by Mark Dolson
This is an opinion piece. The opinions are not necessarily those of the Santa Cruz Mountain Bulletin.
There has not been a regular San Lorenzo Valley Water District (SLVWD) Board meeting since
my last report, but there is still plenty to discuss. After two special Closed Session meetings,
the Board effectively revealed that Brian Frus is no longer serving as Interim General Manager,
and a new search will be initiated. No further information was immediately available, but the
very alarming and inescapable conclusion is that the District is currently operating with no
General Manager.
In addition, there are two extremely important SLVWD-related topics on our local ballot this
November: two open Board seats and Measure U. If you are like I used to be, you will be
tempted to wait until the last minute and skim the voter information pamphlet (or perhaps ask
a friend for advice) just before casting your ballot. This isn’t really the way democracy is
supposed to work, though. Voter input is only truly helpful when it is well-informed, and
becoming well-informed requires some preparation. My goal here is to provide a useful
resource (but I also want you to know where I stand).
Open Board Seats
There are four candidates for two seats on the SLVWD Board. Bryan Largay and Alina Layng
were appointed to fill Board vacancies in 2024, and are running together to continue serving.
Bruce Holloway and Bill Smallman are the other two candidates. I personally find Bryan and
Alina to be by far the best choices, but my aim in this column is to inform rather than persuade.
To this end, I would suggest that the two most critical questions for people to answer before
they vote are: (1) what are the key issues facing SLVWD? (2) how effectively can each of the
four candidates work with other Board members to constructively address these issues?
With regard to key issues, the most important thing to know is that the status of SLVWD is
more precarious than people assume. The District has a huge backlog of aging infrastructure
that it has only more recently begun to substantially address. However, progress has been
repeatedly disrupted by intervening events: the CZU Fire, winter storm damage, dramatically
escalating costs (affecting water districts across the state), and an extremely worrisome parade
of senior staff departures (at least two of whom cited an antagonistic Board member as a key
factor in their choice to leave).
In parallel, and in the interest of supporting our larger SLV community, the District is struggling
to pursue the consolidation of two small neighboring water providers north of Boulder Creek:
Bracken Brae and Forest Springs. Members of these communities have been unhappy with the
District’s support in recent months, but this undertaking frankly requires more resources than
the District currently has available; it has recently made incremental progress by approving the
extension of a key pipeline, but much additional funding is still needed.
The upshot is that the District is stretched extremely thin and is just another major storm or
financial setback away from an acute crisis. What it most needs right now is simply a stable and
supportive Board and community.
With regard to the ability of Board candidates to contribute constructively, it is virtually
impossible for voters to make this assessment purely on the basis of candidate statements (just
as people are rarely hired based merely on their resumes). Fortunately, all four candidates
have established track records of involvement in local water issues and are well known to those
who have been paying attention.
Two of these candidates (the two already on the Board) have demonstrated an ability to
participate effectively and responsibly in local governance. Bryan Largay currently works as a
conservation director for the Land Trust of Santa Cruz County and also represents our district
on the Santa Cruz County Water Advisory Commission. Alina Layng has worked as an
environmental scientist with special attention to watersheds and has served on SLVWD
committees for the past three years.
The other two have shown themselves to be far more disruptive (sometimes proudly). Bruce
Holloway is the lead proponent of Measure U (see below), and Bill Smallman repeatedly
garnered serious public criticism from fellow SLVWD Board members when he served on the
Board in the past. The bottom line here is that the current Board is already providing
responsible oversight, and we just need it to continue doing so.
Measure U
The second major item on the ballot this fall is Measure U which aims to repeal certain portions
of the new rate structure that took effect this spring. In the interest of full disclosure, I want
people to know that I am the treasurer of the campaign opposing this measure, and I have
taken this step because I personally regard Measure U as a terrible idea that is being very
misleadingly promoted and that has the potential to do serious harm to our District. Again,
though, my primary goal here is to provide readers with relevant background before they vote.
The proponents of Measure U are Bruce Holloway and Debra Loewen. I have talked with Bruce
at length about Measure U, and I believe he is well intentioned. However, I also believe there
are important points that his proposed solution disregards. Bruce does not dispute (and, in
fact, everyone agrees) that the District needed to substantially increase its rates in 2024 in
order to reliably continue providing water. But he introduced Measure U based on two
concerns that will likely resonate with many voters.
First, there are people in the valley with very limited incomes for whom any increase in water
rates is a significant hardship, and Bruce wishes to help them. Measure U repeals (and
subsequently restricts) portions of the new rate structure involving fixed monthly charges
because Bruce believes it is important to give individual ratepayers greater ability to minimize
their bill by minimizing their water consumption. This sounds like a good idea, but it overlooks
some vital considerations.
For one thing, over 90% of SLVWD’s costs are fixed – unaffected by how much water customers
actually use. These are the costs of simply making water available for home use and fire-
fighting; they have always been high for SLVWD due to its mountainous terrain, and they have
more recently skyrocketed across the state. However, this doesn’t mean the District should
collect 90% of its ratepayer revenue from a fixed monthly charge: there would then be little
incentive to conserve water, and the cost burden on some ratepayers would be extreme. On
the other hand, if the District collects too little of its ratepayer revenue from a fixed monthly
charge, its income will fluctuate severely with changing patterns of water use. This is why the
District was advised to increase its fixed base-charge percentage from 37% to a more industry-
standard 45%.
In the end, the District (Staff and Board and consulting experts) labored intensely for over half a
year to devise a new rate structure that would reliably deliver essential revenue while shifting
as much of the cost burden to high-volume users as feasible (under current legal constraints). A
key feature of the new rate structure is a tiered-rate system that allows the District to charge
high-volume users a higher rate per unit of water. Meanwhile, rates for the low-volume users
that Bruce is focused on ended up increasing by an average of about 8% per year over the five-
year time-frame of the new rate structure. This is a lot, but the District could still potentially
mitigate this, for example, by substantially expanding the scope of its Ratepayer Assistance
Program. In contrast, Measure U ignores these complexities and imposes an overly simplistic
“fix” that will ultimately do enormous harm.
Bruce’s second concern was that the process of revising the rate structure incorporated only a
limited amount of public input, and the process of approving the new rate structure felt
undemocratic to him because it wasn’t submitted to the public for a final yes/no vote. He
conceived of Measure U as a way for the public to weigh in. This view of the process, however,
is based on two significant misconceptions.
The primary reason that there was limited public participation in the formulation of the new
rate structure was that the process is actually quite complex, and very few members of the
public have the time and interest to immerse themselves in this. I personally think the District
could have done more to include the public, but I also recognize that this would have required
the District to commit additional time and resources that are already in extremely short supply.
The other key point here is that the process employed by the District was thoroughly
democratic. The new rate structure was approved by an elected Board striving to represent the
best interest of our community. There were numerous public notifications and inputs
throughout the process, and there was an opportunity for a public veto at the end.
In contrast, interventions like Measure U are fundamentally antithetical to good local
governance. They invite the public to provide a relatively uninformed endorsement of an
arbitrary and capricious proposal simply on the basis of some superficially appealing word of
mouth. The reality is that Measure U has already cost the District a large amount of money,
and its passage would escalate the District’s losses into the vicinity of a million dollars.
Simply putting the measure on the ballot has already harmed the district’s credit worthiness so
much that borrowing funds for urgent capital projects will cost rate payers $200,000 more; the
measure is also costing rate payers $80,000 to $120,000 in election and legal fees. If Measure
U were to pass, the District would immediately begin incurring a major loss of revenue, and it
would be forced to go through another lengthy revision of its rate structure to make up for this.
However, the intervening shortfall would jeopardize near-term water reliability (for homes and
fire-fighting) and would disrupt preventive maintenance (with predictably costly
consequences). The recent 3-day water outage at Boulder Creek Elementary is a good example
of the kind of events we could likely expect more of.
Lastly, Measure U would not only greatly increase the District’s exposure to potential
insolvency, but it would also compound the problems the District is already experiencing in
attracting qualified Staff and Board members. In my view, a more secure water future begins
this November with votes for Largay and Layng and a resounding No vote on Measure U!