A Modest Proposal

By Nick Schou   |   June 11, 2020

From 1 to 3 pm on the afternoon of June 15, the Montecito Water District (MWD) will hold an online hearing in which Nick Turner, the agency’s executive director, will explain several proposed water rate changes that will affect roughly 4,000 households in Montecito and Summerland, not to mention several major luxury hotels and private country clubs with world class-rated golf courses, and therefore significant water needs.

Several important topics will be on the meeting’s agenda, including the district’s recently-adopted urban water management plan, groundwater banking, demand management, and initial actions that the district has already taken to enhance the water supply. According to MWD’s presentation summary, titled “Securing Water Supply Reliability,” the district’s overall costs are estimated to increase by just 2.8 percent per year. Despite this, 56 percent of MWD’s customers will actually see a decrease in their monthly water bill, while heavier water users, whether golf clubs, hotels, or large estates, will pay more.

In past issues of this newspaper, the Montecito Journal has explored different aspects of our complex relationship with local municipal water. These stories have included a discussion of controversial conservation measures enacted by the MWD’s previous board and how that led to heated elections that brought new leadership to the district, as well as an historical overview of the agency’s once-per-generation battle to secure newer and more reliable water sources.

This epic, century-long water procurement undertaking has resulted in not only one of California’s if not the world’s most lush, beautiful landscapes, but also created one of the state’s heaviest users of water per capita, where our landscaping draw can be more than five times as much as parts of Los Angeles, and amounts to 85 percent of the district’s annual deliveries. For perspective, much of the U.S. uses only about a third of their water for landscape. Though, admittedly, the rest of the U.S. also doesn’t have our enviable, arid Mediterranean climate.

In this article, we’ll take a deep dive into the complicated nature of Montecito’s proposed “Water Sharing Agreement” or WSA, with Santa Barbara. We’ll also explore Montecito’s historical relationship to Santa Barbara’s desalination project and how the MWD was unable to reach a deal with the city, at least until now. On January 28 and 29 of this year, both MWD’s board and Santa Barbara’s city council agreed to a so-called “term sheet,” the final draft of which is 20 pages long. It’s an ambitious document, which if passed by MWD and Santa Barbara’s city council this month, will represent an historic moment in the annals of California environmental policy.

Water, Water, Everywhere

In the late 1980s, as tends to happen every decade or so, Santa Barbara and the rest of California faced a chronic water shortage that lasted several years, a crisis that led many coastal cities to consider building water desalination facilities. The success rate of these projects tended to be 50-50 at best, since water desalination plants are expensive to build and operate. There’s also the quandary the entire process can take so long, especially in environmentally conscious California, that by the time a desal plant finally goes online, water needs change and it is no longer needed.

Controversy over various desal projects in California has become routine, and while well-organized environmental groups have complained about dangers to local sea life, vociferous proponents of desal seem to be all but nonexistent. When desal started, the technology was too new and seemingly untested to win unanimous support.

“You have these outspoken people,” said Joshua Haggmark, Santa Barbara’s Water Resources Manager, who joined the agency in 1999. “And while I don’t understand their reasoning, there’s really nobody passionate about desal. You typically only hear from the environmental groups.”

But all that may be changing now. While some former water district officials such as Dick Shaikewitz and Bob Roebuck strongly oppose the project, others, including MWD’s longtime former general manager Tom Mosby, believe that desal technology offers Montecito a means to find a reliable local supply of water for the next half-century.

In Carlsbad, a private company named Poseidon Resources (now Poseidon Water) built what is now the largest desal plant in the world, a major accomplishment of public planning and private enterprise. According to the company’s website, it currently produces 50 million gallons of salt-free drinking water per day. That project survived California’s complicated, burdensome permitting process.

In Huntington Beach, Poseidon sought to build a plant that would save energy costs by attaching itself to an aging AES powerplant that had long been opposed by local environmental activists already worried about the project’s potential threat to sea life and who also opposed continuing the operation of the AES plant, a notorious beachside eyesore. That project is still enmeshed in the labyrinthine permitting process. Although it is likely to become operational some time in 2023.

In contrast, Santa Barbara’s venture into desal during the early 1990s went relatively smoothly, at least from a permitting perspective. City officials saw the Charles E. Meyer Desalination Plant, which cost $34 million and opened in March 1992, as a wise investment. Originally permitted to produce 10,000 acre feet per year of desalinated water, the plant aimed to provide only 7,500 acre feet to both Montecito and Goleta, while the city would reserve an additional 3,181 acre feet per year for its own needs.

When It Rains, It Pours, Unfortunately

Yet because of “abundant” rainfall during the next few months, Santa Barbara water officials officially shut down the desal plant just three months after it opened, in June of 1992. Yes, just three months later. It would be a little like setting up the Office of Homeland Security on September 12, 2001 but finding Bin Laden that same Thanksgiving. You put this enormous mechanism in place to solve a certain enormous problem, then suddenly that problem gets solved much sooner than anyone thought.

The double whammy for desal was all that rain also ruined Santa Barbara’s chances of getting either Goleta or Montecito to sign a long-term contract. Both towns provided Santa Barbara with five years of cash to keep the plant operational in case of a water emergency, but neither municipality renewed that contract at the end of its term. The result is Santa Barbara’s desal plant was mothballed for the next 23 years. Yes, desal sat idle for basically a quarter century.

In addition, thanks to a clerical error on the state ballot, Santa Barbara voters were inadvertently given the opportunity to approve both desal and a long-term deal to purchase water from elsewhere to satisfy local needs, whereas it should have been an either/or scenario. It’s kind of a big mistake.

So on June 4, 1991, both measures, each of which weakened the other, received enough votes to pass. Just in case you thought accurate polling is a new problem. When the dust settled, Montecito and Goleta no longer had need to manufacture desal water since their needs were already being met via straight-up purchase. And with Montecito and Goleta’s water starvation now solved with dueling solutions, they went with the easier and less expensive one.

“When Goleta and Montecito backed out, it put Santa Barbara in a weird financial situation,” Haggmark said. “And the way the desal partnership was set up, it was not all that sound. You take out one partner and it falls down.”

Because Santa Barbara’s desal lost its clients of Goleta and Montecito, funding for the project wouldn’t rematerialize until decades later, when we were once again back in our once-in-a-generation severe drought. Thus, on July 21, 2015, Santa Barbara’s city council voted unanimously to reactivate the nearly 20-year-old plant, which finally began producing water two years later and now accounts for about 30 percent of the city’s water supply. In the meantime, Santa Barbara City Council sold off critical parts of Santa Barbara’s desal plant to the Saudi government. That certainly added a level of complexity.

Reverse Osmosis

Ocean water contains about 97 percent pure water and just 3 percent solid materials. That ratio is critical to understanding desalination technology, which goes as follows: In order to produce a gallon of drinkable water, a typical desal plant such as Santa Barbara’s must push 2 gallons of ocean water at a pressure of 800 pounds per square inch (PSI) through a reverse osmosis membrane. Pressurized steam pushed through the membrane at that volume creates a gallon of drinkable water and another gallon of heavily concentrated brine which is then ejected back into the ocean.

Recent innovations in reverse osmosis technology squeezes the high-pressure briny solution that is left over and thus produces a reliable supply of renewable power. “This new energy recovery system gets 93 percent of the energy created by bringing that rejected brine back to zero pressure,” Haggmark said. “The water that is rejected with all the salt in it is still pressurized at 800 PSI, and now, by harnessing that energy, we are able to reduce the energy loss associated with the creation of that water.” In a nutshell, a formerly inefficient process has become a 93% efficient one. Not bad.

In the summer of 2015, when the desal plant went back online, Haggmark and other Santa Barbara water officials were busy negotiating with Montecito’s previous water board. Led by Shaikewitz, MWD’s Board of Directors sought to enter into a 50-year desal contact – exactly the term of MWD’s currently proposed water deal with Santa Barbara. “The city was initially insisting that the desal contract would only be for twenty years or less, as opposed to fifty or more,” Shaikewitz said. “The negotiations went nowhere for a long time because of this. Plus, the City kept insisting that it could sell us recycled water instead of water that had actually been desalinated.”

As a result, negotiations between Santa Barbara and Montecito’s water agencies once again broke down. “The prior board always seemed interested in as long an agreement as they could get,” Haggmark recalled. “Dick Shaikewitz was really pushing for that,” he added. “But we had in our municipal code that no agreement could last longer than fifty years.”

Meanwhile, said Haggmark, Montecito’s previous water board wanted to work out a contract that would allow it to own a percentage of the desal plant, which proved to be a deal-breaker for Santa Barbara. “The City wasn’t interested in sharing ownership,” he explained, adding that the ownership demand complicated matters so much it essentially derailed the negotiations. “It didn’t make any sense at all,” he said.

A New Deal

A year after Santa Barbara began negotiating with Montecito for the second time since the inception of its desal plant, the city found a new ally in Montecito’s newly elected water board. Directors Floyd Wicks and Tobe Plough, who each raised massive amounts of cash to take control of MWD’s board, led the district in new discussions with Santa Barbara to purchase desalinated water from the city.

“The previous board wanted ownership,” said Haggmark, “but all the new board really wants is water, and that’s what this new deal is going to do.” According to the final draft of the WSA, Santa Barbara will provide Montecito with 1,430 acre feet per year for the next 50 years at a price of about $4 million per year, which represents a total cost to MWD’s rate payers of about $200 million over the course of the agreement.

Eventually, desal water from Santa Barbara will get cheaper, according to the terms of the contract. Currently, MWD’s agreement with Santa Barbara provides that Montecito will help the city pay off the desal plant’s initial price tag as well as its ongoing costs. However, Santa Barbara’s low-interest state loan only needs to be serviced for another 17 years, meaning that once the debt is paid, Montecito will pay a much lower price for desalinated water for the roughly 30 years left on the contract.

“Once the debt is retired, the cost of our water goes down,” said Wicks. “So we will be getting water at a much lower cost.”

Cheaper Than Dirt

According to the Montecito Water District’s latest available figures, should its deal with Santa Barbara go forward, MWD’s customers will be divided into three new categories, or tiers, depending on the volume of water they use.

Tier 1 consumers, who use up to 6,750 gallons per month, represent nearly half MWD’s customer base. They will see a reduction in their monthly bill, Wicks said, adding that the total bill will amount to $105.90 including service fees, which works out to just $3.50 per day, or 1.5 cents per gallon. “This is cheaper than what it would cost to buy dirt for your front lawn,” Wicks said. “That’s why I can say with complete accuracy that potable water is actually cheaper than dirt.”

Heavier users of water will be charged more, depending on how much they consume each month, a cost-spreading system that has held over from the previous water board’s emergency conservation measures. Even Tom Mosby, the MWD general manager who was kicked out of the water district as a result of the agency’s drastic response to the last drought, supports the board’s new proposed rates.

“I have to give credit to this board,” Mosby said. “Their new rates represent a big change in how we bill for water. Most users are going to pay less or the same as they used to, but larger consumers will be charged more, as they should be. It’s a reasonable solution. Right now, we are using forty percent less water than we were using before the last drought, as a result of conservation measures. With this new deal, we’re preparing for the future. We need a new water supply and the district’s new board and staff is providing that.”

Next week, a closer examination of the effect that the drilling of hundreds if not thousands of private wells has had on Montecito’s local water supply.


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