CARB-ing out dollars for heavy vehicle replacement
Supervisor Larry Johnston was a lone wolf when it came to last week’s Mono County budget discussions surrounding saving for future CARB (California Air Resources Board) replacement vehicles.
In April, Assistant Public Works Director Jeff Walters brought it to the Board’s attention that of the County’s heavy equipment vehicles, 70 fall into the CARB’s required updates for improving air quality in California. The County needs to begin meeting CARB requirements in January 2019 and be in full compliance for its off-road vehicles by 2028. On-road vehicles must be in compliance by 2024.
“If the equipment is replaced according to the attached schedules, the total costs would be $26,773,697,” Walters wrote in his April staff report. “If all the equipment is replaced in 2013 the cost would be $21,047,663.” The difference is based on a 3 percent cost of inflation over time that Walters factored in to his calculation.
The information that Walters provided in April was what he called “the worst case scenarios,” but the $26 million number has stuck and the CARB compliance issue is at the top of Mono County’s list of long-term liabilities and unmet needs.
According to budget documents presented this week, the first CARB deadline in 2019 will require approximately $5 million in replacement costs.
Supervisors Tim Fesko and Fred Stump have advocated setting money aside in the 2013/14-budget cycle in order to begin to prepare the County for these costs. So, in the General Fund policy item discussions before the Board this week, staff had included and recommended a CARB compliance set-aside of $1 million.
County Finance Director Leslie Chapman explained that the $1 million is one-time money not being carved out of operations. It would be transferred out of the County’s Trindel account if needed. However, if property taxes in the County were to go up enough in the next year, the money would not need to be pulled from the Trindel account.
Trindel is the County’s Joint Powers Authority (JPA), which, according to County CAO Jim Leddy, is comprised of a pool of counties that put money on deposit with Trindel to act as an insurance fund. Once a county reaches a certain level of deposited money it has the option to pull some funds back if it needs to. The pull back of the $1 million can’t be done until May 2014, at which time the County should know if property taxes have gone up enough to be used instead.
Supervisor Johnston, however, was interested in exploring a different avenue for dealing with the CARB replacements.
“I think we need to acquire vehicles and finance them as we need to,” Johnston said. He suggested utilizing the County’s investment pool to finance the needed vehicles.
“There is $70 million in the pool gaining less than 1 percent interest,” Johnston said. “We could finance the vehicles and then pay back with a little more than interest. 1.5 percent would yield 50 percent more interest.”
Johnston, under the impression that the County sets its own investment policy, argued that, the $1 million “is being set aside to just sit there doing no one any good.”
Johnston also pointed out that the County had no idea if the CARB regulations would change before the County had to replace anything.
“We should consider this before we take the leap of $1 million,” he said.
“Can we have a rebuttal?” asked Chapman.
She clarified that the County doesn’t just get to change its investment policy any way it wants, rather it is a “government guided” decision.
“If you want to take treasury loans that’s fine, but if you start lending you need a treasury oversight committee that gets everyone with an interest to the table,” Chapman said.
She also raised questions such as, “If you’re servicing debt all the time, how do you pay your employees?” and “How do you justify a 10 year loan on a piece of equipment that will only last five years?”
“I am absolutely not for this, but I don’t want to be disagreeable,” Chapman said. “If the Board wants it explored, I will.” Later in the day, Chapman backpedaled and said she was not against the idea, she would just need more information, and suggested that a financing workshop be held.
However, the remainder of the Board was not interested in exploring the idea.
Supervisor Tim Fesko asserted that Johnston’s argument that the $1 million was putting stress on the remainder of the budget was invalid.
“There is no stress on this year’s budget,” Fesko said. “With or without the Trindel $1 million, the rest of the budget stays the same. We need to start saving here. I want to see the $1 million here now. Whether it will be spent this year or not is up for discussion.”
Stump softened slightly during policy discussions, saying he would be willing to hold financing workshops, but wanted to have the $1 million sitting there until the workshops are held.
“I’m so surprised you don’t want to spend your money more wisely,” Johnston said in defeat.
