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Gail's Thoughts and Positions on Issues Facing SLV Water District

Emergency Preparedness for the SLV Water District

Wildfire. The highest priority is to replace all lines adjacent to storage tanks and treatment plants with ductile iron and bury them, thereby avoiding catastrophic loss of water storage and chimneying of VOCs and soot into tanks. Where long runs or difficult topography make the installation costs of ductile iron make it too costly (e.g., 5-mile line transporting stream intake water to storage tanks) either bury HDPE pipes or create defensible space around pipelines. Smaller outbuildings such as creek intake facilities or pump houses at groundwater wells should be rebuilt using rebar-reinforced cinder block and high-fire-rating composite roofing material. Finally, create defensible space around essential facilities. 

Earthquake. Where iron is used for pipes, use ductile iron, which is less likely to break in an earthquake.

Mega-rainstorms. Following the CZU fire, all facilities on the east side of Ben Lomond Mountain are going to be subject to debris flows (a fast-moving slurry of rainwater, mud, sand, rocks, fallen logs and roots) during high-intensity rain events. While the biggest debris flows are expected in the first rainy season, experience from previous intense fires demonstrates that watersheds are subject to debris flows for 2-3 years. This mostly affects the decision of when and where to reconstruct stream intake structures. Current plans are to reconstruct the Foreman Creek facility this coming spring, after the heavy rains. I think more thought should be given to whether it would be better to postpone construction of creek intakes until after the second winter, in the meantime using more well water.

Ultimately, the District should consider whether there should be less dependence on surface water. Groundwater is much less subject to damage from natural hazards. Rather than replacing all the surface water intakes, we may want to consider whether it would be better to drill a new production well.

Funding of Reconstruction Following the CZU Lightning Fire

FEMA will reimburse the District 75% for replacement and repair of facilities. Because FEMA reimburses after the fact, the District will need to obtain a bridge loan. It will also need to request State help in paying the remaining 25% and/or appealing to the federal government to have the matching requirement waived.

California state Watershed Emergency Response Teams (WERTs) have been deployed after the fire to assess damage and formulate initial emergency responses to mitigate hazards from debris flows, flooding, erosion, and rock falls. This work can be funded by FEMA or the California Natural Resources Conservation Service. The latter will also provide funding for restoring the forest on District lands.

But we don’t want to simply replace infrastructure that was there; we want to end up with a system that is less susceptible to flooding and debris flows and is more resilient to fire, including larger distribution pipes that will provide fire flows to outlying districts and structures that are more fire-resistant. A Hazard Mitigation Program under Section 404 of the Stafford Act allows for hazard mitigation projects during the recovery process, including removing standing burned trees, creating defensible space, installing barriers to trap sediment, and reseeding hillsides. In particular Item (14) specifies “replacing water systems that have been burned and have caused contamination”.  This item may help pay for upgrades to our pre-existing system. We may want to consider reducing future fire and debris flow hazards by reconfiguring surface water intakes and drilling a well on District property (e.g., at Bull Creek, where there is abandoned infrastructure and the bedrock is Lompico Formation, a known aquifer in the basin).

Financial Status of the District

Prior to the fire, the District had a structural deficit of about $2-3M/year, largely due many years of deferred maintenance prior to the current and the preceding Board. By that I mean that if we were replacing and maintaining infrastructure at the rate it should be, our annual costs for the infrastructure upgrades, contributing to the retirement benefits fund, and operating expenses would exceed revenues (mostly from water charges to ratepayers) by $2-3M/year.  It isn’t feasible to raise water rates to decrease this structural deficit. The only way to pay for large capital costs is through a bond or an assessment or by taking out a loan.  With interest rates at historic lows, it made sense to take out a loan to fund the capital projects, including a small increase in staff to implement them. 

What was a difficult financial situation, has become more daunting following the fire.  Although FEMA (and perhaps other agencies) will reimburse the District for most of the costs, some will land on ratepayers.  Moreover, FEMA reimburses expenses incurred, which mean the District has to pay for millions of dollars in repairs before starting to get money from FEMA, creating a cash-flow problem that will have to be solved with a bridge loan.

Rate Increases, Decreasing Operating Costs, and Increasing Revenue

All utility rates increase with time; the job of the Board is to work with SLVWD staff to limit the size of those increases.

Salaries and benefits (about $4M/yr) are the lion’s share of the costs to run the District, so the only way to substantially reduce operational costs is to reduce staffing over time. The SLVWD staff is about twice the size of the Scotts Valley Water District staff. This is due to the greater complexity of our system (6 surface intakes, melding of different water systems, multiple groundwater wells), the greater age of the system, which results in frequent breaks and leaks, and geography (our district covers a much larger area, with households commonly spread far apart, in a steep terrain full of landslides served by narrow winding roads that make access difficult). Producing and distributing water in the San Lorenzo Valley is always going to be more expensive than it is in flatter, more densely populated areas. 

That said, capital improvements to upgrade and simplify the system, would over time allow for a decrease in the number of field technicians servicing facilities and fixing leaks. Another way to reduce salary costs is to pursue efficiencies on the administrative side by joining forces with other local water districts to accomplish certain activities such as human resources, billing, payroll, website management, IT, or GIS management. Contracts for consultants are also a major expense for the district. Most of the consultants are not local, leading to travel expenses and salaries not remaining in the local economy. Environmental and engineering staff spend a considerable amount of their time wrangling consultants, getting them to perform their work on time.  It is worth considering whether it would be more cost-effective and lead to quicker, better outcomes to add staff in engineering, environmental, and/or communications/outreach areas and reduce use of consultants. All these things are best accomplished by allowing management to engage in long-term planning rather than cope with arbitrary across-the-board 5% cuts to annual budgets. To this end, the District should adopt multi-year budgeting that encourages management to put into place actions that over a period of years would reduce operational costs or at least flatten the annual increase.

Sale of surplus properties can generate revenue, but in the end only a modest gain is expected because most of the properties are small and of little value. Moreover, it is a one-time infusion of cash best used for capital expenses. 

Prior to the fire, Lew Farris and I had discussed the potential for raising revenue through selling excess winter flows to Scotts Valley Water District, so they could rest their wells for at least part of the winter.  This would have been possible because the District has been operating under capacity due to conservation by ratepayers, and because there is an existing intertie.

Replacing Aging Infrastructure

Before the fire I would have said that the highest priority was replacing 2” lines that are far below modern standards and lead to low water pressure and insufficient flows to fight fires. Then or now I would say that the least critical element of infrastructure to address is modernizing or consolidating the District’s administrative and operations buildings. 

In the aftermath of the fire, the most critical repairs are blasting and recoating the Lyon and Little Lyon tanks (45% of the District’s storage capacity) to eliminate VOC contamination, and removing falling trees and burning roots around the Lyon tank and treatment facility and access roads that pose hazards to property and workers. Rather than replace all 7 of the damaged or destroyed creek intake facilities near Boulder Creek, I believe the District should assess whether it would make more sense to drill a new production well, and shift more of the District’s water supply to groundwater, given that groundwater is less subject to damage by natural hazards. There is time to make these decisions because reconstructed surface water intakes near Boulder Creek cannot be used until Spring of 2021 at the earliest due to the likely debris flows brought down by intense rain events in the upcoming winter. 

Ratepayer Assistance Program

I was in favor of the District implementing the pilot RAP, though I suspected that the amount of assistance offered was too small to attract many takers. That has proved to be the case, as the program is under-subscribed. Under ordinary circumstances I would have advocated doubling the assistance, and making it revenue-neutral by a slight increase in connection fees. But after the fire, the Board and staff have more urgent matters to attend to, so I think that, for now, the RAP should remained unchanged.

Environmental and Watershed Protection

I believe that the award-winning, environmentally sensitive way in which the Probation tank was constructed is an example of the most substantive way in which the District can express its commitment to good environmental stewardship.

The CZU fire has made more urgent the need to complete the District fire management plan, so I think this should be fast-tracked.

Linking up with environmental groups to mobilize volunteers to help maintain District lands (e.g., remove invasive species from District sand hills properties, trash removal on the Zayante properties) could help the District and provide opportunities for informal education about District lands and activities.

I support the District's ban on use of glyphosate on its lands. I consider the ban an established District policy adopted by the Board in response to wishes expressed by voters in 2018; hence, I do not consider the use of glyphosate an issue in this year’s campaign.

District-sponsored Environmental Education Programs in the Schools and Other Outreach Activities

The District’s environmental education programs in the local schools were eliminated in 2019. In an ideal world, it would be wonderful if the District could reinstate these activities, but being realistic I don’t see that happening in the next few years. The District used to have two staff members engaged in environmental, regulatory, and outreach work; it now has one, and, before the fire, it was all she could do to keep up with fulfilling all the county and state requirements to move ahead with replacing aging infrastructure. In the aftermath of the fire, her workload has increased mightily. The District is facing a huge financial burden to repair all the infrastructure damaged and destroyed by the fire, even with FEMA picking up 75% of the cost, so all resources will have to be directed there. Once we are through the crisis of the next two years, I think the District should be more aggressive in working with local school teachers to get federal grants to pay for educational activities. I know from my experience writing grants to fund my geologic research as a Professor at Stanford, there is a great deal of grant money available through the National Science Foundation and the Department of Education for real-world science and engineering educational programs to enrich K-12 school curricula and to increase teacher competence in STEM fields.  I know how to navigate this system, and would work with Valley school teachers to write proposals that would provide funding for the educational activities and a staff member to coordinate them.

We don’t have the staff to engage in extensive outreach activities, but we could gain some of the same benefits by having researchers come to us by inviting them to work on projects of interest to the District (e.g., regrowth in burn areas; effect of the fire on salmon habitat in Fall Creek; more fine-grained studies than provided by the U.S. Geological Survey of debris flow hazard in the creek drainages that supplied District surface water; numerical modeling of run-out and inundation zones of debris flows of a range of volumes using FLO-2D and LAHARZ programs; geochemical modeling of well waters to determine sources of ions that affect palatability or are toxic; additional computer runs of ModFlow 6 to test the effects on groundwater levels of a range of increased pumping rates of District wells; social and economic barriers to rebuilding destroyed homes in the Valley).

Potential Sale of the Zayante Watershed Properties

For years, the District's Zayante watershed properties have been on a list of surplus properties that could be sold. District Manager would like to surplus the Zayante properties because we don’t have the water rights, and they create nuisance maintenance problems due to homeless encampment and dumped trash, and are a potential liability due to trespassers. There are no immediate plans to sell them, and the District Manager has placed them on a list of surplus properties flagged for further study before a decision is made. If we were to sell them, I am concerned that construction or tree removal by a new owner might degrade Zayante Creek in such a way that it indirectly limits withdrawals from our Quail Hollow and Olympia wells fields to meet SMGWA’s groundwater sustainability plan benchmarks. This is a good reason to retain the properties if the nuisance costs are fairly small. If the properties are to be sold, I favor selling the property with a conservation easement in place (e.g., Sempervirens Fund) that would severely limit construction and tree removal.  

Engaging with Santa Margarita Ground Water Agency (SMGWA)

My top priorities in engaging with the SMGWA are (1) to critically assess the quality and accuracy of work by consultants on groundwater basin modeling and climate modeling; (2) to clearly communicate the technical aspects of the deliberations to other Board members and ratepayers; and (3) to make sure that decisions about groundwater management in the Basin do not impose costs on the District out of proportion to the potential benefits to the District.

We need to make sure that the SLVWD does not pay a disproportionate share of solutions that largely benefit Scotts Valley Water District. The SLVWD wells do not have as serious a problem with overdraft as the SVWD wells. Similarly, we need to make sure that solutions proposed for the Santa Cruz Mid-County Groundwater Association that are familiar to the Santa Cruz members of SMGWA are not “imported” to the SMGWA, because the geologic settings and hydrologic problems are quite different. For example, an idea that has been floated is to drill a very expensive managed aquifer recharge well to raise groundwater levels in the Lompico aquifer in the eastern part of the basin, based on a decision to drill such a well in Mid-County in a different aquifer for a different purpose.

While protecting the financial interests of SLVWD, we need to use SMGWA to develop stronger cooperative relationships with SVWD and Santa Cruz Water Department so that we all three entities have greater flexibility in responding to emergencies such as faced by SLVWD following the CZU fire or to longer-term issues such as drought and climate change.

Board Role and Deliberations

In my view, the primary roles of the Board are (1) to set District priorities in collaboration with District staff with input from ratepayers and (2) to safeguard the current and future financial stability of the District. This includes providing feedback and final approval of policies developed by staff, approving capital projects and major purchases, and adopting a budget and having oversight of the finances of the District. I have been impressed with the dedication and competence of the District's current high-level staff. In my opinion, the Board too frequently gets bogged down on minor matters that could be better left to staff (e.g., the wording of a letter; the details of a policy), while breezing over decisions that have consequences in terms of lost revenue or increased costs amounting to hundreds of thousands of dollars.
 
If elected, I would work to make Board meetings more efficient so that more time could be devoted to important issues, and I would encourage use of Roberts Rules of Order to better organize consideration of issues. Too often there is a motion on the table and then things devolve into discussions of finer points or of issues that should be taken up separately at a later date. I am results-focused, so will work to find the middle ground on contentious issues, so that most members of the Board can agree. And when a compromise can’t be reached, I would model respectful disagreement.  
 
I believe that the District and the Board members must do a better job communicating clearly with ratepayers. It is not easy to find information on the District website, and once found the information is often not in a readily digestible form  (e.g., post-fire water analyses). If elected, I would devote time to writing clear summaries for Facebook and NextDoor of work the District is undertaking and the reasoning behind decisions made by the Board and staff with the goal of providing ratepayers with a better understanding of the District and a platform for them to easily ask questions and provide feedback to me as a Director. 

I would bring to the Board a wealth of experience from my administrative and leadership roles at Stanford University participating in high-stakes meetings (e.g., University Budget and Strategic Planning Committee) and chairing meetings of people with strongly held, widely divergent views (e.g., as Chair of the Faculty Senate). In my interactions with ratepayers I will draw on 45 years of teaching experience, in particular, introductory courses that wove geology, hydrology, human land use, and climate change to give students an understanding of the landscape they live on.


Paid for by Gail Mahood for SLVWD Director
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