Friday, June 10, 2016
The Carpinteria Valley Water District, deep in debt for state water it says it doesn’t need, will look into selling some of its entitlement to two developers who want to build homes in Goleta.
Voting 4-1 on Wednesday, with Director Richard Forde abstaining, the Carpinteria water board agreed to start negotiating with the developers – Glynne Couvillion of Montecito and Ken Alker of Santa Barbara – on the condition that they shoulder the cost of reviewing the proposal and drawing up a deal. Any proposed sale, lease, or option to buy Carpinteria’s state aqueduct water would be subject to further public hearings.
“It’s not a bad idea to invest in this at someone else’s expense,” said board Director Matthew Roberts.
Couvillion and Alker are looking for a way to speed up their housing proposals – respectively, the Shelby project, for 60 homes at 7400 Cathedral Oaks Road, and Kenwood Village, for 60 homes and apartments at 7300 Calle Real. Both projects are stalled because of the Goleta Water District’s ongoing water moratorium, or ban on new connections in the drought emergency.
Shirley Johnson of Carpinteria advised the board on Wednesday to proceed with caution. The state has announced it will deliver only 60 percent of state water requests from contractors this year. Allocations for 2015 and 2014, respectively, were 20 percent and 5 percent, the lowest ever.
“This may be Carpinteria participating in an end run around Goleta’s moratorium,” Johnson said. “State water is not reliable. If we participate in this, we’re creating more pressure on water that doesn’t exist. It’s paper water. I think it should be looked at very carefully.”
Couvillion had planned to exchange his agricultural water credit for residential water service to the Shelby project, which he is proposing to build on 14 acres of historic farmland. But last month, the Goleta district abruptly nixed the plan, saying a 1988 ballot measure prohibited such an exchange; and the city suspended its review of the project.
The Shelby Foothills Coalition, representing six community and environmental groups, sent a letter of protest to the Carpinteria water board on Wednesday, urging a “no” vote on any negotiations with developers “in the midst of this unprecedented drought of unknown duration.”
“The District’s long-term supply remains tenuous and it is foolhardy to sell rights to a portion of its water supply as requested by the Goleta developers,” the coalition said. If the deal goes forward, and state water allocations should plummet again, the Goleta Water District might be forced to hook up to the projects, the letter added.
Mark Lloyd, a consultant for Couvillion, told the board, “This agreement would reduce your debt. It would not diminish the resources of the Carpinteria Valley or have impacts up and down the coast. Those points of view are totally irrelevant. We’re talking about water that has never come through the pipeline before.”
No one knows how long the drought will last. Even if it ended next year, according to a report for the Carpinteria water board, it would take likely take another two years for the Goleta Water District to lift the ban on new meters. Before it can do so, it must restore a significant amount of water to the groundwater basin for use as a drought buffer.
Carpinteria water officials estimate that valley residents today are paying for an entitlement to 25 percent more state water than they need, or about 500 acre-feet. The cost of that water – $3.1 million yearly to pay back the bonds for Carpinteria’s share of the aqueduct branch to Lake Cachuma – represents nearly a quarter of the district’s annual budget. (One acre-foot of water supplies between four and six local families yearly).
Past efforts to sell off some of the expensive supply have had mixed success. But in the drought, the value of state water has increased, district General Manager Charles Hamilton told the board, urging them to enter into negotiations with the Goleta developers.
“We’re struggling with this debt burden,” he said. “There really isn’t a way to get out of it unless we sell that bond entitlement. Without this agreement, you won’t have the benefit of knowing how much revenue this could mean for the district.”
Hamilton reminded the board that nearly 10 years ago, the Plains Exploration & Production oil company purchased an option to buy state water from Carpinteria for a property in Lompoc. PXP cancelled the option after three years, but for those years, it paid the district $950,000.
According to staff estimates, the district could receive $60,000 or more per year in option payments from the two developers, or up to $750,000 for the outright sale and transfer of 68 acre-feet of water to them – 50 acre-feet that Couvillion is requesting for the Shelby project and 18 acre-feet that Alker wants for Kenwood Village.
With the money, the district could make a strategic investment in local, more reliable sources such as recycled water or seawater desalination, according to the board report.
“Both of these supplies are robust during droughts and in the case of recycled water it is about the same cost as the state water project allocation,” the report said.