 Thank you. I'd like to convene this meeting of the Board of Directors of the San Lorenzo Valley Water District. And this is the, or the closed section. I think I'm here to do this. I just need to mute. Can I have the roll call vote, Holly? President Mayhood. Here. Vice President Henry. Here. Director Ackman. Here. Director Fulse. Here. And Director Smalley. Here. Okay. Are there any additions or deletions to the closed session agenda? Staff has enough. All right. This is the part of the meeting where we have oral communications regarding the items in a closed session. Are there any comments from the public on this one item? Catherine, if you're a member of the public and you didn't want to comment on this, you probably meant to come to the open session meeting which starts at 630. So did you want to comment on this? If so, put a raise your hand. If not, then we don't have any oral communications regarding the closed session. So we will now adjourn to close session. It is 532. It's August 5th meeting of the Board of Directors of San Lorenzo Valley Water District. Our first item will be a report of action taken in the closed session. And our district council, Gina Nichols will present that. Thank you, Chair Mayhood. The board voted unanimously to make the following report out of closed session. The district proposed a meeting of principles with the county in an effort to reach an early resolution of the county's Bear Creek Road lawsuit against the district. This week, the county accepted the district's meeting proposal. And accordingly, the district will proceed to schedule the meeting to take place in August. Okay, thank you. Holly, could you take the roll call please? President Mayhood. Here. Vice President Henry. Here. Director Ackman. Here. Director Falls. Here. And Director Smalley. Here. Okay. Are there any additions or deletions to the agenda tonight? That has no. Okay. We now turn to oral communications. This is the portion of the agenda that's reserved for oral communications by the public on any subject that lies within the jurisdiction of the district, but is not on the agenda tonight. Are there any oral communications from the public tonight? Hearing none, seeing none. I will go to director's report. I don't have anything to report as president. Do any of the other members have anything we want to add tonight? Okay. Then we'll go on to our first item of new business, which is 11A. And in that I am now convening the Proposition 218 public hearing on the district's proposed wildfire recovery surcharge on water rates, which is item 11A on the agenda. We will begin with a presentation, PowerPoint presentation by staff on the proposed surcharge. District manager, Rick Rogers will give that presentation. Thank you, chair. You will just give me a second here to pull that up. Hopefully your full screen will be the presentation that you will see. First off, I'd like to thank all the folks, our customers and general public that are joining tonight. We have a lot of folks in the audience, which is great. A lot of long-term supporters of the district recognize a lot of names. Thank you for attending. This will be a short PowerPoint on the CZU wildfire recovery surcharge. The proposed, I got one more issue here. Just gotta give you that. The proposed CZU wildfire surcharge, the district was severely impacted by the CZU lightning wildfires or water systems sustained at least $20 million in damage based on engineering estimates. Most of the time we do our water supply lines and storage tanks. The district has a surface water network across the pendulum and mountain that was severely impacted by 100% of the transmission amines were destroyed by the fire. The district anticipates receiving partial financial assistance through the federal emergency management agency, which is FEMA, to help cover some of the costs of the emergency response recovery and permanent repairs. The district will be responsible to pay all of these costs up front and will submit eligible project costs for FEMA reimbursement upon completion. The district has roughly estimated that the total net costs to the district after FEMA reimbursement will be approximately $5 million. However, the final costs could be more or less than the estimated $5 million. The CZU lightning fires coming up on its one year anniversary. The cause was lightning, 85 or 86,500 plus acres burned, 1,400 structures. In that 86,509 acres, the district's 1,300 acres watershed across the Empire grade mountain was burned. One fatality and the entire San Lorenzo Valley was evacuated. Those were some really serious times if you were up in the San Lorenzo Valley. Our water connection statistics, 3,191 connections had a do not drink, do not boil order as a result of the fire. 354 connections were without water. 120 homes were destroyed by fire in the district service area. And our last do not boil or do not drink, do not boil notice was lifted on October 27th, which was in effect for approximately 60 days. The major damage was our seven and a half miles of raw water supply line across that Benelum and mountain that conveyed surface water from four of our streams to our water treatment plant. Treated water lines between three of our major tanks in Boulder Creek, which resulted in the loss of 50% of our water storage and a very short time due to the fire. Our fort creativity station, Bennett's bring a raw water line in Felton, off Empire grade, the sweetwater lane piping our all to be a transmission system, Ridge Drive, Blackstone Terrace, the four men P mine, sweetwater, Clear Creek intakes. Although they were concrete, that the intake boards screening and all the monitoring equipment for stream bypass flows and so forth was destroyed by fire. As we talked about the raw water supply lines, or men P vine, sweetwater and Clear Creek. Those are all pre-1914 water rights surface sources. There's some big challenges ahead in replacing those pipelines. We are right in the process now with a constructability study. We'll be looking at limited access, the timeframe to replace type of materials are a big discussion. As a lot of you know, the type of material that was out there was an HDPE pipe, high density polyethylene that melted and had a potential to release volatile organic chemicals compounds into the water. However, that whole pipeline was shut down, which we'll talk about a little bit more in this presentation. Yeah, the environmental concerns are weak, reconstructing whether we're going to bury that line or put it back above ground, that's a pipe, so forth, cost and of course, constructability. The first time we put that pipeline in, it was all done by hand labor and helicopters. Picture on your, it's on my right there, is a telephone pole structure that the pipeline laid across. A lot of the cross arms were burnt, but you can kind of see the type of terrain that the pipeline goes through. So constructability is going to be a huge issue and putting together the study. There's some more of the raw water pipeline above ground supports. The dark black line that you see is the melted pipe that's left of it. There's a five mile supply line right at the, that we're across this clear creek that before and after picture. It's interesting, you know, we had that pipe was supported on many telephone pole supports. One of the issues with installing that pipe is we have to keep this pipeline at grade. When I say that is that we can't allow the pipeline to dip and collect air and water. Air in the pipeline, because entrained air will give our treatment plant a false sense of probability. And there's a lot of operational concerns. We try to maintain a 1% grade. We'll start to finish all downhill to the treatment plant to avoid those air pockets. So a lot of those supports were all of those supports did burn during the fire. You know, difficult repairs. Some of our sites we had to crane in temporary storage tank right after the fire with that belt that weren't. This was up on the Black South Paris area up in Boulder Creek. The damage and mitigation as a surface water treatment plant was shut down before the fire reached in its supply lines. It was interesting that we had a fire management plan in the beginning stages before the fire, Director Lou Ferris and Dr. Larry Ford worked strongly together with district staff and board to start a fire management plan. And although we didn't get very far into the plan before the fire came, we did have a contractor consultant on staff that prepared satellite heat maps during the fire and was able to work with our director of operations and follow the fire as it came down to facilities. All of our pipelines were overlaid on that mapping and the director of operations made the determination 24 hours before the fire reached the pipeline to shut that pipeline down. The low contamination from the surface water above ground surface water pipeline came into the treatment plant. The picture you see on the right is the actual HDP pipe burning. It was taken a day or two right during the fire. You can see how volatile that pipe was to fire damage. Currently, because of that whole pipeline being destroyed, the water is being pumped from our district groundwater wells located in the Ben Lomond Quail Hollow area. Also, we're taking additional surface water from our fall creek of diversion in our Felton water system. This is putting additional strain on our groundwater sources. Short lived, it shouldn't be issues, but this is something that we don't want to maintain additional pumping through our groundwater sources for a prolonged timeframe. The district's makeup of surface water, groundwater in the north system is almost a 50-50 split. So now we're utilizing right now 100% of groundwater in our north system. Also, during the fire, the emergency interties, which were somewhat in the ground for maybe a couple of years, were very new. It was a grant project and district funds went into that project to connect all of our water systems, the south system to the north system, Scott's Valley to the south system, Belton to our north system. Those interties were all put into service and the Felton intertie is still in the service today as part of that fire. We know Senator got those in service and we were utilizing. They came in very great timing. We did not have those interties in. Most likely we would have had some outages especially lost potability in our Felton system and we had to move water bi-directional into Felton and then now out of Felton. The lion surface water treatment plant has a large settlement chamber and turbidity station that used to be here to monitor water quality was severely impacted by fire. Right after the fire, the ground was basically still burning. We moved to put in temporary piping and to restore piping to our lion water treatment plant from the Foreman Creek water source. That is the shortest distance of all the surface water. It's about 2,700 linear feet. So we called in outside contractor crews to come in and replace that pipeline. The pipeline was in service for a short period of time but now the amount of water that is available due to drought from one source is not enough to run the treatment plant. So now that source is offline until winter rain. All surface sources combined would be enough to run the treatment plant but the one source it just is below the capacity to operate valves and the treatment system. Our watershed development mountain empire grade. Again, it was at 1,600 acres of burned. Staffs are working on the post-fire restoration of the district's watershed land. Fire management plan and corporates post-fire recovery. However, post-fire recovery is not covered by it's non-eligible for FEMA funding. So the district is out looking for grants and using district funds to accomplish those goals. Some funds have been obtained from a grant for a fuel reduction. So we are moving on that pretty much as we speak. Again, the term temporary, they're on the way. Operational cost increase due to the wildfire. We did purchase and this was through a grant, 14 additional generators to support the PSPS outages. We have increased costs with maintenance fuel permitting of those generators. We have increased operational costs due to loss of surface water intakes with power PG&E costs, staff time. Increased operational costs are not eligible. A reimbursement from FEMA. Fuel reduction, defensible space, fire hardening. We are moving on putting in defensible spaces, removing brush and fire fuels around our tanks, our redwood tanks, our sources of supplies, our wells and some of our more critical booster pump stations that are not covered by FEMA. But we did just obtain, I think a $200,000 grant to get a great start, but there's still a lot more work to be done there. Increased water quality monitoring and grudge to the fire. We have increased monitoring in our streams due to the fact that the burn watershed, that that is considered an operational cost in FEMA and is not eligible for FEMA funding or reimbursement. Staff time working on FEMA and rebuilding plan specifications, bidding and implementing construction. It's a huge lift for staff, although those costs are covered by FEMA, but it is a huge work lift for district staff. The wildfire has been an emergency on top of COVID and the other emergency that we're also dealing with right now is the drought. Our finances, we had approximately $3 million reserves to help finance unexpected costs, including wildfire emergencies, response and repairs. We pretty much exhausted that $3 million in about three months or a little greater. The district was working with FEMA and Cal OES to maximize grant funding for wildfire response and repairs to infrastructure. We have submitted the $20 million of permanent repair projects to FEMA, no determinations yet as to what the reimbursement will be of eligible costs from FEMA. It has been received, the scope and estimate of project costs will be charged over time due to results of constructability, studies, environmental review and contractor availability, et cetera. We are working daily with FEMA and our insurance provider to process damage claims for covered facilities and equipment. FEMA will deduct any insurance proceeds from reimbursement. The district is pursuing other grant funding opportunities. We're looking for funds anywhere we can find and there are a lot of funds available. It's just, it's time consuming and we don't know what will be approved and what will not be approved. The district has also contracted the services of a grant writer to help staff put together those additional grants, but to date we have not even got on a list of eligible potentials. To date we had not received any reimbursements from FEMA. The major disaster declaration was August 22nd, 2020. The incident period was beginning of August to the end of September. The district is in the process of working with FEMA and OES and other state and federal agencies to obtain the funding. We're also working with FEMA and the Stanford Act 406 mitigation and the Stanford Act 404 hazard mitigation and we're also applying for disaster assistance updating to current codes and standards which FEMA will cover. The 406 and the 404 referred to the applicable section of the Robert G. Zamford Act that hopefully you'll never have to get very familiar with is extremely cumbersome, but it includes the repair restoration and reconstruction replacement of public facilities damaged or destroyed by a major disaster. And the 404 is a competitive grant program focused on mitigating risks for future disasters through the implementation of long-term independent solutions to increase the protection and the capacity of existing fully functioning facilities. So those are definitely two areas that we'll be working with FEMA to try to obtain additional funding, but to date we have nothing concrete from FEMA yet. We're not even in the review process. The public assistance process, you can see the FEMA, we are right here under project review. None of our projects have been approved. We're still only three to six months out on getting approval and moving forward on what eligible projects that we can apply for grants. Estimating the public assistance, the assistance FEMA provides through its public assistance program, the subject to a local cost share. The federal share is expected to be not less than 75% of eligible costs. And the key is gonna be eligible costs here. This could increase if pending federal legislation passes. There is some federal legislation in discussion to increase the amount of funding, but again, nothing has come down concrete. The district recently learned that Cal OAS will cover 75% of the 25 cost share that FEMA does not cover. And again, that's of eligible costs. Currently the district estimates the out-of-pocket share of eligible costs. It will be a hard cost of 6.8%. We know we're on the hook for 6.8% of the damage. The key word again is eligible costs. We don't know at this time what eligible costs will be. Past disasters total cost was closer to the 20, 25% out-of-pocket for the district. Some of these projects involve hardening above ground cross-country transmissions mains that were probably installed before the district was formed. We're not located in the right-of-ways, they're cross-country. We're bringing those over into the right-of-way, which will provide the added protection to the district, which will be buried into today's standards, which may only receive up to 15% of the increased cost for relocating. And that gets a little complicated because sometimes there's pipeline out there, say you have 1,000 feet of pipeline that was damaged, but it's part of a 1,500 foot pipeline and then 500 feet wasn't damaged and FEMA will not cover the cost to relocate the portion that wasn't damaged, but yet we have to because the water supply is moving, we have to move the complete 1,500 feet. So it's a little tricky, but that's where you work under the Stanford Act and hopefully we can receive additional funds. The proposed surcharge would be an additional $9.67 a month to the average residential water customer. The proposed surcharge would last for about five years, totaling $5 million. The surcharge would end automatically once a total of $5 million is collected. This is a very important bullet point. The board could end the surcharge early if the district's CZU wildfire net cost will be less than the estimated $5 million. The district has taken on long-term debt to help cover the cost of the CZU wildfire, especially upfront costs in which we depleted all of our reserves. The district potentially could use surcharge revenues to pay interest and or prepay the debt to reduce the district's long-term debt obligation. It proved to do so under future financial conditions. There continues to be significant uncertainty due as to why the actual final net cost to the districts will be after all repairs are completed. We just don't know yet. We don't have confirmation of what FEMA is going to approve, what are eligible and what are not eligible. It's a huge process. There's four different FEMA reviewers working on San Lorenzo Valley right now and they're working full-time and they're constantly firing off emails to staff, mining more and more information to try to get all the information that they need to find out what eligibility will be. The board has directed all surcharge revenues received by the district to be tracked and maintained in a restricted fund or account for which only CZU wildfire expenses will be prepaid or be payable. That is a huge, huge bullet point, very important. And that's the end of the presentation with that. I will turn it back over to the chair. Thank you very much, Rick, for that comprehensive presentation. I am now opening the public comment period on the proposed surcharge and I just like to begin by setting up a couple of guidelines for this. Each person who wishes to comment will be allowed to speak once and for no more than three minutes and you can see in your upper left corner there, there's a little timer in case you need to keep track of yourself. After all attendees who wish to comment have been given one opportunity to address the board, the public testimony or public comment portion of the hearing will be concluded. After that public comment period concludes, the board members will deliberate and there will be no further opportunities for the public to comment. So with that, I'd like to go ahead and if you wanna raise your hand, we'll call on people who would like to address the board. Looking here, I don't see any raised hands. So am I the only one that has that on the attendees? That's correct. Yeah, it does not appear that anybody is raising their hand. So does that mean that nobody wants to make a comment? That would be very surprising if there were 37 people in attendance and nobody wanted to comment. What about the people that are phoning in? Are there people who raise their hand? Well, that's what I'm wondering about is this just seems very unlikely that, let me... Yeah, I don't think it's likely 37 people don't have anything to say. It just doesn't seem possible. So... Mayor Mejha, just a suggestion. Perhaps call on somebody we know. Okay, let me call on... How about Kathy Dalmaso? Cause I know she was here an hour early. So maybe she has something she wants to say and we'll go ahead. So Kathy, go ahead, you're permitted to speak. Can I have only one person at a time be permitted to speak, please? Yes, we can. Yay, thank you. Oh, hello. Well, first off, thank you for doing this. I feel much better after having heard your presentation. Part of the reason I feel better is not for good news. You have no reserves. What I got was that there was terrible trade-offs were going to have to happen if we did not approve these extra taxes. And I wanted to know specifically what wasn't gonna get done if we didn't approve the extra taxes, but there were no reserves. I don't know how you would have... If we don't... Well, I can still ask you, if we don't approve the taxes, what would you not do? Well, I think to make sure that everybody gets a chance to comment, I'm not gonna have staff answer questions like that. But if any members of the board would like to pitch in, we'll go ahead and they can ask that question for you while we deliberate. If that's okay with you. I think it's just, we don't wanna get it into back and forth. I just had a phone message from one person in the audience that said there's no way for them to raise their hand on the Zoom meeting. Pardon me? I have no way of saying I wanted to talk. I had to call on you. All right, well, we'll just do our best here. Okay, did you wanna finish up your comments, Kathy? Sure, mostly thank you. I would like to understand specifically what the trade-offs would be if we do not pass these taxes. And also wondering why we don't wait to find and get a better idea of how much money we need before we raise the taxes. I think, I mean, I think that ship has sailed. I think that we're gonna get these taxes, but I don't understand that the process was a little dodgy in that you have to get 50 plus people to affirmatively do something to stop the taxes. And that was never gonna happen. So I just feel better if I knew what the trade-offs were gonna be and understood better why we didn't get a better handle on what we needed before we did the tax thing. Let's see, I have, I'm just, I guess there's no way to raise hands. So I don't know what- Mayor, Chair Mayhood, can I make a suggestion for you to consider, which is it might be necessary to go to call on each individual who's in the attendee list. And then at the end have everybody unmuted and ask if anybody who hasn't spoken would like to speak. That was kind of what I was gonna start doing. And I guess I'll just kind of go down in order. And so the next one on my list is the person that's phoning in from 408, something 48. Is that, would that person like to address us? May I just say one thing? I wanted to tell CTV, we cannot raise our hands. Is there something that you can do to make that a possibility, please? Thank you. Well, wait a minute. Now one 408 has been turned into a panelist, which is not correct. Or is that somebody else? Let's move down to April Zilber. Would you like to address us? Yes, I would. Thank you, Gail. Thank you, Gina for suggesting a temporary solution to this Zoom issue. I support the increase because I don't see how the district can prepare everything, continue with major infrastructure, keep everybody on staff that we need to move forward without doing this increase. It's gonna be a little bit painful, but it's under $10 a month. So I feel like it's worthwhile. Thank you. Thank you, April. Beth Thomas? Yes, thank you. I think it's important for us to understand what previous caller mentioned, which is what would happen if this didn't happen now? If the surcharge did not pass now. I also think an important question to answer for the public is, why it's not possible to wait longer to see what the actual charges are going to be and base the surcharge on the need for that. The district has engaged itself in long-term debt to cover the operating costs. So I'm curious as to what the problem would be with waiting until we had a better fix on what our actual costs were. I don't agree with previous caller that this is not a big deal for some people. For some people, it is a big deal. Thank you. Thank you, Beth. Let's see. Alina Lang? I did not put, no, I put my hand up. Sorry, I was on the phone. No, no, no, it's all right. There's no way to raise your hand. So when I call on you, you're not required to respond. Just if you don't wanna respond, just say I didn't have a comment at this time and I'll go on to the next person. Okay, thank you. All right, no comment. Okay, Cynthia Zenzel? Thank you. First, I wanna say thank you, thank you, thank you. All the board members and the staff for everything that you've done and the thoughtful way you have prepared the presentation to justify this surcharge. As a rate payer from Felton, I feel that since my house was not damaged in the fire, I am willing to pay to make sure that everyone in our district has water. And I am concerned that if we don't do the needed repairs, the effects on our groundwater and on Fall Creek in particular, because I'm from Felton could be very damaging. I think we need redundant water supplies. I'm sorry, Cynthia, you're muted. I don't know how that happened. Can you hear me now? Yes, we can, go ahead. Thank you. So I just wanted to say, I think it's critical that we get all these other sources back online fully functioning so that we can take the pressure off of the limited resources we now have. And I am willing to pay the extra, I fully support your thoughtful consideration of the debts and the need for reserves for the future disaster that may come very soon. So thank you very much. Thank you for your comment. Next, David Kurtz. Yeah, one comment. And I don't know if and when you'll respond to this question, but as a Santa Cruz County resident, I've noticed that for the many years of new property taxes or sales tax increases that they say would be temporary, almost invariably, they end up being permanent. So can you guys guarantee that this would be temporary? We can answer these questions that are coming up all at the end, I think is the most efficient way to do it if we're gonna do it. Debbie Rice. Hello, can you hear me? Yes, we can. Thank you. I just wanted to say, I also support this, and two of my questions have already been asked, so that's it. Thank you. Let me catch the, there's two people that have phoned in. One is a 408 number and the other one's an 805 number. So would the 408 number person like to make a comment? So Gail, the 408-482-4650 is me. Is you okay? Yes, you do wanna make a comment, but we'll wait for you. How about the 805 number? How about the 805 number? Okay. I believe that, sister. All right, so let's, let's see. Here, Mayha, there's an 831 number further down. Yeah, I wanted to catch the ones that are at the top of my screen first before as I go down. So let's go ahead and there's an 831 number. Does the 831 number person wanna speak? Yes. Debbie Rice, again, that's my number. I've already spoken. Oh, you've already spoken. Okay, for some reason you came up twice. No idea. Thank you. Thank you. Doug Engfer? No comment. All right, Elaine Fresco. Hi, yes. I just wanna say that I appreciate the presentation and I very much support the surcharge. I would like to pay less for water. I'd also like an end to climate change and a cure for cancer, but that's all wishful thinking. And I think that there's been a lot of, there was a lot of damage done obviously from the fire and it's you folks have come up with a very responsible way of dealing with the payment and I very much appreciate it. Thanks. Thank you, Elaine. GM Carlo? What'd you think? Hi, I would just reiterate the other questions about what happens if this isn't done and how that works relative to long-term debt and also what happened to the protest vote if you could answer what the results of that were. That's all. Okay, the protest votes will be given at the end. Jeff Hill? No comment at this time other than that I support it. Okay, thank you. Jennifer Lohan. Jennifer, did you have a comment you'd like to make? Well, we will try you again later if you want. Jessica Peters. Hi there, can you hear me? Yes, we can. The only comment I have is that I don't support the fee at this time. I'm concerned that there will be fee increases going forward in this is and can be significant spending people on such a comment. Thank you. Everett Ginger? Can you hear me? Yes, we can. Have I joined too late to generate a comment? No, you're at the right place at the right time. Go ahead. So I'm opposed to putting the increase right at this moment and principally because we have our representatives in DC strongly working on a program that's gonna supply a lot of infrastructure money. And I think it's premature for you to hit the rate players when there's a good chance that this very water district will be eligible for some of those funds for the infrastructure because water is indeed one of the ones that's being passed. The fact is a lot of talk about the water being a big priority in the infrastructure bill that the federal government's passing. So for that reason, I think you should wait a little bit before you sit us because if you get us taxpayers or rate payers and then later on you get some more money, what's the odds of me getting that money back? Probably zero. Government doesn't like to give money back once they have it in and they can go spend it. Or in this case, I guess you're not considered a government, you're a local board. That's much of a sense. Thank you. Joe Cuciara. Thank you, Madam President. Are you able to hear me? Yes, we are. I with rather heavy heart, I oppose this surcharge for a very simple reason. It's always the easy way out to charge the rate payers. And since the outset of the disaster damage, the fire damage to the district before this board on at least three occasions, I provided a roadmap as to how to get 100% federal funding so that the rate payers would not have to pay an added charge. And this is just a lazy way to do it. I offered both to the board publicly and in phone calls privately to help get the 100%. The Stafford Act, which is with two Fs, it's not the Stanford Act like Stanford University, it's the Stafford Act allows up to 100% federal funding that has to be requested. It has to be done jointly with the state. And we currently live in a state that has a $75 billion surplus. And that is before the new stimulus money coming as a result of all the COVID relief and the state's still going to get that additional stimulus funds. $5 million for the local share of the district's project is 1,600,000th of a percent of the $75 billion surplus. This is a political project. It requires the coordination of the county primarily through the fifth district supervisor who has been in protective custody throughout the CZU fire. That's not my opinion. That's the Santa Cruz County grand jury's opinion. It requires the coordination of the two US representatives as well as the two US senators, both the congressional and the Senate representatives. And it requires the governor and the current district supervisors particularly suited to help with the state because he was the secretary of state for California. This decision also should not be made until there is an in-person public hearing. School boards throughout the country are meeting in-person debating issues having to do with COVID. We can certainly have an in-person meeting of our district before going any further. Thank you very much. Thank you for your comments. Jim Mosher. Yes, can you hear me? Yes, we can. I just wanna express my appreciation to the staff and to the board for the hard work we've been doing on this. We do have extensive damage. The presentation that Rick Bade was very informative. I support imposing this at this point. There are safeguards in place. If we were to get more funding back, this would stop but it seems to me the board made a responsible decision that we should alert ratepayers that we are gonna have to have a substantial amount of rate payer funding for this. I did some exploration of what the previous speaker talked about in terms of 100%. My understanding is that many, many of our costs are not, cannot be included in that. I'm assuming that this has been fully explored by staff and by Supervisor McPherson's office. That is what they called me anyway. So I support it and I'm very relieved that you've got a special fund for it so that if we hopefully do get more reimbursement than we expect and the costs aren't as much as we expect that the ratepayers will not be overly burdened by it. I also wanna say that I am concerned about it having an impact on many of our low income residents and I urge the board to consider expanding their low income rate payer assistance program to help those folks deal with this. The unfortunate truth is that water is going to get more and more expensive with all of the challenges that we have and it's difficult. We've done all this deferred maintenance that we have to deal with and so anyway, I appreciate the board's deliberations on this and I support going forward with it. Thank you. Thank you. Karen Hall. So I would like to sort of echo what Jim just said. I also support the rate charge. Of course, like anybody, I don't want an additional charge but I know that the board has worked and the staff have worked really hard to try to manage the cost and this isn't due to irresponsible spending. Things happen, we had a fire and with the drought conditions and potential fires in the future, we have to make sure we have all of our water sources online and I also appreciate that there's a clause in there that if we are able to get additional funds or if costs come in less or there's other sources that I presume the board and understand that they would remove the charge and I understand that we're already incurring debt so waiting to do this later is just gonna we're gonna be paying more interest and we're not gonna have the money to do what needs to be done. Thank you. Thank you. Larry Ford. I'm here. Thank you. I'm Larry Ford. I just want to say that I've been a resident for 20 years. I was one of the leaders of the flow group that helped to bring the Felton water district out of the control of the multinational that owned it and into the water district. And so I'm still committed to supporting the water district. Calom would never have had the creativity or the capacity or the willingness to do the kind of work that Rick Rogers and his team did right away after the fire. And so I want to thank them again like others have said for all the work that they did right away to get the water system back up and running for all those people that were affected. I also want to point everyone's attention towards all the work that has been done already and that still needs to be done. There's an awful lot. There's been a lot of other accomplishments that I'm really appreciative for. It's been an emergency. And the staff has responded really well, very efficiently. The work has been done well and quickly. So the next thing that I'm concerned about is that we're in the middle of another wildfire season that everybody is saying is worse than last year. And so it's very likely that we're going to have a catastrophe that's worse than our worst fears from last year. We need to start paying for this. It's not anybody else's responsibility but ours. And so I don't want the water district to be underprepared to have the staff be demoralized again by cutting back on their budget, by criticizing them for being unnecessary. None of that is worthy of paying any attention to. Anyway, this is a terrible time to be cutting the budget. And so we've got to go ahead with this surcharge. If the money's not needed, it'll be the surcharge to be terminated. Thank you. Thank you. Linda Skeff. Linda, did you want to make a comment at this time? I'm sorry, thank you. Am I unmute it now? I'm there. I would like to say that I am in support of the surcharge for all of the reasons that have just been mentioned by Jim and by Larry Ford. We need to not only fix what was broken but we need to upgrade in and we need to be upgraded and ready for the future. And so I think that there's just no other way around this than to institute these surchargers. And I think we're actually going to see them go higher in the future and we probably need to be ready for that. Thank you. Lee Summer. Hi, can you hear me? Yes, we can. Great, yeah, I'll just keep this short and sweet. I'll just say that I am in support of the surcharge. And I appreciate the presentation that Rick Rogers gave, that was very clear, thank you. Okay, let's see. Michael Loick. Hi, thank you for your time. And I'd like to say thanks to the board and to the district staff. We are now at what looks like a second major drought in the past 10 years and that has been very concerned about all kinds of infrastructure and with other forms of climate change, we really have to be on our toes. And so I support this charge, but I want to also support or get behind some of the prior comments about the assistance program as well as including a mechanism that if other federal funds come loose that whatever has been paid can be offset future water bills or costs. And I think that was it. So thank you for your time. Alina Lang. Oh, I think you already called on me, but I guess I'm sorry. Okay. I'll call it this time. I had just logged in and was confused before. I just wanted to say that it was kind of a hard decision but I definitely, I think I'm against this increase in the surcharge. I think it's going to be impacting some of our lower income people in the valley here disproportionately. I also don't like how much the schools are going to be charged since they have the larger diameter pipe. So then, you know, we're paying for it twice as taxpayers that way. And I really think it would have been a better idea to think out the merger with Scots Valley in more of a keeping our water in this area, but including them and then we could have done a tiered pay structure. And I think that would have helped us out a lot better. That's all. Thank you. Lynn, Lynn, did you want to address us? Nott, we'll come back to you. Mark Doulson. I know comment I do support the surcharge. Okay. Let's see. Nicole. Nicole, did you want to address us? Nott, we'll go to... Mayor Mayhood, it looks like Nicole has been unmuted if she wants to speak. Yeah, well, so was Lynn and as well. So either one of them could speak up, but they're not. So we can come back to them later if we need to. The next one is called owner Terry. Can you hear me? Yes, we can. Okay, thanks to everyone for having this meeting. Rick Rogers, he presented a technical meeting statistically in a framework that, hey, even I can understand, congratulations. Anyway, my comments are directed not so much at the SLV water department, but on a bigger spectrum of there must be more districts like us scattered across Washington, Oregon, California, who might be in the same boat. And I'd like to see some sort of effort to coagulate all those folks into some uniform movement against Cal Fire and the US Forestry Department, saying that the use of larger planes is not economical in fighting forest fires. I doubt that any of those people have ever been in a forest fire or near one. What they're using today and what our governor is spending money on, i.e. helicopters, two-engine fixed wind planes, planes that can't fly at night to fight forest fires is ridiculous. I was aboard an aircraft carrier. We flew flights nightly in Vietnam, treetop level, dropping whatever was necessary. It's possible. The radar that is necessary for these planes has been in existence for over 50 years. This is not rocket science. You can either take a 727, 737, which is sitting on some field in Arizona, doing nothing or a military plane and do the same thing. And you're saying, well, this will cost a lot of money. That's why they're shutting it down. I think you've made your point about that. Did you have something more that you wanted to add about the surcharge? No, but I hope to get an answer about my questions. I think I'm all for the surcharge. It's you guys are doing one hell of a job. Thank you. All right, thank you. I can't tell, there's somebody here that's O F I Zoom host one. I don't know if that's our Zoom host or if that's actually a person, but if you're a person, please speak up. I am, can you hear me? Yes, we can. Oh, Sydney, what the hell? My name is Virginia Wright, and I'm sorry, I'm using my work login, excuse me. I'm a Felton residence. I'm a human being here. And I just wanna say that, I think everyone's thing's been said, but I wanted to thank the staff and the board for doing this work. I just wanted to thank you all for doing such good work. The presentation that Rick gave was excellent. The checks and balances that are built into the idea are very strong. And I'm gonna thank you all for doing the work. So that's about it. I think everything else has been said that I would wanna say. Thank you. Robert Lewis. We have to click on unmute, which is why I'm on now. Well, I just wanna- We can hear you, Robert. You hear me, good, all right. Thank you. I wanna just echo what Jim Moser and Larry Ford said earlier, so I won't tie up any time here. And I'll just add, when I moved here, the Felton gas was 25 cents a gallon, and you know what it is now, over and out. Okay, thank you. Scott Mattock. He is our timekeeper for the district. Oh, sorry. Waldo Berford. Waldo, did you want to address us? Can you hear me now? Yes, we can. All right. Little technical problems. Well, I was moved by the presentation of staff and the biggest commendation I have is that they are focused on hardening because I would echo what others have said that this problem in our forest is probably gonna continue or get worse. So I'm glad that we're planning and hardening the infrastructure. I'm kind of feeling rushed on this. I tried to get my comments in today. The district office is locked up, so I had a bit of frustration with the due process on this, and I feel it's been a little rushed. You know, I think the need is there, but I'm just feeling a little rushed. So a lot of my concerns were addressed by the staff, so that was good. That wasn't widely available that I could find earlier than his presentation, so that helped, but I'd have to say I want to put it on pause and say no for now, pending some just further information and find out the numbers and where all of us sit and allow more people to really put their vote in because I just don't think it was, even this process of keying into the meeting tonight was broken up and difficult and kind of discouraging input. So I'm keen with the idea generally, but I think it's premature and I'd like at least another 30 days to let this kind of settle and give people a full opportunity to participate as was the objective of the public law that required this input. That's all. Thank you, Nicole. Can you guys hear me? Yes, we can hear you. Okay, cool. Thanks for coming back to me. I was having trouble figuring out how to unmute earlier. I just want to say thank you guys for all of your hard work, and I'm very much in support of this, this charge. It's, as Rick was saying, it's been, we're coming up to the year anniversary and we're just now starting to talk about finding ways to pay for all of this and things are just gonna get worse from here. So I really think it's good timing. I mean, good timing would have been like a year ago, but we didn't know this was all gonna happen a year ago. So thank you guys so much. And that's all I wanted to say. Thanks. Okay. William Gutswiller. He's not, we need him to be talking permitted. If the CTV people can make it possible for him to speak. Are you there? And did you want to speak with us? Does it look like it? Okay, I think we've been through everybody. There's one that was at the bottom that just moved to the top. Okay. We'll, yeah. Yes, we'll, all I see now is we'll WA. So I'm sorry to ask you in such an awkward way, but you're up now. President Mahoud. Yes. And other respected attendees, thank you very much for being here. My wife and I both strongly support the surcharge. We know that water is life. There's very little that's more important. And I have international experience with countries and places where the water disappears. And that's how you define disaster. So to me, this is a mental health issue. I'm hoping that those of us who live here and have lived here for some time can continue to be hopeful that our currently excellent SLVWD team can be allowed to continue their work. And as someone else has already stated, there is a clause freeing any fear that this will go on forever. The board of directors has the ability to turn the surcharge off if those of us who believe that's necessary force them to do so. So I don't see any negative side to this. Let's go for it. Go fast, go hard and get it done. Okay. Thank you. Let's see. At this point, is there anybody else? I know Lynn, we didn't hear from you. There's another 408 number. This is Lynn. Can you? Yes, we can hear you. Please go ahead. Sorry, I was having a problem with my microphone. Anyway, I just wanted to say that I really undecided about this issue and I wanted to attend this meeting, this Zoom meeting just to see what other people and the board was, we're going to have to say about this matter. I think people on both sides have presented really valid reasons to vote one way or the other. But I have also heard other people say that they're concerned about the surcharge not ending and I also have that fear that once we start paying more on our water bills that it's kind of like, the cost are just going to increase over time. And I kind of foresee that this surcharge is going to need to become a permanent thing. I don't know how water rates are increased over time to accommodate the increasing cost of doing business and things like that. But I would also like to see an extension of the time to submit our ballots, our protest ballots or not, because although I have seen information about this issue come out across the internet and places like that, I've gotten it in the mail that our protest must be received by the end of the meeting tonight. And I think that's a little bit short time for people like me who maybe need to digest this information a little longer and try to come to a well-informed decision about which way I should vote based on what I've heard tonight. And anyway, that's about all I have to say. Okay, thank you. President Mayhood? Yes. William Gutswiler is now on the, has ready to make a comment. Yeah, we should call, he has sent multiple, we should try to see if he has a comment that you'd like to make. I'm sorry, I'm... William Gutswiler? Unmuted, can you hear me? Yes, we can. Great, I've sent you folks a number of emails along with my campaign that was this year, BBC, Dr. Leier, number has increased between four and 500, even assuming that two years since when you actually let the contracts forbid prices depress, express concern that, well, once a district raises rates, they're not gonna go down. That's true with wholesalers and retailers across the board, as part of our system. There's also the issue of... Hello, hello, hello, hello. We can hear you, William. We hear you, Bill. We sent you an email today, and I did any email back then. Please, Scott, I can see the red thing beeping. Did you have a final finish up to your comment, Bill? Part of my concern. So, there was a 408 number that somebody kind of just came in recently. Would you like to speak? There may hood if I may. Yeah. I've been keeping notes on who has spoken. Yes. And I have two individuals in the attendee list who you tried to call on and didn't list them on. And one is the 805 number, and the other is Jennifer Nolan. Okay. So if either one of them would like to speak now, you're under talking permitted. So I don't see Jennifer still online here. What was the other one, Gina? The other one was the 805 number, 805-889-5591. If that person would like to speak, you're talking permitted now. If you'd like to demute yourself, hearing any response, I guess we've gone through everybody that is on the attendee list. And given that, Gina, is it, it's a little bit awkward. Normally we'd ask for any final comments if we haven't gotten everybody, but it sounds like you were keeping track and that was certainly my impression too that we've gotten to everybody. Yeah, well, I guess I have one final caveat, which is that there's two Waldo Burford online and it's possible that there's two individuals calling in under that handle. Yeah, there were actually several people that kind of got in twice, but if that is the case, then go ahead and Waldo, go ahead. If there are two of you rather than one, please have the second person. This is your opportunity to speak. Can you hear me now? Yes. Well, there's only one Waldo Burford, so you can all go home and tell everybody you found Waldo tonight, but there was one. Okay, good, we're glad we could get that. Good job, and I just all, just double my thanks to the whole staff and everything they do for us to assure that we have good quality water every day. All right, thank you, Waldo. All right, with that, since we've heard from everybody who wanted to speak, I'm closing the public comment portion of this Proposition 218 hearing. And with that, no further written protests will be accepted by the district. Shortly we'll commence board deliberations on the proposed surcharge, but first, I'll want to hear from the district secretary what the total number of written protests received by the district. And I understand that because people could be sending them in while we were listening to people give their comments, that it might take a moment for Holly to update the totals. And so let's take a 10 minute recess for her to do that. So we will be back at 7.55, we'll reconvene at 7.55, and at that point we'll pick up where we left off, okay? Thank you, Chairman Hood. Okay, so it looks like we have all the board members and the staff back online following our recess. So we'll pick up where we left off. District secretary, please let us know how many written protests were received by the district. We received a total number of 547 protests. Okay, and just for clarification, that's a raw or unvalidated number of protests, is that correct? That's correct, they have not been validated. So that's just the total number of written protests that district has received. And I'd like to ask our district manager, what is the number of protests that would constitute a majority protest under Proposition 218? Yes, we have that number to be 3,866. Can you describe to us how that number was determined? Using the APNs gives us, let's see here, let me, the most conservative approach on the front and look with the district, finance manager has given me, so it's a seven, we look at 7,731 APNs and it'd be 50% of that or 3,866. District council, can you tell us, based on that information, is it necessary to validate the protests? No, since that total number of protests received by the district is far below the number that would constitute a majority protest, legally it's considered manifestly apparent that no majority protest exists. So there's no need to validate the protests, which would have entailed if the district had to do it, of course that would have entailed some additional process where the public could observe the district reviewing each protest in terms of if it's valid. But as I said, that doesn't need to be done. Given the 500th number of protests compared to the 3,866 number that would have constituted a majority protest. Okay, thank you. Since no majority protest exists, let's continue with the board deliberations and I will ask each board member to comment on the proposed surcharge if they so desire. And I'd like to start with Director Ackman. Thank you. First of all, I want to thank everyone who joined us for this evening's meetings. I appreciate all of your thoughtful comments. It was a really civil discourse. You gave us a lot to think about and a lot to discuss here. So let me start by saying that. I wanted to sort of talk a little bit about some of the questions that came up around process. Rick, can you just tell me this length of time that the protest that was open for protests to be made, was that any different than any other Prop 218 process that we as the district have gone through? Was that shorter or can you just kind of give some context around that? No, it was not. It was the same as previous, with COVID into the mix, it's a little different with the Zoom meeting instead of in person, but other than that, and the District Legal Council would be better to inform the board on that process seeing as she's been through, I think our last two processes. Okay, Gina, is that in line with past processes in terms of the length of the time that we offered for individuals to submit their protests? It is, it's 45 days is what's required between the mailing and the hearing, and that's what was done this time and other processes have been similar, the District's mailed it out shortly before the 45 day window. And I guess if I may also point out that there were several meetings as discussed in the board memo that addressed this prior to the hearing that was going up. That's right, thank you. And I was going to mention that this did come up in several meetings for discussion. So, thank you. Rick, one of the things that, and you did address this, but we've talked at length about the fact that insurance doesn't cover all of the damage just because there were certain pieces of infrastructure that insurance or our policy will not ensure. So we've got that delta to cover. And then there's also work that's just not eligible in the FEMA recovery process for consideration, but it's still work that we'll have to do, right? And I think some of the things that you and I talked about were like watershed restoration work, things like that are things that we are going to have to do and they're quite expensive, but they fall somewhat outside of the typical items that would even be eligible for consideration by FEMA. So I guess where I'm getting to with all of this is even if by some legislative victory, we were able to get 100% of our FEMA reimbursement, there would still be costs that would not be eligible under FEMA consideration if I'm understanding correctly and we would still be responsible for covering those costs. Can you speak to that a little bit, Rick? Well, you know, that's definitely correct. And you know, there was a lot of, you know, good comments from folks tonight and a lot of good questions, but yes, I mean, we're going to be responsible. And again, it depends on how far and how much the board wants to accomplish. It all takes money. And you know, the recent bids and we had three bidders for fuel reduction around our sites. And we're looking at an average pump site that they're coming in somewhere around $20, $25,000, which is a extremely high number, but everybody is finding that all of these costs are extremely high. We're just in a time that we're contractors and work, for one of you can find the contractor, all of this is extremely expensive and FEMA is not going to cover all of it. So, you know, the district's going to have to make a decision, you know, we need to do the hardening around our facilities. We need to protect our well field, our sources of supply, our redwood tanks. It's no longer if a fire comes through, we know what happens if a fire comes through. And it created a large amount of damage. And our costs are going to be a little more than the average water system because of the age of our infrastructure. Some of that infrastructure is back in the early 1900s, it's still been in place out in the system. And it needs to be upgraded, it needs to be relocated, it needs to get put in the right away where it's protected. It needs adequate fire hydrants and all of that will come. FEMA will cover a lot of that, but we're not there yet to see how much they're going to cover on the eligibility. But there's all, and that'd be, you know, probably two years down the road to really have a good grasp on our project costs and our revenue. Thanks. Okay, last question, and I appreciate the time to sort of walk through this. You mentioned that there were 354 connections that were without water during the CZU fire. And, you know, I know that the fact that we did have reserves available was a large part of the reason that we were able to get our customers back in water as quickly as we were. Can you tell me, first of all, how long were those 354 connections out of water? And I know that Big Basin's issues were different, but, you know, by comparison, many of Big Basin's customers were out of water for, you know, how long. I mean, I think that it's really important to take stock of the fact that the fact that we had reserves available to us at that time was part of the reason that we were able to recover as quickly as we were, if I understand correctly, and, you know, that some of this is about ensuring that we continue to have reserves because we know, as we've talked about, the next fire or disaster is coming. So could you speak to that just a little bit, Rick? Well, you know, obviously reserves are very, very important. And we blew through that $3 million, you know, rather quickly. And there was, you know, there was some cash flow times that our finance manager, you know, raised concerns that, hey, we're gonna run out of cash. And if we don't do something, either, you know, a bridge loan or get some type of funds coming in. So it doesn't take long to go through the $3 million. You know, I think our emergency reserves or $3 million is just too low, quite frankly. I'd like to see it up around the $5 million mark. And there's ways to do that. You know, even so we got low of cash, there was other reasons that were impacted on getting our people back in water. Some of the areas we just couldn't go back in. They were still burning. Cal Fire Sheriff's Department would not allow us back in. It was unsafe. So we pretty much centered on the areas that we could get in, biggest bang for the buck. And we started bringing people back in water. The Big Basin area Highway 236 corridor was hit hard by fire. That was a lot of damage, the most damage in our water system other than the watershed. And Big Basin today is still hauling water from us to fill their tanks. Their tanker trucks are picking up water today. So they still have issues. We're back in water, you know, we're back in potable water and we're moving ahead. Our system's still fragile until we get our surface water intakes back online. And we still have a lot of work to do. You know, we only have one way direction of flow coming for water sources right now. We don't have the surface water treatment plan online. Majority of our storage, 50% of our storage is located up off of Highway 236. The only way to get water in and out of the Santa Rosa Valley right now is pretty much the Highway 9 corridor. So we don't have that redundant piping. So it's increased monitoring, it's increased operations. And we'll get through it, but we do got to be concerned, additional fires, additional disasters. We do need to expedite our repairs and our recovery for a lot of reasons. And Gina, to the concern about this surcharge never ending, as I understood it, the way that the resolution is written, it says that we will stop collecting revenues when we reach $5 million, or before if the board so chooses, right? So there is a finite end to this collection of these surcharge revenues. That's right, Director Ackman. The surcharge cannot go on beyond the five years without going through another process like this one based on whatever the need is at the time at the expiration of the surcharge. It will not continue past the five years. It does automatically end. Thank you. That's all of my questions for now. Thank you. Director Fultz, Luz Director Fultz. Yeah, Gail, as I mentioned before, my man has an attendee and apparently I can't get moved over to be a panelist. No, you're fine. It does be that, but we'll do that the way. Yeah, you know, I think the, I think the couple of things I wanna say about this has to do with starting with where we all agree. And I think everybody agrees that we're responsible for our portion, whatever that turns out to be, whether it's 25% or 6.8%, that's the amount the community has to have to fund. And then of course, on top of that, any additional monies, if we choose to spend that in order to harden things beyond just simply replacing plastic pipe with plastic pipe. Because of course, putting plastic pipe to the watershed won't necessarily harden things more than they were before. I think we also wanna make sure that people understand that we recognize the issue associated with burning through our reserves as quickly as we did, combined with the fact that we actually have to front the money before we get reimbursed with FEMA. And so in order to make sure that we had cash available to cover that construction, as well as to make sure we had money available in case there was another disaster, prior to getting money in from the community one way or the other, we took out a $15 million loan that is going to cover that. And also cover additional infrastructure improvements that aren't necessarily part of the fire recovery if there are funds left over to do so. And Rick, I think I got all that right, but it would be great for you to confirm that, is that correct? I think it's more like a 50-50 split for CZU fire and for additional capital projects that are non-related to the fire. Right, and that's assuming that all the estimates come in as we think, and we don't necessarily have any additional costs, but we're basically covered on that. The other thing I wanna mention is that I think we sometimes have a, we sometimes conflate two completely separate monetary phenomenon. One is operating the district in the desert is a capital required to, in this case, repair the infrastructure or improve the infrastructure. How they're related though is very important because whatever money is left over from the revenue we get for selling water minus the expenses to deliver that water to everybody, that operating margin is then what we can use combined with property taxes for funding infrastructure, for doing reserves, for paying debt that we take out and for handling all the other capital obligations that we have. And as long as those operating expenses are going up as rapidly as they are, we need to ensure that everybody understands why that is, which I don't know that we have a great handle on that yet. What we're getting for that and what that means for water bills going forward. And if we take a historical view of that over the last eight years or so, and those same trends continue into the future, we're looking at $200 a month water bills for four units. And that is completely independent of the CZU recovery. And so that gets back to my basic point, which is it's not a question about how we, that we have to pay for this. It's a question about how we pay for it and where the money comes from doing that. I would have liked to have seen more fiscal restraint on the rapid increase in operating expenses, which between budget year 2021 and budget year 2022 are going up by a million dollars or about 12%. Fortunately, the next year is only at 3.5%, but the two years combined is still 8% a year, which is going to translate directly into water rates exclusive of the surcharge, having to go up as well at some point if we continue on that path. And so I think the broader conversation here is where money is coming from, where money is going, and what our plan is to use the margin that we have and the property taxes we have to address all the capital obligations. That is why I was advocating for a smaller surcharge combined with operating cost savings that would help us give some relief to the community and some view that going forward, we're not going to have the same kind of rapid increase in expenses and rates that we've had year over the past, well, less than a decade. I think it's interesting that we've heard folks talk about cuts. What I'm really talking about is slowing the rate of increase in operating expenses, which isn't really a cut, they're still going up. So I think we also need to make sure we're getting the vocabulary right. So in light of all this and in light of the fact that there are still unknowns about what that exact number is, and I would rather go to the community with an exact number, I would definitely like to not do the surcharge at this point in time and take another look at it later. Once we have answers from FEMA, what they're gonna cover, once we've decided how we're going to replace the raw water pipelines, whether they're gonna be plastic or something else. And we have some better estimates about where those costs are going to be. It is likely, more likely than not, that the 5 million that is being asked for here won't be enough, in which case it's gonna have to come out of the loan that we took out, which means that loan's gonna get paid for by operating expenses anyway. So I think being providing the community with more concrete information with a slightly different process that's still within the bounds of 218 would be a better way to go going forward. But I recognize that I am probably the only voice in that taking that point. So I will stop here and we will go on to the next person. Thank you. Thank you. Director Henry. One of the questions or one of the comments that were made by members of the public was concern or low income people. And we do have, it's kind of a test program to see it small, about $10 a month to help low income people, they have to be involved in the PG&E, how PG&E allows people to pay less, they have to be involved in that. And it seems that we don't have very many people signed up for that. I don't know an exact number, but that is one thing people could do to help them. And if we see there's a lot more need, perhaps what's funding that is property tax. So we could possibly increase that, just a possibility. I support this surcharge. I believe that as if we continue to wait and continue to wait, prices will only go up. And if we continue to wait to see what the federal government does with their infrastructure bill, who knows? How long that would take before we'd get any money? I think we need to move ahead. We don't have reserves right now. And the longer we wait, the more it's gonna cost. Okay, thank you. Director Smalley? Yes, am I coming through okay? Yes, you are. Okay, I've heard from numerous folks from the public tonight, supporting this surcharge. I've heard comments about, we should be putting off doing this until we know how much we're going to incur. We know we're gonna incur a significant portion. We've already spent a significant portion, if not all of our existing reserves. We need to replenish the reserves at this point. So based on all of that, I support moving ahead with this. And I would like to put that in front of the rest of the board. I would like to make a motion that we put this to a vote according to the motion that we have in front of us, which I can't pull up right now, but. There's a resolution. So you can, if you wanna make a motion, can I, would you like me to read it? The resolution at the top, the title of it. We need, I'm having difficulty with my connection this evening. The, it would be the resolution that is in the board packet, which fixes, fixing and adopting a water surcharge to pay for a CZU wildfire recovery and repairs of the San Lorenzo Valley water district. Is there a second? Yes, I would like to make that motion. Second. Okay. We now have a motion on the table and that allows another round of discussion. If anybody would like to comment further. Gail, I did have just a couple of quick comments. Yeah, let's let Jamie go next and then I'll come back to you. Yeah. Thanks. I just wanted to circle back to a couple of things that came up in the discussion. One is this, you know, we are already doing or will be shortly a rate study. My recollection of that is correct. We passed a contract recently to have the district go out and do rate study. So we know that we're gonna be looking at our rates long-term, right? And so this money is not about, you know, addressing any structural operational needs that the district may have. This money is about addressing the cost of recovery for fire related repairs and improvements, right? Okay, so I just sort of wanna separate the two things because I think, you know, in some of the comments they get conflated. We're going to look at the district's operating costs and what the reasonable trajectory for potential increases will be and whether we need them and how we can, you know, achieve greater efficiencies as an organization, as a function of that rate study. But I don't wanna conflate this effort with that also separate but very important process. So it just, is that my recollection of that is accurate? I mean, you know, that's, you're muted. It's somewhat accurate, but I don't think the rate study, not unless we design is going to look into the expenditures. I think the rate study is gonna look at what current expenditures are and what it would take to support those. I think what you're talking about, Jamie, is something we're going to do, what your staff will do is to evaluate operational costs and see what we can do to reduce those costs, what we can do to reorganize. And we do have a lot of suggestions, you know, such as going paper lists and some of the other SCADA systems and some things that we do in the operational and to try to lower costs. I think the rate study will look at what it takes to support those costs. And it's right to say that as we improve and upgrade infrastructure, you know, more modern infrastructure is less likely to break down and therefore may need less, you know, maintenance on an ongoing basis, at least in the near term. And that, you know, likely through upgraded infrastructure we will achieve some additional operating efficiencies. That's correct. Especially in reduction of unaccounted for water, water loss due to leakage through our implementing our capital improvement program has the potential to greatly reduce a lot of operating costs. Great, great. Okay, and then the other thing that I wanted to say, and this is more of just a public service announcement because, you know, the subject of our low rates or low income rates program came up and right now because of COVID, the rental relief program also covers utility assistance. So individuals who qualify because they've had some sort of an economic impact as a result of the COVID pandemic can apply and qualify for utility relief in addition. And that is the moratorium in the state of California ends at the end of September. That just means that the addiction moratorium ends at the end of September. But the ability to apply for that relief goes on until the money runs out and the money will be available for some time. So I just wanted to let people who raised that concern know that that is another avenue in terms of getting some utility rates assistance right now. And Jamie, we are working with the other water agencies to try to obtain some of those funds. And those funds will be allocated to the county of Santa Cruz. We haven't received any yet, but the district is looking to cover rate assistance to all the folks that have not been paying other water bill due to COVID issues and so forth, which is close to a half a million dollars in the accounts that we're working on. Okay, thank you, that was all for me. Bob, did you have some additional comments? Yeah, a couple of things. Relative to conflating things, again, this goes back to where we are going to get the money from. So one way is to go for a $5 million surcharge, but if we had changed our operating cost curve from the current 7.1% a year down to 5.5% a year, that's $2.5 million in savings over the next five years, which is half of the surcharge that we are asking our community to go. That is a 1.6% decrease every year in operating expenses and we get half the surcharge we need just from doing that. The power of compounding when we're dealing with multi-million dollar budgets is phenomenal and really can go a long way to reducing the burden that is on our community through just very simple math. So it's related in terms of how we decide to manage things at an operating expense level. I do wanna assure everybody that's attending the meeting that we have reserves today. We took out a $15 million loan in order to make sure that we had cash to do both the construction immediately even before all this money from the surcharge comes in and so the prices, we're gonna be waiting five years to do the construction because then prices would be much, much higher. We're gonna be moving on this as quickly as possible and to make sure that we had cash in the bank as reserves to cover ourselves until we found a way to pay for the recovery from this fire, whether it be through 100% through the surcharge or something different as I was advocating. So I want people to understand that the district right now from a financial point of view has cash in the bank to cover both those construction costs and to make sure we have money available in case we do have another disaster. And that was one of the reasons that I was so much in favor of increasing the original loan amount from 5 million to 15 million to make sure that we didn't run out of cash should things not go the way that we are hoping that they go and that we not have a repeat of last year. So I want people to rest assured that the board and the staff have taken a very close look at this and have made sure that the cash is available for us. So those were basically the three points I wanted to make, thanks Gail. Okay, I think I'd like to weigh in with a couple of comments. One follows up directly on what Bob just said. When we made the decision to go for the larger loan for 15 million largely at Bob's wisdom of taking out a loan when the interest rates were low about half of that was supposed to be devoted to the deferred maintenance and infrastructure upgrades. And so to somebody asked at the beginning what do we give up if we don't get the surcharge? And the main thing, as you just heard from Bob's comment was there was nothing in his comment about the deferred maintenance and the infrastructure upgrades because that's what we'd give up. And I'm not willing to give that up. We've had problems with this for their longstanding. And I think we need to continue on as planned to get some of these efficiencies that Rick was saying and decreasing the amount of accounted for water that we lose. The question and the question of why don't we just wait is I think sort of immaterial in that we know we're gonna have to do these things. And it's pretty obvious what we're gonna have to do. So we should get it done as soon as we can, not simply because it's going to be more expensive as we wait, but simply because we don't want the system to be fragile. We wanna be able to have everything working as well as it can so that if there's another fire we can produce the water that's needed to fight it. So we really don't want to wait. And then I just wanna really emphasize that the board was really concerned and we all agreed that we wanted this to be a temporary thing. We all agree that it will automatically disappear after five years. And if it turns out that all the stars align and we get money from the state and the federal government increases the amount that they reimburse, the way we've constructed this going into the restricted account that it can only be used on recovery from the CCU fire means that we cannot spend it on anything else. And so I'll just ask our district council to confirm that if all these things actually did align that we would just have money sitting in that account. And so we would essentially have to reimburse it to our ratepayers. And is that correct? Yeah, I mean, it's a little tough to see exactly that far down the road, but because the board, the resolution that is before the board as the board requested requires the money to be placed in a restricted account and maintain that way. There really isn't anything else the district could do with it like you said, Chair Mayhood. And so one of the options that perhaps would have to be considered if there was a surplus was refunding it. But there's really no way to exceed the cost of service here because the money can't be used for anything other than the intended purpose. Right, okay. Thank you for clarifying that. And I guess I would just finally finish up by saying that I don't disagree at all with Director Fultz's concern about sort of bending the curve on the increases in operating costs. And I think Jamie addressed this as well. And I think where I differ with Bob is that I think he's getting confused about time scales. In other words, we have things that we need to do to repair the district and recover from the fire in the next couple of years. You simply cannot change the operating budget of an organization like ours where some 85% of what we spend is on salaries. And we also have a lot of things where we're contracted with consultants. We simply could not have in a single year made the kinds of cuts that would allow us to make the repairs that we need. So I view this as we have a short-term problem that we need to solve with the surcharge. And we have a longer term issue that we need to work on to decrease the rate at which operating expenses have increased. But that requires planning. It requires negotiations with the labor unions that we have with the district. And so really those things operate on two different time scales. And this surcharge is addressing one, and I'm committed, and I think other members of the board are committed, to working with Bob and with the staff, and Brick is committed too, to really looking hard at operating budgets. But that's gonna take place realistically over a period of a number of years. And we can't do both things on the same time scale. I think everybody's had their say, unless Mark or Lois, do you wanna pipe in again? Well, it's nice that we can borrow money to take care of things, but we cannot continue to borrow money. It's not gonna do our, okay, when you borrow money and you pay it back, you get good points for doing that. And we pay things back. But when you continue to borrow and borrow and borrow, it can lower your chance to get good rates, because they're looking at you, you seem to be borrowing a lot of money. And that hasn't happened yet, but I see that as a possibility. And I wanted to ask Rick something, because this is just probably a stupid question, but, um, okay, he said one of the things he wants to do is to do away with paper. And I get that. But how do we protect ourselves if we get a ransom thing that comes in and just kind of takes over our internet? Is are we going to be able to function if we can't look at things on the internet? And they're getting more and more sophisticated by ways to attack, by getting into your infrastructure through all your accounts, everything by spyware. And I just, I guess that's something that maybe I'm ahead of the time to worry about, but it kind of bothers me. Well, when we get into that, that subject, you know, cybersecurity will be a big concern and that'll come up and at committee level and we'll discuss, but there's ways to do that. Okay. Mark, can I offer you one more opportunity to speak if you'd like? Thanks, I've had my questions addressed and still concur that we need to move ahead with this. We've already spent significant from our reserves. We need to replenish the reserves. We need to be moving on putting new pipe in the ground. We've got consultants working on that now. The timeliness of needing to do that is in the next couple of years, not five years from now if we figure out with the federal government whether they're going to reimburse any more significant portions of this. So. Okay. Well, we have a motion to adopt the resolution that has been moved and seconded. And Holly, could you take a roll call vote please? President Mayhead. Aye. Vice president Henry. Yes. Director Ackman. Yes. Director Falls. No. Director Smalley. Yes. Okay. The resolution is adopted. With that, we conclude this agenda item and we'll move on to the next item of business, which is authorizing signatures for banking and investment accounts. And I'll turn to Rick Rogers to address this. Thank you, Chair Mayhead. The memo pretty much speaks for itself. We're asking the change. The intent of the memo, the resolution is to use titles instead of naming specific individuals as signatory or contact purposes for banking and other financial documentation. Most of our banking institutions require just a basic letter or form designating the changes by the board. And this problem comes up anytime we change staff and with the recent change of the finance manager, some of the banks are different than other. It's just much easier if we have titles and we don't have to go through this long process of backing forth with the banks to change signatories. So there should be a resolution attached. Pretty straightforward. I agree, it seems pretty straightforward to me as anybody want to make a comment on this, the board. Let's see, I can't. I can't see, it's hard to see everybody. Go ahead and pipe up if you want to make a comment. Otherwise, hi, Jamie. Looks like you're tapping a snack. I guess she's not going to make a comment right now. I'm so sorry, I'm not going to make a comment right now. Not right now, thank you. All right, does anybody want to make a motion regarding this? I'll make the motion. I'd like to make the motion that we move ahead. Hello. Yeah. I'll second it, moving ahead. Okay, so this is just to clarify, this is a resolution in the board packet that designates, we're designating and authorizing persons to sign for district checking, savings and investment accounts. So we have a motion that's seconded. Does anybody have any further comment on this? For Mayhood for the public, is it possible to just unmute everybody or allow anybody to? Yeah, that's right. I'm sorry, I forgot that the public, this seems so straightforward, but you're right, the public should be able to weigh in if they want. So let's just unmute everybody and if anybody would like to speak, please go ahead. Okay, hearing none. Holly, can you have the roll call vote? President Mayhood. Aye. Vice President Henry. Yes. Director Ackman. Yes. Director Falls. Yes. Director Smalley. Yes. Okay, the resolution passes. So the only thing left is we have the consent agenda. Is there anything anyone would like to pull from the consent agenda to discuss this evening? Okay, hearing none, then we've finished our business for tonight. And if there's no objection, it's time to adjourn. All right? Okay. Good night. Thank you everyone. Good night. Good night. Thank you, Becca. We'll talk tomorrow.