Water intertie project likely to be scaled back

A decrease in state funding has likely caused an emergency intertie project between Scotts Valley, San Lorenzo Valley and Santa Cruz water districts to decrease its scope.
The original intertie project included seven emergency interties that would allow the three agencies, along with Soquel Creek Water District to share drinking water in the event of an emergency.
In fall 2012 the districts anticipated nearly $10 million in Proposition 50 Water Security, Clean Drinking Water, Coastal and Beach Protection Act funding to help pay for the $18.9 million project.
Soquel Creek dropped out of the project last year changing the scope and cost. In May 2012 the full grant application was submitted to the California Department of Public Health, estimating the cost of six interties between the three districts at $12.86 million. The state responded in April 2013 and stated the project was eligible for $6.9 million in grant funding. However, in May the CDPH contacted Scotts Valley Water District, which is the lead agency for the project, saying it had overcommitted the Prop. 50 funds statewide and had about $3.9 million available for the project.
In June, SLV dropped the idea to build an intertie to the Lompico water system after residents along the intertie route questioned the environmental planning process related to the Lompico intertie.
According to cost estimates from SLV, the remaining five interties would cost $12.06 million. SLV would be on the hook for just over $6.5 million, $3.9 million would come from Proposition 50, Scotts Valley Water District would pay $1.5 million and Santa Cruz Water Department would pay just over $159,000.
At a SLVWD board meeting Thursday, July 18, district General Manager Jim Mueller said that San Lorenzo Valley could not afford to spend $6.5 million from its reserves, which stands at about $7.3 million.
“$6.5 million is not a number we can pledge from our cash on hand without brining us down to basically no cash,” Mueller told the board.
Mueller noted the district should keep two months worth of operating costs on hand (about $750,000), and the district’s reserve fund policy calls for another $1 million on hand for emergencies.  
Mueller’s staff offered two alternatives, both which would decrease the cost to SLV.
n Keep four interties, but eliminate the intertie between the Felton system and the north part of the SLV system. The cost would decrease to $10.73 million with SLV to pay for $5.59 million.
n Keep four interties, but eliminate the intertie between Scotts Valley Water District and Santa Cruz Water Department. The cost would decrease to $8.803 million with SLV paying for $4.58 million.
Mueller recommended to the board that option two is the most sound financially for the district.
Jay Moseley, the board president of Scotts Valley Water District, attended the meeting and asked to set up a meeting with SLV board members to discuss the options. No vote was taken at the meeting.
For a full description of the project: www.slvwd.com
Proposed interties
n No. 1: Santa Cruz and Scotts Valley along Highway 17 to Pasatiempo.
n No. 2: Scotts Valley to SLV south system along Lockewood Lane in Scotts Valley.
n No. 3: SLV north to SLV south systems between Graham Hill road and East Zayante Roads in Felton
n No. 4: SLV south system to Mount Hermon.
n No. 5: SLV to Lompico (Option has been eliminated)
n No. 6 Felton to SLV north system along Highway 9.