The city is applying to the Local Agency Formation Commission to stop using the district’s services, but county officials have not taken a position on the proposal. The county could remain neutral, support the city’s proposal, or apply for unincorporated areas — such as Isla Vista — to detach as well.
If detachment goes through, the property tax revenues currently going to Goleta West would be divided between Goleta and the county. Tax revenues are currently used to subsidize rates and are applied toward capital improvement projects. Although LAFCO has the power to allocate Goleta West’s reserves as well, most of those funds are and would continue to be earmarked for the district’s share of the neighboring Goleta Sanitary District’s $50 million treatment plant upgrade. GSD is paying for its portion of the project with some cash and a $20 million loan.
Under Goleta’s current revenue-neutrality agreement with the county, reallocation of the tax revenue would direct 70 percent of the property taxes received to the county fire district and 30 percent to Goleta.
According to a revenue-neutrality synopsis of 2009-10 tax information, Goleta West receives about $1.5 million in property taxes from within the city of Goleta and about $127,000 from unincorporated areas. Reallocation of the funds after detachment would award about $455,000 to Goleta and $1.06 million to the county. Mayor Eric Onnen has said the detachment proposal has no financial incentive without a renegotiation of the revenue-neutrality agreement.
It’s not yet clear how sanitary district services would be provided for the detached areas, either. Services could be contracted out to Goleta West or GSD, or Goleta could create its own service, which city officials have said is unlikely. Goleta West is “prepared to consider” consolidation with GSD, according to a letter to the Board of Supervisors from Goleta West counsel Steve Amerikaner, but GSD opposes a merger.
Board documents include many e-mails from GSD general manager Kamil Azoury, who has expressed the district’s neutral position on detachment but opposition to a merger with Goleta West; merger attempts have been made at least three times in the past 20 years. GSD submitted a proposal, with a cost estimate of about $310,000, to cover Goleta West’s territories within the city upon request. The district would be responsible for user charge adjustments and wouldn’t have access to the property tax money used to subsidize rates, according to the e-mails.
“Goleta Sanitary District does not desire to become a player in an alternative governmental reorganization,” Azoury wrote.
Goleta West has loudly opposed the detachment proposal. The two financial reports — one financed by the city and another by the district — came up with wildly different estimates in many areas.
In a letter to the supervisors, Amerikaner requested that the board oppose the detachment proposal and instruct its LAFCO representatives — chairwoman Janet Wolf, Joe Centeno and Doreen Farr as an alternate — to deny the application.
Detachment would lower the quality of sewer and street sweeping service and increase user fees, Amerikaner asserted. Financial reports conclude that fees in Isla Vista will increase rapidly over the next five years, but the city’s estimates are too high, he wrote. Goleta West’s estimate was a jump to $309 from $168, while the city’s report projected $360.
Fees are subject to protest, since ratepayers can vote to block a service charge hike, and there could be future revenue shortfalls, Amerikaner said.
Goleta West has criticized the proposal on more ideological grounds as well. The city, it maintains, has argued that two providers are not necessary, but in detaching, it would require three, as the city must get services to the detached areas — even if such services are subcontracted.
Use of the property taxes is also a touchy subject. Goleta has criticized Goleta West for underwriting sewer capital projects and subsidizing rates with tax revenue, so it would be disingenuous for the city to claim it would use the taxes for the same purpose, Amerikaner wrote. The city would likely use the taxes for general city services, city manager Dan Singer has said.
The Board of Supervisors meeting begins at 9 a.m. Tuesday in the board hearing room on the fourth floor of the County Administration Building, 105 E. Anapamu St. The hearing is one of the last items on the agenda, so it will likely not be heard until the afternoon.
— Noozhawk staff writer Giana Magnoli can be reached at firstname.lastname@example.org.