Supervisors Hand Small Water System Oversight to State in 4-1 Vote
Board of Supervisors • Santa Cruz CountySeptember 15, 2026
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Santa Cruz County will stop regulating 68 small drinking water systems. On Sept. 15, 2026, the Board of Supervisors voted 4-1 to return that oversight to the state, choosing budget relief over the objections of operators who said they trust local regulators. The same meeting showed budget pressure at every turn: a demand for a leaner conflict-defense contract, a transit sales tax headed to voters and a rejected push to give voters the final say on AI data centers.
- 4-1 vote ends the county's Local Primacy Agency, shifting 68 small water systems to the state
- Conflict-defense RFP sent back for a rewrite after the current contractor called it biased. The 5-0 vote also set a Dec. 15 deadline for a recommendation.
- Half-cent METRO transit sales tax qualifies with 11,377 valid signatures and heads toward the ballot
- AI data center ballot measure fails 3-2 as supervisors ask for more study first
- North Rodeo Gulch residents warn that unrepaired road slides threaten wildfire evacuation
Small Water Systems Return to State Control
The basics: Since 1994, county Environmental Health has served as the Local Primacy Agency, or LPA. That means it regulates small water systems with 15 to 199 connections on the state's behalf. The State Water Resources Control Board's Division of Drinking Water will now take over that role.
Why it matters: The program costs the county more than it collects in fees. But many operators told the board that local staff are the regulators they trust.
Where things stand: The program runs on 1.3 full-time employees. State grant funding ended in 2021, and staff said fees would have to double just to close the current gap.
"However, the status quo seems to be unsustainable," said Andrew Strader, Director, Environmental Health.
"If we were to double our fees, a community water system serving 50 households would then be paying $5,172," said Sierra Ryan, Water Resources Program Manager, Environmental Health. Ryan said that is more than 7.5 times the state fee.
New regulations would raise local staffing needs to at least 1.75 employees. Staff pointed to two precedents: Monterey County's smooth handoff to the state in 2025, and this county's own return of surface-water systems in 2017.
A staff survey drew responses from 26 of the 68 systems. More than 70% wanted to keep the LPA, but only 23% said they would pay enough to close the current gap.
The other side: Four public commenters urged the board to keep or restructure local control:
- Troy Boone, an environmental consultant and former LPA lead, proposed merging the program with the land use section rather than ending it.
- Martin Mills, operator of Pure Source Water, cited poor state service and said his system could absorb a fee increase.
- Becky Steinbrunner, a Pure Source Water customer, feared higher state costs and forced consolidation. She cited the Big Basin Water Company emergency.
- Adam Holbrook, operator at Jarvis Mutual Water Company, said he feared a more punitive relationship with state regulators.
Supervisor Kimberly De Serpa has 27 of the systems in District 2. She floated tabling the item until the San Andreas Mutual appeal on hexavalent chromium is resolved.
"Delaying this decision just creates more uncertainty for us, for the state, and for the water systems," Ryan responded.
"So today I will be standing with my small water districts and voting no on this," said De Serpa.
Decisions and stakeholder impacts: Supervisors Manu Koenig and Justin Cummings and Board Chair Monica Martinez cast the move as a response to unfunded state mandates. Koenig noted the county could petition to resume primacy later.
"This does seem like an area where we will likely not see service interruptions, and at the same time we can have some cost savings," said Justin Cummings, Supervisor, District 3.
"Throughout our budget hearing process back in June, we started to identify areas that our county was subsidizing non-mandated services," said Monica Martinez, Board Chair and Supervisor, District 5.
Supervisor Felipe Hernandez moved the item, and Koenig seconded. The vote was For: 4 (Cummings, Hernandez, Koenig, Martinez), Against: 1 (De Serpa), Absent: 0.
The county saves money. Small-system operators and their customers trade a local regulator for a state agency they openly distrust.
What's next: Cummings requested a transition update in six months. Martinez asked about technical-assistance and liaison roles the county could keep.
Conflict-Defense Contract Faces a Rewrite
The basics: Conflict defense covers criminal cases the public defender cannot take, usually because of a conflict of interest. The county pays the Page firm a flat monthly fee for first-tier conflict cases and uses a panel for additional conflicts. The current contract expires July 1, 2027.
Why it matters: The board is weighing cost, flat-fee contracting and a possible county-run alternate defender office. The county created its Institutional Public Defender's Office in 2022, following a 2020 Sixth Amendment Center report.
Where things stand: Staff proposed a request for proposals (RFP) that would score bids on five criteria:
- Effective representation
- Interdisciplinary services
- Client outcomes
- Organizational stability
- Cost
Under the plan, staff would compare defense models and bring a recommendation by December or January.
Page firm representatives pushed back hard. A staffer from the firm's alternate defender office called the RFP unfair and predetermined toward a public-defender model. Mitchell Page, who heads the firm, said its recordkeeping requirements misunderstand how conflict defense work is done. Nikki Pennebaker, an alternate defender with the Page firm, called the RFP overly onerous. She said the firm plans to bid as a nonprofit and that switching models would harm clients.
The other side: Cummings moved to keep the earlier RFP, citing perceived bias.
"I don't think that we should be moving into a new RFP process when we don't even know what our options are," Cummings said.
Staff defended the process on several grounds:
- The RFP is legally required.
- New RFPs reflect current best practices.
- Itemized hours support Medi-Cal and MAA claiming.
- Flat fees may become illegal.
"We're required to contract out services every 4 years," said Nicole Coburn, County Executive Officer.
Koenig raised cost growth in the public defender budget, which he said has risen from $14 million. "It's up to $21 million now. That's a 44% increase," said Manu Koenig, Supervisor, District 1.
Decisions and stakeholder impacts: Cummings' motion produced no action. Martinez offered a substitute motion to keep staff's timeline while retooling the RFP, but it died without a second.
Koenig then moved a compromise, seconded by Martinez. It directs staff to:
- Revise the RFP to give more weight to effective representation and price
- Cut the overall requirements
- Bring the revised RFP back for approval
During debate, De Serpa questioned the cost of holistic defense. "It is staggering how much each one of these people costs to this county," De Serpa said.
The vote was For: 5, Against: 0, Absent: 0. The Page firm got a leaner process, but a county-run model remains on the table.
What's next: The County Executive Officer must return by Dec. 15, 2026, with a recommended conflict-defense model for service beginning July 1, 2027.
AI Data Center Ballot Measure Stalls
Why it matters: For now, decisions on where data centers can go stay with the board rather than voters.
Where things stand: Cummings asked staff to draft ballot language for the March 2028 election. His measure would require majority voter approval before any general plan amendment allowing AI data centers or high-intensity computing facilities. He cited electricity, water, noise and pollution impacts. He also pointed to the county's Measure A and Measure D precedents and recent actions in Monterey Park and Mendocino County.
A Davenport resident and a county Information Services Department employee, speaking as a private individual, backed the proposal. The employee argued that the economic benefits of data centers are overstated.
"We don't have anything in the code that specifically regulates this," said Stephanie Hansen, Assistant Director. Staff said any data center proposal would likely require an environmental impact report, which would take at least a year. County counsel noted uncertainty over whether state or federal law could preempt local rules.
The other side: "I see this as a pretty low risk for our community," said Koenig. He put the last practical date to place a measure on the ballot at around Dec. 10, 2027.
"I just don't know enough about AI data centers or any data center to make this sort of sweeping decision," said De Serpa, who requested a study session.
Martinez also said she would prefer a study session to learn where the technology is heading.
Decisions and stakeholder impacts: The motion failed: For: 2 (Cummings, Hernandez), Against: 3, Absent: 0. Martinez and De Serpa were among the no votes.
What's next: Supervisors called for a study session and are watching pending state and federal legislation. No date was set.
Rodeo Gulch Neighbors Sound Evacuation Alarm
Why it matters: More than half a dozen North Rodeo Gulch residents linked unrepaired road slides to wildfire survival.
Where things stand: Residents spoke during general public comment.
- Dr. Daniel Spillman, a physician, called the washouts a serious evacuation risk and urged the board to triage the budget for critical items.
- Jim Gilchrist said the slide has gone unrepaired for years and objected to a 2028 repair date.
- Linda Gilchrist said the fire department has called the road indefensible.
Speakers described a one-lane road persisting for roughly a decade. They cited a countywide road need of $40 million to $50 million a year.
Rob Darcy said more than 300 residents rely on the road and that none of the three alternate escape routes meet county road standards. He asked Central Fire, the Sheriff's Office and OR3 to encourage neighbors to cooperate on those routes. He also asked the agencies to respond in writing to the NRG Firewise board.
Decisions and stakeholder impacts: Koenig said two slides are funded for construction in 2027, with 2028 marking project close-out. The third slide is unfunded because the year it occurred was not a declared federal disaster. He urged colleagues to use local funds to fix all three.
"It sort of doesn't make any sense when it comes to evacuation planning that you would fix 2 out of the 3 slipouts that are actually reducing the capacity of the road," Koenig said.
What's next: Martinez noted the board cannot deliberate on items not on the agenda. Any funding decision would have to come back as a future agenda item.
Transit Tax Heads Toward the Ballot
Where things stand: Petitioners submitted 15,473 signatures on Aug. 4.
"The County Clerk Registrar of Voters has deemed the petition sufficient with 11,377 valid signatures," said David Brown, Analyst, County Executive Office.
The initiative would impose a half-cent (0.5%) sales tax starting April 1, 2027. The money would maintain and expand bus and paratransit service and fund fare programs. Because it is a tax measure, the board must send it to voters. No public commenters spoke.
Decisions and stakeholder impacts: Cummings moved to accept the certification under Elections Code 9118, and Hernandez seconded. The vote was For: 4, Against: 0, Abstain: 1. Koenig, who disclosed he had been a proponent of the initiative, did not participate. Martinez congratulated Friends of Metro.
What's next: Staff will return within 30 days with the resolution and documents to call the election.
- Six-home subdivision advances: Supervisors approved in concept, 5-0, a Planned Unit Development and negative declaration for six homes near Thurber Lane and Mission Drive. The vote included an emergency-only access link between neighborhoods. Second reading is Sept. 29.
- Consent agenda passes 5-0: The package adds 52 shelter beds through Housing Matters at Bridge House and Live Oak Landing. It also includes a $10 million Fairgrounds Community Resilience Center grant application and responses to the Grand Jury.
- Heritage oak plea: Deborah Morrison asked for a county arborist review to save a heritage oak on a parcel planned for development.
- Duchenne thanks: Joanna Edmonds thanked the board for its World Duchenne Awareness Day proclamation.
Looking ahead: The board meets again Sept. 29 for the subdivision's second reading. Key dates to watch: METRO election documents due within 30 days, and the conflict-defense recommendation due by Dec. 15, 2026.