Montecito at the Crossroads

By Judy Ishkanian   |   November 1, 2018

Your choice for the Water and Sanitary District (MSD) candidates in the Tuesday, November 6, election will decide what kind of Montecito will be rebuilt from the debris and destruction nine months ago. A few months ago, I spoke to the Montecito Association at “public comment” time about the need for unity while the community healed and rebuilt. The election passions have destroyed that hope, and now the reality of our future must be decided whether healed or not.

Were it not for Tim Buckley, publisher of Montecito Journal, the three incumbents would not have had an opportunity to address the issues presented by the aggressive Water Security Team, recruited by investors with a budget of $120,000.

Last week’s MJ letter to the editor from Phil Bernstein, Montecito, states that he is troubled by the vacancy presented by the abrupt resignation by director Warner Owens, MSD. I can assure Mr. Bernstein that nobody has more regrets than I do to see Mr. Owens leave his post. He served with diligence and honor. Anyone interested has ample opportunity to apply to complete the term of Mr. Owens. I can also assure Mr. Bernstein that I have no intention of applying for that post or a full-term post in the future. I consider the November 6 vote of the citizens final.

According to the Melinda Burns interview with Mr. Bernstein, (see last week’s article by freelancer Burns on, he states that he was a founding member of the “Birnam Group” along with Fred Gluck. They represent the interests of PERC Water and advise the “Water Security Team” about the private investment options their public-private partnership company offers a community. About four years ago, PERC Water representatives introduced themselves to the MSD Board of Directors, taking each of them to lunch (except me, but no, my feelings are not hurt) and also members of the MWD.

I began to research PERC Water and why it was interested in Montecito. At this time, Floyd Wicks came into the picture as a consultant to PERC Water, and in 2016, along with Tobe Plough, won a position on MWD Board of Directors, both financed by the Birnam Group.

The “PP3” business model offers private investment to design, build, manage, and finance large infrastructure projects for public utilities. On the face of it, it is a wonderful answer to the financing problems that torment some public agencies. Time is exposing some problems with this model that is not initially apparent to the enthusiastic recipients of the PP3 service. When the bill comes due, the public utility finds itself bound by contract obligations it cannot meet.

Take the City of Santa Paula, for example. It entered into contract with PERC Water for a state-of-the-art wastewater-recycle plant at the cost of $62.2 million dollars. By 2015, customers were in an uproar over the escalating debt at 8.2% interest. Well, it is investor owned, so, of course, it would – and should – make a profit. (The city council members who had advocated this project were voted out, and the new council voted to buy the plant for $70.8 million, financed by a long-term lower interest bond.) Wow.

It is the responsibility of the public-owned utility to look at all aspects of any private investment deal. including the payment obligations. Surely, Montecito leaders are astute enough to recognize this. The taxpayer is the undisputed boss of a public utility, until a private investor comes in with prior obligations to its investors.

What we are currently facing in Montecito is a manifold agenda put forth by the Birnam Group. Its factions for cityhood, consolidation, and development come together over the prospect of money and power.

Montecito is at the crossroads. Will it choose a future led by a group of investors, or will it choose the decentralized, semi-rural model it now has? Your vote, along with those of your Montecito neighbors, will decide.


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