Purchase of wastewater treatment plant on Monday’s Council agenda
February 01, 2015
By Peggy Kelly
Santa Paula News
The possible purchase by the city of the long controversial wastewater treatment plant will be the big item on Monday’s City Council agenda that will also include the transfer of the refuse franchise from Crown Disposal to Recology.
When it comes to the city purchasing the wastewater treatment plant Mayor John Procter, who voted against the 2008 deal said the issue has now come full circle.
The February 2 meeting will start at 6 p.m. with a closed session to address the ongoing arbitration with Santa Paula Water LLC, the private partnership that owns the wastewater treatment plant.
The session will be move to the public meeting starting at 6:30 p.m. at City Hall Council Chambers, 970 E. Ventura St.
Time Warner Cable Channel 10 will broadcast the meeting live and replay it according to schedule; the session will also be live streamed on the city’s website and archived for viewing on demand.
An item of interest the Consent Calendar — the portion of the agenda reserved for business not expected to warrant discussion — includes city sponsorship of $1,099 for the American in Bloom competition to allow the local chapter to again compete nationally.
The council will be asked to approve the annual Community Development Block Grant allocation — this year an estimated $250,000 to $300,000 — funding projects and social services to be forwarded to County Supervisors for final decision-making. The report includes a list of recommended allocations determined by city staff.
The council will be asked to possibly take action to purchase the privately owned wastewater treatment plant for $70.8 million.
According to the report by City Manager Jaime Fontes and City Attorney John Cotti the deal could reduce the interest rate now paid by Santa Paulans for sewer services from an onerous 8.21 percent to 3.75 percent. Customers now pay a whopping $77-plus for basic sewer service — the second lowest in the county — plus a $1.12 per 100-cubic-feet surcharge (to be converted to a flat winter rate in the future).
In 2008 a controversial deal was struck for the city to replace its aging sewer plant with a privately owned facility under a so-called Design-Build-Operate-Finance model. The council at the time split 3-2 on letting the contract to PERC and Alinda Capital, which formed Santa Paula Water LLC. Procter was on the council in 2008 when the deal was struck with a narrow council majority.
Procter, one of two council holdouts who voted against the proposal, objected most to the private financing and ownership of what he said should remain a public facility funded with lower interest bonds.
Later that year Procter declined to run for what could have been his third council term.
Procter was reelected in November after two councilmen who voted for the project; Ralph Fernandez and Bob Gonzales were defeated at the polls, losses in part attributable to the sewer plant and the spiraling increase in fees.
“We’re doing it the way it should have been done to begin with,” said Procter, although regrettably, “We can’t go back and undo the damage… ”
The purchase, according to the staff report, would end other costs including a $600,000 annual property tax payment the city is liable for. The city leases the land to the facility but must pay property tax based on the base facility value of about $60 million.
Combined with the lower interest rate and lower costs the purchase transaction of the wastewater plant could lower monthly sewer bills by as much as $23 the first year.
At Monday’s meeting the council will also be asked to finalize the refuse franchise agreement with Recology, which purchased hauler Crown Disposal last year.
