Mr. Katchoman Strikes Again
The County doesn’t want you to think about Maria Kelly and Paavo Ogren.
County Public Works unveiled an ace up their sleeve at the SLO County Board of Supervisors on Tuesday, August 9. Public Works’ John Waddell told board members during public comment that on August 4 Governor Jerry Brown signed into law Assembly Bill 1125. 1125, which was introduced by former BOS supervisor Katcho Achadjian, is a supplement to State Senator Sam Blakeslee’s AB2701 that allows the County to “develop a program that would offset the assessments and charges adopted by the county for very low and low-income households with outside funds, including grants.”
Most of AB 1125 is a regurgitation of AB 2701 with a small, but ambiguous addition that allows the County of San Luis Obispo to dictate how much “low-income assistance” Los Osos residents will receive. The bill — most specifically, the one paragraph amendment known as Section 25825.5 (g) — offers no singular vision of how the County low-income assistance program will be deployed, so it is very uncertain how effective their program will be. It’s worth pointing out that it has taken six years — since Gov. Schwarzenegger signed AB 2701 — to address the glaring omission of affordability in their legislation as it has been the biggest elephant in the Los Osos room, if not in the Board of Supervisors room.
Some may argue that AB 1125 does not address affordability at all.
For one, the bill only authorizes the County to develop a low-income assistance program, but it stops short of mandating one. The key provision in AB 1125 states that the County “may [not shall] develop a program to offset assessments, standby charges, or user fees and charges that are authorized pursuant.” There is no actual guarantee of this program’s implementation and practicality.
Second, it is a widely recognized fact that costs for homeowners increase proportionally with increases in project costs. Affordability for large-scale public works projects is recognized when costs are cut from the project design itself, and those cuts produce savings for homeowners. That’s why it is important for capital costs for any public works project to be low and contained. However, the Los Osos wastewater project’s capital costs continue to increase, so the effectiveness of any loan/grant or “low-income assistance” savings decreases. The current project is estimated at about $200 million with a strong tendency to produce budget adjustments/increases. At this point, unless low-income assistance savings will be provided with respect to project cost increases, the assistance is meaningless. The project is simply too expensive to begin with.
The County’s willingness to provide actual financial assistance for residents has been mixed at best.
For instance, County Public Works forecast that they would receive USDA financing for the project as a $64 million loan and $16 million grant (financed over 40 years with “below market interest rates”). Originally, Public Works said they were applying for “disadvantaged community” assistance at 0% interest. Instead, they received an $83 million loan and a $4 million grant (financed over 40 years with 3.25% interest). When USDA financing was awarded, Prohibition Zone residents were on the hook for paying more interest on a significantly larger loan portion — and the County was quick to blame project opponents/appellants for the increase despite the California Coastal Commission finding substantial issues with it.
Recently, District 2 Supervisor Bruce Gibson floated a “sewer welfare” fund: a “private charitable possibility” with “a sum of around $180,000 that sits with the Community Foundation ready to be disbursed to individuals for the express purpose of affording compliance with [the wastewater project].” Razor Online calculated that this fund, if it even exists, would only be able to pay for one month of the sewer for only 720 residents (assuming the monthly cost is at least $250/month). That comes to about 6.9% of ratepayers for only one monthly sewer bill.
There are other financing opportunities for Los Osos, but updates from Public Works have been scarce and underwhelming. Traditionally, the County has not been forthcoming about project financing and low-income assistance. Given their dismal record for providing constructive financial aid to residents for this costly project, AB 1125 will not have a positive socio-economic impact in Los Osos.
Two years ago, the often-ridiculed Opinion Studies Community Survey (March 2009) reported that 42% of survey respondents/assessed owners would definitely or probably apply for financial assistance (see Table 7). The January 2009 Affordability Report, which was authored by residents Sherry Fuller and Mimi Whitney, homeowners making less than $45,000 annually would suffer significant financial hardship. Those who are in the lower income bracket making less than $35,400 a year would likely need to move. Neither of these studies included O&M and one-time homeowner costs associated with the project. Neither of these studies included the interest rates for the loans and grants received for the project.
When Gibson was asked by Regional Water Quality Control Board member Monica Hunter whether the County “made any projections on how many households may actually qualify or need assistance,” he responded, “Right now we don’t know…”
Gibson is right, though not for the right reasons.
In California, there is low-income assistance for utility bills like the CARE Program and the Low-Income Energy Efficiency Program (LIEE). The qualifications for both of these programs are based on total annual household income and total number of persons who are living in that house. These programs offer clear criteria that allow low-income households to decrease the costs of their utility bills, and even incentivizes consumers to be more efficient with their energy consumption. For six years, the County has been unwilling to provide this type of financial assistance nor understand the dire consequences to pushing for an unrealistically expensive project that requires a specific plan to keep Los Osos homeowners in their homes. Right now, the County is not going far enough to prevent thousands of residents from having to move.
In SLO County, low-income assistance for Los Osos has become a stale joke that’s now being used to sweep a scandal under the rug. How low can they go?
– Aaron Ochs
