Goleta Eyes Cash Stockpile

City Claims It's Entitled to Sanitary District Tax Revenue

<strong>WHAT'S OURS IS OURS:</strong> Goleta City Manager Dan Singer, left, has argued that the City of Goleta should be receiving property tax revenues that currently are allotted to Goleta West, which receives roughly $1.2 million annually.
Paul Wellman

The question of Goleta West Sanitary District’s future has come bubbling to the surface again. The City of Goleta released a financial report this week that, according to city officials, proves that detaching management of sewage infrastructure within city limits from the Sanitary District’s jurisdiction would be cost-effective. As things stand, Goleta West has dominion over a vast expanse of wastewater resources, including much of the City of Goleta, Isla Vista, and some areas just west of the city. However, through a loophole in state Proposition 13-passed in the late 1970s to protect property owners from increases in property taxes when their holdings went up in value-the nearly 50-year-old district receives property tax revenues amounting to roughly $1.2 million annually.

Not long after Goleta was forced to cut more than $1 million from its budget in the face of a faltering economy, Dan Singer, Goleta city manager, said the city should be receiving the property tax revenues currently allotted to Goleta West. The prize jewel in the treasure chest is the district’s nearly $30-million reserve fund, which Mark Nation, Goleta West’s general manager, said has been set aside for a number of capital improvement projects; namely, a $20-million upgrade to the sewage treatment plant. “Nobody’s accused them of not doing a good job of hoarding money,” said Singer, opining that although they’re doing nothing illegal, the district’s use-or lack of use-of property tax revenue goes against state guidelines.

“There are lies, damned lies, and statistics. I’d say this report contains all three of those,” said Dr. David Bearman, a director on Goleta West’s board, of the city’s report.

Singer and City Attorney Tim Giles presented the report at a press conference Tuesday morning, and Singer said the city plans to file an application with the Santa Barbara Local Agency Formation Commission (LAFCO) early next year. A proposal had been filed with LAFCO last May, but the commission asked for more information, prompting the City of Goleta to pay financial consultants Bartle Wells Associates $20,000 to complete a detailed study. Goleta West had commissioned its own study by Raftelis Financial Consultants, but the conflicting messages delivered by the two reports has led to a flurry of finger pointing and indignation from both sides. “There are lies, damned lies, and statistics. I’d say this report contains all three of those,” said Dr. David Bearman, a director on Goleta West’s board, of the city’s report. “Assumptions were made in a vacuum without regard to reality.”

The fulcrum of the conflict between the two agencies seems to be a matter of mentality. Goleta West has been saving for a rainy day for some years, and the city feels that the money would be better used if spent on a variety of purposes. While the city agrees that much of the district’s reserves would be best left untouched for use on upcoming capital improvement projects, Singer and Giles intoned that property tax revenue should be spread among fire protection, police services, school districts, community services, and other general fund services affected by the budget crunch.

Nation and his camp maintain that not only does Goleta West need the reserve for the massive upgrade its treatment plant will need soon-changing to a tertiary system that proponents say is better for the environment-but that detaching the city portion of the district’s zone will likely triple rates for its customers in Isla Vista and other unincorporated areas. Furthermore, concern has been raised that until Goleta irons out the details of its contentious revenue neutrality agreement with Santa Barbara County-and if it assumes responsibility for Goleta West’s aging network of sewer pipes-the county may receive a sizeable chunk of the property tax revenue currently used for wastewater treatment. “The board made a conscious decision many years ago to save for tertiary treatment,” said Nation, adding that though incremental rate increases over the next several years are inevitable due the higher cost of running such a system, otherwise, “We haven’t raised our rates in 15 years.”


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