Local Control of Community Services

By Bob Hazard   |   May 23, 2019

Montecito Association (MA) members have identified three issues – water security, including lifetime independence from drought; effective recycling with re-use of wastewater; safety and security from future flood and debris flows – as critical issues facing Montecito that need to be explored and resolved as the community looks toward a better future.

To resolve any one of these challenges – or all of them – will require three things: sufficient resources (both access to money and human talent); focus (including a high-degree of local input and decision-making); and an organizational structure, attuned toward strategic planning for the future, rather than continued tolerance of the present status-quo.

Addressing Specific Needs

Montecito is not a candidate for incorporation as a city and there is not sufficient appetite at this time to move in that direction. The existence of onerous “revenue neutrality” laws prevent newly incorporated towns from receiving adequate funding from county government to provide needed services. This impediment has brought a screeching halt to the California incorporation process. The punitive Goleta Cityhood extortion deal in 2002 remains Exhibit #1 as to how an incorporation arrangement should not work.

Montecito’s 3,800-or-so parcels (and 8,965-or-so residents) consists of only one-quarter of 1% of Santa Barbara County’s property tax base, yet contribute 17% of the county’s property tax revenues. It also generates 62% of the county’s Transient Occupancy taxes paid to the General Fund. Under normal rules, Montecito would have no difficulty funding the same type of services enjoyed by similar communities that have incorporated, such as Tiburon (with 8,962 residents), Westlake Village (with 8,473 residents), Atherton (with 7,127 residents), Woodside (with 5,287 residents), Portola Valley (with 4,462 residents), and Belvedere (with only 2,894 residents).

Forget incorporation. Montecito will not become a city or a town in my lifetime. The closest Montecito can come to effective local government is our five Special Districts, formed and governed by local residents to address specific community needs.

Our Special Districts

The Montecito Fire Protection District (MFPD), headed by Fire Chief Chip Hickman and Division Chief Kevin Taylor, performed exceptionally well in cooperating with CalFire to stop the Thomas Fire virtually at our front door. Leave MFPD alone and be grateful for its professionalism. MUS and Cold Spring School Districts are also A+ Special Districts. Don’t touch them or their resources. All receive adequate funding from local property tax revenues.

That leaves the Montecito Water District, wholly-funded by ratepayers, with no funding from a percentage of property taxes, and the Montecito Sanitary District funded jointly by a ½ percent property tax on parcels in Montecito, plus a sanitary service charge imposed on residents receiving sewer service.

Independent special districts are local government agencies organized to serve unincorporated areas. They deliver only the public services their constituents want. They are accountable to local voters and ratepayers. They are required to submit public strategic planning reports to the State and local residents every five years.

Special Districts are empowered to employ workers, sign contracts and acquire real property. They can fund capital improvements such as an expanded wastewater treatment plant, groundwater management programs, recycling, desalination or State Water System infrastructure. With voter approval, they can issue revenue bonds secured by service fees, or by voter-approved property taxes, or by loans from the state and federal governments, or by reserve funds.

Community Service Districts

More than 325 communities in California have found it beneficial to consolidate former special districts to make them more efficient, and/or to add new services. They have created Community Service Districts (CSD). Rather than deliver a single service, a single community service district can deliver up to 32 different services. For example, a Community Service District could be created in Montecito to incorporate all the services of the Water and Sanitation districts, plus selected services chosen by the community that currently lack funding.

Added services selected by the community should include flood protection (Safety and Security) from Pat McElroy and the all-volunteer “Partnership for Resilient Communities” who have relied 100% on volunteer community donations for the installation of their GeoBrugg ring nets without one cent of county funding. The CSD might also include the restoration funding for the Montecito Trails Foundation (Ashlee Mayfield and Hans Van Koppen); or pedestrian pathway funding along North Jameson and Olive Mill, connecting to the Ennisbrook Trail, a volunteer effort of Abe Powell and his Bucket Brigade; or county funding for the Montecito Library Foundation. None of these local volunteer organizations receive county funding; this seems unfair, given Montecito’s outsized contributions to the county in property taxes and hotel TOT taxes.

Properly structured Community Service Districts provide desired services more efficiently and at lower and fairer costs than individual districts. They recognize that focused citizens can be quicker and more responsive to change. 

Forming a Consolidated CSD

Combining the services of existing special districts for water and sanitary while adding a new function for flood and debris flow protection is infinitely easier than creating an entirely new district. LAFCo (Local Agency Formation Commission) recognizes that as communities evolve, or experience traumatic events like the 1/9/18 debris flow, new organizational structures are needed to address changing priorities.

In order to get the process rolling, the current boards of the present Water and Sanitary Special District would need to come up with a proposed plan to affiliate, and present that plan to the County Board of Supervisors. The formation of a CSD may require a special election if LAFCo receives a 25% of voters petition protest. The California Special Districts Association (CSDA) with its 1,000 members, and LAFCo both provide an asset for legal advice and formation assistance. 

Funding for CSDs

A Community Service District can be structured to allow voter-approved capital expenses that benefit all residents, such as the State Water System infrastructure, upgrading a sanitary sewage treatment plant, or partially-funding ring nets through the community property tax rolls. Operations and maintenance costs are generally funded by user service fees, where appropriate.

Loans and Grants

State funding grants and loans are heavily dependent upon joint support from both Water and Sanitary working together as closely as two halves of the same zipper. Unfortunately, that sense of cooperation has been missing from both districts for most of the last 20 years, despite glowing promises to the contrary. A single Community Services District with one consolidated Board would resolve this shortcoming. 

Stronger Talent Pool

There is a growing list of community achievers who are focused on “What can we do for our community next Monday morning that is different and better?” These leaders are doers; not talkers. They are busy people, willing to serve on professional boards that value strategic planning and innovative thinking to achieve measurable results.

Would our best and brightest be more likely to serve on a single Community Service District Board that seeks innovative solutions to water security, recycling of wastewater and protection from future debris flow?

I think you know the answer.

Spending Wisely

The former Montecito Sanitary Board approved a new $3.5 million office building for its GM and a few other staff people, that they named the “Essential Services Building,” forgetting that the real essential service at Sanitary is the automated sewer treatment plant and the operators who run it. After receipt of office building construction bids this month, the total office building cost, still unknown, is expected to exceed $5+ million. The Sanitary Board meets next Thursday to approve a construction contract before knowing the full project cost.

The Sanitary Board has no cost estimates for the future cost of recycling. There has been no strategic planning effort to estimate possible cost savings from a merger with Montecito Water or Summerland Sanitary. No one has explored drilling water wells on the Sanitary site. There has been no estimate for combined recycling and desalination on the Sanitary site, or for sharing resources with Carpinteria or Santa Barbara. Because Sanitary has a $9 million reserve fund, building a $5+ million office building may be a good idea, or not. There should be no rush to start construction until full costs are known, and the decision is validated by the current Sanitary Board.

If Montecito were to create a Community Service District embracing Water, Sanitary, and Flood services, it could examine all community priorities and allocate resources appropriately. It is possible that that the same $5+ million might be better spent on finishing the job of installing the GeoBrugg ring nets, rather than spend $5+ million for offices for the GM and a new Board room for the volunteer Sanitary Board.

Proposed Solution

As a starter, I would ask Montecito Journal readers and the Board of the Montecito Association, on behalf of the community, to strongly request that both the Montecito Water District and the Montecito Sanitary District add an item to each of their board agendas to discuss the formation of a Community Service District for both Water and Sanitary in Montecito and Summerland, with the possible addition of flood protection, and/or selection of other possible community services, all under a single Community Service District.


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