Opportunity to save Los Osos so much money

January 5, 2012

Julie Tacker


It’s funny that Monday’s story about the California Public Records Act graced the pages of the Tribune just as I was writing my response to a December 1 Tribune  article, “Los Osos sewer project may get a little cheaper,” using information obtained in a California Pubic Records request to SLO County Public Works.

Yes, I am one of those pesky citizen activists who have had to learn the law and use it — because government isn’t always as transparent as we hope.

My CPRA request revealed exactly what I suspected, and the reason for my request.

Among all  correspondence over eight months between March 1 and November 30 the County Public Works Department, while negotiating a $70 million loan on behalf of Los Osos citizens, never asked for the lowest possible interest rate for the term of the loan from the State Water Resources Control Board staff.

In hundreds of pages, emails, interest rate scenarios, conference call agenda’s and spreadsheets, nowhere is the documentation that Public Works or our Supervisor, Bruce Gibson, advocated for a 0 percent interest 30 year loan. Not until the last day and last hour to comment on the item, after the county had presented all their material, after the state staff report had been posted and well after state staff had made their recommendation for 2 percent.

For a little background, the State Water Resources Control Board administers the State Revolving Fund, a source of low interest funds for water quality projects throughout the state of California. Our County representatives and a handful of Los Osos citizens (including myself) went to Sacramento on March 1 to make the case that the then proposed 3.0 percent interest rate was too high for the economically disadvantaged community. With unison pleas from the citizens and county reps, the State Board agreed to lower the interest to 2.6 percent and gave the county the ability to return — no later than December 2011 — to make the case for a further interest rate reduction.

What difference would it make?  According to John Waddell, the county’s project manager, reducing the interest rate to 2 percent would result in an overall savings of $5.9 million, and no interest would result in a savings of $22 million, a significant cost savings to an economically disadvantaged community.

The backroom negotiations were never brought to the San Luis Obispo County Board of Supervisors and public for their input. No invitation to engage with the state board to ask for a lower rate.

Not until November 29 when the State’s December 5 staff report was made available on the web (only a handful of citizens knew to search the web for it) did it become clear the county wasn’t advocating on behalf of Los Osos to the best of their ability. The report revealed the county’s request for lowering the interest rate was presented in 3 scenarios; 2, 1 or 0 percent for 10 years all with a bump to 2.6 after 10 years (assuming the LOCSD would take over the project at that time). As an aside, no one thought to ask the LOCSD if they would want the project back in the future — a wholly different debate for another time.

As the scene unfolded, I was in disbelief. Reading all the material, understanding what was at stake and the missed opportunity.

It is clear to me that for all the drama and sewer saga, all sides and detailed debates, lowering the interest rate was one thing we could all agree. This was the time in which sewer factions could unite and make a difference in the future of the project. But, there was no time to mount a citizen response, even the Tribune sat on their hands, having been notified ahead of time.

Sadly only three Los Osos citizens and President of the Los Osos Community Services District Board Marshall Ochylski commented in time.

But there was one more, in a strange and confusing twist, after all the negotiations and gyrations over the past eight months, Public Works Director Paavo Ogren writes a letter requesting 0 percent interest for 30 the year term of the loan submitted just minutes before the comment period closed.

Fortunately for Los Osos, homeless advocate Richard Margetson, drove the ten hours to Sacramento and back to further make the case. While his testimony was compelling and one board member motioned for 1 percent, the motion died and he was unsuccessful in lowering the rate below the staff recommendation of 2 percent.

After reading over all the negotiations in the CPRA, it’s clear that the public works department and our supervisor are disconnected from the citizens the project effects.  After repeated requests, they have refused to perform an economic impact study, claiming they know Los Osos is “disadvantaged” but continue to use community-wide MHI data, claiming $60,000 household are affected. But, using community wide census data does not get to the detail of those in the Prohibition Zone.

For example, of the 772 school age (K-6) children in Los Osos, 41 percent are eligible for the free lunch program, all the seniors many of whom live in mobile home parks and renter populations are higher in the sewer zone than outside.

While the sewer has been “studied to death” the economics of it has not. The costs associated with abandoning septic systems, hooking up, ongoing operations and maintenance and debt service for 30 to 40 years has not been analyzed against the real people who will forego medicine, heating their homes, and cutting out all discretionary spending to the local “mom and pop” businesses in Los Osos that currently scrape by, not to mention costs for the businesses to become customers of the project.

Furthermore, the economic ripple effect of Los Ososans no longer making the trek to their favorite spot in SLO, Morro Bay or beyond to catch dinner and a movie. As discretionary funds dry up and Los Ososans stay home to flush their new toilets for entertainment hasn’t been quantified as a countywide impact and should.

Making the economic case to the State and grant providers is paramount to receiving low-to-no interest funding for the project. These providers are political bodies and can be swayed to waive application fees, reduce rates and extend terms. But the case has to be good. For the good of the “disadvantaged” the economic study needs to be done, get the county “negotiators” out of the way and let the data make our case.

Julie Tacker is a 40 year Los Osos resident and longtime dedicated “Sewer Nut”

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Thank you, TW, for posting the e-mail address of the CSD! Muchas gracias!

Friends don’t let friends design sewers

Isn’t it a hoot when public works projects become cat fights? Kind of like pay for view, and believe me, you will pay.

It’s just comforting to know that if, when all is said and done, the sewer system doesn’t remove all the nitrates we get our money back. right? right?