues with the way the contract with the Community Foundation was originally drafted, and he had questions about where the District could get the best return going forward.  He had concerns about how long it was taking contractor Jodi McGraw to complete the Habitat Conservation Plan, and he suggested that the District might try to partner with the Zayante Sandhills Conservation Bank so as not to be directly responsible for habitat management.

There was one public comment.  Bruce Holloway of Boulder Creek said the rate of return had more recently changed to 3.75%, and he thought the District had a one-time opportunity to claw back the full $55,000 of accumulated returns.  He didn’t think the Board was getting all the detailed information that was presented to the Finance and Budget Committee.

Director Largay noted again that the endowment needed to become large enough to fund the habitat management work in perpetuity.  He also commented that the District’s mission includes watershed protection, and the team does all sorts of work maintaining land.  However, District Staff don’t have expertise with protected species.  He added that the hourly consulting rates for Jodi McGraw are generally far lower than most competitors and that the Zayante Sandhills Bank may charge more.

President Smolley proposed that the Board take no action at this time.  He asked Staff to assess the costs incurred to date in managing the District’s six-acre plot (both to determine whether it might be feasible to claw this back from the Community Foundation and to better understand the actual cost that the endowment needed to fund).  Jason said he would follow up with Legal Counsel and also research other options.

Board Policy Manual

General Manager Jason Lillion introduced this agenda item.  He explained that, while state law establishes minimum requirements for Board conduct, best practice is for each Board to adopt a written Board Policy Manual.  The District’s Board Policy Manual has therefore been comprehensively updated to improve transparency, align with current law, and reflect Board and committee direction. Jason summarized the substantive changes as follows:

  • Director–Counsel Contact: Clarifies that Board members may not exceed thirty (30) minutes per month in direct consultation with District Counsel without prior authorization from the Board President, rather than the Interim General Manager, ensuring accountability and cost control.

  • Meeting Frequency and Start Times: Codifies the Board’s practice of holding regular meetings twice monthly (first and third Thursdays), with Closed Session beginning as early as 5:00 p.m. when necessary.

  • Meeting Decorum and Chair Authority: Strengthens the Chairperson’s discretionary measures to ensure orderly conduct of meetings, protecting the integrity of deliberations and public participation.

  • Agenda Authority: Reaffirms that control of the agenda resides with the full Board, not individual Directors or staff, preserving the Board’s legislative role.

  • Technological Conferencing: Updates procedures to remove outdated emergency references, making permanent the Brown Act’s teleconferencing allowances and eliminating restrictions on last- minute materials that conflicted with the law.

  • Committees: Reflects the division of the Engineering and Environmental Committee into two separate standing committees, updating the manual to list four standing committees instead of three.

  • Inclusive Language: Removes gendered pronouns (e.g., “himself/herself”) and replaces them with gender-neutral terms (“themself”).

  • Code of Conduct and Censure: Adds new provisions reinforcing director conduct standards, clarifying expectations for behavior, and providing a formal censure process for violations such as breaches of confidentiality, disruption of meetings, or harassment.

  • Order of Business and Minutes: Updates the order of business in consultation with counsel, clarifies that Board minutes are action- based only, and removes outdated requirements for restating motions or providing summary minutes.

  • Annual Review and Reporting: Adds flexibility by removing prescriptive dates for certain reviews, clarifies reimbursement disclosure requirements, and establishes a new section on definitions and terms.

Jason said these revisions modernize the District’s governance framework, improve legal compliance, and ensure the Board’s procedures reflect best practices for transparency, efficiency, and accountability.

Four of the five directors had little or no comment, but Director Fultz was highly aggrieved.  He said he had many concerns.  He said the bulk of the additions had to do with punishment, and he had been the subject of a weaponized effort based on unfounded staff allegations where people were just basically saying that their feelings were hurt.  He said he had two or three dozen things he felt the Board needed to discuss.

President Smolley requested that Director Fultz send these to Jason in the next few days and that Jason share these with other Board members.  Director Fultz agreed to do so, but he continued to express outrage and to offer his own account of past events.  He said there were many things that would now allow someone to bring a censure charge with no foundation, that there was no penalty of perjury, and no investigation by a neutral party.  He made references to the Star Chamber and to a kangaroo court and characterized this as a political ploy.  He said he was probably hypersensitive, but as a dissenting Board member he was concerned about the impact on future Board members.

Director Layng started to dispute Director Fultz’s claims, but President Smolley said he didn’t feel any further discussion was warranted.  He disagreed that the Board was out to get Director Fultz.

There was one public comment.  Bruce Holloway of Boulder Creek said these kinds of controversies arise from time to time.  He was personally satisfied that the reference to recall was eliminated.

Director Layng said other Boards have a censure policy, and this one was provided by Legal Counsel to fill an existing void.  Director Fultz said the District has a harassment policy which he was being accused of violating by two exiting staff members.  He said the Board failed to follow the process in its written policy and, instead, conducted a Star Chamber struggle session.  He said this was because the Board knew the accusations were unfounded, and no one wanted all this to come out.  He said if the Board wouldn’t follow through on written policies, then he became very suspicious.  He said what happened was wrong all the way around.

 

Consent Agenda

There were two items on the Consent Agenda:

a.     Board Meeting Minutes from 8.19.25

b.     Board Meeting Minutes from 8.21.25

Jason requested that the minutes for the August 19th meeting be pulled so that two small corrections could be made (for a misidentified Board member and for a 3-1 vote that was misreported as unanimous).  The revised minutes were unanimously approved.

 

District Reports

None.


Written Communications

There were two written communications.  One, which Jason called attention to, was a letter of appreciation for Operations Manager Jesse Guiver, submitted by a satisfied customer.  The other was yet another plea from a local resident for the District to refuse to serve the proposed Haven Development on Graham Hill Road.  (The District has not yet engaged with this issue.)

 

Board Comment

None.

 

The meeting was adjourned at 8:00 PM.