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Friday, January 18 , 2019, 2:29 am | Fair 54º


Goleta Council Moves to Detach From Sanitary District

The city says its plan addresses a disparity in how residents pay for sewage collection and treatment

Amid speculation as to what the city of Goleta might or might not be able to do with additional funds, the City Council a week ago voted to approve a tax allocation agreement as part of its plans to detach from the Goleta West Sanitary District.

The unanimous vote came amid dissent from GWSD Director Larry Meyer and the agency’s attorney, Steve Amerikaner, who have been trying to keep the city from fragmenting the district’s boundaries.

“I really think this is a mistake,” Meyer said at the meeting last Tuesday afternoon.

The district serves the portion of the Goleta Valley west of Los Carneros Road, as far as the Embarcadero Municipal Improvement District, just outside the city’s western boundaries. Unlike the Goleta Sanitary District, GWSD is funded by service fees as well as property taxes

Because of its existence before the 1978 passage of Proposition 13, which changed the way property taxes are handled in California, the district continues to receive revenue from property taxes, as well as for fee-based services, building a sizable reserve in the process. The district has accumulated about $30 million in reserves, with about $21 million coming from property taxes.

In detaching the area in its boundaries from the GWSD, the city argued that it would be addressing an imbalance in the way residents pay for sewage collection and treatment. Because of the additional revenue from property taxes, the city said, residents in the GWSD area pay $14 a month for services, while residents in the GSD area pay about $34 in fees in addition to property taxes, effectively subsidizing those in the GWSD area. The city also has said that transfer of the reserves to the city coffers would give the money more protection from state raids.

Plans to detach include a transfer of about 78 percent of the total annual allocation, based on the valuation of the properties within the city’s boundaries, leaving 22 percent with the district, which also operates in the unincorporated areas.

If the city were to detach, which is still a decision to be approved by the Santa Barbara Local Agency Formation Commission, the agreement requires that about $20 million be taken off the top from the estimated $30 million reserves to pay for a necessary upgrade to the Goleta Sanitary District waste treatment plant. While GWSD collects sewage and sweeps streets in its area, it doesn’t have its own treatment facilities, sending its effluent instead to the GSD plant. The district has long been building its reserves in anticipation of the $50 million project.

The rest of the reserves would be split between the city’s general funds and the district.

For all of the city’s intentions, however, GWSD attorney Steve Amerikaner said that Goleta might not get as much as it thinks it will, given the city’s Revenue Neutrality Agreement with Santa Barbara County. A condition of its incorporation in 2002, the city agreed to share up to 50 percent of its revenues with the county, in some cases unto perpetuity. The city has been attempting to renegotiate the agreement with the county, but he county, which has been negotiating on behalf of the district, has not been willing to discuss the RNA.

“The county did not want to engage in that dialogue whatsoever,” said City Attorney Tim Giles, who advocated that some of the property taxes used to upgrade the treatment plant be considered in RNA negotiations as they would be used for “regional benefit.”

Given the RNA and other factors, Amerikaner said, detachment “will likely produce serious fiscal problems.” He cited numbers giving the district $360,000 annually, the city $378,000 in revenue per year, and the county about $882,000 yearly as a result of the RNA. Meanwhile, he said, ratepayers could be experiencing rate increases they might oppose, and the city will be legally responsible for a sewage system it might not be able to support.

Councilman Eric Onnen was doubtful that Amerikaner’s gloomy predictions would come true, as the council voted 5-0 on the agreement, and the process that is now in LAFCO’s court.

“The rate increases will be much different than your projections, the net benefit will be much different than your projections,” he told Amerikaner, “because yours are based on assumptions that benefit the Goleta West Sanitary District.”

Noozhawk staff writer Sonia Fernandez can be reached at .(JavaScript must be enabled to view this email address).

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