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Santa Cruz County health officials for more than two months have been waging an intensive battle against an outbreak of hepatitis A, a potentially deadly virus.

When Bill Smallman, a director of the San Lorenzo Valley Water District, announced two weeks ago that he would be requesting a Civil Grand Jury investigation of his own board and staff, citing a lack of transparency and payment of Terry Vierra’s legal bills, his four colleagues remained silent.

An privately owned antique Brookdale firetruck lost its brakes coming down a steep hill on Larkspur Road in Brookdale on Monday, Sept. 11,, failed to negotiate a turn and slammed into a corner of the bridge across the San Lorenzo River.

San Lorenzo Valley Water District ratepayers are still paying legal bills connected to actions by former director Terry Vierra.The original November 2014 lawsuit challenging Vierra’s role in a 2010 real estate deal in Boulder Creek – filed by Boulder Creek ratepayer Bruce Holloway – was split nearly two years ago into two case numbers but based on the same set of facts: one with Vierra as the defendant, and one with the water district as defendant.In the first case, Vierra faced individual penalties for violating state conflict-of-interest laws. The second case was created when the judge ruled that Holloway did not have standing to sue and separated the district from Vierra’s conflict-of-interest case.Vierra decided to appeal to the Sixth District Court of Appeal. Holloway also appealed, contending that the real estate deal was illegal because of Vierra’s actions, and should be voided.The appellate court this month decided to coordinate the appeals of both cases, which means the same panel will hear all arguments related to Vierra’s conflict of interest. Oral arguments are likely a year away.The coordination of the appeals may simplify things for the Court of Appeal in San Jose, but it makes sorting out the legal payments difficult for ratepayers, because the same law firm, Colantuono Highsmith & Whatley PC, of Grass Valley, is representing both Vierra and the water district. Details of legal bills may be protected under lawyer-client privilege.Payment of legal bills with ratepayer money has been a hot button for many SLV water ratepayers.The district paid approximately $160,000 for Vierra’s legal bills in Superior Court, for the trial and for an unsuccessful attempt to convince the trial judge to reverse his own decision. In April, the water board decided it would not fund a continuing appeal, and Vierra decided to continue on his own.In his appeals, Vierra is asking the appellate court to reverse a December 2016 Superior Court decision that resulted in a $9,346.67 fine, plus $116,647.47 in plaintiff’s legal fees. Vierra is arguing that he did not violate the state Political Reform act when he and his wife pocketed real estate commissions from a 2010 water district decision in which the trial judge determined Vierra had participated.In its defense of Holloway’s appeal, the water district is arguing that even if its decision to buy property in Boulder Creek was illegal, the decision cannot be challenged in court by its ratepayers.A Superior Court judge in October 2015 had separated the district from the Vierra lawsuit brought by Holloway, and said Holloway did not have standing to seek to void the 2010 contract even though it involved a conflict of interest. The district has called this a “victory.”State law gives citizen taxpayers the right to challenge illegal expenditures by public agencies. The trial judge said that law didn’t apply to Holloway.On April 3, Gene Ratcliffe, president of the Board of Directors of the San Lorenzo Valley Water District, stunned a packed Boulder Creek meeting room with the announcement that the board had just voted in a closed-door session “to stop all financial commitments to the Political Reform Act case,” which Ratcliffe described as “the case of Bruce Holloway versus Terry Vierra, the San Lorenzo Valley Water District, etc.”The district had actually been separated as a defendant in that case 18 months earlier, leaving Vierra as the only defendant.“Now that a legal decision has been rendered and reaffirmed by the judge,” she said the board had concluded unanimously that “the district’s obligation [to Vierra] is complete.”Any decision to further pursue an appeal of the case would be “his [Vierra’s] choice moving forward” – and presumably at his expense – added Ratcliffe.On July 14, the announcement by General Manager Brian Lee of the July 13 decision by four water district directors proposing five years of water rate increases included in its “Frequently Asked Questions” the question: “Will any funds from the proposed rate restructuring be spent on legal fees related to the Terry Vierra case?”Lee’s first answer:  “No, for two reasons: 1) the district is no longer funding legal costs in the Holloway/Vierra case: and 2) the proposed rate restructuring would support capital improvement projects and building the District’s emergency reserves.”In a later version of this statement, Lee added this qualifier: “Legal costs are considered to be operational costs and therefore would not be funded through this [rate restructuring] proposal.”There is no language in the legal document that is the subject of a final Sept. 21 public hearing on new water rates that includes any language with regard to “legal costs.”On Aug. 17, Lee reported to the water district directors that he had paid a $13,624.61 bill from the Colantuono law firm for “services through June 30.” The board accepted his report without a vote, following its new procedures for approving payment of the water district’s monthly bills.The Colantuono firm had been retained by the board early this year to convince a Superior Court judge to reverse his own decision in December that had ruled Vierra had violated state conflict-of-interest law when he was on the water district board. That ratepayer-funded Colantuono effort to seek a new trial for Vierra was rejected by the judge in March, which prompted the water board’s April decision to stop paying Vierra’s legal bills.Lee authorized payment of $2,473 to the Colantuono firm for “services through April 30,” on July 20.Colantuono, meanwhile, had continued to represent Vierra after April, presumably at the former director’s expense.The law firm in June unsuccessfully sought to reduce Vierra’s legal obligation to pay plaintiff Bruce Holloway’s legal bills.Sometime in late June or early July, Colantuono was asked to take over the board’s appeals, although the only record of any board discussion of the appeals was at a closed-door meeting on July 20.The board’s discussion included the Terry Vierra case that it had publicly washed its hands of in April.That discussion occurred one full week after Colantuono filed a stack of supplemental briefs in the case in which the district is still the defendant.The district never announced it had retained Vierra’s lawyer for its appeal, and it was unclear who made the request or when it was made.The firm was paid $13,624.61 on Aug. 17 for work done “through June 30.” A July invoice from Colantuono could appear in the Sept. 21 bill list.The water district changed its district counsel on July 1, hiring Nossaman LLP of Los Angeles, which assigned Gina Nicholls as the district’s counsel. She is to be paid $370 per hour.“Our representation of the district does not include a representation of the individuals or entities that are officers, directors, joint ventures, employees or members of such entities,” Nicholls wrote in her contract.The previous district counsel, Marc Hynes, who originally represented both Vierra and the district in the Holloway lawsuit, continues to be paid a retainer of $3,500 per month through September.

The so-called “green rush” has jarred Santa Cruz County, where the value of a retail cannabis license has soared to more than $2 million.

 

Ratepayers in the San Lorenzo Valley Water District late last month received a letter – in many cases a stack of letters – about the five years of water rates increases set to go into effect in November.The letters provided information about the new water rates, and included “protest forms” that can be sent to the district about the new rates.If more than 50 percent of ratepayers file individual protests of the rate increases by Sept. 21, the rates will not go into effect. That is a requirement of Proposition 218, the “Right to Vote on Taxes Act” approved by California voters in 1996.This will be the ratepayers’ only opportunity to influence SLV water rates until 2023.Social media sites roiled with confusion and questions after the district decided in late July to mail 23,000 letters to the 7,900 SLV ratepayers. Many property owners who received multiple letters were confused about what to do if they wanted to protest the water rates.“I have one hookup, two parcels and I got four letters, wrote Felton resident Dana Weigand on Facebook.Antoinette Barker of Boulder Creek told the Press Banner she has two parcels, two meters, and got three letters. “How many protest letters can I send in,” she said. “If I send in the wrong number, will they all be thrown out?”Many other owners of multiple parcels expressed similar concerns.The latest explanation by the district late Wednesday of how to determine who is eligible to file a protest letter? “One vote per parcel that is receiving water from the district.”Repeated attempts to further clarify the issue with the water district were unsuccessful.The district’s initial explanation of how eligibility to file protest letters would be determined – “one vote per parcel that is receiving water service from the district” – did not address issues of multiple parcels served by a single meter, a common occurrence in the mountains.Then Holly Morrison, board secretary said the policy would be “one vote per meter,” in an email sent at 11:38 a.m. on Wednesday, Aug. 9.At 2:13 p.m., Morrison sent an email stating that her earlier response had been in error: “It should be one vote per parcel.”When the district was told by the Press Banner that this “one vote per parcel” policy would be very confusing for multiple-parcel owners, general manager Brian Lee, through his public relations spokesman, Bill Maxfield, decided to return to his original explanation: “one vote per parcel that is receiving water from the district.”Despite repeated requests for clarification for people who have multiple parcels, Maxfield, speaking for Lee, would only say: “The district would request that you publish the statement as is and allow customers to contact the district with questions. Since each of these scenarios is apparently unique, district customer service staff is available to work with each customer to clarify questions.”Questions about specific problems of district homeowners in deciphering the district’s policy were not answered and dismissed as “hypotheticals.”Customers earlier in the week told the Press Banner they had received conflicting and contradictory information from district staff.“To ensure the least likelihood that we would miss any property owners and protect the district’s legal right to lien properties for nonpayment, we sourced the distribution list from the county tax roll rather than our customer service database,” said Lee on Tuesday, in explaining why the district didn’t simply mail the rate-increase letters and accompanying protest forms to its smaller mailing of ratepayers.The protest forms sent by the SLV water district, addressed to “owner and/or tenant,” said valid protests must be signed, and told property owners they could identify their parcel, their address or the water district account number.Lee said this week that if people in a household complete and return each protest form they received from the district, the district will match them against its customer list.Protest letters stating opposition to the propose rate increase do not have to be on the protest form supplied by the district, he said, but they must include an address, date, printed name and signature. He said the district this year will allow scanned or photographed versions of signed letters to be emailed to the district.“The addition of email receipt of protest letters is an improvement over SLVWD’s 2013 rate increase process, which did not allow for email receipt,” said Lee. He said written protests are received and stored by district staff at the office, and will be opened and tabulated in public view following the public hearing to be held Sept. 21,  at Highlands Park Senior Center in Ben Lomond.Proposition 218 requires that districts give notice 45 days prior to the final public hearing. Lee said SLV mailed its notices approximately 55 days prior to the scheduled public hearingThe protest procedure will exclude participation by many apartment dwellers and residents of mobile home parks that use a single meter for all residents. For example the 200 residences of the Vista del Lago mobile home park on Whispering Pines Drive in Scotts Valley will not be able to register valid protests of the water rates because a single bill for a single meter goes to the park management, which bills residents for water on a pro-rated basis. The manager will get one vote.SLV water rates will increase 29 percent for a typical family in November, and a total of 61.5 percent over five years, If fewer than 50 percent of the ratepayers send in protest letters.The Scotts Valley Water District chose a different approach when it went through the Prop 218 process for its water rate increase last year.Piret Harmon, general manager of the Scotts Valley district, said “We sent the Prop 218 Notices to the 3200 account holders – the individual identified as the responsible party (either owner or tenant) for the account.”“We eliminated multiples if we were able to identify them,” she said.She said the Scotts Valley letters were addressed to the account holder,” not to “owner/tenant.”Scotts Valley did not include a sample protest letter.       The district received 181 protest letters, she said.“The district’s operating principle for the Proposition 218 process for the proposed rate restructuring is to provide our customers with as much or more opportunity to engage, and protest if desired, than is required by law,” Lee wrote the Press Banner.“The most important step in that process is notification of the public.”

The following story is the result of extensive interviews with law enforcement officials, assistant district attorney and court records. It contains graphic details that may be disturbing to some readers.