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Gettin’ Dirty with the Montecito Sanitary District

MSD Takes $14.7 Million Loan, Discusses Hammond’s with Heal the Ocean, and Plans a Public Meeting


Tuesday, March 27, 2007

One might think that Montecito Sanitary District board meetings are about the down-and-dirty issues of sludge, but think again. Montage attended only one-hour of this semi-monthly special district meeting and we were drowning in the complexity and mass of the wastewater business. The no-nonsense board flushed out the nuances of a new nearly $15 million debt, determined a hopeful course to work with some ocean environmentalists, and then set an agenda for an open-to-the-public daylong district issue workshop.

The directors of the Montecito Sanitary District are (pictured from left) Judith Ishkanian, Charles Arnold, Dan Eidelson, president Deirdre Cannata, and Harry Hovey. They are responsible for the policies and actions of Montecito’s 60-year-old independent wastewater treatment service operation. The mission of the special independent district is to ” protect public health and safety and to preserve the natural environment through the collection, treatment, and disposal of wastewater in the most cost-effective way possible.”

But, for aging infrastructure installed in the 1960s, a huge portion has gone well beyond its life expectancy, which makes the district’s mission difficult. With patches and part-time fixes no longer an option for the aging system, the district voted last year to take on substantial debt to make necessary improvements.

They floated $14.7 million in certificates of participation, which are similar to muni bonds and have laddered due dates, spreading over the next 30 years. Eidelson, the MSD treasurer, said the board got a very favorable effective rate of 4.59 percent at the bid auction two weeks ago. The nearly $15 million will be funded this week and be re-invested in a state run interest paying savings account until disbursed for project costs. The funds will be used only for system revamp and refurbishment, and not for operational expenses. The rehab is expected to include new sewer pipes, generators, aerators and pumps, and some sewer main extensions.

Our system had far out lasted its life,” explained general manager Diane Gabriel. “Some of our system is so antiquated that there were no longer any parts available for purchase.” The

board, which has been reviewing this issue for over a year, had two options to cover their rehab needs: going into debt with these certificates of participation and rate increases, and they’ve used both. In 2004, MSD adopted a five-year rate increase package. But with Montecito’s numerous stalled commercial projects over the past three years such as the Miramar, San Ysidro Ranch, and the Coral Casino hampering revenues, there simply was not enough money to meet the massive refurbishment costs. So MSD moved forward with the new borrowing program.

With the finance issues divested and digested, the board moved on to discuss a future meeting with clean-ocean water advocacy group, Heal the Ocean. The ocean environmental activist group has targeted water impurity near Hammond’s Beach and they are questioning outfall from the MSD as a possible culprit. “How can they distinguish that?” queried Ishkanian.

To address that question and hear Heal the Ocean’s scientific hypothesis attendant to a future Hammond’s study-grant, the MSD will host a special public meeting with representatives of Heal the Ocean on Friday, April 13, 2 p.m., at the districts offices at 1042 Monte Cristo Lane. Be on hand if you’re interested watching treated water and ocean water mix.

Reaching that mellow solution, the board agreed to set April 23 for an all-day, public-invited board workshop. They agreed roll up their sleeves (even further) to tackle the district’s priorities and informally hash out topics of interest. The meeting will begin at 9 a.m. and will include a visit to the district’s plant, and a motor tour of pump stations and systems throughout Montecito.

Following the tour, the board will return to MSD for a topic-discussion session, where public input will be encouraged. On the preliminary topic agenda are septic-to-sewer mandatory connections (could these be mandated as part of real estate closings?), main line extension needs (where first?), and enforcement procedures for illegal rainwater connections to the sewer system.

The workshop is open to the public and, given the importance of Montecito sewer system to the Montecito community, Montage recommends you attend. MSD promises this info-flow conference will not be draining!

MARKET WATCH: Inquiring minds often ask Montage how we go about gathering our ceaseless stream of current news. Our secret? We use “The Market Approach!” This reporting tool requires pushing a grocery cart down the aisles of Vons, gathering tales along with Tide, and bagging a variety of Montecito dreams and schemes before checkout.

A productive encounter this week at the produce aisle is worth sharing. Montage had the good fortune to bump Montecito-maven (Montecito resident since 1982) and Sotheby’s International Realty’s longtime pro Sandy Stahl.

Montage was in a dither about Sunday’s L.A.Times real estate stat noting a nearly one-third drop (32.6 percent) in zip-93108 prices over the past year. Fearing our nest egg was scrambling into a financial has-been omelet, Montage was considering the glow of a merlot to make us forget reality, and realty. But the fortuitous Stahl-sighting on Von’s Aisle Seven re-charted our course.

She said Montecito real estate is solid and statistics can be misleading. “Statistics are very deceptive,” she offered, soothing our shakes. “You have to know which properties you are talking about.” In a small market like Montecito, she said, one or two sales of $18 million-plus removed last year’s average could create the statistical misnomer or, more accurately, mis-number.

The Montecito market is about supply and demand and you have no idea how little (inventory) there is in Montecito,” Stahl said. “Montecito is itty-bitty. People come here from L.A. and are shocked how small it is.” She said in the high-end L.A. market, for example, shoppers have options in Beverly Hills, Brentwood, and Bel Air, but Montecito is limited to a mere total of 22.8 square miles.

The number of buyers wanting to purchase in this small area far outweighs the sellers,” Stahl said, adding that’s her gauge of Montecito R.E. health. “I get four our five emails as week from as far away as London asking me to ‘please, please, please’ find something for a would-be buyer in Montecito.”

But, Stahl explained, “You’ve got people who live here and don’t want to leave. They are downsizing and trading Montecito properties or upgrading from a Montecito vacation home to a Montecito main home. A lot of people are looking, and there are very limited choices. That drives the market,” she said. While the buyers are sophisticated and won’t over pay, even with 18 years of experience in the Montecito real estate industry, Stahl finds “the numbers mind boggling.”

Montage, too, was becoming boggled, so we grabbed the merlot anyway - now needing to toast our new insights instead of drown our financial insecurities.

RUDY RIDE: With their $2,300 passport to Rudy-Land in hand, over 100 supporters lined up for a quick photo and personal handshake from presidential hopeful Rudy Giuliani. And, in spite of what might seem pricey to most, guests seemed thrilled with the political ride-some wanting to give even more!-held at Lee and Lori Mikles’ Montecito home last Sunday. In addition to good well pours at the garden bars, guests nibbled on salmon and teriyaki chicken and were serenaded by local tenor Matt James.

But nibble and pour and song was not what these guest had paid for. They were there to meet and greet Giuliani and support his Presidential Exploratory Committee. “Exploratory” seemed to be a only a matter of semantics, because on three occasions during Rudy’s 20-minute canned issue-talk he said, “That’s why I’m running for president.” This indicates to Montage that Rudy is more than exploring the presidential endeavor, but it’s a fund raising tactic, so “exploring” we did go.

Media was barred so Montage promised not to tell you that Giuliani talked about health care and the Patriot Act and the Iraq War. But, given how Montecito talks, we think it is no secret that Andy and Dolly Granatelli provided a very gracious greeting. Parker and Carolina Montgomery were seen (he worked with Giuliani in New York). Dallas and Peter Clark, were visiting with Jane Russell (pictured). Bob and Vicky Hazard were greeted by Mary Belle Snow. Nina Terzian was there kibitzing with Erin Graffy and about dance tips for a later dance event. Mark Melchiori and Suzanne Perkins were there along with Mike Huffington and Tom Wathen. (And could that have been a banished KEYT we saw creeping through the back bush?)

The seated crowd reached just over 100 and contributions out paced attendance. Santa Barbara produced an impressive $275,000 for Rudy’s coffers, who, after speaking and taking questions, departed with a quick a wave. With nearly $100 million needed to finance his presidential campaign, time is money and, as nice as Montecito is, there are other lucrative California domains to cover, so Rudy rode on.

Montecito Meandering: Over 50 people turned out on Saturday to honor Coast founder and Montecito volunteer Barry Siegel, including Assemblyman Pedro Nava (pictured). “I tell people I represent the best district in California,” Nava said. “We have the mountains on one side and the ocean on the other and extraordinary people in between-Barry Siegel is one of them.”

:Marsha Wayne hosted nearly 100 people at the Monecito Country Club to for a Human Right Watch talk by Richard Dicker. Dicker, who was on his way to The Hague, is the Director of the International Justice Program of Human Rights Watch and was an official observer at the trial of Saddam Hussein. Montecito’s Lillian and Sam Hurst were there along and Nancy Koppelman. Vicky Riskin served as the very able MC of this thought-provoking meeting.

:Montecito Planning Commission (MPC) goes into a special session on Thursday to review the on going Hurst case. Nearly two years ago, Mr. Hurst submitted plans for his property on Park Lane and it has generated neighborhood rancor for its size and height. After two years and over 10 hours of hearing before the Monecito Board of Architectural Review and one MPC hearing, the case may finally be getting closer to the ground. (Height is one neighborhood complaint.) MPC goes into session at 9 a.m. “It’s my dream house,” Hurst said. “But it seems to have turned into a nightmare.”

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