Montecito Water Part 1: Is a Merger in the Works?
By Melinda Burns
A merger of Montecito’s small, independent water and wastewater treatment districts, the dream of a group of wealthy Montecitans who raised more than $250,000 to win control of both agencies during recent elections, is now under study by a Los Angeles consulting firm.
In February, the Montecito Water District and Montecito Sanitary District boards voted overwhelmingly to split the $47,000 cost of a study on consolidation “to determine if there is a business case affirming that the two Districts can and should consolidate.”
“This is just to see if this is something that would work or not work for our community,” Dorinne Johnson, the sanitary district board president, said at a Feb. 24 board meeting. “We’re not trying to rush anything.”
The water and sanitary boards also voted jointly to retain the California law firm of Colantuono, Highsmith & Whatley to handle consolidation matters. If the study shows that a merger would be beneficial, they plan to proceed with further studies required by Santa Barbara County Local Agency Formation Commission. Consolidation would not necessarily require a vote by the ratepayers.
The study is being conducted by Raftelis, a company that works with water and wastewater utilities nationwide; the results are expected to be made public later this year. But there’s already strong support for consolidation on both Montecito boards.
“My feeling is that even if initially there’s more cost and more people have to be hired at both districts, I’m still for it,” Woody Barrett, vice president of the sanitary district board, said at a joint district committee meeting on Feb. 8. At a board meeting that month, he added: “I’ve said this all along: I don’t think there’s going to be much cost savings in the consolidation of the districts, but I think the efficiencies are going to go way up.”
Most of the board members on both districts, including Johnson and Barrett, ran for election on “Water Security Team” slates that were recruited and backed by such deep-pocket donors as Bob Hazard, a past president of the Birnam Wood Golf Club and an editor of the Montecito Journal. At district meetings and in his columns, Hazard advocated tirelessly for the consolidation of the water and sanitary districts and cityhood for Montecito.
Over the course of the 2016, 2018 and 2020 elections, with $256,000 in campaign funds, including generous checks from members of Birnam Wood and the Valley Club, the golf resorts on East Valley Road, the slates captured nine out of 10 seats on the water and sanitary district boards.
Gary Fuller, a sanitary district board member who ran against the Water Security Team, cast the sole vote against the consolidation study on either district board this February. Fuller said he viewed consolidation as“the first step of efforts toward privatization” of water in Montecito.
“Our board has a lot of support for it, but I don’t see that there is any public support for it,” he said.
Building plan scrapped
During the 2020 campaign, the Water Security Team took aim at the Sanitary District’s plans to replace its dilapidated and cramped offices at 1042 Monte Cristo Lane with a $4.6 million operations building. The project was approved by the Montecito Planning Commission, but the new district board majority cancelled the contract in February, 2021. Fuller voted against the cancellation. Under emergency permits, three trailers on district property are providing a staff room, office space and toilets for employees.
“Even with consolidation, Montecito would still need infrastructure for the collection and treatment of wastewater,” said Brad Rahrer, who was hired last June as the new sanitary district manager. “The water district cannot provide the certified operators to do that.”
Hazard did not respond to requests for comment on consolidation this week. But Ken Coates, the water board vice president and a former Water Security candidate, stressed at a joint district committee meeting in January that the focus was on “the longer-term strategic benefits” of consolidation, “rather than short-term cost savings … We’re looking further into the future rather than at what we can get out of this tomorrow. How do you get the community on board so that it doesn’t object?”
Raftelis was chosen for the consolidation study in part because the firm recently helped the water district devise a five-year schedule of rate increases to begin paying for a $33 million supply of drinking water from Santa Barbara over the next 50 years, There was little opposition; the city began delivering the water on Jan. 1 this year.
“The ability to avoid any controversy in the community: that’s an area where Raftelis has experience in the past,” Coates said.
At a Sept. 30 committee meeting last year, Coates said he was in favor of “moving very quickly.”
“This is the sort of thing that could drag out and we get everybody anxious about what the hell’s going on,” he said. “The faster we can move, the better off we are.”
In recent interviews, Charles Newman, a former member of both the water board and Montecito Planning Commission, said he viewed consolidation “a solution in search of a problem.” Donna Senauer, a current commissioner, agreed, saying it would be “very unwise.” Why don’t the districts simply draw up a memorandum of understanding for any project they jointly undertake? she asked.
Senauer said she was often the only person from the public in attendance at water and sanitary district meetings.
“I'm concerned that the community doesn't understand the complexities and cost to ratepayers of forming a new special district,” she said.
As to the persistent rumors about the privatization of Montecito’s water and sanitary districts, Floyd Wicks, a water board member since 2016 and the former CEO of Golden State Water, a private company serving 80 communities in California, would like to set the record straight.
“I was accused of getting on the board for that purpose,” he said. “I’ve got no purpose in mind to do that.”
Wicks said he wouldn’t rule out some kind of public-private partnership for future water management in Montecito, “but not for the purpose of acquiring systems or taking over anything.”
Turnover at Sanitary
The talk of merging Montecito’s water and sanitary districts has already had an impact on their operations. Since the 2020 election campaign, according to Fuller, 12 sanitary district employees have quit, including the general manager, interim general manager, two legal counsels, two district administrators, the engineering manager, operations and maintenance manager, chief plant operator, treatment plant operator and two maintenance workers. Three of these were retirees. The engineering manager has not yet been replaced.
Meanwhile, 19 non-managerial employees at the water district and 11 at the sanitary district have joined Local 620 of the Service Employees International Union, the union that represents Santa Barbara city and county employees and Goleta Water District employees. The Montecito Water District is currently in contract negotiations with Local 620, and talks at the sanitary district are pending; the main issues are job security and wage parity, union officials said.
“The employees do not feel safe, which is why they’re running headlong to the unions,” Fuller said. “We are losing employees.”
At the same time, he said, “We are spending an inordinate amount of money on meetings. I’m extremely frustrated with the lack of a clear direction and the literally endless meetings, including ad hoc committee meetings that are not announced, so the public cannot view them, and no recordings are made.”
District records show that the sanitary district held 31 board meetings in 2021, compared to 15 in 2019. Board members are paid an honorarium of $220 per meeting. The board formed several ad-hoc committees in 2021 to update the board’s “policies and procedures” manual, review proposed sewer line extensions and recruit a general manager.
Rahrer said board meetings have been held more frequently because “the board president feels two shorter meetings a month are better than one long meeting a month.” Also, he said, the number of special board meetings increased in 2021.
Finally, a public records request filed by Fuller last summer revealed that Johnson, the board president, and Barrett, the vice president, were ordered by the district in May, 2015 and January, 2020, respectively, to replace their aging sewer laterals. The laterals — private sewer pipes that connect the plumbing in homes with the public sewer mains located under the streets — had overflowed, causing sewage spills.
District records show that Johnson and Barrett completed the required video inspections and were given 90 days to replace their defective pipes. In the pandemic, Barrett requested and was granted an extension to early 2021; he obtained a district permit in November. Johnson has not yet obtained a permit. To date, neither she nor Barrett have done the work.
“That appears to be a direct conflict of interest,” Fuller said.
Johnson and Barrett did not respond to requests for comments about their laterals. Their properties are among five in Montecito that are out of compliance with district orders regarding sewer laterals.
“Due to staff turnover, from a workload standpoint, other land use issues have been more pressing for the district,” Rahrer said. “We have it in our ordinance to enforce the issue; we have not pushed it very hard. We have not followed up with any of the corrective actions that could be taken, other than a reminder.”
Look for Montecito Water Part 2 next Thursday. Melinda Burns is an investigative journalist with 40 years of experience covering immigration, water, science and the environment. As a community service, she offers her reports to multiple local publications, at the same time, for free.