Montecito sewer rates could go up by a maximum of 14% each year for the next five fiscal years starting July 1.

The Montecito Sanitary District’s Governing Board on Wednesday voted 4-0 to move forward with the Proposition 218 process to increase rates. It set a public hearing for 2 p.m. June 10 to allow property owners to submit written protests to the proposed increases.

Director Dana Newquist was absent and Director Woody Barrett appeared virtually over Zoom for the meeting.

The board hasn’t voted to raise rates since 2019.

While the board is pursuing an increase of up to 14% per year, rates might not actually go up by that much if the district can secure grants or other financial support to help with repairs and operations, staff explained. 

If the majority of property owners don’t protest the rate increases by June 10, then the board will be allowed to vote to increase the rates.

Current Rates

Montecito residential property owners pay a fixed amount in sewer rates based on type, regardless of parcel size. The rates are collected on property taxes.

Under the current rates, the owner of a single-family dwelling pays $1,480 yearly, while the owner of a condo or second dwelling pays less, at $696. 

Commercial parcel owners pay rates based on water usage and amount of wastewater.  

The district’s rates are already the highest compared with nearby areas.

A single-family home in Goleta, for example, currently pays $530.38 per year compared with $809.52 in Santa Barbara, $824.73 in Carpinteria and $1,351 in Summerland. 

Montecito Sanitary District staff attributed that, in part, to the way sewer lines are placed.

There are roughly 77 miles of line connected across lots of various sizes. Lines that service the 3,150 businesses and residences located within district boundaries are not neatly placed side by side or clustered, which can make them expensive to repair and service.  

Why 14% Increases Per Year

District staff began a comprehensive review of the district’s wastewater system needs and financial obligations last year. 

They developed a five-year capital improvement plan and identified $60 million in needed capital improvements. Those include much-needed repairs and upgrades to the district’s sanitary plant, which was built in the 1960s, staff said.

Other capital improvements in the planning pipeline include sewer main upgrades and lift station repair, among others. 

The district hired a consultant firm for a rate study — its first rate study since 2016 — which came up with that yearly 14% increase number. 

That number allows the district to maintain fund balances, meet planned debt services and finish capital improvement projects over the next few years, paired with a planned $42 million debt that would be issued in fiscal year 2029, per the rate study. 

The district’s current sewer rates can’t keep up with escalating costs and needed improvements, staff said.

District General Manager John Weigold said that every month the district delays on its capital improvement projects will cost an extra $250,000 to complete them.

Board president Rock Rockenbach emphasized that these rates “are ceilings — they are not floors.” 

“In other words, if Oprah donates $20 million to the district next year — Oprah, if you’re listening, we’ll send you the mail address — we might not have to raise rates at all,” Rockenbach said. (Media mogul Oprah Winfrey is a Montecito resident.)

If capital improvement projects “fall out, if the cost of steel comes down, if we get an infusion of grant money that doesn’t have to be repaid … if any of these unknown contingencies occur, we adjust. Because it’s a special district, we do not profit. We charge the cost of operating,” Rockenbach added.

Weigold told the board that while he understands “nobody likes to see double-digit rate increases,” the district’s pressing problem is that its board hasn’t voted to increase rates in years. Because of that, the district is now “really getting hit on a number of fronts” with costs, he said.

If the board didn’t vote to move forward on Wednesday with sending the notices about the 14% maximum yearly increase, the board would have to wait another year to increase rates, Weigold said.

In that time, that 14% would go up to 22% because of escalating costs, he said. 

“Your cost of doing business continues to escalate,” he said. “… There’s urgency in all of this. There’s urgency in getting the projects done, there’s urgency in adjusting the rates as soon as possible, because delaying increases the costs of doing these projects and it increases the cost of the rate.” 

How Proposition 218 Works 

The district can increase rates under a state law called Proposition 218. Property owner opponents of a proposed rate increase (such as water and wastewater) can submit what is known as a written protest ballot.

Only written — not verbal or emailed — protests will be counted. Protests must include the person’s name and signature, their address or parcel number, and their stated opposition.  

If the district receives 50% plus one protests against the rate increase, the board can’t approve the increase, staff explained. 

That 50% plus one number includes all the district’s serviced parcels, not just the owners who submit written protests. 

Mailing notices will go out to the affected parcels this month. A copy of the rate study is available on the Montecito Sanitary District’s website.