[Noozhawk’s note: This is the first in a series of articles exploring the South Coast water agencies, as well as regional and state issues affecting them.]
When compared with Southern California, chaparral-blanketed southern Santa Barbara County is incredibly verdant. Both people and plants seem always to be happily watered in this slice of coastal paradise, but there actually are many more homes, businesses, farms and ranches here than there is water for.
At first relying upon wells and small reservoirs on the coastal side of the Santa Ynez Mountains, and later damming the Santa Ynez River on the other side of the mountains — diverting its waters to reach the South Coast — Santa Barbara’s seaside residents have gradually built an infrastructure over the past 100 years that, for the most part, provides faucets and irrigation systems with an uninterrupted supply of water.
There was a multiyear drought about 20 years ago that spurred voters into asking for a connection to the State Water Project, which had long been spurned as unnecessary. While water politics are often complicated in any part of the American West, connection to a statewide water distribution system was a momentous turn down a road of complexity that has only intensified as the needs of people and the environment evolve.
Today, most of the South Coast’s water still comes from the Santa Ynez River watershed. Montecito has Jameson Lake, the city of Santa Barbara has Gibraltar Reservoir downstream, and the entire South Coast uses water from Lake Cachuma, even farther downstream. Filling in behind the U.S. Bureau of Reclamation’s Bradbury Dam, Cachuma accounts for 80 percent of the region’s water supply. For the agencies that need it, State Water is delivered from farther north, via San Luis Obispo, and deposited into Cachuma. Water from the lake then flows through the Santa Ynez Mountains in the 6½-mile-long Tecolote Tunnel, emptying into the 26-mile South Coast Conduit — the spine of the South Coast’s water system.
Although there are five separate water agencies on the South Coast —- each with its own unique issues — they are all inextricably intertwined by the South Coast Conduit and a common water supply. Now that Cachuma and the South Coast Conduit are nearing six decades in use, both the physical and administrative components of the regional water delivery system have come under scrutiny as officials decide how best to go about ensuring a safe, reliable water supply well into the future.
Over the next several weeks, Noozhawk will examine each of the South Coast’s water agencies in close detail, outlining the challenges they face individually and together. The most logical place to start this series is with the Goleta Water District, which begins at the outfall of the Tecolote Tunnel.
Part One: Watering the Good Land
Stretching from Santa Barbara’s city limits all the way to El Capitán on the Gaviota coast, the Goleta Water District has more customers (nearly 80,000), delivers more water (more than 14,000 acre-feet, or 4.6 billion gallons, annually), and covers a larger land area (about 29,000 acres) than any other South Coast agency. Because of its size and volume, it also shoulders the biggest share of financial responsibility for the regional water system.
While all water districts have issues to deal with, a strong argument can be made that in addition to its other superlatives, the Goleta Water District is also the most contentious on the South Coast. From the “Goleta Water Wars” of the 1970s — when the existing board of directors imposed a moratorium on new water connections, ostensibly to limit development — to the much more recent controversy that arose over chief financial officer Eric Ford’s selection, and subsequent dismissal as general manager, the district’s board meetings have a reputation for attracting passionate individuals and, sometimes, colorful language.
COMBing Out the Wrinkles
Now under the leadership of John McInnes — who previously served as Santa Barbara County’s director of long-range planning and later as its assistant executive officer — the Goleta Water District has been a strong proponent over the past eight months of commencing work on a list of much-needed distribution system repairs and upgrades that had been suggested by the Cachuma Operation and Maintenance Board. As its name suggests, COMB is responsible for operations and upkeep of Lake Cachuma and the South Coast Conduit, and because it contributes 40 percent of COMB’s budget, the Goleta Water District is entitled to a representative with two votes on the board.
Things seemed to be going smoothly after COMB hired engineering firm AECOM to perform an analysis of the South Coast’s aging regional water infrastructure. By last spring, COMB staff had devised a list of eight projects that, among a list of many more, were deemed the most crucial to the system’s reliability. Calling for a $16 million bond issue and matching Proposition 50 funds from the state to pay for the construction costs, COMB told its member units that not only were the projects needed, but that in the current economic climate, construction could most likely be completed at or under budget.
At the top of the list was the $9 million “second barrel,” a redundant 8,200-foot section of pipe running from the outlet of the Tecolote Tunnel to Goleta’s Corona del Mar Water Treatment Plant, 1510 Glen Annie Road. Designed to restore overall system capacity of Cachuma’s distribution system, COMB general manager Kate Rees touted the project as a necessity for water districts to continue to provide uninterrupted water service during the hot, dry summer months when demand is typically highest.
Cost sharing was to be based upon the breakdown created when the Cachuma Project was built in the 1950s — Goleta paying 40.42 percent, Santa Barbara 35.88 percent, the Montecito Water District 11.5 percent, and the Carpinteria Valley Water District 12.2 percent. Carpinteria’s board and staff — facing withering criticism from customers over high water rates — balked at its suggested share, saying use of the system’s pipes for state water and other purposes called for a readjustment of percentages. Charles Hamilton, CVWD general manager, also contended that the second barrel would have more of a direct benefit to Goleta and Santa Barbara customers.
Over the past eight months, South Coast water agencies wrangled over details as construction deadlines have come and gone, but still no repairs or upgrades to the South Coast Conduit have been made. The list has all but fallen into disarray, and the only project before COMB right now is the second barrel.
After Carpinteria’s board elected not to participate in COMB’s proposed bond issue, the other agencies agreed to shoulder the burden. Montecito then chose to self-finance using its own reserves, and the COMB representative from the Santa Ynez River Water Conservation District, Improvement District 1, commonly known as ID-1, began to look like a tennis spectator as COMB’s plan was constantly changed. (ID-1 isn’t directly involved in any of the South Coast’s water issues, but because it is a voting member unit of COMB, it had to legally indemnify itself every time the game changed.)
ID-1 had a few other issues it needed to work out with COMB, and got the regional agency’s attention by becoming the latest entity refusing to endorse the embattled second barrel project. On Monday afternoon, COMB and ID-1 forged an agreement.
The second barrel may yet be approved, but there appear to be deeper issues needing resolution.
“When (COMB) was formed,” McInnes told Noozhawk, “no one could have envisioned the challenges we face today. But times have changed and challenges have changed, so it’s time to take a look at the structure of COMB.”
Closer to the Fold
Regional issues aside, once water from outside of Goleta’s rolling hills and wide swaths of agriculture-ringed suburbia flows into the district’s 230 miles of pipeline, its water policymakers face another unique set of challenges.
Ford, for 10 years the district’s chief financial officer, served also as interim general manager when general manager Kevin Walsh abruptly retired in October 2008. After going through a selection process for the open position, the district’s board of directors selected Ford as its next permanent general manager, and extended him an employment offer.
That is as far as Ford’s managerial stint went. During the previous decade as CFO, he had written and managed the district’s financial policy, also coordinating investment of district funds into municipal and corporate bonds. Investment by municipal agencies into corporate bonds is regulated by the state, but Ford said he had written the district’s policy to be more conservative when it came to which bonds it would invest into.
When the bond market, along with the rest of the economy, tanked in the fall of 2008, it came to light that Ford had invested repeatedly into CIT Group bonds that did not rate high enough to comply with the investment policy that he himself had written. Enter Jack Ruskey, persistent finder of problematic details.
The Ruskey Factor
If ever the Goleta Water District faces a problem, Ruskey is almost always on hand to point it out. A one-time candidate for the district’s Board of Directors — he and director Bert Bertrando ran as a slate in 2006, but only Bertrando was elected — Ruskey has distinguished himself at board meetings with his technically behind-the-scenes, but physically in-your-face involvement in nearly every minute detail of the district’s business.
When he caught wind at the end of 2008 that the district stood to lose millions of dollars from Ford’s investment into CIT Group bonds, he began rallying for Ford’s removal. Ruskey also alleged that Ford had been “churning” accounts, producing district financial documents indicating that Ford had presided over nearly 70 transactions — worth about $192 million — made on the CIT account by Greater Pacific Securities since 2000.
“Ford said bonds should be held to maturity, but he never holds them to maturity,” Ruskey said of Ford’s entreaties before the board not to sell off the CIT group bonds when the financial trouble began in 2008.
It took a while for Ruskey to achieve what appeared to be his desired effect, but at the 11th hour, after an employment offer had already been made, the board voted to rescind its offer in August 2009, eventually reopening the position and hiring McInnes two months later.
Urging board members to sell the plummeting CIT Group bonds, Ruskey continued to pursue the issue, calling for Ford’s removal from his position as CFO. Ford has been on administrative leave since December, but district officials have been unable to give details or comment on when he will return to work.
“It’s a personnel issue,” McInnes said a week ago. “That’s all I can say.”
Becky Cantrell, a certified public accountant on the district’s staff (Ford is not a CPA), has been filling in as CFO, and the district hired investment advisory firm Public Financial Management (which is also used by the financially robust Goleta West Sanitary District) to rewrite its investment policy for a one-time fee of $10,000.
Ford has not responded to multiple requests for comment.
Weathering the Financial Storm
As with other public agencies, the Goleta Water District has felt the pinch of economic hardship over the past year. Although the district has not yet adopted the type of tiered water use fee structure that is fast becoming the conservation-oriented standard of water districts everywhere, water use among residential customers has dropped significantly this year.
“Revenues are down about $1.5 million,” McInnes said. “People are using less water.”
Monthly water rates for the district’s customers currently are $3.71 per hundred cubic feet, or HCF, for residential; $3.55 per HCF for residential conservation (customers using an average of 4 HCF or less); $2.17 per HCF for reclamation irrigation; $1 per HCF for agricultural irrigation; and $2.68 per HCF for recreation irrigation. The district measures its rates per HCF. One HCF is 748 gallons, and there are 436 HCF in one acre-foot of water, which is approximately 326,000 gallons.
Unbudgeted expenditures in the district, such as $400,000 to treat water contaminated by ash from the 2008 Gap Fire, have added to the organization’s burden. Several maintenance projects have had to be postponed as a result.
Still, the district is pressing forward with its water supply plan, which will look at water sources, their costs, and a list of best- and worst-case scenarios related to delivery.
“We don’t want to be resting on our laurels,” McInnes said. “Our groundwater supply is in great shape, but many people have lived through drought, and we need to look at our water supply over a multiyear period. There are wet years and dry years.”
McInnes said the document will be available to the public for review within the next 90 to 100 days.
Moving ahead, the Goleta Water District has a lot on its plate. Water supply decisions will have to be made as UCSB’s Long-Range Development Plan wraps up, and the district is looking at expanding use of recycled water.
“There are a lot of issues and challenges I’ve inherited at this district that are pretty monumental,” said McInnes, adding that his No. 1 goal is to make sure his board of directors remains better informed than ever before to ensure good decision-making.
“None of those challenges are insurmountable, but there’s a lot of work to be done.”
— Noozhawk staff writer Ben Preston can be reached at bpreston@noozhawk.com.