Montecito Water District to Consider Sale of State Water Interests
The board meets Sept. 29 to weigh a non-binding letter of intent for a partial sale tied to the proposed Solomon Hills development.
The Montecito Water District Board of Directors will consider entering into a non-binding letter of intent concerning the future sale of a portion of the district's State Water contract interests at its meeting on Tuesday, Sept. 29.
The potential buyer is Solstra Communities California LLC, and the water would serve the planned Solomon Hills development of up to 4,000 homes in northern Santa Barbara County. If the board approves the letter of intent, next steps would include preparing a purchase agreement, a process anticipated to take about six months. Even with an agreement in place, the sale would not be finalized until the development receives all final approvals, which could take several years.
If completed, the transaction would divest the district of about 40 percent of its interest in California's State Water Project, according to the announcement carried by the Association of California Water Agencies. The district has participated in State Water since 1997 and pays annually for an allocation and use of the conveyance infrastructure regardless of availability. Over the past decade, the district says, State Water costs have risen while reliability has fallen. The proposed sale would provide an upfront payment for the portion permanently transferred and reduce future operating and capital costs tied to State Water, while the district would retain more than half of its original entitlement. The district says there are no projected impacts to the reliability of its supplies.
The Sept. 29 meeting is a consideration, not a final decision. No sale terms are final, and the development itself still faces years of approvals.
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