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Monday, February 18 , 2019, 6:42 am | Fair 43º


Commercial Clients Confront Goleta Sanitary District About Proposed Rate Changes

Office building owners and tenants at a Thursday workshop question officials' flat-rate model, which could lead to drastic increases

Eight Goleta office buildings face huge rate increases under the Goleta Sanitary District’s proposed changes, and the owners and tenants want an explanation.

A workshop held Thursday afternoon was supposed to do just that, but time will tell whether the district heeds the concerns.

In addition to a 4 percent increase for all customers, a restructuring is designed to fix inequality in commercial building rates, which came about because the district’s staff members had no concrete definition of an office unit. A pricing model for office buildings led to disparity, with some customers paying three cents per square foot and others paying 74 cents, according to Kamil Azoury, general manager for the Goleta Sanitary District.

Rates are not based on usage such as water, gas or electric utility bills; instead, customers are given a “capacity entitlement” based on the average usage for their type of building. Residential customers get an entitlement of 203 gallons per day (per single family residence) and are charged accordingly, regardless of whether they use that much.

Office units would be given a 100 gallon-per-day entitlement under the proposed changes, but an office unit would be defined at 500 square feet. The smaller size means there would be many more office units per commercial building now, so rates are increasing — dramatically for some — in office building rates.

Customers at Thursday’s workshop said they were angry and confused as to why the district uses that calculation method. They argued that pricing based on volume and actual usage would make more sense than the flat-rate model, and suggested that water meters could be used.

Craig Minus of The Towbes Group said the company’s buildings in the Fairview Business Center at 420 S. Fairview Ave. use about 795 gallons of water per day now, but the district’s entitlements would charge for 14,500 gallons per day.

Minus said that when the entitlement and actual usage are that far apart, something is wrong.

Proposed charges would result in a $234.03 per-office-unit (500 square feet) annual rate for two years, including surcharges for the district’s $30-million construction effort, then 25 cents per square foot.

Azoury said entitlements are a planning tool to ensure the sewage system’s resources aren’t over- or under-committed. The flat rates also save on overhead, with no billing department or meter-readers, he added.

But the customers at Thursday’s meeting would have none of it, asking him and the board to re-examine the definition of an office unit and the office entitlement of 100 gallons per day.

“The question is, are the assumptions that you are proffering us the ones we should be using?” asked Jim Takayesu, a tenant at the office building at 420 S. Fairview Ave.

Beth Collins-Burgard of Brownstein Hyatt Farber Schreck said that 100 gallons per day isn’t an average or baseline, but an outlier.

Some even calculated the amount of water per employee, finding that each worker would have to go to the bathroom 17 to 20 times a day to use the amount of wastewater resources for which they’re charged.

Jeff Bermant, owner of the 5383 Hollister Ave. building, said the district has an extreme amount of wastewater resources allocated despite the fact that bills show customers aren’t using that much and most likely never will. Bermant estimates that his bill would go up 850 percent, from $4,738 a month to more than $40,000 a month on his Hollister Avenue building.

Goleta Sanitary board president George Emerson said he would take everyone’s concerns to the board. Azoury said his staff can take another look at the definition of an office unit and entitlements, in the interest of rolling out rate increases in the most equitable way.

The agency’s board is scheduled to discuss the rate increases at Tuesday’s meeting at the Goleta Sanitary District Office, 1 Moffett Place in Goleta.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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