Montecito Water District Update

Earlier this month, Montecito Water District’s Strategic Planning Committee met to review the current status of a potential long-term Water Supply Agreement with the City of Santa Barbara. Phase 2 negotiations resumed in late March 2018, spearheaded by Nick Turner, MWD’s General Manager. 

Turner and MWD staff, along with District consultant David Moore of Clean Energy Capital, met with Josh Haggmark, City Water Resources Manager, providing key terms to a long-term Agreement at the December 5 meeting. These key terms, which staff representatives backed as mutually agreeable, represent significant progress through a process that has been reinvigorated by a renewed commitment in regional partnerships. 

“We are hopeful that the terms will be viewed favorably and garner mutual agreement so that we can move on to the next steps: finalizing a term sheet and drafting an agreement,” said Turner. “We’re striving for regional cooperation that will bolster the production and affordability of local, reliable water supplies for all parties.” 

Key terms satisfactorily address a number of past sticking points, including duration of an agreement, source of water supply, and cost, as follows: 

1) Duration: A 50-year term for the agreement is proposed, the maximum allowable under the City’s charter. Shorter terms were a concern in prior MWD discussions, due to the significant costs involved. 

2) Source: The source of water supplied remains at the City’s option, which is understood as vital for their management of a complex water supply portfolio. MWD is guaranteed water that meets all federal and State primary water quality requirements. Ultimately, this increased flexibility of supply will work in everyone’s favor as conditions change over time, and particularly if the agencies cooperate more on regionally appropriate strategies. 

3) Cost: A new cost structure has been carefully engineered by the two parties, and lands the estimated cost at approximately $2,700 per acre-foot. This is a moderate reduction from prior MWD estimates, and seems to better address the needs of both agencies in planning for fixed versus variable costs. 

The cost decrease is partly due to increased volume as the discussion now commits to 1,430 acre-feet per year, an increase of 180. Greater volume would give MWD more water security, and help the City achieve efficiencies by running the plant at greater production levels. The cost may be even further reduced in years when a newly described “Take if Offered” (TIO) provision is exercised, which could provide MWD with additional water, up to 445 AFY, when the City has available supply. Depending upon quantities involved, costs may be comparable to State Water, however the reliability of this local source gives it much greater value. 

The City Council received a comparable presentation at their meeting last week. The meetings were scheduled in tandem with hopes that both presentations would garner agreement and that staff could return to their respective boards in January with term sheets for consideration and possible approval to move forward with development of a Water Supply Agreement. Preliminary support was expressed in both meetings. 

Also happening at the District: new board directors Ken Coates, Cori Hayman, and Brian Goebel were sworn in on December 7. The newly elected directors join Floyd Wicks, board president, and Tobe Plough, board vice president. Board meetings are open to the public and are typically held on the fourth Tuesday of the month, now at a new time: 9:30 am.

For more information, visit www.montecitowater.com.