Wednesday, July 28, 2010

Tick, Tick, Tick, Cont.

The BOS had a sewer project update yesterday. There were three due diligence issues the Board was concerned with: The Coastal use permit is pretty much done, the funding -- $80 mil at 3-4% interest loan from the USDA, SRF loan, etc.  – was pending and while the prospect of litigation was low, the time frame for suing were rapidly closing so that prospect was diminished.

And there were two directions staff wanted a decision on: 1) advance $400,000 more county money to start double tracking various tasks so that bids could be taken quicker, thus taking advantage of a better bidding environment due to our poor economy or 2) consider due diligence done and jump in and use assessment money already in the bank to start double tracking various tasks so bids could be taken quicker & etc.

There was no news regarding the $80 mil USDA grant and no firm commitment on the SRF loan. Or the $16 million grant. The 80 mil is the last of the stimulus $ for now so staff said they should hear whether they got the loan in a few days to a week.

There is still the problem of securing the Prop. 218 vote from the property owners of undeveloped properties agreeing to assess themselves for their share of the sewer project – some $27 million worth that’s now missing from the over all project budget. And the rest of the owners in the PZ also have to vote on a Prop 218 vote of “rates and charges” for O&M and other various fees, (i.e. costs above and beyond the $25,000 they’ve already assessed themselves for.) including, should the vote of the undeveloped properties fail, all those additional costs in the form of even higher the rates and charges (which amounts would be “refunded” in lower rates, should those properties come on line somewhere down the line.)

The Prop 218 assessment for the vacant lot owners will be a straight assessment vote. The Prop 218 for rates and charges will be a “protest” vote, which is often easily won since many people don’t understand the paperwork and toss it in the wastebasket, hence the number of people who take the time to “protest” the vote is traditionally very low and so measures done this way usually zip through. Of course, this is Los Osos.

The sticking point on the 218 assessment’s “missing $27 mil is that if it fails, nobody seems to know what would happen. Would the whole project go kerflooey and the county walk away? Can they somehow go get the “extra” money with no way to secure it? If there’s never going to be enough water to allow build-out, or people believe there’s not going to be enough water, why would land-holders vote to “tax” themselves on a “worthless” piece of property? And if residents in the PZ, who have already been slammed with a huge sewer bill say No when asked to pick up a larger tab for those properties (an additional hit that many would see as patently unfair (another unintended consequence of the artificial PZ lines in a real world/basin), will they be held hostage by a stunning piece of blackmail: pay for it all – even though you get no direct benefit from paying for a system that was designed to accommodate full build out even though that may not happen -- or loose it all?

The County plans on having town-hall meetings before the vote, so maybe questions of that sort can be asked and answered.

There was some complaints during public comment about the escalation of costs in the numbers being bandied about. Listening to Will Clemmens our Dept of Public Works Financing Guy, stated that one of reasons remain very, very high is that the county is presenting the worst case scenario to both the Feds and the State Water Board – worst case being the actual, real-time, total out-of-pocket numbers, such as hook up costs, property repair costs, added charges and fees & etc, that are going to land on homeowners—is so the lending agencies can actually see what’s really facing this community – not some smiley-faced PR numbers designed to get votes or coerce community participation. Real numbers. And since the State Water Board recently changed the designation of this community into being officially “disadvandated” i.e. “poor,” those real numbers are critical for the lenders to realize exactly what’s going to happen here if we don’t get better terms and/or more grants.

So, financially, there’s several sets of numbers in play here. Real numbers that can result in more help from feds and state thereby resulting in better, smiley-faced PR numbers when the dust shakes out.

Mr. Clemmens also noted that people asking to dump the 4% USDA loans in favor of 0% SRF loans needed to understand that there isn’t enough money in the SRF loan program to cover the $80 mil needed – the SRF program would have to award a whole year’s budget just to Los Osos while letting the rest of the state go fish for years, and that’s not gonna happen.

Public Comment & Misc Stuff

Steve Paige asked an interesting question of County Council, quoting from the Engineer’s report that appeared with the 218 ballot, and asked if that report was considered a form of a contract. That is, if the ballot measure and engineers report said the vote would do and be A,B,C,D, and if, after the vote was secured, somebody came along and removed D, that is changed the substance of the ballot measure after the fact, was that legal? Astonishingly enough, County Council said, Yep, the courts held that apparently the engineer’s report that goes along with an assessment ballot has no more meaning than a glossy campaign brochure – filled with all kinds of stuff that can be changed, removed, added, whatever AFTER the voters have voted. (The issue in this case was the engineer’s report that included a statement that STEP would be given equal consideration all the way through the process, something that obviously didn’t happen as listed.) I found this piece of information amazing. Something everyone should think about when approaching any and all assessment ballots or proposition ballots & etc. Apparently, it’s all hokum and can be changed after the fact willy-nilly by The Powers That Be, thereby making a mockery of a “vote.” Pretty amazing.)

Mr. Owens of PERC noted that his company can offer design/build/finance and show up with firm project bids (no add ons and nice open-ended change orders) and noted that that’s what his company will be presenting to city City of Morro Bay/Cayucos for their sewer upgrade. The implication of which was; You guys shouldda opened up The Process and RFPs for true design/build so you’d end up with completed packages with solid price tags instead of whacking the project up into pieces and “arranging” the list of bidders allowed in the door. A suggestion that wasn’t gonna fly anywhere in that MWH-happy room.)

Other speakers reminded the Board that a gravity system may turn out to be an oxymoron – gravity systems take lots of water to work; the goal in Los Osos is to use LESS water, not more, hence gravity systems are the wrong type of system if your goal is to save water. That information also fell on deaf ears. Though there was mention of the need to move the water retrofit/conservation program up the to-do list, i.e. start that first before anything else since saltwater intrusion is the real danger here, not nitrates, and should have been THE priority.

At the end, Supervisor Gibson wanted to push forward to either move to accept due diligence and spend the assessment money to accelerate to-do work and/or advance the $400,000 to accelerate to-do work, but the rest of the Board was having none of it since USDA funding wasn’t secured and they weren’t about to spend more money on this project at this point. Plus, the Los Osos CSD’s bankruptcy issue was due to finish up in Sept, so they needed to wait to see how that shakes out before moving forward. Plus it was pointed out that this agenda item wasn’t an action item, so they instructed staff to allocate within their remaining budget to move onto accelerating some of their tasks and when they hear back on the funding, prepare a report and return to the Board and it’ll then decide what to do then.

At the end of public comment, a gentleman from The Association of Environmental Professionals stepped up to present the staff (Mark Hutchinson, John Waddell, et al) a 2010 ”Merit Award, Environmental Analysis Document,Los Osos Wastewater Project EIR” Many in the audience gasped, groaned, booed and stormed out in a huff. Apparently they were outraged that a document they found sorely lacking in context (and perhaps lacking in detail that resulted in a gazillion “comments” and further input of missing info, & etc.) would get an award for excellence. I suspect that perhaps they didn’t understand that awards for excellence don’t usually include context. For example, one could argue that the SS certainly would have deserved an “Award of Merit for Organizational Excellence” for their final solution plans. It was a well done plan. Of course, when you add in context, then, uh, not so much.

But it was quite a moment. I actually thought it was a Stephen Colbert “Colbert Report” straight-faced joke and after the spiel we’d all have a good laugh. But no, it was for real. And, in the overall context of the Hideous Sewer Wars, I had to admit it was a true Los Osos moment.

Another reason why I love this town.

Off The Topic

This from the L.A. Times yesterday: “The Republican National Committee has invited conservative blogger Andrew Briebart to participate in a private GOP fundraiser in Beverly Hills with party Chairman Michael Steele next month.”

Ah, lay down with dawgs, git up with fleas. And now the question: Will they all end up at that S&M Strip Club swilling champagne and tucking $100 dollar bills into the thongs of strippers, all on the RNC’s dime? Oh, I sure hope so.


The Razor said...


There was also Frank Ausilio, who talked about buildout for the sewer being permitted for est. 6,200 more residents than our current Prohibition Zone population; so we're going to have a sewer that's too large for the community it serves.

It's important to note that the 218 assessment engineer's report is not a contract, however that document detailed the special benefits of the assessment and outlined exactly what residents would be assessed for. That engineer's report gave residents the clear impression that both STEP and gravity were going to compete throughout the design-build process in its entirety.

The County has satisfied the criteria for fraud. Sure, there's no law against making broken promises, but to influence (and even coerce) assessment voters using false pretenses is fraudulent.

Sewertoons said...

Wait a minute! Don't you recall what Al has been saying for years --don't you pay attention?? The infiltration is supposed to be SO huge -- well, it's just quite clear that we'll USE all that theorized extra space!!

Alon Perlman said...

Thanks Ann for this review. Also interesting the confusion regarding the 3 options. After all, this was by Staff reporting and noticing, a request for future direction to staff only. Some supervisors re/revealed a reluctance to advance the monies, and the discussion did draw out, unnecessarily, considering that the 80 mil loan uncertainty was recognized at the outset, but it did get settled as far as the staff knowing what to do next. As for the Award; What made it ludicrous was the narrow fact that the project before the Supervisors was not the EIR (Tonini) project. There is a larger context of multiple issues not the least of which is affordability, those would not necessarily negate the validity of the award. The EIR's second flaw was in a technical linkage of a project component to 218 (empty lot) dependency. The rates and charges issue to me at this forward point is not in the removal of “D”, given that it has already happened, but in the addition of “E”; 25 mil or so necessary to create the basin wide benefit.
The 2 218s were explained and the uncertainties in both will not be settled till they happen.
All in all this was not so much a milestone, as an alert regarding an upcoming milestone.

M said...

Anyone know what happenede to the story in the Tribune about the last Supervisors meeting? I did a search on the Tribunes sight and it's gone.
Sincerely, M

Alon Perlman said...

They seem to have a glitch in the search engine. It applies The story is reachable through other means, such as an account.