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Goleta West Sanitary District Detachment: A Boon or Boondoggle?

The district contends ratepayers would face steep cost increases; the city says the plan would mean better protection of revenue and services

Ratepayers who live in the Goleta West Sanitary District could face huge cost increases if a detachment proposal from the city of Goleta pans out, the district contends.

Goleta would like to assume responsibilities the district has in the western Goleta Valley, such as sewer and street-sweeping services. Goleta applied earlier this year to the Local Agency Formation Commission for approval to detach from the district.

If the city succeeds, it also would have access to the district’s hefty property taxes — about $1.2 million. The district also maintains that the city would like to dip into $1.3 million of the district’s healthy reserve. That reserve, which the district set up years ago to pay for a treatment plant upgrade, now has a balance of about $30 million.

There are two sewer service providers in the Goleta Valley. The GWSD covers the western portion, including the Embarcadero Municipal Improvement District, and serves about 6,000 accounts. The GWSD also provides street sweeping to its district. The eastern portion of the valley is serviced by the Goleta Sanitary District.

Goleta West attorney Steve Amerikaner is adamant that rates would go up while services would go down, and said ratepayers can expect rates to rise dramatically between 2010 and 2015.

He contends the current rate for single-family customers, $168 per year, would increase to $352 a year for city residents and $309 a year for Isla Vista residents.

Even greater rate increases could loom later, he said.

“The way things work right now is just fine,” he said. “A better idea would be to consolidate the two districts into one.”

Amerikaner said the GWSD is open to that discussion, but that the two districts have never been able to come to an agreement. If the detachment were to succeed, the city would put the proceeds into its general fund, creating another concern.

He said he wasn’t sure how services would suffer as a result, and that it depended on how much the city diverted to other services.

“The reason the city wants to pursue this is because they want the money for city programs and services,” he said. 

It’s not an easy time for California cities financially, and because of Goleta’s revenue-neutrality agreement with Santa Barbara County, Amerikaner asserts that up to 70 percent of its taxes would go to the county, and most likely would end up serving other areas.

“They’re not being specific on how they would spend it,” he said.

The GWSD said that because the city is proposing to take over service areas in Goleta proper, it would lose about half of its customers.

“We can survive, but our rates would go up,” Amerikaner said. “If you divert money away from the sewer system, it will not serve the public as well as it does now.”

Goleta city officials disagree.

“Our first and foremost priority is to take care of those obligations to keep up the sanitary system,” City Manager Dan Singer said. “Look at the way we keep up our roads. ... We’ve done an outstanding job. Our council is committed to that quality of service. Why would they take over the system and let it deteriorate?”

Singer said that if detachment goes forward, several options would exist for how to provide the service. Contracting back to the GWSD is one option, although not likely, Singer said. “I don’t think they’re interested in talking with us,” he said. The county also could initiate detachment.

A more likely scenario, Singer said, would be for the city take over services and contract with the Goleta Sanitary District.

Singer is dubious of Amerikaner’s claim that such a high percentage of tax revenues would end up with the county.

“We obviously wouldn’t be going into this if we believed that 70 percent of this would be turned over to the county,” he said.

Singer and city representatives argue that property taxes should go for general purposes, and that most districts don’t keep their property taxes. The fees of the district cover the operating expenses, and the rest of the money is “icing on the cake money,” Singer said.

Goleta City Attorney Tim Giles agrees.

“If you’re getting a service, you should pay for that by a fee,” he said. “When they use property tax money, that’s money that can’t go to services like police, sidewalks, schools and things that people benefit from.”

Under Proposition 13, there’s only so much property tax to go around, and the “county gets less service because of the way this is structured,” Giles said. “If you do that, you can’t replace those tax dollars.”

Giles also said the language in the county’s revenue-neutrality act is ambiguous about how much of the money the county would receive.

“It could be interpreted many different ways,” he said. “I’ve thought of at least five or six different scenarios.”

Giles acknowledged that the city doesn’t have a legal right to absorb the customer base of the GWSD, and that LAFCO ultimately will issue the final decision.

“But clearly this is a typical and traditional city function, which most cities do,” he said.

The issue has proceeded slowly since February, primarily because of opposition from Amerikaner, Singer said, and the county “wanted to be sure this was being done properly.”

LAFCO is expected to look at the issue this fall, and the public will have an opportunity to weigh in, Giles said.

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

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