Solvang Tilts at High Price of State Water

This is a town trapped in paradox.

Residents are ripping out their lawns, rationing toilet flushes and buying plastic plants even though their town has access to more water than ever before.

Despite such zealous conservation, some home water bills zoomed above $300 a month last summer. And elected officials warn that they may have to triple rates this year just to break even.

The way local leaders see it, the only way out of this mess is a lawsuit asserting their right to reject state water--the very same water that nearly 75% of Solvang voters demanded in a 1991 election.

In a trial now unfolding before a Santa Barbara judge, Solvang claims that its politicians and voters were bamboozled into accepting state water they never wanted, never needed and could not afford.

This Danish-themed tourist town of 5,100 is suing the local water district, which acts as a broker for state water.

With its cutesy windmills and buttery bakeries, Solvang may look sunny and quaint, but its legal papers screech with hardball allegations. Among them: that the water district tricked voters in the 1991 election and has slammed the city with excessive fees ever since.

“We mean business,” Councilman Frederick P. Kovol said. “We don’t need their water.”

In response, the Santa Ynez Water Conservation District offers a simple defense: Politicians and voters are grown-ups who should have known what they were getting into when they signed up for state water. If they had done their homework, they would have understood the costs.

“They never read the contract--they never did squat, apparently,” water district attorney Stanley M. Roden said. “Our view is, if you don’t read the documents we put in front of your nose, that’s your problem.”

The lawsuit, Roden added, “is a disingenuous way of trying to get out of their obligations because they don’t have the guts to say, ‘OK, we did what we did.’ ”

What they did was vote to hook up to the Department of Water Resources’ California Aqueduct and buy an entitlement to 1,500 acre-feet of state water a year (enough to serve 3,000 families) through at least 2035.

The council members who endorsed the purchase knew that they would be charged for their full allotment of water whether or not they used it. They also knew that Solvang had flourished for decades without a drop of state water, drawing from the shallow aquifers of the Santa Ynez Upland Basin.

But the 1991 vote came at the end of a brutal seven-year drought. Nearby Lake Cachuma had shriveled to a puddle. Conservation mania was so fierce that residents feared to wash their cars in public. And pessimists were predicting a parched future. So the council recommended state water, and Solvang voters backed them up at the polls.

Many now regret it.

State water turned out to be at least five times as expensive as Solvang’s traditional underground aquifers. It has proved so pricey, in fact, that some residents have taken to skimping on baths and pulling out flower beds.

That thrift holds down their individual bills, but it doesn’t much help the city, which contracted to pay the state for a fixed number of gallons even if its citizens use just a few drops. As a result, every $100 a resident shaves off his or her water bill is another $100 Solvang must put up from its own coffers--by siphoning off funds once reserved for building renovations, parks programs or employee raises.

The financial crunch is so bad that the city forced every employee to take 12 unpaid days off in the last fiscal year.

As lawns crisp to brown and city services stutter, Solvang locals are starting to complain. Loudly.

“People are raging,” businessman Luis Rodriguez said.

He knows why, too. The water bills at his small downtown deli surged so high last summer--up to $500 a month--that his landlord stopped covering them. To keep the tab down, Rodriguez shut off his automated dishwashing system, replaced real plants with fakes and instructed his waiters to serve water only when asked--and then, only in small glasses.

Hooking up to state water was a “big mistake,” Rodriguez said glumly, “that’s going to compromise the future of this town.”

In the trial now underway, attorneys for the city seek to cap Solvang’s costs and void the city’s contractual obligation to buy state water.

Anticipating victory, Solvang has refused to pay its state water bills since January. And city engineers are digging two new wells into the Santa Ynez River--which looks like a dried-out rock farm but contains bountiful underground reserves--to ensure an ample supply of home-grown water.

Solvang’s lawsuit hinges on a line in the 1991 ballot measure promising that the local water district would not spend more than $18.4 million in bonds to extend the state’s California Aqueduct into Solvang.

Voters and council members say they thought that figure represented the total price of bringing state water to their faucets.

The water district, however, contends voters should have known that the bonds covered only the cost of building local facilities. In addition, Solvang would have to pay for the water itself. And the state has always charged hefty fees for its water, because it folds its formidable pipeline operation and maintenance costs into the price of each gallon.

“The [water] molecules don’t cost you anything,” Roden explained. “It’s the infrastructure cost that makes it expensive.”

Roden said various documents available to the public before the 1991 vote clearly explained the pricing structure of state water. “Buyer’s remorse,” he argued in a pretrial motion, does not give Solvang citizens the right to weasel out of a deal they signed six years ago.

But Solvang officials insist that voters never would have agreed to the deal if they had known its true price. They further argue that it’s unconstitutional for a city to take on such a massive debt burden--and one that could grow if the pipelines into Solvang need major repairs in the decades to come.

“The whole thing was a swindle--an absolute swindle of major proportions,” said resident Ed Greenwood, who recently tore 17 cypress trees out of his backyard to pare his water bill. “It’s as if someone told you they would get your car fixed for $18 and when you went to pick it up, the bill was $810. That’s exactly what happened to us.”

As council members only recently realized, Solvang’s state water bill will amount to about $84.5 million, spread out over several decades. On top of that, the city had to put up more than $3 million to upgrade its water distribution system.

“The numbers,” Councilwoman Nancy Nolan Orchard said, “are catastrophic for a little town.”

Faced with such whopping costs, Solvang has tripled its water rates in the past five years.

The city’s rates still are not the highest in Santa Barbara County. But they’re appalling enough to residents like Jessica Jensen, who turned her outdoor fountains into rock gardens, cut back on her daily Jacuzzi baths and still amassed a $341 bill last September. Considering her mortgage payment is just $485 a month, Jensen views the water costs as ruinous.

“I’m getting to the point where I will not be able to afford to keep up this place,” she said. But even at those griped-about rates, Solvang’s treasury does not take in nearly enough revenue to cover the cost of state water. In fact, the council, which actually sends the bills to customers, would have to triple rates again simply to break even, Orchard said.

For now, council members have agreed to subsidize the water tab instead of raising rates. The subsidy this fiscal year amounts to nearly 11% of Solvang’s $7.8-million budget, according to Orchard, who serves on the city’s finance committee.

Residents say they can already tell how badly the water subsidy is draining their treasury. Their roads are starting to look shabby. The downtown needs spiffing. The council has put off renovating the community center.

“The quality of life is going through our fingers here,” said retired businessman Ivan Volkoff.

Solvang’s officials are betting on the lawsuit to bail them out. Councilman Kovol estimated that the litigation could cost the city up to $2 million. But he insists it’s money well spent.

“That’s nickel and dime stuff,” he said, “compared to what’s at stake.”