Mark Dolson
Board unanimously ends consideration of consolidation proposal.
The May 20th Board Meeting for the SLVWD was exceptionally long (four hours) but also well worth sitting through to the end. The final agenda item concerned the controversial proposal, first advanced by District Manager Rick Rogers in February, to explore the possibility of consolidating the SLVWD and the neighboring Scotts Valley Water District. This suggestion evoked considerable alarm in the SLV community, and the Directors asked Rick in March to prepare a brief memo identifying and quantifying potential benefits and drawbacks. The memo reviewed by the Board on May 20th was not fully responsive to this request, but the Directors felt that they now had enough information to unanimously vote against any further consideration of consolidation (and public commenters unanimously concurred). Three key concerns emerged over the course of a 55-minute discussion. First, while consolidation is generally being promoted by the State and would very lik The first two hours of the meeting focused on the District’s draft budget for the two years beginning in July 2021 and on its planned five-year fire-recovery surcharge. The proposed surcharge would be $10 per month for typical ratepayers (higher for customers with larger billing meters) until the District has recovered the estimated $5 million that it won’t be reimbursed for by FEMA. (The surcharge could be terminated early by the Board if the District ends up owing less.) All Board members agreed that it was important for the District to establish a restricted account to ensure that the surcharge funds be used only for fire recovery. However, Director Fultz also wanted the Board to explicitly approve the final wording of the notice that the District will send to ratepayers notifying them of their opportunity (mandated by Proposition 218) to object to the surcharge and/or to attend a public hearing on August 5th. The Directors ultimately voted 4-1 (Director Fultz opposing) to require the restricted account but not to oversee the wording of the public notice. The proposed budget is fairly straightforward. It assumes that water consumption will fall by 2% each year (based on historical data) but that overall revenues will increase due to the fire-recovery surcharge. Operating expenses will increase due, most notably, to the addition of a Special Project Manager (badly needed to offload District Manager Rick Rogers), a mandated rate study and a Going Digital campaign in 2021, and pay downs of the District’s pension liability. The Directors asked various detailed questions and urged the District to more clearly define and track specific categories of funds, but there were no other significant directives to revise the current draft. The District also sought initial Board feedback on a possible revision to its Billing Policy relating to water shutoffs. Particularly with a new state law, it makes a lot of sense for the District to stop shutting off water for non-payment and to instead use the property tax roll to collect on accounts that are more than one year past due. However, this will also require the District to eliminate the option for tenants to have their own accounts. This introduces some additional complications, but the Board unanimously concluded that these could be satisfactorily addressed and that the revised policy is far preferable to the current one. Lastly, the Board unanimously approved a request from Big Basin Water to enable an emergency intertie between the two districts, provided that SLVWD is protected from incurring any associated costs. The Fire Management Plan and Panorama Environmental discussions originally planned for this Board meeting were deferred until the June 3rd meeting. 
ely provide some financial and operating benefits, there were questions as to how significant these would be. Second, everyone agreed that community concerns about loss of local control would require considerable time and investment to adequately engage with. Third, and perhaps most decisively, the Scotts Valley Water District has some major pending expenses associated with refurbishing its recycling water treatment plant and, especially, with upcoming groundwater protection initiatives potentially emerging from the Santa Margarita Groundwater Agency planning process. President Mahood estimated that it will take five years for these latter costs to become clear.
