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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.

 

While 2,400 students at Scotts Valley Schools, like many of their counterparts across the county, stared at dense fog with and without special UV-shielding glasses on Monday, Aug. 21, about 100 Boulder Creek Neighbors, fans of the popular Facebook page, gathered at Crest Farm near the of the tallest mountain  in the San Lorenzo Valley, Ben Lomond, overlooking Boulder Creek. There, above the morning fog, they relaxed in the morning sun, and with cameras, telescopes, pin-hole cameras, and special sunglasses, observed a solar-lunar phenomenon that captured the imagination of much of the U.S.

Announcing: Bay Photo of Scotts Valley is sponsoring the 2017 Back-to-School Photo Contest in the Press Banner.

“The people of this state do not yield their sovereignty to the agencies which serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know, and what is not good for them to know. The people insist on remaining informed so that they may retain control over the instruments they have created.”                                               The Ralph M. Brown Act, California Government Code

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.

Directors of the San Lorenzo Valley Water District this year were worried by the threat of a lawsuit from former director Terry Vierra, as they continued to pay his legal bills in a conflict-of-interest case, director Bill Smallman revealed this week.“The threat of Vierra suing the district has been brought up numerous times in closed meetings ever since I got on the board,” said Smallman.Smallman went public this week with a request for his colleagues to release a 2014 letter from Vierra to the board. Board President Gene Ratcliffe said in April that Vierra had written the water board, asking it to pay his legal bills arising from his actions as a director in 2010. A judge would rule two years later that Vierra had violated state conflict-of-interest law.“This is a public communication and needs to be released,” Smallman said this week, referring to the letter.The district’s lawyer in those closed-door meetings, Marc Hynes, also was representing Vierra. Each month, the water board would pay Hynes’ $3,500 monthly retainer plus the legal expenses of Vierra’s efforts to contest the conflict-of-interest charges, even after he lost the initial court case.Ratcliffe in April refused to release the letter, claiming it was protected by “attorney-client privilege.” District general manager Brian Lee reiterated that claim this week in response to a new request from the Press Banner for the document.Legal experts have said the Vierra letter should be a public record if it is, as described by Ratcliffe, a simple written communication from Vierra to the board.“There is fear that Vierra is going to sue the district, and I think this letter will be essential to fight this, so I believe it is important that we get a hold of it as soon as possible,” said Smallman in an email to the Press Banner.He and his fellow directors were each asked individually this week by the Press Banner to release the letter, and offered an opportunity to say why it should or should not be released. The other directors – Ratcliffe, Margaret Bruce, Chuck Baughman and Eric Hammer – ignored the request.The Vierra letter “may, in fact, be a deterrent for Vierra to not even try to file a lawsuit,” said Smallman. He said he would request a copy of the letter at the next board meeting, “and future meetings” if necessary.Vierra lost the conflict-of-interest case, and was fined $9,000 by a Superior Court judge, who also later denied Vierra’s request for a new trial and for a waiver of the payment of plaintiff Bruce Holloway’s legal bills.The district’s ratepayers ended up paying more than $160,000 in Vierra’s legal bills before directors pulled the plug on April 3, when Ratcliffe revealed the existence of the Vierra letter.About half of these payments went to Marc Hynes, who also was the district’s own counsel until July 1, and who represented Vierra. The district had been separated from that Vierra case since October 2015.The new district counsel hired to replace Hynes, Gina Nicholls of Los Angeles, traveled to Boulder Creek on Wednesday to meet separately with each director to discuss issues surrounding the Vierra letter raised this week by the new Press Banner inquiry. It was not clear whether she had seen the letter or been briefed about the controversy surrounding it.Smallman said the issue of the letter came up briefly at the April 3 closed-door session in which his fellow directors – facing growing public concern about paying Vierra’s legal bills and the prospect of escalating payments for an appeal – reversed themselves and withdrew financial support for Vierra.This had been Smallman’s public position since he joined the board shortly after Vierra lost his court case in December.After the unanimous vote to end payment of Vierra’s legal bills, Smallman said there was no vote to withhold the letter. He said Ratcliffe referred to it and told her fellow directors it could not be released because of “attorney-client privilege,” which is what she said publicly two days later in response to a Press Banner inquiry.Smallman said he did not see the letter. He believes other board members have.“I have no idea what is in this letter,” he said.He said that in the closed-door meeting on April 3, he made his first request to release the letter, which prompted Ratcliffe’s response.Ratcliffe told the Press Banner that “the letter is subject to attorney-client privilege and should not be released publicly at this time.”“As soon as that changes, we’ll be happy to release it,” she wrote in an April 5 email.Because of these changes in the relationship between Vierra and the board, and the hiring of a new district counsel on July 1, the Press Banner on July 17 renewed its request for a copy of the letter.On July 26, board secretary Holly Morrison said, “There are no documents responsive to your request.” Brian Lee, general manager of the water district, clarified that response on July 31 by saying “Attorney-client privileged documents are exempt from disclosure under the California Public Records Act. Ms. Morrison’s response remains correct.”“A letter from an ex-director addressed to anyone in the district, including its legal counsel, would not be privileged,” and should be available to the public, said Terry Francke in April.  Francke is a Sacramento lawyer and a recognized expert in open meetings and public records law in California. He helped write the Ralph Brown Act, the California open meeting law.Ratcliffe had said the Vierra letter was strictly a letter from the former director to the board. She did not say that the letter was sent to or from an attorney. Nonetheless, she said the board chose to withhold the letter from the public.Ratcliffe also refused to say when the letter was written, who received copies, or whether the board had ever actually voted to keep it private.Ratcliffe, Hammer and Baughman were sworn in as new directors at the Dec. 18, 2014 board meeting that saw the election of Bruce as board president. Vierra had not sought reelection in 2014. Smallman was elected and Bruce was re-elected in 2016.Holloway’s lawsuit alleging that Vierra had illegally profited from a real estate commission from the purchase of property by the water district was filed on Nov. 7, 2014.One of Bruce’s first actions, in her first closed-door session, was to ask directors to agree to pay Vierra’s legal bills. At the time, the district was added as a defendant to the lawsuit after it had chosen not to be a plaintiff with Holloway. Over the next two years, the district argued that Vierra, while benefiting from a district real estate deal, had not participated.If Ratcliffe’s account is accurate, the Vierra letter or some reference to it must have been presented to the new board members at that fateful Dec. 18, 2014 meeting.On April 5, 2017, Ratcliffe wrote in an email to the Press Banner, , “I can tell you with 100 per-cent clarity, the letter is very straightforward with regard to the request for the district to support Mr. Vierra’s defense and contains no other statements, questions, or opinions.”