 Then we will begin this meeting of this special meeting of the, I'd like to convene the special meeting of the San Lorenzo Valley water district. For February 2nd, 2023. Holly, would you take roll please. President Smalley. Here. Is President Hill. Here. Director Ackerman. Director director act Ackerman notified me that. She wished to be excused this evening. They had to euthanize their family dog. And Jamie was grieving today. So. Director falls here. Director May hood. Here. And if we have to vote for excusing that absence, can we all just raise our hands to do that. Okay. Thank you. Thank you, Gil. Okay. Do we have. Any. Additions or deletions to the meeting. Holly. I think that would be Gina. No, she sugar had no, so. Okay. All right. We do not appear to have any participants. Available. So we can go to closed session. The go to meeting. Okay. Open that for you. Seeing Jeff. He's not on video yet. Okay. I hear him. I didn't see him. His name is there. Okay, there he is. Okay. I'd like to convene this meeting. Again, the San Lorenzo Valley Water District. For February 2nd, 2023. We have nothing to report. We have nothing to report. We have nothing to report in this open session regarding the. To close session items that we discussed. Since we've already taken roll. I think we're covered on that. That right, Gina. And to the agenda, we take roll again when we. Okay. All right. We take role, Holly. President Smalley. Here. There. Director Ackerman is absent and excused. Director folks. Here. Director Mayhood. Here. Okay. Are there. Any. Additions or deletions to the. Open session items, Rick. Scott has none, sir. Okay. Okay. Okay. So we have some oral communications. This is the portion. For anyone from the public. To provide comments on items that are not on our agenda this evening. Don't. See anybody wishing to comment. So we can proceed. Okay. The presence report. I have no. No items to report on now. So we will move to unfinished business. The redwood park pipeline. Yes. The district engineer to. Report on this item, Josh. Thanks, Rick. So. As has been discussed previously, the. District is working to replace the swim tanks and. Some associated pipeline. In the redwood park neighborhood. This memo recommends that we award the. Construction of the pipeline. To Casey construction and provides. A. A proposed. Motion. A little bit of summary. We had four beds ranging from just under 550,000. To just over 675,000. The low bid is Casey construction. They. For all we've been able to find out in our research are experienced and capable contractors for this type of work. The work involves constructing new pipeline between the existing swim tank site and the proposed or future swim tank site. With that, I will take questions. Okay. Thanks, Josh. So we'll start off with Bob. Member of the engineering environmental committee. And to clarify, the committee has not reviewed. This. This bid submittal. So. Yeah. Thank you, Josh for clarifying this is in preparation for installing the new tank. That's great. And that. You've done some diligence on Casey construction. I didn't recognize their name. And what, what kind of projects did you find that they had done? That led you to the conclusion they would be able to execute. To be told, I didn't find their name. Terribly familiar either. I found multiple pipeline projects. And one of which was in a similar type of situation. That was in a narrow road. A lot of houses. And a variety of other construction work, which while not pipeline work, which is what this is. Showed that they seem to be able to execute on projects that require traffic control that can be as. Complex as that required by Caltrans. And in this particular situation, the traffic control is going to be a significant issue. So that was something I was looking for. Had they had one of their projects been a Caltrans related project. More than one. More than. Okay, great. You know, as you know, I'm really excited when I see new names because we need more fitting on our. Projects. I'm really happy that you guys many names as you're glad. I think we're starting maybe to get the word out that we actually have money that, you know, we want to spend. A little bit of time on that. Okay. So a quick calculation, roughly about $400, a linear foot. Which given some of the challenges that are going to be there is, I mean, that's probably. I hate to say it's market. But because it's really expensive, but it's market. What about the pipe? Do they have pipe available? No, no one has pipe available. This project will be subject to the same Dr. We're looking at currently 50 weeks. That's five zero weeks delays, according to Ferguson. And according to court and main. Or two of the supply houses I reached out to the check. And is there any kind of. Concern that perhaps this might go up based on whatever the price is by the time of the line. There is concern, but we do have two paragraphs in our general conditions, which are part of the RFP for this project. Paragraphs 4.5 and 4.6 4.5. Addresses materials escalation. And provides that any change in material price. Will be. Honored, but. Hegged to. See the index for scrap steel. The idea being that whatever the change percentage wise it is in the cost of scrap steel, we will pay that percentage change in the cost of materials. 4.6 refers to costs of labor. And should prevailing wage change between now and the time the project actually goes. And the contractor asks us to pay the prevailing wage at the time that the contract is able to be executed. We will pay that prevailing. Great. Thank you. Thank you. Thank you. Actually. Bob's last question that Josh answered so well. Was really the only concern that I had. So nothing more. Okay, Jeff. So. Going back to the subject of what other types of pipeline projects or similar things they've done. I'm just looking at their list here of experience and. They've done a lot. A lot of pipeline work was from what I can see. A lot of it was sewer rather than fresh water, but they've. I think you've got a good vendor here. It looks like on paper at least. Okay. We received four, four bids. The second bid is. Within 10% of the first. So I think we're, we're comfortable with that. From a bidding perspective, Josh, on the escalation factors that you mentioned. They have the opportunity to do that at the time. The contract is issued. You said. It's kind of variable. When they receive their materials from their suppliers. From person or from core and main. They will receive a bill for those materials. What those materials cost them at that time. May not match what they were quoted. When they've completed their bids. Okay. Rather than leaving contractors on the hook for that and forcing them to take a wild guess about what costs might be a year from now. And inflating their bids. I think we're going to be able to see what our escalation clause 4.5 does is allows them to say. Hey district. We quoted this pipe. I'm going to pick numbers out of the air. $10 on an earful. But we got our bill from Ferguson and it's. $12 a linear for. Just for the materials. Will you pay us the extra $2 a linear foot. Okay. Okay. Let's look at the change in the scrap steel index price. And if that price is a 20% increase, then yes. If that price is a 10% increase. Then we'll pay $11 a linear foot. Okay. Good. Good. Well, I'm comfortable with this. Good job on getting that number of bids. So I'd like to make the motion that we direct the district manager to enter into a contract with Casey construction. For construction activities related to the redwood park pipeline replacement project. In conformance with Casey constructions bid. In the amount of. $547,601. Thank you, Jeff. Thank you. Given that I. Don't see any members of the public to solicit comments from. No, there are five. You're five. Oh, okay. Excuse me. Any comments from members of the public. Seeing none. Holly, will you. Take a roll call vote on this. Yes. Vice president hell. Yes. Director falls. Yes. Director may hood. Yes. Motion passes. Okay. Moving on to new business. The great study. Request. Yes. Thank you, chair. The finance manager will present this item to the board for discussion. Good evening, everyone. So the district completed a rate study back in 2017. That resulted in a five year rate increase. The 2017 rate study in corresponding five year water rate schedule are included for review in the links below. While revenues and expenditures are monitored on an annual basis. Rate studies are usually done every three to five years. And we had a rate study budgeted in the fiscal year. 21 through 23 biennial budget. Part of the rate study would include a cost of service analysis. And the last cost of service study that was done in 2016, along with the rate study. And the last cost of service analysis. Since then we've had significant changes in our water system, including damage from the CZU fires and our most recent storms. And that warrants an updated cost of service analysis. And basically a cost of service analysis is to equity, equitably distribute the revenue requirements between the various customer classes. And the last cost difference is if any. Exist that exists between serving the various customer classes. Attached to this memo is the draft 2023 rate study RFP. This RFP was reviewed at the November 1st and December 6 budget and finance committee meetings. And it was discussed at length with staff and the committee members. And all edits and comments have been included. And the final decision is that the board of directors review and provide input on the 2023 rate study and cost of service analysis request for proposal and authorize the district to advertise the RFP. Okay. Thank you Kendra. Since this has been reviewed with the budget and finance committee, I'd like to hear from the committee chair on that. Okay. Yes, I would just add that. Okay. Thank you, Kendra. We also discussed it at the January 18 budget and finance meeting. Is that, that's, am I right there on that, Jeff? Remember correctly. I believe so. Yeah. So the first draft was prepared by the staff and presented to the budget and finance committee on November 1st. We had a number of comments, but we had a number of comments. We had a number of comments. We had a number of comments. We had a number of comments. And we incorporated into a second draft. And that was. Sort of provisionally approved. And, but then over the end of the year, we realized that. Well, it was approved. One of the members of the. Committee had dropped out members of the public. And then we had two new members of the public join us this year. And recognizing that. The next draft. Study was going to be largely falling on the budget and finance committee, moving it forward. This year we felt it was important that the. New members. Of the committee, all three of the public members be able to sign off on this. So we took the opportunity to do some. More revisions myself and Jeff. To just. Updated a little bit in terms of issues having to do with the budget and finance committee. And so we again presented it. And it was adopted unanimously at the. January 18th meeting of the budget and finance. Committee. So our. Goal tonight is we hope that. We want the board to take a look at it. If they have any suggestions for changing it. And if there are not, then we would hope that we would get the approval of the board. To authorize the district. And the district manager to advertise the R. Okay. Thank you. Jeff, any further. Comments or questions that you have on it. I think Gail covered it quite thoroughly. And I'm going to agree with her. Okay. All right. Thank you. Bob. Yes. I see that if it's adopted tonight. That the RFP responses are due by March 6th. When would the. When is the estimated time that the consultant would start. Their work. Well, so the proposal would be due March 6th. And we do interviews and negotiations sometime in March. After the review process. And we'd select the. Selected consultant at the April 6th board of directors meeting. And then the final selection would go out April 7th. So essentially it would be starting. After we select the consultant. So this is shown on page 61. Of the agenda tonight, this schedule. It's under selection schedule. Item number seven. Yeah, I appreciate that. Sometimes I ask questions just to make sure that they're on the videotape for the community when they're watching. So thank you. Will this. I mean, I wasn't sure about this, but I looked at the. Last. Rate study, you know, I was very deeply involved in the district at that time. Will this rate study also include a specific. Five year operating budget and capital budget. For the district so that the community will know exactly where their money is going. Yeah, let me find what page that's on. It talks about them laying out a five year and 10 year budget. Yes. I'm not paid. If someone finds it for me, feel free to. Speak up. I encourage. Page 58 of the agenda under task 200 revenue requirements and rate schedule. Consultant will develop recommended alternatives for. Sorry. Consultant will conduct a detailed review of the district's operating and capital improvement budgets and one time costs associated with recovery from the CZU wildfire to determine revenue needs over five year and 10 year horizons. And then we'll develop recommended alternatives for a five year rate schedule beginning with the fiscal year starting July 1st. 2023. So I just want to make sure I'm really clear about what that means. So. A couple of years ago we did a two year budget. That one part of it was a five year look ahead. I think that your predecessor did. I think that's what is being envisioned that we will put together an operating budget and a capital budget. That would be looking ahead five years and 10 years at that same level, at least at that same level of detail. Yes. And given that we are in the middle of. Contract negotiations. Will all of that sort of come together at the same time do we need to do that? I mean, depending on when negotiations are. Finalized, then it would be taken into account in the race study. In the specific exploration of options. On tiered volumetric rates, the rationale for moving to a flat rate five years ago. Was that tiered rates were not. General tier rates. Was that tiered rates? Was that tiered rates? As part of a was that I think was a San Diego court case something somewhere in Southern California. And the volume metric rates would only be allowed in circumstances where the fine cost could be shown. To justify the volume metric rates. How, how did that. How was that discussion during the budget committee meetings? I think I would just point out that the timing of that court decision. I think colored very much the discussion during the 2017 rate study, but since then. I think that there have been other decisions that have shown that it's pretty easy to demonstrate. That increased consumption increases your costs because you have to. In our case, it would mean we'd have to pump more well water to. You know, build new reservoirs or, or. Bigger pipes. And so. The result is, is that. Everybody around us Santa Cruz. Scott's Valley. So Cal. Where I used to live, Menlo Park. All have tiered rates. And of two, three or more rates. And in some cases also have special rates. So there are ways to deal with that too. So that, that's why. That's, that situation has changed. It was just the sort of timing of the 2017. Rate study was in it. In opportune time in terms of the legal. Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, Um, allows you to establish a lowest tier that that could be somehow linked to what you believe to be say for example a number that you often bring up Bob that you know sort of the fact that our indoor usage you know is is less than the California State mandate is that you could somehow set that lower tier to incorporate those so that people that are of lower income we we can sort of help out that that group of people that maybe don't have as as big a properties or they don't have swimming pools or whatever so it's both to sort of avoid a situation where you have a flat rate which in frankly I think is sort of regressive for the the poor residents of our valley and also to encourage conservation Jeff do you want to answer respond to that as well so keep in mind here that we're studying tiered rates this is a study and we haven't predetermined that we'll end up with tiered rates there it's just one of the elements of the study so while I agree with everything gal said I'm not saying that I don't believe that including the ability to look at tiered rates in the study necessarily predetermines that we'll end up with tiered rates we'll see where the study takes us well I mean I would say the rapid skyrocketing costs of water in our district over the last few years due to rapidly skyrocketing operating costs have effectively done a dampening effect on demand as well so it'll it'll be interesting to see how that works if the objective is to try to maintain some level of revenue neutrality with respect to the volumetric rates and I'm what I'm hearing is that the cost would be considered would be the marginal operating costs associated with chemicals and and if chemicals are used and power I mean our pipes are the pipes we're not going out and putting new pipes in to accommodate the fact that somebody went from four units to six units in their particular neighborhood at least not yet okay the next one was on the shift from I also want to make sure people that might be watching this understand that their the proposal here also calls for looking at changing the mix of revenue from more variable which it is now to more fixed correct that's one yes that's one of the elements to explore yeah right but Bob there again this is not a predetermination of where we'll end up with it it's it's a request for them to run the numbers and see what it looks to see what the issue is yeah I understand that Jeff I mean but there's there's certainly a fair amount of politics so we're going to this as well the the last one on the cost of service for the different 37 pressure zones so the implication of that is that depending with pressure zone you live in you may in fact pay more for the same amount of water if that kind of recommendation were to be followed if that type of recommendation were to be followed yes there's I would just add that again emphasizing that we're we're talking about running some different scenarios so that one of the things I hope would be that there would be different ways of for example balancing fixed versus variable costs and the idea of you know I think it's worth examining the costs that the different zones have but that doesn't mean that you would ever implement anything different and I I can just give my own guess is that we probably wouldn't because it would just be too hard to why would you want to punish people that have lived at high elevations for 25 years I mean I just can't imagine personally myself wanting to do that but what we're trying to do is one of the things that I hope that comes out of this is not simply an exercise that allows us to set rates but that we actually get some information so that we understand better what our costs are and what's driving increases in costs so I see that also that's a benefit of this and so that's why some of these things are sort of hypothetical and we are like when I just said probably unlikely to do but it's worth knowing well it sounds me like what I'm I think what I'm hearing for all this is really asking the consultant that we hire to build a fairly robust financial model for the district in in sort of an analogous fashion to what the I forget the consultant's name did for the water system itself and infrastructure itself so that the objective the objective at the end of this would be to have a sophisticated model for engineering and operations and an equally sophisticated model for financing so that when let's say you decided you wanted to make a change in some element of the cost structure you'd be able to put that percentage in and it would have a ripple effect through the model the model could be extended out a number of years to match whatever it is that you need to do for planning purposes and it would also include the ability to layer in capital projects both for debt service as well as for capital projects that are funded out of operating non-operated margins for the year I think that would be a really beneficial thing and if that is what is actually being requested here you know that that's definitely a worthwhile objective oh I think you've stated what I'm hoping will be one of the outcomes how do we how do we guarantee that is one of the options so so the bid request does specify that they will build a model for us it probably isn't specified as it's as great detail as we might like but it does specify that they will build a model for us and it will be available you know for us to use on a continuing basis so and I don't actually know exactly what we had to you know what what had to go into that model but well having built a model a financial model for the district a fairly rudimentary one but that's still a model I can I tell you it shouldn't be particularly difficult for them to do that particularly people that are used to building models and do it for a living and I'm hopeful that we do get things that allow us to have percentage changes around compensation or power costs or what have you so that we can get a better handle on operating costs one of the things that struck me about the previous rate study was the fact that they were assuming a 2.6 percent increase in operating expenses over the course of the five years which I mean I have to had to smile when I read that because you know my target number in the in the discussions that we've had previously with about 1.75 times inflation which during that time was about 2 percent which would which would give you somewhere around 3.5 percent our actual increase is somewhere around six to seven percent and I think it's going to be incumbent upon us that if we're going to put together models that show rapidly increasing operating expenses that we also are equally transparent with the community in these models about what that means for rates and all of the elements in the cost structure that feed into that have to be equally transparent around that as well because a seven percent increase in rates per year or excuse me in cost per year is roughly going to be around six to six and a half percent in rates a year just to maintain your margin in order to maintain your infrastructure through either debt or capital projects in that year and that also then gets into a situation where you're doubling your rates about every 10 years Bob um do you have further questions on the Mark I'm perfectly aware this is a this is a agenda item that has to do with building I with the rate study and models I am perfectly free to comment on that and what should be in here right and I'm trying to get to with questions on this um the RFP that's been developed and I think you're I think you're trending back to the previous excuse me with all that that I said what I want to do is figure out how do we guarantee that we're going to get that kind of a financial model and I well I think let's Bob how about if I understand what you're getting at and I would be happy to entertain you providing uh the budget and finance committee through me um you know a sentence or two under task 200 or under the um final rate study report that addresses what you're concerned about because we do at Jeff says at the end we do have something about wanting a model but it isn't it isn't as specific as as you obviously want and so I mean I'm happy to do that if you because is because as I say I share I share your desire to be able to use a model um to change things and figure out how that affects rates from a thank you Dale I would be happy to do that from a process point of view um is there you know if this was something that was going to be sort of managed through the process that's one thing but if we want to put it near a fee is this do we have the opportunity to do that because I don't have that two or three sentences right now today no I guess what I what I would propose then Bob is that um that we approve going ahead with this um with the stipulation that I would make these minor changes to add one or two sentences that you provide to this effect in fact I will make that motion right now um to speak things along okay fair enough there may be long sentences but there'll be something yeah okay okay so second thank you and the to clarify the motion is to um accept these amendments and issue this rfp gail is that yes so yes and we would um that making the change the changes of adding one or two sentences that Bob provides about models and then forwarding it on to the district manager with the authorization that he advertised the rfp okay and we will try to do that expeditiously because we would like to keep with this March 6 deadline right is um is Monday early okay yeah but no later than that okay because we need to move it along no I understand I'll take care of it over no no I know I know you're still a working man so yes Monday is fine with me okay great thank you uh rick I am I muted now I you know these models whatever models we put in the rfp we have to be able to mine the information and that information needs to be available um you know like when we did the engineering models and so forth it took a large amount of time uh to to get that information I just want to be sure whatever we ask the consultant to do that information is readily available it doesn't take a year to mine I'm sure it will okay um I do see in the uh discussion of the rfp it references the uh cz u recovery costs rick will we be able to update um existing all of the existing costs we've had for cz u and then also all of the forward looking ones also so that we have a more complete that you were I think you were alluding to in the in the rfp you know we we will be able to you know give some of good estimations uh you know there's still some unknowns that may be a large cost and that's the replacement of understand that of the cross-country pipelines but the rest and the lion the lion's slide those are are could be substantial costs to the district but we'll do what we can and we will update the costs then yes okay all right well hold a second so we're talking about operating costs here at capital because we already have a five million dollar surcharge for cz u recovery so what is it that we're talking about with respect to cost because operating costs for skyrocketing before the fire and the pandemic I was speaking about capital costs because it is alluding in there to the cz u recovery costs well well but again this is where we have to be really careful about how we're communicating because the capital costs are in a different bucket than your operating costs and your capital costs supposedly have already been handled by both the fema 90 and the five million dollar surcharge it's already been levied against our community now if we're saying that we have additional cost capital costs associated with that that means to make that cz u recovery go up then that's a separate thing from my point of view than a regular rate study to deal with our ongoing capital and operational needs I'm not clear at all as to what the increase in operating costs are associated with the cz u fire recovery there were very well may be even at this point but I believe they're mostly capital let me just jump in here and say I don't think we want to get in the weeds here it might the whole section on impacts of cz u wildfire is to just provide some context and so if we need to update any of these numbers of what we think the damages are you know I think we have an estimated cost of about 50 million and that's a capital cost if that's now 60 we can change that but otherwise there shouldn't be anything in here that has to do with operation operational costs you know I can also add a line in here that says after the floods of the winter of you know of january 2023 we now have estimated capital repair costs of four million right but none of these this is all just context for them to know what the state of basically the state of the district and we would only be referring to capital costs not anything having to do with operations I think the problem with that is is that the way it's written makes it sound like there are costs associated with running the district that require the rate increase and the fact that we've already done a surcharge and then we put in oh the justification for the rate increases cz of fire that that is a mixed message to the community and I don't think that's the message that we want to say okay thank you for that comment Bob um well we do have a motion on the table in front of us we do have to ask the public and I think Alina has been right I'm going out to the public right now but just wanted to make note that we do have a motion uh comments from the public uh Alina lying sorry I just bumped that it was in my pocket apologies but thanks great discussion tonight okay so that's your comment okay uh Jim Moser can you hear me we can uh yes I also appreciate this discussion and I'm on the budget and finance committee I'm the new member one of the new two members we did discuss these issues I want to kind of we affirm what Gail said which is that the legal decision that was made right before the last rate study has had a lot of there's been a lot of discussion and analysis of it and many many many districts across the state now have tiered rates based on a variety of strategies for showing how uh the ways in which people who use more water should be paying more and the rate study structure that has been developed by the staff and approved by the committee is actually quite typical of what's going on around the state I I'm a little confused about the back and forth between Gail and Bob about these one or two sentences that are going to be added and I wondered if it could just be a little more clarification about that um I I just didn't follow the discussion very well thank you okay thanks Jim um from what I understood both Bob and Gail saying was that it was to further clarify uh details around the model um and that that's the verbiage that Bob wanted to offer in that and Gail had agreed to incorporate that since the definition on the model was uh less than what Bob was seeking okay any other uh comments from the public if not um there's one more oh okay oh I do see it now uh Cynthia and Zell good evening I just wanted to clarify um it seems unreasonable to me to believe that we are taking on all these new capital projects and there will be no new administrative or operating expenses associated with them unless all of those um administrative expenses are included in the bids in other words are we assuming that all of the contractors that are doing this work will be providing all of the um support uh you know staff uh responsibilities that are associated with this type of project thank you okay Rick you want to address that well the the majority of them will be by the contractor and then the support staff that will be working will be charged to the capital as well now the accounting and the keeping track of all the billing and and how to payable accounts receivable I don't believe that that will be absorbed and operate costs and am I correct there Kendra or do you charge your time back to the project uh so we can only capitalize um like let's say Josh or was working on the project providing engineering services or our field crew were actually providing labor in the construction of the project as far as administrative costs um we cannot capitalize those those are going to be expensive so you know all of our administrative costs for submitting to FEMA and all of that uh those get um expensed okay thank you mom quick comment well just a quick follow-up on what Kendra asked are any of those administrative costs associated with the recovery also reimbursable by FEMA um FEMA has one um they call it category Z where there are we are able to um charge whatever labor costs that we do um spend on uh submitting things to FEMA and preparing things for FEMA but I I don't know exactly what the cost share is on that um so I'd have to and there is a threshold to the amount that we are reimbursed thank you and on Jim's comment on the financial model it's basically to in my view uh help the district more transparently communicate to the to our community when it comes time for the prop 218 why their rates are going up what it is going for and why because the last time we did this um in a in a substantive way resulted in 2400 no votes which was the most ever and the enormous amount of community dissatisfaction around this I would really very much like to avoid all of that okay okay oh we have a motion in front of us um and we need to take a vote on that Holly President Smalley yes Vice President Hill yes Director Falls yes Director Mayhood yes motion passes okay uh moving on then item 11 b the district manager succession planning Rick thank you yes um the current district manager employment contract will expire in august 2024 and then and I have indicated the intent to retire facilitate a smooth transition the board desires to develop a comprehensive process for the district manager succession planning recruitment and selection process to facilitate this process it's recommended that the board establish an ad hoc committee and appoint two board members to this committee later on ask Gina if she would like to explain more on an ad hoc committee but an ad hoc committee is generally understood to be temporary the full board of directors would establish an on ad hoc committee to perform a specific task which in this case would be the district manager succession plan which will include developing a process to be approved and followed by the full board in connection with selecting a new district manager the brown act does not apply to an ad hoc committee consisting solely of less than a quorum of the legislative body provided that they are composed solely of members of the legislative body and provided that these uh that these ad hoc committees do not have some continuing subject matter jurisdiction and do not have a meeting scheduled fixed by formal action of a legislative body thus an ad hoc committee generally serves on a limited or single purse uh purpose uh the committee is not perpetual and is dissolved when the specific task is completed which would be hiring a new district manager uh the task of the ad hoc committee would be at a minimum to prepare drafts of the following uh subjects uh for the approval of the full board and that would be to develop a draft succession plan and recruitment process for selecting a new district manager to review to be reviewed and approved by the full board uh prepare a draft request for proposal for for a professional recruitment consultant for the position of the district manager and then the last any additional tasks related to the pacific task of the replacement of the district uh manager as directed by the board and if district council would like to talk more on ad hoc committee um i would turn it over to her well i think you covered it it's pretty well rick's the only thing i would add is that the resolution does put a one-year um time frame on the ad hoc committee in order to ensure that it remains an ad hoc committee so um the committee will uh dissolved after one year if it's not dissolved before then by an act of the board thank you and the recommendation would be for the board to adopt the attack like a attached resolution establishing an ad hoc committee for succession planning with the position of district manager and additionally if the resolution is adopted adopted to appoint two board of directors uh by uh motion okay thank you for that rick um point of clarification for me at this point um do we talk about this uh ad hoc committee first and then talk about uh the two individuals jena or do i do can we do those concurrently can be done concurrently um for purposes of taking action um you know you could have a motion that both adopts the resolution and the points of the two board members or you could do two separate motions either way okay all right then um i would like to cover these uh concurrently um and i would like to uh propose that uh director hill and director ackerman two members of the administration committee um be the ad hoc committee to address this director ackerman is not available this evening but i do have her uh concurrence prior to this meeting that yes she would agree to do that um as such uh let's hear from the board and let's go with jeff so i would be happy and honored to take on this responsibility um you know personally i have hired numerous people over the years and uh i think generally been very successful with my hires but anyway i think this is the right way to go with it is to have a committee develop a process that the board will prove the process and then implement it so okay thank you jeff for that it's a sink discussion uh gail um i i think this is a good plan i just um i'm wondering whether um what the timeline we're kind of considering um on doing this in other words would uh director hill and ackerman start on this right away with the idea that they would have a recommendation within a month or two and then we start to advertise or um i just like to to know and um because partly because i'm concerned that it could take um quite a while to find somebody in this labor market and so i want to just get a sense for what the expectation is my expectation would be that they would start immediately um on this process and keep it moving at board level um and not to um take or take any real time in between steps that i think we should move on it and hopefully we can put together a timeline and a six to twelve month process depending on how it moves you know and we have to have a put together an RFP we have there's a lot of board interact there'll be a lot of board interaction on this process and i would imagine it'll take six to twelve months but that's one of the first objectives that the ad hoc committee would do is try to put together a somewhat of the schedule staff okay i i'm hope my hope is that we can have um a fair amount of overlap between um having a new person on board and ricks uh so that we can have a mind meld of some sort to all the knowledge that he's acquired over the decades of work here can be transferred and that'll be part of the succession planning trying to figure out you know and again it depends on who you select and and and you know what their knowledge is of the district and so forth okay thank you for that kiel uh bob questions comments yeah just from a process point of view is the intent then that the ad hoc committee would go off and draft um this proposed process or would the board provide input or thoughts or topics that they'd like this to be covered um and then the ad hoc committee would would work just curious how we might go about them um it's my thought that the the ad hoc committee would develop the draft um and then bring that to the full board for review and comment um similar to other drafts that we've seen like this having something for us to look at first um and let them begin to put some uh you know framework strawman framework around it for us to be able to review uh jeck do you have a different thought on that um no i i think it's it's definitely important that we was doing sort of a structure first and then have it something specific to discuss and and that doesn't mean we don't want to have input from other directors uh early on in the process but i don't think we want to take time at board meetings to discuss um in great detail the process of this until we've put together something specific to you know talk about it and i expect that uh there would be frequent check-ins with the full board yes during the process of development okay all right bud i might i might um i might only suggest that the ad hoc committee may take a look at the process that was used last time that we had this situation back in uh 2014 um and um maybe not do the same thing so um or at least do it in a different way um but i think i think some of that might be instructed uh to take a look at and i think certainly rick might have some uh views on what maybe work back then what didn't that would be great input for the ad hoc committee but we'll have to start with some information gathering and bob in your case since you have been uh apparently we're there at that time uh we probably will be we'll send some queries to you and ask for some input brown act violation i think we have to be very careful about that yes we will be very careful but but we will ask for some input okay um then uh before i go off to the public um i would like to have a motion in front of us then we adopt the attached resolution um forming the ad hoc committee to develop the district manager succession planning and recruiting uh process with the two directors that we've mentioned uh director hillan director ackerman i second that okay thank you uh comments from the public i see none at this point so uh holly given that will you take a vote president smalley yes vice president hill yes director falls yes director mayford yes motion passes okay uh moving on then item 11c the lion and big steel pipeline did a word for that yes and uh this is a major project i'll ask the the district engineer to present this to the board thanks rick as rick mentioned this is a major project this is all new piping connecting our lion and big steel excuse me treatment facility and downtown boulder creek we are making improvements to the hub line where it crosses this element's river near the urwin way bridge and making some changes in the way the system operates moving certain areas from one zone to another to improve service and if everything works out according to the calculations possibly even reducing the number of zones in the district which is something that i would dearly love to see anything we can do to reduce our our exposure in terms of operations and maintenance and simply materials costs is a good thing so this project has been in the works for several years and we finally got it out to bid it's closed last week on january 26 the low bid was from monorail peninsula engineering and it's sort of hard to describe it as low because it is six million two hundred and thirty three thousand dollars by the eight bids that we received ranged from there up to a high of roughly eight point two million the second low to address what i believe president smalley will be looking at is well within that ten percent range being less than one percent different that was from granite rock with that i will cheerfully take questions okay thanks josh so another pipeline construction project great josh i hope that you're compiling the metrics um into a database of pipeline uh lineal per foot costs that we've been experiencing that is valuable not only to us but to other bid teams out there and i think we've got a a good database now so uh with that uh let me go out to questions then uh josh i don't have any at the moment okay yeah yeah i just looked at the first two are essentially trivially difference in cost and so um i was just wondering how you arrived at the recommendation for moderate peninsula engineering i mean i know of granite rock i know we do a lot of work with them and this is a big project so i just want to make sure that you're confident that monorail peninsula you know has the same kind of capacity that we know granite rock has that's an excellent question i did consider relative uh capability of the two companies while granite rock is the larger firm monorail peninsula engineering has successfully completed multiple projects in this range both cost-wise and scope-wise they recently completed a project for us at the glen arbor bridge the new crossing there so we have very recent experience with them we also have very recent experience with granite rock on quail hollow i i will say that the project managers from each company that we had on those two projects were very different and i felt that assuming the cost was the same that monorail peninsula engineering was a firm which was more interested in making sure the district got what we wanted than granite rock was and i will confess that is a totally subjective judgment based on my experience with each company with one project each by given that monorail peninsula was low and that i had that personal takeaway i felt that they should be awarded this project well that that's very helpful and i think given that we've had success with monorail and you know your subjective judgment matters to me as well so so that that answers my question thank you okay rick do you want to comment yeah just monorail peninsula also a few years back it completed the north south intertide and pump stations for the district a similar project in a high dollar amount and was very successful in that project and it's pretty much a lot of the same folks that we're dealing with on this project so we have a long history with mpe okay thanks for bob yeah they've been peas pocket by a number of times again josh you know the number of people that bit on mirrors is really great uh cost per foot approximately five hundred and twenty dollars so um larger pipe um and i think a lot of this is going to be only not a lot but some major portion of it's going to be in a state highway correct we'll be working in both highway two thirty six and highway nine yeah so that i'm at that right there you have to deal with all the you know caltrans stuff um just for grins i went back and looked at the original estimate from the original certificate of participation resolution that we did which i think still needs to get updated for a project that was dropped and that was three point five million so i was disappointed that we were three million over however we were two point five million under on quail hollow so you know we're almost even for the for all the projects as a whole as i think i mentioned back then in quail hollow you win some and you lose some and i wish granted had been a lot more um aggressive on this i'm sure they're kicking themselves right now for being a percent off um and one other question uh what is the current size and age of the pipe that's being replaced it varies i the largest of the pipes being replaced are six inch and uh that's mostly in the lion's zone down to some areas of two inch in boulder creek where we are taking advantage of rerouting some of our major transmission lines to be able to simply use those transmission lines as distribution and age varies wildly from a hundred years to maybe if it's two and some of that might be i might be a cast right from i would hesitate to put a number on it but certainly older than i am to i think the most recent pipe that we would be replacing is Rick can answer better than i but probably 20 or 25 years old i think the other thing that's important for me anyway is that i think this is also part of the water superhighway that we were trying to create from north all the way to south making right making the the ability for the district when ultimately we get through the environmental impact process for our water rights to be able to operate the district as a unified entity water source to any destination with no restrictions and that will allow us to operate much more efficiently and geesh you know josh if you can get rid of some pressure zones at the same time that's just a big bonus and i didn't realize that was a possibility but yeah please do if you possibly can i'm sure that our water master plan was a big help correct it was and so huge that we were able to do that and do it in time to be able to assist with this process so really good work josh thank you very much okay um i see that uh uh james furtato has his hand up from staff uh james did you want yeah i just want to say that from the original uh engineers estimate on this project um the project did change a lot through review of plans as we kept finding things from our mapping to what the project was that were indifferent and so it expanded and that's what really drove the cost this project to go up from the 3.5 okay appreciate your clarification josh at a macro level board level borrowing money i'm still focused on making sure we stated at 14.5 million and josh correct me if i'm wrong but isn't some of this work covered by a um cz u fire damage up by the reservoir and so forth correct there is a stretch of pipe running from big steel tank down to 236 and i believe also a small portion of lion's own pipeline on payone that will be covered by fema 90 percent it's a small percentage of the overall project but it's it's there it might get as closer to 2.5 million so that we can be in photos and that's one entirely possible okay um i'd like to make the motion then that we direct the district manager i have one quick question here oh okay we're talking 6.2 million dollars here um when do we anticipate that we're going to need to pay that money and where is the money currently that will be used to pay that the costs we will start to incur will be i would anticipate about a year out because this is another dr lyron python project so significant costs will be when materials start to come in and the project the contractor wants to mobilize so you know spring of 24 or possibly mentor prior to that as for where that money is i will defer to right yeah that's part of the loan money jeff and this will be money that were in the process of reinvesting in yes interest and we've accounted for that in that investment uh schedule okay that's what i was looking for i mean we we have a resolution that says that 14.5 million will cover this is to be applied to this project so we better not be doing anything okay um i'd like to make the motion that we direct the district manager to enter into a contract with monterey peninsula engineering uh for construction activities related to the lion and big steel zone pipeline improvements projects in conformance with mpe's bid in the amount of uh six million two hundred thirty three thousand one hundred dollars no second thank you okay uh let me see if we have any comments from members of the public on this i see none so holly would you take a roll call vote president smalley yes vice president hill yes director falls yes director mayhood yes motion passes okay um moving on to the consent agenda uh does anybody want to pull the items that are on the consent agenda for any comments seeing none um that is approved uh district reports um district managers report rick i'll give a quick update we're happy to report that the district is currently on 100 surface water from our far north reaches of boulder creek to our far south reaches of scott's valley and that water is predominantly coming from our foreman creek which we put right back in right after the cz u and from our pelton uh diversion fall creek um and there was still a lot of water out there but we are happy to uh uh be on 100 surface water and we also received another one hundred thousand dollar grant and meter replacement um but that will become your way shortly for final approval that work we're happy on both of those items good thank you rick bomb and rick just to clarify something on the surface 100 surface water our south system typically is on well water but we are able to supply them with surface water due to the emergency situation right right and we are still in an emergency situation from cz u um and but hopefully soon as part of the eir process for conjunctive use the intertize will be approved for day-to-day use from your lips your god's here soon yes um right soon as a matter of perspective okay um apartment status reports i see that we have one from the um operation staff we have any questions on that jep no gail bob uh rick answered the question i was going to ask james so there we go okay i don't have any questions either uh committee reports any questions on those from the board i'm mark sorry thank you it looks like we're going to move our money into a higher return um or at least looking at that is that what i understood from your report rick and from this budget finance committee yeah i can give a quick answer we are working on that uh we the budget finance committee reviewed uh the district manager's request uh to move uh our loan money out of the county of santa cruz a very low interest and uh look at moving we have a lot of hoops to jump through and we are moving and working on that daily right now to hopefully get that completed very shortly but yes i mean for perspective the county of santa cruz was offering a decent rate of return when interest rates were in the uh much much lower than they are now and at a risk-free rate what we're what we're seeing is with the increased interest rates there are more opportunities i think to invest the funds right okay great thank you okay um i don't see anything else um on the no written communications no informal materials um and we do not need to um re-adjourn to the closed session so without objections i think we can adjourn okay thanks folks seven forty six adjournment and um we do no no longer need to have anybody come back so we're all set and good night good night holly