by Mark Dolson
Progress on Consolidation Planning; Rejection of Rate Adjustment; 2022 Board Officers
The two December SLVWD Board Meetings ended up being held in rapid succession on December 2nd and December 7th. Only a few members of the public were in attendance, and many of the agenda items concerned fairly routine procedural matters. However, there were also multiple developments of public interest. The most consequential topic at the December 2nd meeting involved the possibility of a temporary rate increase that the Board was unanimously eager to avoid. The District’s current rate schedule (approved via a public process in 2017) included a provision for revised “revenue-stabilizing” rates to potentially take effect if cumulative consumption during a water year declined more than 10% compared to the average for the prior three years. This trigger threshold was designed to ensure that the District’s target revenue stream could be maintained, via a Board-approved temporary rate increase, in the face of reduced consumption due to conservation or unusual weather patterns. District Staff explained that water consumption had recently fallen below this trigger threshold for a variety of reasons including both unusual weather and anomalous events like the CZU Fire and the Covid pandemic. They projected that revenue could be reduced by $613,000 if water consumption continued at lower levels for the remainder of the fiscal year. They also noted that the District had realized an unanticipated savings of $181,000 due to its inability to promptly fill three currently open Staff positions. District Manager Rick Rogers proposed that delaying certain capital expenditures (water meter replacement and vehicle and equipment purchases) could account for another $288,000, and the remaining $147,000 could be taken from the District’s reserve fund. The Board unanimously accepted this plan as preferable to temporarily raising rates; however, they also noted that this issue could resurface at some point in 2022. The most contentious topic at the December 7th meeting concerned next steps in the process of enabling potential consolidations with the Bracken Brae and Forrest Springs water companies north of Boulder Creek, both of which are badly in need of assistance. District Manager Rick Rogers was seeking Board authorization to begin spending money on preliminary engineering work based on: (a) continued progress towards formalizing collaboration agreements with the two water companies and (b) receipt of a grant for $3.2 million from the State of California. Board members, however, were concerned about the worst-case financial risk that this course of action could expose the District to. Board members noted that the state grant was for a million dollars less than the District had estimated it would need and that, while it was possible that the State might make up the difference if necessary, there was also a conceivable scenario in which the State would effectively retract the grant (namely, if the projected collaborations were to fall apart). The ensuing discussion culminated in a fairly pointed confrontation between District Manager Rick Rogers and the Board, and the Board eventually approved a revised plan via which the District would move forward as recommended, but more cautiously and incrementally. In other business, the Board approved a Proposed Water Rights Protest Resolution Agreement with the City of Santa Cruz in closed session but then ended up still having to press City representatives for more ironclad assurances (of appropriate protections for SLVWD) in the ensuing open session discussion. The City eventually agreed to put these assurances in writing. Lastly, the Board approved (by a vote of 4-0, Director Fultz abstaining) to retain Gail Mahood as Board President and Lois Henry as Board Vice President in 2022. Committee memberships mostly stayed the same for Board members (though further changes appear to be pending). Twelve members of the public applied to serve on Board Committees (ten of whom served the same roles in 2021), and all twelve were appointed to their first-choice committees. The next regular Board of Directors meeting is scheduled for 6:30 PM on January 6th (still via Zoom).
