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Montecito board directs staff to pursue $42 million debt issuance, sets rate ceiling
Summary
The Montecito Sanitary District board voted unanimously to direct staff and the district’s rate-study consultant to pursue a $42 million debt issuance for capital projects and to use the packet’s proposed rate schedule as a ceiling while staff refines reserve targets and outreach materials under the Proposition 218 process.
The Montecito Sanitary District board voted unanimously March 2 to direct staff and the rate-study consultant to pursue a debt-issuance option that would fund major capital projects and to use the proposed rates in the meeting packet as the upper bound for future Proposition 218 notifications.
"The motion I have is to direct staff of the rate study consultant to follow the debt issuance option, wherein $42,000,000 is issued in fiscal year 29 and the rates reflected as on page 72 of today's board packet," the motion-maker stated before the board voted. The motion was seconded and carried on a roll-call vote with all five directors recorded as "aye." The clerk called the vote for Director Barrett, Director Johnson, Director Newquist, Director Ullman and Director Raukenbach; each voted in favor.
The motion does not itself adopt final rates. Instead it directs staff to prepare the documents, modeling and Proposition 218 notices that would be required before any rate adoption. Under the process described by the consultant, notices must be mailed 45 days before a hearing and written protests meeting the statutory threshold can block implementation. The board also asked staff to return with recommendations on reserve-level adjustments for possible incorporation into the rate study.
Consultant modeling presented two broad funding paths: a rates-only approach that would require very steep near-term increases and a blended approach using debt to spread costs over multiple generations of customers. The board chose the latter as the more feasible option to meet the capital program without imposing an immediate, extreme rate shock on customers.
Next steps: staff and the consultant will finalize the draft cost-of-service report and the Proposition 218 notice, bring reserve-adjustment recommendations to the board for review, and schedule required public-noticing and hearings. The board set the next regular meeting for March 11, at which follow-up items will be considered.
