Board of Supervisors — 2019-01-15

This meeting is being recorded. This meeting is being recorded. This meeting is adjourned. This meeting is adjourned. Seeing none, I'll call the vote. This is a test. This meeting is being recorded. This meeting is adjourned. I'd like to introduce the Board of Supervisors. Senator San Buenaventura. This meeting is adjourned. This meeting is This meeting is being recorded.

Thank you so much. This meeting is being recorded. Thank you. Next, on the second part of today's meeting, we'll have Dr. Roberts to answer a couple of questions. So let's go ahead and get started with questions. It's a pleasure to present to you this meeting of the Board of Supervisors. I'd like to begin by saying that this is a very important meeting for the board, and it will be a very important meeting for us as well. So I'm pleased to present to you today, the Board of Supervisors Meeting of the Senate Supreme Court. And I would like to introduce our speakers today. These are the five members of the Supreme Court Committee on Judiciary. This was made possible through a joint effort by the board of supervisors and the Senate Supreme Court.

Welcome to This meeting is being recorded. This meeting is being recorded. Oops. This motion is supported by the Supreme Court. I'm going to be making a motion to approve the report of Barbara County Board of Supervisors meeting. The motion is so moved, seconded, and seconded. Thank you. This meeting is being recorded. This meeting is This meeting is being recorded.

This meeting is being recorded. Yes. This meeting is adjourned. This meeting is Please stand.

This year we established an inpatient pharmacy. This was an effort to really help increase our compliance with the state and federal standards for medication for clients, to reduce errors in providing medication, and to improve client safety. We have implemented, and you'll see pictures of these, a new automated medication dispensing machine called Pyxis. And I don't know what that stands for. A pharmacist might. But the nurse requests and then the system directly provides access to the medication as prescribed while all the other pill storage areas stay closed. So it's really a much more secure system than the medication room approach we had previously.

You really get access to just one thing at a time, so that reduces errors and it tracks every single thing that happens with the medication administration including the bar coding system that's used each time the medication is accessed. So let's go to the next slide and we can see what that looks like. This is the Magic Pixis machine, and it interacts with computerized ordering of medications so you have a display screen there. You can see there's a barcode scanner to verify that what you have in your hand is what you think you have in your hand.

You have the medical record chart there, and

then staff access this The Santa Barbara County Sheriff's Office has issued a report on the approach of a rainstorm capable of producing debris flows in Santa Barbara. If you are in a storm risk area. For more information or to view the indirect a

tablet kind of survey format, and it's encouraged that every client as they leave the PUF reviews the services there using this tablet. And so these are some of the examples of questions that have been obtained from that survey. I liked the services I received here 63% strongly agreed 28% were neutral and 9% disagreed. Next item is my symptoms are not bothering me as much as before, 73% agreed with that at discharge.

I think that says 13%, but I can't really see that far. We're neutral and 9% strongly disagreed or disagreed with that. One of the important functions of our QAPI is to really focus on different indicators to make sure that we maintain standards for the federal and state requirements of providing PUF services. One of the focused areas of attention is on environmental care environment of care including environmental services, emergency preparations and we've been focusing on reducing the use of restraint and seclusion.

So current areas of improvement that we've been focusing on this past year is really increasing the duration of hand washing to meet CDC guidelines And providing corrective action for staff who don't meet that duration standard consistently and presenting monthly stats at team meetings so they're aware of how they're doing with monitoring that variable. Another effort has been to increase compliance and discharge summaries, ensuring that they contain all the required elements. And corrective action has included PUF leadership staff meeting with our Transit Traditions Behavioral Health Director to provide feedback and follow up on current contracted doctors to provide refresher trainings to ensure again that we're meeting all standards for service delivery and audit compliance.

Next One of the things that we typically bring to our annual report is an update on our policy and procedure approvals. One of the main functions of PGB is to review pretty much every word of every policy that goes forward for the PUF Governing Board, and since its inception PGB has reviewed 101 total policies, and this includes revisions of prior policies as well as new policies that have been developed. The next chart shows the areas that these policies broadly fall into. The most policies have related to the medications because we've gone through a transition from having a community pharmacy deliver medications to having our own inpatient pharmacy. So there have been a lot of policies developed with regard to medications over the past two years.

Also, a large number of infection control patient care and crisis policies, dietary administrative nursing facilities and legal policies have been developed as well. This is an example, and I apologize if this print is small and hard to read. But this is an example of the multi-page QAPI indicator report that the PUF Governing Board reviews every month. We have different elements of our review system This one shows environmental service and environment of care variables. It shows the measure that is done, the description of how that measure is examined, the target we are shooting for and whether we are on target or off target for the month. And then it also reflects whether the prior quarter was on target or off target so we can see improvement and change.

I want to talk a little bit about our efforts during the debris flow incident last year and also the fire efforts. significant concern that the puff may need to be evacuated in the fire episodes and we had two very extensive We called them drills because we ended up not having to evacuate but essentially we were ready to go. We had the vans gassed up, all the charts loaded and ready to go into the cars and patients were prepped and ready evacuate to San Luis Obispo County that had beds waiting for us if we needed to go.

So, that was a really good prep for the staff but it fortunately didn't have to be utilized however when the debris flow came a number of our staff live in Ventura County and were unable to get I just want to call out the extraordinary efforts that staff took, either arriving by boat or in the bus convoys. Some of them actually drove five hours around through Bakersfield and down from Santa Maria to make their shifts. They stayed overnight so they did multiple days in a row and some of them took the train when the train was open as well.

Staff went to amazing efforts to make sure that we had our staffing patterns in place, to keep the puff open and provide for the safety of clients. We also had thoroughly developed contingency plans in place in case we needed to evacuate We did formally adopt an emergency preparedness plan in February, so we basically wrote down everything that we had put into place and have that as our formal plan. And then we also formalized our agreements with San Luis Obispo Health Agency and Ventura County Healthcare so that we have emergency mutual aid agreements between our Next slide.

So as we look towards the future and talk about what else we need to improve our system of care, I've already mentioned the impact that incompetence stand trial has on the PUF. And we have long said before the board with our capital facilities report That problem would be immensely improved if we had capacity for in-county mental health rehab centers, both serving our average PUF client and separately or in the same facility.

criminal justice clients as well. So we continue to try to develop these mental health rehab centers, we have zero beds in county right now having any beds in county would be an immense improvement for the effective functioning of our system. An MHRC is a facility that someone goes to when they don't qualify for PUF services, they are not acute but still need locked psychiatric sometimes very long-term care. So those services remain a priority and we'll continue to have discussions about those.

Reminder that we are mandated to provide services in the least restrictive alternative possible so It's a real gap in our system that we don't have the immediate step down from the PUF within the county. So, we send clients out of county now at a cost of millions of dollars per year at these out-of-county facilities. We also have gaps, although we've made a number of improvements in adult residential programs, supportive housing and permanent supportive housing with on-site services provided.

We are increasing these resources even as we speak the No Place Like Home initiative is moving forward and we have been working with Thank you. Our remaining Mental Health Services Act housing funds are being deployed for the Depot Street project in Santa Maria which will result in another 35 units for our clients and that's going to open this year, 2019 summer we think. Is that right? They've already broken ground and so that's moving forward. In addition, we've done a lot of small projects with the City Housing Authority of Santa Barbara and the County Housing Authority as well as developed due to your board's funding some supportive housing programs with one of our provider to help provide outpatient services for incompetent to stand trial restoration.

So a lot of things going on in the area of step down from PUF that ultimately help the functioning of PUF and the flow at the PUF. So our summary on this presentation is that the PUF Governing Board generally meets monthly. We have regular agenda items on reporting for quality indicators, complaints and grievances, infection and prevention control, patient services, care and safety, restraint and seclusion, medication use, pharmacy services, budget development, policies and procedures, and medical staff bylaws.

We opened our pharmacy in September of 2018 and this has resulted in workflow efficiencies, increased compliance and reduced errors. And by administering the Puff Satisfaction Survey in-house we have $13,000 cost savings and a higher response rate compared to the prior survey strategy which only had a response rate of 12% or up to 44%. So we still have room for improvement. Next slide.

It is requested that the Board of Supervisors receive and file a report on the Psychiatric Health Facility on this annual update from the PUF Governing Board regarding operations of the PUF including quality of care and other program activities, and determined that above actions are exempt from the California Environmental Quality Act. Happy to answer questions and staff here are happy to answer questions as well if the board has any.

Thank you Dr. Gleickhorn, do any board members have any questions they'd like asked? Supervisor Hartman.

Thank you I have two questions. Dr. Gleichhorn first are there any rule changes in the works that would change the number of beds that are allowed at a PUF facility?

The federal agency CMS issued a letter recently to state entities Opening the possibility that a longstanding restriction on funding could be waived on a state-by-state basis if state agencies applied for this waiver. So what does all that mean? California currently has a waiver of what has been called the IMD exclusion, Institute for Mental Disease which limits the number of beds an entity can have to 16.

California has this waiver, they got it as a result of a request, an 1115 proposal request to their existing state plan with the federal government strictly for residential substance abuse treatment programs As part of the organized delivery system waiver. So in expanding the drug Medi-Cal benefit due to the Affordable Care Act, the state has already received an IMD exclusion waiver just for substance abuse treatment that allows Substance abuse residential treatment programs to have more than 16 beds. And they are allowed to deliver services for up to 90 days and the federal government pays for the lion's share, about 95% of the funding in a charge for that service.

If California wants to take advantage of the new letter that has been issued by CMS, that would apply to acute psychiatric settings like the PUF or MHRC settings which are also called IMDs if we had those in county. That action has to come from the State Department of Health Care Services because it relates to the overall agreement that the state has with the federal government for those federal dollars.

And, the earliest that the state could put that into effect would be with the next state plan amendment that is due and would start in 2020. So I serve actually on the Executive Governing Board of the California Health, sorry, California Behavioral Health Directors Association which has already been actively engaged with the state around our support for addressing waiver issues.

There's a big caveat on that, and that is the state will have to prove to the federal government that any proposed changes are cost neutral. And so that requires a lot of study and a lot of number crunching to prove that by having the federal government pay for the proposed change, that will offset costs elsewhere. So the State Department Health Care Services is looking at this very carefully. We are advocating at the state level. I've already been in touch with some of our local representatives at the state level and I have

one other question and that has to do, I think with the orange bar on your chart. The goal of the PUF is to stabilize people through behavioral and medical Treatment diagnosis and stabilize them and then get them out to someplace where they have longer-term care Because it's so intensive there, and I understand that we have incompetent to stand trial people who we need to keep Longer perhaps because we don't have another facility But what I'm not sure about is other non Legally involved clients. Are we keeping them there longer at the PUF because we don't want to pay the expense to send them out or we don't have any other place and how big is that problem?

So you're correct that the orange bars reflect the volume of those days that are spent on the PUF, and those are the non-criminal justice involved or at least the non IST clients on the PUF. Part of the problem with placing those clients again is that we have no immediate step-down facilities that are located within county and so we have less control over the availability of those beds because we contract with a variety of those entities outside of the county. So, again it is our top priority as Presented to this board in our last capital facilities report to develop in-county mental health rehab centers To make that transition more quickly

So if I just might summarize we want to see that orange bar go down. That's our goal

Yeah, green is good blue is okay We want the orange and red to decrease

Mr.. Chair yes Just building on Dr. Gleghorn's answer, although Supervisor Hartman's question started off by fencing off the incompetent to stand trial patients who are there, the same discussion applies and that is under the penal code that involves these folks. If the county has other facilities, whether they're step-down or even outpatient facilities that would promote restoration to mental competence those are available under Penal Code Section 1370.01 so the same logic that Dr. Gleghorn was describing applies to those incompetency and trial folks.

Okay great and I just oh yes Doss go ahead.

So I think what I'm getting out of this is the conclusion is if we're going to be out of the fiscal and societal mess, we've got to spend some capital money to save some ongoing costs at some point. And we're right now looking and negotiating for partners in that endeavor. Is that the case?

Supervisor Williams through the chair, yes.

Great and I know that may not be for prime time but of course we want to encourage those health care entities that are interested in solving this problem with us to continue their dialogue with you and figure out how we can solve this together. Of course, so the other pressing need is on IMD beds which we just saw an item on in the A agenda or two items on the agenda.

Those costs are also going up continuing to go up statewide and Twice the rate of people in Ventura being sent to IMD or to IMD beds, so it's a rising cost. And obviously it would also be more humane if we could find a place for them to go in county that we can control at least from a price perspective, we would have more control over and would be better for the patients themselves.

Supervisor Williams to the Chair. Yes, you know that the department has long advocated for both these MHRC or IMD beds in county as well as the need for additional beds to the existing 16. For a county of this size, 16 beds simply is not deemed adequate for the volume of clients that we have really requiring acute levels of care. So we are trying to work collaboratively with all our county stakeholders to develop both more acute beds and any MHRC beds in-county.

And then of course all this oversight, this report in addition to that there is regular audits and inspections from the state. And then our Behavioral Wellness Commission has also done visits to the facility before. So there's a huge amount of oversight at this facility these days that I just wanted to point out in addition to this report.

Supervisor Williams to the chair. I'm sorry, I don't recall if I mentioned this it's in the board letter but it wasn't on the slides we did just have outside of this annual report period we did just have a DHCS chart audit they do those once every three years and our disallowance rate improved by 20% so we're very happy with that and there's still room for improvement but a lot of A lot of energy has gone into making sure that we are meeting compliance on all levels. And that ultimately helps us with any, we have audits all the time from both CMS and DHCS but all that effort helps improve our bottom line really.

Well I want to thank you and all the PUF staff for that effort.

Thank you. And that's kind of where I wanted to go was, you know, I know this is a little bit of a difficult and weighty topic but you know the PUFs one of those areas that we don't really focus too much on until something goes wrong and then it becomes front page news and a huge liability so I really want to thank especially Terry from the CEO's office for heading up this activity and you know our staff probably work in some of the most stressful conditions of anybody in the county they do so in an outstanding manner.

And I did want to I really commend all those that, you know not only my PUF governing board members but especially the staff. Starting with Dr. Glakehorn and Laura Zeitz I know was mentioned, Dr. Berenson Alicia Silva, Susan Sauterman, Sarah Sanchez, Delilah Brown and Yanaris Munoz those 101 policies I think she was involved in every single one of those. Melanie Johnson, Morgan Peterson and from County Council's office.

I also want to give a shout out to Karen Campos who handles all the, she serves as our clerk of that board and does an outstanding job of getting us all of our reports. I think what was interesting to me coming on board was Because we're a superpuff, we fall under the rules and regulations. Basically state and federal government look upon us almost as they do. We have to follow the same rules and regulations as a full scale hospital even though we are only 16 beds.

And while some of the rules and regulations might seem a little over-the-top For example, one of the ones that I remember was how to properly clean a counter. Which spelled out which cleanser you had to use, how you had to spray it, how long you had to wait before you wiped it down, what you wiped it down with. It seemed way over the top but that's part of the way we get reimbursed and so I appreciate the fact that the staff has really embraced this new template of finding out what root causes of problems are implementing corrective action. And then measuring how we're doing against that corrective action, and I think it's something we could probably learn from elsewhere in the county. Also a huge shout out to Jeanette Pell and all her staff at General Services because there has been quite a bit of capital improvement that's been done inside the PUF.

And I know that that makes probably for a better stay for those that not only are staying there but also work there so I look at my two years on this board as watching the staff make a, in my opinion, Herculean effort to really kind of take a different approach to the PUF. And I just really appreciate all the work that's been done and I think it's resulting in better care.

It's resulting in a better bottom line and both of those are front and center for me so If there's no other discussion, then I will entertain a motion to move the recommended actions. Moved and seconded. Roll call please.

Mr. Williams? Aye. Mr. Hart? Aye. Ms. Hartman? Aye Mr. Adams?

Aye Before I say aye, I want to say if I left out any staff member, I apologize. Aye.

I just want to note we did not have any requests to speak on that. Pass is 5-0.

Okay thank you very much. Do you need a break? Are you ready to go? All right let's move onto item D2. Mr. Allen?

Chair Lavinino, members of the board. Item D2 is some community services. It's a hearing to consider recommendations regarding residential property assessed clean energy financing.

Good morning Chair Lavagnino and members of the board. George Chaption, Community Services Department. With me I have Ashley Watkins who is our division lead for the Sustainability Division and Ashley's going to start off by introducing this item giving some background on the residential PACE program Some of the potential benefits and concerns of the program, recent legislation and seeking direction from the board on future action for residential PACE. So with that I'll turn this over to Ashley.

Good morning Chair Lavagnino, members of the board. PACE was first enabled in California with the passage of Assembly Bill 811 in 2008 and what PACE does is provide a mechanism for property owners to finance the cost of energy efficiency, water efficiency, renewable energy projects. When a property owner agrees to pay financing, a lien is placed on the property and an assessment in the amount of the project costs plus any administrative fees or interest are placed on their property tax bill from the county. And then these financing costs are repaid through the property tax billing process.

Pace liens are considered super priority liens and as such they take priority over existing mortgages. And what that basically means is that when a home would go into short sale or foreclosure, liquidated for some reason That the PACE payment and arrears would be paid off first prior to the first mortgage. PACE programs were originally envisioned as being operated by local governments, however the majority of programs throughout the state with a few exceptions are now being operated by third party administrators with private lending partners.

PACE programs require that a local government opt into them. However, cities may opt into them on their own regardless of whether the county has approved PACE but PACE requires some county administration even if there's not an active PACE program within the unincorporated county. And what that looks like is basically PACE liens need to be recorded with the clerk recorder.

The auditor controller or treasurer tax collector has to add that assessment to the county property tax bill, and then as I mentioned previously repayment is collected through that property tax bill. The auditor controller would then distribute the collected funds to the third party administrator. We have some experience here in Santa Barbara County with PACE. We were actually set to launch our own internally administered PACE program for both residential and commercial in June 2010, however just prior to launch the Federal Housing Finance Administration issued a statement in July 2010 expressing concerns related to PACE They felt that it put the enterprise at risk.

FHFA is the agency that regulates Fannie and Freddie Mae, which are two of the largest backers-of-home mortgage. So the board felt that this was important. The effect of this direction was essentially that a potential home buyer is unlikely to find funding or financing that would allow them to purchase a home that was encumbered with a PACE lien and then that would result in the PACE property owner having some trouble selling their home.

Given the potential risks to consumers, the board adopted Resolution 1021 in July and directed staff not to accept any residential PACE applications until FHFA's concerns had been addressed. FHFA's position has not changed since that time and they reiterated their stance on residential PACE in June 2016. In April 2018, the board approved a commercial PACE program only using the CSCDA OpenPACE program.

CPACE programs are considered less risky because they typically require that the property owner get approval from the existing mortgage lender prior to a lien being placed or funding being obtained. And that's sort of an important distinction because getting that lender consent mitigates the risk that a property owner would be violating their mortgage agreement. Many times mortgage agreements have a clause in them that says that the property owner can't encumber the property with additional debt that takes first lien position.

Ashley, we have a question from Supervisor Adam.

Yeah but it in no way eliminates the risk that the person that may be trying to buy that property later can get a loan to do so. Right because Freddie and Fannie can't loan in that whole area code isn't that right?

So you're speaking specifically to some direction that Fannie and Freddie made with regards to residential properties. Fannie, excuse me, FHFA does not oversee commercial lending entities so their direction only applies to residential.

Okay I'm sorry. That was off.

But it is true for residential. Okay

all right but back to what we're talking about today The Freddie and Fannie cannot, I just don't want that to go by because you're kind of moving through this presentation. And I heard you say this and then I just want to make a point here that this is regarding residential projects and residential PACE programs prevent Freddie and Fannie from loaning in the entire zip code That's actually not correct. There was some direction given by FHFA to Fannie and Freddie that stated that they could

What they could do is redline communities and not provide the same amount of ability to have equity in their home if that city or county opted into a PACE program. not move forward with enforcing that, but what they have moved forward with enforcing is if a property owner has a home that has a PACE lien on it and a potential buyer is looking to purchase that home.

They're going to have some difficulties finding financing because the majority of conventional loans are backed by Fannie and Freddie, so they would have to find some other lender. It's possible that there's other lenders that would lend on it but the majority of lenders follow Fannie and Freddie guidance.

Okay thank you.

So while many PACE programs came to a halt after FHFA's guidance, after a brief pause California moved forward really with third party administrators and private lenders emerging as the driving force behind those programs. Residential PACE programs are currently operating throughout the state, including the City of Santa Barbara and the City of Lompoc. The City of Santa Barbara adopted a residential PACE program in 2007, and there are no...

Okay Ms. Watkins we are going to have to hold just for a second. Looks like we had a little hiccup in our, we're ready again go ahead. If you want to repeat what you just said about Lompoc that would be great.

So the city of Lompoc started a residential PACE program or opted into a PACE program in 2017 and they currently have 17 projects according to our records. On a statewide level, the treasurer of the state reports that there's about 145 R-PACE liens valued at about $3.4 billion. I would note that the city of Carpinteria recently voted not to move forward with a residential PACE program at this time, and that overall we're sort of seeing interest in PACE waning with PACE providers.

Reporting a 40 to 50% decrease in interest related to the number of projects that they're seeing that are obtaining PACE financing. Probably related to some of the recent legislation that provides some consumer protections, but there's also been some criticism from the media as well as consumer advocacy groups that might be driving some of that. The residential PACE programs come with both potential benefits as well as potential concerns. Proponents of PACE cite that there's an increased deployment of renewable energy, water efficiency and energy efficiency projects and that those projects result in a reduction in greenhouse gas emissions.

They also cite that PACE provides 100% financing with no upfront out of cost, making it easier for homeowners or property owners to move forward with these projects. And then they also say improved property value job creation and economic development that are resulting from these projects. Alternatively, as residential PACE programs have expanded they've come under criticism from consumer advocates as well as some homeowners. Some of those concerns expressed include what I spoke about earlier with a significant number of homeowners being unable to sell their home either because a prospective buyer can't find financing for it or they just don't want to take on the PACE lien.

There's also been some charges of predatory lending practices, so specifically targeting Spanish speakers, elderly, low-income residents who maybe would qualify for free or low cost services through the state or through the utility. And then also that PACE financing has a pretty high cost associated with it. We took a look at some of the different residential financing products that are out there, there's quite a few.

There are programs that are available through Fannie, there is a statewide program called the Residential Energy Efficiency Loan Program, there's HELOCs. So there's a lot of financing already out there available for these types of projects. Looking at the rates, I would say that PACE rates tend to be higher than the annual percentage rate that's charged. And that's really sort of driven by the administrative fees and costs that are associated with that type of lending. So just to kind of give you an idea of scale With the HELOC, some of the banks that we talked to, they're providing rates of 5% to 7% with fees that could be as low as $500. Whereas the PACE projects that we've seen coming through Lompoc, the majority of them are in the 9% rate for the APR.

Again, PACE programs require some county administration. And because of that there's been some confusion either because contractors aren't representing it properly or homeowners aren't quite understanding what it means when contractors are representing it as a government sponsored program. It's created some confusion about who is actually responsible for the project costs.

And then I also think there's some reputational risk. And then finally, I would just mention that PACE providers do have the ability to foreclose on a property if a payment is missed. To address some of the concerns around PACE, there was legislation that was passed in 2017 to provide consumer protections. Specifically those provisions include requiring that income be factored into underwriting criteria. It was not previously equity in the home was the main driver for being eligible for a PACE loan. Also minimum training requirements for participating contractors, PACE administrators are now required to have a phone call with the property owner to make sure that they understand what they're signing up for and then no contractor kickbacks there's some reports that the PACE providers were providing kickbacks to contractors as a result of them utilizing that specific financing There were some concerns that there were too many loopholes in the legislation that was passed in 2017.

So, in 2018 two more pieces of legislation were approved by the legislature and it's hard to say whether the appropriate level of oversight and consumer protection has been achieved especially given the fact that you know the legislation passed in 2018 just took effect in January 2009 2019, excuse me. So today staff's recommended actions are to either not pursue implementation of a residential PACE program further at this time or to pursue implementation of a third-party residential PACE program and we're happy to take any questions from the board.

Thank you very much. Are there any questions of Board members? Supervisor Hartman to start

Thank you Mr. Chair, my first question is I think under the new law you can also use this for fire hardening? Is that correct? I didn't catch that as one of the things you could use this money for when you introduce your presentation.

Yes, so there was legislation that was passed in 2018. But the board would have to take additional direction, take additional action and specifically they would have to designate an area as a high fire zone area and then only that area would be allowed for fire hardening measures. I would just point out that's not a unique aspect to PACE. Most of these other types of financing options like the HELOC Or even the Statewide Residential Energy Efficiency Loan Program allow for some of those measures.

And two more questions if I may? The first, the 17 examples in Lompoc were most of those before the new restrictions by the state law or are some of those post-new law?

They really vary, the majority of them I would say happened in 2017-2018. And

if you would summarize? I mean I looked at it and it didn't look like a very good story that we're seeing there.

Yeah, I mean when I looked at some of the liens that were recorded in Lompoc. The median interest rate was 9.19% with the highest interest rate being 9.99%. And just looking at the cumulative effect of that rate as well as the long term that's available so These loans can go out as far as 25 years. You have some cases where a property owner is paying $30,000 for a project but over the course of the loan their costs are more than double that.

And my final question is, I'm trying to understand the administrative burden to the county. And I think I get the first part of it where we have to assess the increased value and the loan but when people pay their property tax then they're including this and then what does that take for the county to pay the financing entity? Is that how it works? I mean I don't quite understand how Again, I'd like to understand better what this means for the county administratively.

Sure so when a city or a county moves forward with adopting a PACE program there's a fee agreement and basically what happens is when the money for the property tax is collected some of that money if there is a PACE program that's operating would need to be set aside And

I know in the past our auditor controller has had a negative opinion of residential PACE and I'm just curious if we have any updated information on that. Is our auditor controller in the audience in Santa Barbara?

Yes, Supervisor she's coming up to the podium. Okay

thank you. Good morning.

Good morning. I was going to say good afternoon but it's good morning, Chair, Supervisors. The auditor controller's position is still the same. It's unchanged. We do not support residential PACE at this time from what from my understanding the legislation that FHWA or the FHFA is still and we just all saw that presentation they are still not supportive of This program because of all the various reasons just mentioned I think our white paper is still timely with respect to all of the different arguments against it.

And I guess just for the record, we're not against energy programs. We're sort of against the technical construct of how this is presented so anything

else? Thank you very much if anybody else has any questions from Schaefer. Are there any questions from Santa Barbara before we go to the public?

Yeah, I mean, I guess what I would want to hear maybe from some of the folks who are in opposition. And this is just as a precursor for public comment if people might weave it in is, I served a brief amount of time on the banking committee In the state legislature and To me, this is not even like in the top five or even top ten lending products ripe for abuse. Now obviously it's possible to abuse lending products but I mean we have made a societal choice to allow consumers access to a number of lending products that If they're not treating it with discrimination, they will get in trouble.

I mean we allow credit cards at 30% interest. It's legal in this state to do payday lending which is just I would consider usurious levels of interest and a cycle of problems. So, to me we have to put this debate in some context of we don't make illegal lending products that we think people are going to get in trouble with. For some reason this is the one lending product that people have gotten into trouble with that we're not letting people have access to.

And I want to know why. Why should we make that decision for consumers that they can't assess their own financial situation and have access to this while we allow them access to payday lending, HELOCs, all sorts of home equity lines of credits that people get upside down in their mortgages with? And credit card rates of usurious levels. Why is that all okay, but this isn't?

And that's something I would love some of the speakers that are in opposition to address because to me the advantage and disadvantage of this, the reason why, I think the reason why we're paying more attention to it is because there's actually people going out and finding customers We are not paying attention to these other lending products because there's not people going out and buying customers. That is also the advantage of the program, meaning that Without people going out and finding customers, there's not going to be the energy efficiency work.

Okay I think we have somebody that is going to take you up on that response Supervisor Williams.

Let me repeat what I just think I heard you say and ask you to clarify that it's the one product people have gotten in trouble with that we don't want to allow them access to?

My question is why would this be the product that we don't want to have people have access to when we allow them access to a bunch of other bad ideas? Payday lending, we allow them access to all sorts of home equity line of credits. We allow them access to any number of unconventional loans and credit card rates that Get a whole lot more people in trouble than base programs around the state. So