Board of Supervisors — 2021-05-04

Thank you.

Good morning. I will call to order the May 4th 2021 meeting of the Santa Barbara County Board of Supervisors. Madam Clerk, please call the roll.

Second.

Any further discussion? Hearing none, Madam Clerk will you please call the roll?

Motion passes unanimously

Thank you. Madam Clerk, are there any announcements or changes to our agenda today?

Chair Nelson and members of the board, just a couple of quick announcements this morning. I would like to remind the public our meetings are now being interpreted and broadcast live in Spanish. We are broadcasting our meetings in Spanish both for Cox Cable subscribers in South County as well as Comcast Cable subscribers in North County. Members of the public can now view our meetings in Spanish by turning on the secondary audio programming also known as SAP under their language settings.

Lastly, I would also like to remind the public who are participating in our meeting today of the board's alternative methods of public participation. For alternative methods of public participation and to provide public comment on general public comment or an item on the Board's agenda today please see page 2 of our agenda. Individuals that would like to provide verbal public comment you may do so via Zoom by registering in advance via the link available on page two.

After registering, you will receive a confirmation email containing information about joining the Zoom meeting. Once the chair has announced the item you want to comment on please join the meeting with information provided on the registration confirmation email. The clerk will call you by your last name or the last four digits of your phone number When removed from mute, you will hear a notification that your line has been unmuted. If you are using a touchtone phone, you may need to press star six to unmute yourself. Again if you're using a touchtone phone, you may need to press star six to unmute yourself.

Each person may address the board for up to three minutes and this is at the discretion of the chair. If you have any questions regarding this process please contact the clerk of the board at 805-568-2240 again that's 805 5, 6, 8 to 2, 4, 0 and that concludes my announcements today. Thank you.

Thank you Madam Clerk.

No report this morning Chair.

Thank you. The next item is approval of the Administrative Agenda. Do any Board members request to pull any items on the Administrative Agenda today? Madam

Clerk? Yes. Supervisor Lavagnino A22. Okay.

Okay. Madam Clerk, I understand that items A19 and 48 and 22 have also been asked by the public? Is that correct?

Chair Nelson, that is correct. A19, A22, and A48 have been pulled by the public.

And then I also think we have a 55 will be presenting a resolution on that. Is that correct?

Turn also members of the board that is correct a 55 will be a resolution presented in front of the board today and that could be included in the balance of the administrative agenda.

All right so I'd like to get a motion to approve the administrative agenda with exceptions of items number a 1922 4853 some of it

second

any discussion on those items Hearing none, Madam Clerk will you please call the roll.

Motion passes unanimously

Thank you Let's go ahead and get these in order so let's begin with number A19 I believe that was an item that was pulled from the general public

Chair Nelson and members of the board, administrative item number 19 is from Public Works Board of Directors Laguna County Sanitation District. It is to consider recommendations regarding Laguna County Sanitation North Trunk Line Rehabilitation Phase 2 and this is in the 4th district. And we have one request on this item from the public and that is Jeff Rubio.

Okay Mr. Rubio when you're ready.

Hello, can you hear me?

Yes

Mr.

Rubio.

Okay yeah hi um yeah I just wanted to good morning first of all. I just wanted to just to discuss the matter regards to this North Trump Shore Rehabilitation Project. I submitted a protest letter to the engineer Mr. Kevin Thompson in regards to the bid on on this project and My biggest concern and protest is the experience that the county might allow this contractor to get awarded this contract.

And what my concern is, is this is an ultraviolet cure project which is a fairly new technology that's come to the US. I mean it's been around for about 10 years but in the last three or four years A newer technology that's been proven from other parts of the world to now hit this area. And what my concern is, as a contractor that submitted their bid, they don't have the experience that is needed to fulfill this contract and what they submitted, they actually submitted a couple of their experience lists Indicated two city of Los Angeles projects that they said they had completed with ultraviolet cure and which it's not, it's not true. And they never completed an ultraviolet care project with the city of Los Angeles on those particular projects.

What they did is they completed felt lining, which is a totally different method from ultraviolets here. Felt lining What you do is you insert the liner and you cure it with steam. And it's a fairly simple process, I've been in the business for over 25 years with a bigger company called In-Situ Form Technologies which was originator of this product. And we put hundreds of thousands of feet, but again like I said this ultraviolet cured method.

It's totally different method and it requires a lot of skill you know with your installers to install this product and what my concern was is the addendum basically You know, lower the requirements for this particular project. Especially this is a it's called like a medium diameter project which is 21 inch and it's over a mile of pipe. You really don't want to lower your spec requirements you know or experience requirements on a particular project like this so what they submitted basically submitted three small projects less than $100,000.

You know, as experience which I'm not saying that they have not put it in. They just have not put enough in and again like I said that you know, it's a very tedious-

Thank you Mr.

Rubio. Yes.

Thank you Mr. Rubio. That is your time I'd like to, I understand we have Mr. Wilder on the Zoom but as well as County Council would you mind speaking to a bid protest or what we're operating under at this point?

Chair and Supervisors, the board agenda letter for this item addresses this in part but you're proceeding today in accordance with the public contract code. And this process was bid in accordance with the public contract code. The cornerstone of which requires the bid excuse me, the contract to be awarded to the lowest responsible and responsive bidder. The district has staff has done an analysis and determined that the low bid is both responsive and responsible The district staff is recommending proceeding with the award and rejecting the bid protest. The board has discretion in this area, including as with any public contract you could simply reject all bids and go out again but the district staff's analysis appears to be well founded and the process was done in accordance with the project documents and you would be defensible

Thank you, Mr. Casoni. Mr. Walder I have a quick question for you here. Are you on? All right. Yes, Chair Nelson. I just wanted to publicly ask you did you feel that the bid was sufficient? You're comfortable with the bid that you received from the current contractor here?

Chair Nielsen, yes absolutely. This contractor also helped us with our pilot project which was the first part of this phase two and performed very well. All our background research indicates they do have adequate experience coupled with the appropriate licensings and certifications and as County Council indicated the contract is required to be bid to the lowest responsible bidder.

Protections do the district taxpayers have if this. The contract is awarded and it seems it is insufficient or is done incorrectly? Do we have some protections?

Chair Nelson, yes, we have the standard provisions in the contract documents that provide for liens hold back payments and a one year guarantee after the work is completed.

All right, thank you. That's sufficient for me. I'm seeing a nodding head out here if we can go ahead and get a motion of approval for A-19.

So moved.

Second. Is there any further discussion from the board? Hearing none, Madam Clerk will you please call the roll?

Motion passes unanimously.

Thank you Mr. Rubio for bringing that to our attention but I believe that we think we have process in place to work through this. All right, that brings us up now to item A-22. Madam Clerk will you please call out another roll?

Chair Nelson and members of the board, Administrative Item Number 22 is brought to you by Supervisor Williams and Supervisor Hartman. It is to consider recommendations regarding the adoption of a resolution expressing interest in participating in a viability study for Central Coast Public Bank. And we have five requests to speak on this item from the public.

All right thank you I understand that Supervisor Lavinino did you want to ask some questions first or would you like to go to public comment first? Let's go to public comment Is that acceptable to the sponsors of this resolution as well? Seeing some nodding heads, we'll go ahead and go to public comment.

We will begin with Harold Hill to be followed by John Douglas.

Mr. Hill when you're ready.

And if Mr. Hill can unmute himself and begin his comments.

Good morning.

Good

morning, Nelson. Can you hear me okay?

You can. Thank you.

Okay. Thank you to you and members of the board. My name is Harold Hill and I live in the second district. I'm a member of People for Public Banking Central Coast Which is a five county advocacy group, and I invite you to visit our website at peopleforpublicbanking.com. I am here to ask you to vote yes on the resolution to join with the other Central Coast cities and counties in studying formation of a Central Coast public bank.

Public banks are safe A public bank would be regulated by the FDIC and the California Department of Business Oversight. Public banks save money if cities, counties and special districts put their money in a public bank and borrow money at lower interest rates they can save large amounts of money. Public banks enable local control Public banks leverage their deposit base and lending power to benefit the public. This allows public banks to focus on the pressing local needs such as infrastructure, parks, renewable energy projects and so forth.

Public banks partner with local community banks and credit unions The Community Banking Act restricts public banks from offering retail services where consumers and commercial markets already adequately serve the constituents. A public bank will partner with local banks and nonprofit credit institutions to extend credit to communities that expand, to expand the service to the underbanked.

People banks people are public banks are managed by banking professionals The Public Banking Act enforces layers of fiscal oversight, governance and organizational structure that ensure highly ethical business practices when it comes to management of public monies. Therefore please pass a resolution to join with the other Central Coast counties in taking the first step towards forming the Central Coast Public Bank.

Thank you Mr. Chairman

Thank you, Mr. Hill.

We will now go to John Douglas to be followed by Larry Bishop.

Mr. Douglas when you're ready.

All righty can you hear me supervisors?

We can.

Great thank you very much Chair Nelson and Supervisors my name is John Douglas I'm a resident of the First Supervisorial District here in Santa Barbara And I also am calling in to voice support for this resolution to establish a five county public bank. You know, important thing is to remember that it's not just because it's a public institution that doesn't mean it won't or It will be a profit-generating enterprise.

The difference is the people of the community will be enjoying the profits rather than well-heeled Wall Street investors, and as Hal mentioned it'll enable local control For the interest earned off of our tax revenues, fees and other forms of income that local governments take in. It's a it's a it's a really good opportunity Something to remember that under AB 857, only two banks per year may be created. So let's say it's a phase in type of law and the maximum of 10.

So it's really important that Santa Barbara get in on the ground floor and not miss this opportunity to enable local control of our public funds. Keep them all so that the public bank will not compete with our Check local institutions like the Montecito Bank and Trust, the Riviera Bank, the various credit unions and so on. They'll work partnership and you don't need to go any further than North Dakota to see the success of their public bank over the last century.

That bank, that public bank or the one existing public bank in our country weathered the 2008 economy or the recession and came out on standing up straight without having a hat in hand to the federal government. So that's a great example of a public bank that works. Anyway, I hearty urge you to approve this resolution to engage and invest in this viability study. Santa Barbara County can get in on the ground floor very much for letting me speak.

Thank you Mr Douglas.

We will now go to Larry Bishop to be followed by Dick Flax.

Mr Bishop when you're ready.

Thank you to the Board of Supervisors for, I am also speaking in favor of the public banking measure or the proposal to join a group to study that. I urge you to vote yes on a resolution to join, excuse me. I'm in Buelton, so it's just in the third district. I urge you to vote yes on a resolution to join other Central Coast counties to forming a Central Coast Public Bank given Santa Barbara County significant mandate to build and maintain much needed infrastructure in the coming decades. A public bank will save taxpayers substantial financial costs and spend more on our many capital projects The main thing I like about it is that there's the local control, the public banks answer to the needs of local government programs and not to quarterly reports of stockholders.

Their focus is to fund projects and programs that benefit our community in general such as communication and transportation infrastructure, education, parks and environmental quality Secondly, I like the fact that there is a lot of oversight. There's increased professionalism in the Public Banking Act, which enforces, as Hal was saying, layers of physical oversight governance and organizational structure that ensure highly ethical business practices in the management of public monies.

Thirdly again it's a much safer way for our public agencies and governments To work a public bank would be regulated by the FDIC and the California Department of Business Oversight. And that's, it's just lower cost as counties and cities and special districts pool their money in a public bank. They can borrow at lower interest rates saving substantially in interest payments.

One big thing of just the synchronicity of the concept, a coordination with private lenders and community banks and credit unions. They're restricted by law from lending to normal customers or private banks and credit unions. A public bank can partner with these institutions to extend credit to underserved communities. Thank you very much for hearing Thank you, Mr. Bishop.

We will now go to Dick Flax to be followed by Andy Caldwell who is our final speaker.

Mr. Flax when you're ready.

I'm ready can you hear me?

We can.

Great so uh I'm Dick Flax I'm co-chair of the Santa Barbara County Action Network as we can. Hal Hill has done a good deal of great work in educating us about Thank you very much. Thank you, Mr Mayor. We've been for years on the housing crisis in our county, a crisis that has a lot to do with the shortage of capital to support affordable housing. So one possible advantage or real benefits from the public bank would be to begin to fill that gap and especially with the capacity to partner with as been said community banks credit unions And we're also, of course interested profoundly in climate change and the development of support for alternative energy and other ways in which we can meet the crisis of climate change. And again, the public bank provides at least a space or the opportunity for supporting that kind of need.

And so what I want to add that this first step is itself may be important. It's not just a step toward the public bank, it's a time when re-imagining these questions and what a institution like this can do for the community might be a real benefit of the study itself because obviously it's a new concept for most people in this country, not elsewhere in the world but in this country I'm just excited about the fact that we're going to be investigating it and making this a topic of public discourse and debate.

So, and I'm very grateful to you on the board who have supported this and taken these steps. It's a creative step, speaks well for your understanding of America's needs. Thank you.

We will now go to our final speaker, Andy Caldwell.

Mr. Caldwell?

Chair Nelson, members of the board, Andy Caldwell representing Colab. You know I think this is a perfect example of what I would call mission creep. Instead of serving the public you're competing against them. There's no return without risk You know, look at your treasurer. Your treasurer invests money every year but to avoid what happened to Orange County they minimize risk which means they get virtually no return.

Look at your pension funds in some cases they try to maximize returns but that could lead to literally multi-billion dollar losses so where do you think you're gonna land with this project? Los Angeles? San Francisco? And the California Treasurer's Cannabis Working Group all studied this already. And the voters in Los Angeles rejected it. In all of these cases, it talked about that all of the models forecasted losses in the millions of dollars plus they talked about how long it would take In many cases, it would take upwards of a billion dollars in capital and not that there was no profitability for more than a decade.

And the bottom line here is who bears the risk? It's the taxpayers. You know one of our biggest issues here is that our current banking system is not broken You're spending like Dick Flax, you guys are spending tens of millions of dollars building affordable housing for all sorts of people right now. The interest rates from commercial banks is really low. There's 155 banks operating in California that are loading more than $100 billion a year annually.

One of the reasons we believe you want to do this is you want to make loans that banks won't make. Well, the question is why wouldn't they make them? It goes back to risk and return. The bottom line here is it is not easy to run a bank. Banks fail. Do I have to remind you of savings and loan crises and a bunch of other things I think you need to look at the studies that were already done before you launch another one. And I hope this isn't like CCE, where you keep doing studies until finally one of them comes up with the answer that you want. The system's not broken. You need to get back to your mission, fix roads, fix buildings, use the money that you have to do what you were elected to do versus this mission creep objective. Thank you.

And that was our final speaker.

Okay, and I believe that Supervisor Lavinia pulled this item?

Yeah, I was originally just going to call for a separate vote but I guess I probably should explain why you know and I looked at some of the studies that had already been done. This isn't a new idea. Public speakers mentioned the Bank of North Dakota that was formed over a hundred years ago. I believe that is the only success story, over two dozen have shut down.

San Francisco studied this just a couple of years ago and came up with the you know after doing all the equations it was 56 years for this bank to break even. And then John Chung former treasurer of the state of California not a Rock rib conservative by any measures. I don't think he, he studied the idea of a public bank to serve the cannabis industry came back and said there were unacceptable degrees of financial risks.

So you know, I'm not sure why we want to go down this road. Some of the actual arguments that Mr. Caldwell raised, it's you know why would we stop at banking? I mean this idea because this industry is making profits and we could spend those profits better than that private industry. We could do better with it than giving bonuses. You know, we could redirect that wealth. That's a pretty slippery slope. I'm not sure why we would stop at banking, you know? Car dealerships make money. Why don't we get into the car dealership business or restaurants make money? We could take over the restaurant industry.

I don't really think that's our mission. I think this is a sign of government overreach and just not interested in going down this road so I would be voting no on the resolution.

Thank

you. I'm sorry, I did want to add one last thing

is

that at least in the North County especially in Santa Maria local banks are partners in our community. These aren't big giant Wall Street banks. You know these are the people that whenever you go to a fundraiser in town the local banks and credit unions step up in a major way and are involved in our community. They are some of the pillars of our community. So banking might look a little bit different up here, I'm not sure how it's viewed other places but I'm not looking to compete against this industry right now.

Thank you Supervisor Lavenino. Supervisor Hartman?

Thank you. Let me start by saying that as we heard from some of the public commenters, a public bank doesn't compete with credit unions or community banks. In fact they partner with them and that is by law. Thank you very much. Thank you. Thank you. Just like Community Choice Energy, this offers an opportunity to reinvest money that we are already collecting in taxpayer revenue and investing it locally.

It's not the local community banks and credit unions but it is Wall Street. And if you look at the exorbitant executive salaries, the annual bonuses to match I'm here to talk about the And so I think that what, I'm not as interested in it for cannabis or other things but I do think for infrastructure it offers tremendous opportunity. It is also very transparent.

It's run by experts And it can pay significant sums from these otherwise money that gets sucked out of a community to the general fund. And it can reduce taxes or it can provide a major new source of income, so I think it's well worth investigating and I would say that We would go with five other counties and we've already allocated in budget workshops some, our share of the funding for a feasibility study. So I think it's well worth studying.

Supervisor Harbin can you remind me what was the number on that? I'm just curious where are we? About

25,000. Okay

thank you. Supervisor Williams did you have some additional comments?

I do. You know I think that Mr. Caldwell is a little off on what makes for the right kind of investment, I think the right kind of investment is diversification and at least studying this as a possibility, I think is a responsible decision in light of the hedging of risk and diversification as the way to minimize risk and at least have the possibility of returns Like Supervisor Hartman, I am most interested in this from the perspective of whether we can accomplish more infrastructure for better interest rates or a better return.

And, but I am not opposed to using it in other sectors. Obviously a huge position of advantage would be if cannabis was part of this analysis because their lending opportunities are fewer and so I would imagine that There is at least the possibility of a competitive advantage on a public bank that, you know, is willing to look at financing either borrowing or investing.

I think it would be a responsible. Decision to analyze that, to analyze the possible benefit for the taxpayer and for the county. And if there is not benefit then you don't move forward but I think that our job is to look at the long run not just a short run and times when interest rates will not be This is part of a responsible decision to do so.

Thank you, Supervisor Williams. Supervisor Hart? Have we heard back from the other counties that were approached to join in this collaborative investigation?

Supervisor Hart for the chair, I did speak to my counterpart in Santa Cruz and he said today they had not yet received any interest but they knew that the letter was out there and circulating. I did tell him that the board had directed us in their recommended budget to set aside some funds to assist so he knows of our interest and believe he knows what the boards action today

Well, I agree with Supervisor Williams is that we should continue to investigate this. The ability to be successful will really depend on how many other counties are interested in joining this if we are in Santa Cruz end up being the only counties that are interested It's going to be very hard to generate enough money to make this successful in any kind of reasonable time frame that there has been a lot of investigation.

Accumulate enough capital to operate successfully and to diversify the risk, but it is an institution that has proven its benefit. The Bank of North Dakota which is completely unique because it was chartered long before modern federal banking regulation. It isn't really comparable in any sense to what we're talking about today, which is unfortunate because had folks 100 years ago been more foresightful in the state of California and other states they would have followed that model and we'd be reaping the benefits from it today. But it is something worth continuing to look at and to see if we can attract partners who would be interested and then from that do the feasibility work and now analyze that and then have the complete information necessary to make an informed decision going forward.

Thank you, Supervisor Hart.

And

on this one I've got various thoughts. First of all, I'm not one of these guys that is going to speak out against Wall Street. Yes there's been some bad things that have happened in all industries and You know, that seems true is within government too. So we're not going to throw out government over some bad actors as well as that you know Wall Street is also our pension program I mean that's how we make return and and you know we're able to take care of our former employees and so I'm not interested in competing with Wall Street or replacing Wall Street and definitely I'm not interested in competing with our local banks that employ our residents.

That said, I don't know enough about this yet so I am willing to learn more about it and I see that there's three votes to move it forward and my commitment is to try to make it better. And so one of the things that I'm going to ask and see if we can get some consensus on is with the CCE studies, we had that prohibition that if you did the study You can participate in the CCE to try to create that level of protection so that somebody is not going to give you some bad data because they want to get your contract.

I think that's a smart route to go on this. I know that we had a prohibition in the CCE study where if they did the feasibility study, they weren't able to bid on being a vendor for that new entity and so I'd like to see us maybe add that into feedback for Santa Cruz as they move forward on this. Any thoughts on that is maybe some further direction? Supervisor Hart

Yeah, I think that seems like a reasonable if that is it. That's what we did with the CCE process then may be rearing that ended up being very successful and mirroring that process does provide a level of transparency and accountability to the public and there are many people that are skeptical about this and having that from protection I think would go along way to helping build consensus

Could you clarify? I'm blanking on what you're referring to. We

were working with community services on the feasibility study for CCE there was a something in the contract for the feasibility company we actually that was a feasibility study for the county Santa Barbara County and you know, we had it where there wasn't a If they did the study, they weren't able to bid to be a contractor.

I know what you're talking about now. I thought okay yeah sure

that's okay that's what i'm trying to get to and so if there if the board is willing to go in that direction I'll go ahead and support the feasibility study. I'm getting a couple nods up here would that be acceptable to you Supervisor Williams as one of the sponsors? Absolutely.

I mean, you know this complex of an issue you want to be able to have advice that is not colored with a possibility of that same firm becoming sort of a vendor in the management or advising of the public bank itself. All

right, well I thank my colleagues for being willing to add that to it. And then I'm also gonna be looking once that feasibility study comes back to our own council just to make sure that these claims of not competing with local banks is rock solid. So I understand the concept of partnering but I also have my doubts and so I'm not committing my support to this in the end but I am cautiously moving forward with all of you Mr. Sonia said you have some additional thoughts or comments

chair and supervisors just maybe a quick discussion of the general framework, and I was the staff attorney who was part of the work up on this. And this is all under a B 857 series of statutes. And early at 10,000 feet the structure if the board was to go down this road ultimately would involve a non-profit public benefit corporation. Then there's a series of valves and choices as to what amount of investment and what type of investment each of the participating local agencies would go through So with those decisions, there will be an impact on the viability of the organization. But there's a series of go no-go valves along the way. Again this is a feasibility study and that will help to inform some of the choices that are laid out in this quarter inch thick group of pages that all discuss your choices.

Thank you Mr. Gazzani. So with that do we have a motion on this item?

So I move we go ahead with the

resolution.

Second from Supervisor Williams and does staff feel like they have enough direction from the board here on talking to our partners in Santa Cruz about what we would like to see in the feasibility study?

If you could make that part of the motion, that would help us.

Would the maker of the motion be agreeable to that?

Yes, so whatever contractor would do the feasibility study would be prohibited from actually bidding on doing the actual creation of the bank.

Correct. That's what I was hoping for.

Mr. Chair, I think the wording would be that we advise that to be built into the City of Santa Cruz's proposal.

That makes sense. Is that OK? The motion is amended to include that language from Supervisor Williams and does the second work for you there still, Supervisor Williams? Absolutely alright so Madam Clerk would you please call the roll?

Thank you Chair Nelson members of the board in addition to that added direction this is to approve staff recommendations A through C