A California water district is considering selling about 40% of its State Water Project allotment, which could help supply a massive proposed housing development, Noozhawk reported.
The development is a new 4,000-home community, planned on vacant land south of Orcutt, California. If approved, the deal could reshape how the Montecito Water District manages its water supply.
Here's what to know
The Montecito Water District Board of Directors has written a non-binding letter of intent that would allow it to explore selling about 1,400 acre-feet from its annual State Water Project share.
According to Noozhawk, Solstra Communities California LLC is the company seeking the water for its proposed Solomon Hills development on 4,195 acres west of Highway 101.
The project calls for up to 4,000 single and multi-family homes, along with office space, commercial buildings, public facilities, and open space. Construction is expected on about 1,903 acres. The total property would also include about 950 acres of open space and a 506-acre conservation easement.
District staff said the sale could bring in as much as $40 million by 2028 and reduce Montecito's future operational and infrastructure expenses tied to State Water. The district would keep 1,900 acre-feet in its annual allocation.
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The water in one acre-foot, which is 325,851 gallons, is typically enough to supply about two to three households for a year.
More background
The proposal comes as California water agencies face growing pressure to balance new housing with uncertainty about the state's future water supplies.
Rainfall and snowpack have long made State Water Project deliveries unpredictable, and the agencies involved have also faced increasing costs. However, Montecito Water District staff said the district is in a stronger position now because it has shifted more of its supply strategy toward ocean desalination.
Floyd Wicks, a Montecito Water District board member serving in his 10th year, said the district has spent years preparing for this kind of transition.
"We have been building this plan for years. Because of our team's collaboration with Santa Barbara, we now have a far more reliable water supply from the Pacific Ocean. As a result, we are able to divest a portion of our State Water Project assets to other communities that don't have access to the ocean," Wicks said.
The Solomon Hills project still faces a lengthy approval process, including a water supply assessment and environmental review.
"Because these sources may not be reliably available at the time of project development, the adequacy of the water supply will require further evaluation in a Water Supply Assessment, which is being prepared by the applicant," the county's scoping document agreed.
What's being done?
For now, the district is considering only an initial framework. If the letter of intent advances, Montecito and Solstra representatives would then move on to drafting a purchase agreement, a step that could receive final approval in spring 2027.
Even then, the transaction would be completed only if the Solomon Hills development secures all required approvals. That process could take years.
Where can I learn more?
Water use discussions are popping up more and more along the West Coast.
• In San Diego, agencies are selling desalination-backed surplus water to drought-stricken buyers across the West.
• In The Dalles, Oregon, officials faced backlash over ceding a public water source near Google's data center.
• In San Jose, residents and councilmembers pushed back as water and garbage rates jumped for households.
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