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Monday, December 10 , 2018, 5:02 pm | Mostly Cloudy 63º


LAFCO to Weigh In on Proposed Goleta-GWSD Detachment

Commission will hold a hearing Thursday as questions about reserves, property tax revenues and rates remain unanswered

The first third-party decision regarding the City of Goleta’s proposal to detach from the Goleta West Sanitary District is expected to come Thursday.

Much has been said about the proposal from both sides, but the Santa Barbara County Board of Supervisors delayed taking a position on the detachment in April, asking first for a LAFCO study on the application’s merits.

The Local Agency Formation Commission, which will discuss whether the city’s summer application has lapsed, will meet at 2 p.m. Thursday in the fourth-floor Board of Supervisors meeting room in the Santa Barbara County Administration Building, 105 E. Anapamu St. in Santa Barbara.

The application will either be determined valid and sufficient, or not — in which case, the city could have to start all over.

Goleta West asked LAFCO for the hearing months ago, before the city completed its application, according to Goleta West General Manager Mark Nation. He said he believes the city’s application is incomplete, despite the lengthy process that led up to it.

“There’s not enough information for the commission or the public to really weigh in if they think it’s a good idea or not,” he said. “Something of this magnitude needs more details. The devil’s in the details.”

Goleta and Goleta West have each hired consultants to analyze the financial and service impacts of detachment, but their information has conflicted in nearly every area. Everything is a “could be,” not a “will be,” including where the property tax revenues would go, who would provide service to the City of Goleta and how fees would be affected.

As far as Goleta Mayor Eric Onnen knows, there has been no direct communication between the two groups. He said the process has taken a long time to get to LAFCO, but that there’s been no reason to rush into this. The logistics of detachment have been undecided, with nearly all of the important questions left unanswered.

The City of Goleta then would need a sanitary district provider, whether it contracts with GWSD or the Goleta Sanitary District or creates its own district, which officials have said is very unlikely. GSD, despite remaining neutral in the detachment issue, roughly estimated that it would cost $310,000 annually to cover the areas in Goleta vacated by GWSD.

Goleta West’s service area would include areas north of Goleta but mostly Isla Vista and the Embarcadero Municipal Improvement District. But LAFCO has the last say on which entity serves EMID, so GWSD could be left with Isla Vista as its primary — and almost only — customer.

“If the detachment happens and our services are needed, then we will provide them; if not, then that’s fine,” GSD General Manager Kamil Azoury said.

While Goleta West has expressed a willingness to consider merging with GSD, the district has opposed it.

Then there’s the big question: What happens to the reserves and property tax revenues that GWSD gets as a special district? Well, most of the $29 million in reserves is earmarked for Goleta West’s portion of the GSD treatment plant upgrade — and everyone agrees on that. The $50 million project will go out to bid soon, and construction most likely will begin early next year, Azoury said, adding that construction will be phased so the plant can maintain the same level of treatment will no impacts to service.

Property tax revenues are another story. All of the groups involved have financial skin in the game, and in the current economic climate, the $1.5 million in property taxes that go to Goleta West is looking good.

The city’s revenue neutrality agreement with the county means it would never see $1.06 of that money, but Onnen and other city officials have been pushing for renegotiation of that almost decade-old agreement. While there has been no communication that the city is willing to rethink most of the provisions, Onnen said he has received the impression that the county wouldn’t pursue the revenues from the detachment.

“We interpret it that way, but an interpretation is not good enough,” he said. “It has to be very clearly spelled out, and that would require amending the neutrality agreement.”

Goleta West has pointed out that, without any changes, Goleta would have to give 60 percent of the tax revenues to the county, so there’s no financial incentive to detach.

“If we get the approval for detachment, before we execute that, we’ll clarify from the county how they enforce they’ll enforce the revenue neutrality agreement,” Onnen said.

Finally, the possible impact on rates. There are a lot of discrepancies, as Goleta insists there will be no detachment-based fee increases, and Goleta West argues that customers, especially in Isla Vista, will see much bigger numbers on their bills.

All sanitary district fees will increase during the next five years because of treatment plant upgrade costs, but estimates vary as to how much they’ll go up.

Goleta West’s low rates are possible because it subsidizes them with property tax revenues, which would end if detachment goes through. Estimates have ranged from $309 to $360 within the next five years, according to each side’s financial reports.

LAFCO’s executive officer, Bob Braitman, recommended that the application be considered valid in agenda attachments, and the next step would be a hearing on the merits of detachment. LAFCO has the authority to decide whether Goleta can detach as well as the power to determine what happens to the district’s reserves.

While Ventura’s LAFCO and others have policies in place for application expiration, Santa Barbara has no such policy, “nor has there been a demonstrated need for such a policy in the past,” according to agenda documents.

Noozhawk staff writer Giana Magnoli can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk or @NoozhawkNews.

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