Cambrian: Opinion

Government grants aren’t helpful if you still can’t afford price

The old Cambria Library is being sold to the Cambria Community Services District for a total cost of nearly $1 million, the bulk of which is being financed by a loan the district expects to repay in roughly 15 years.
The old Cambria Library is being sold to the Cambria Community Services District for a total cost of nearly $1 million, the bulk of which is being financed by a loan the district expects to repay in roughly 15 years. sprovost@thetribunenews.com

Update: 12:05 p.m. Aug. 18

Patrick O’Reilly, finance manager for the CCSD, has provided the following updated numbers on finances for the Sustainable Water Facility:

“We have received $13,321,256 for the SWF Project,” O’Reilly wrote in response to an email question from The Cambrian. “That includes the loan of $8,939,000 and the Prop. 84 Grant of $4,382,256. So far, the board has approved expenditures of $13,202,057 for the project, which leaves $119,119 uncommitted. Of the $13,202,057 in expenditures that have been authorized, the district has actually disbursed only $12,070,642.

Original column

Shopping can be like a game show for the American consumer. Just think back a few years, when game shows populated the TV dial (once upon a time, there actually was a real dial) with titles such as “Let’s Make a Deal,” “The Price is Right” and “Sale of the Century.”

When Kmart was king, we were attracted to those “blue light specials” like moths to an artificial azure flame. Before Starbucks began selling coffee for $4.95, we loved our 25-cent (or, before that, 5-cent) cups o’ joe at the local diner.

We stay up late for Midnight Madness, get up early for Black Friday and let ourselves be rushed into purchases at last-chance sales. We’re wooed by “exclusive offers,” two-for-one deals and free vacations if we sit through a timeshare spiel.

And consider the following:

Retailers such as Costco and Sam’s Club offer you savings if you buy in bulk. You’re also more likely to purchase something you might not otherwise get because someone sends you a coupon. “Save $10 off your next purchase of $100 or more,” on a selection of breakfast cereals.

Never mind that you might not even care much for breakfast cereal.

Grants as coupons

State and federal grants are the coupons and Costcos of the government world. Grants available to local agencies are often offered in the form of matching funds: In order to qualify, you’ve got to put up a specific number of your own dollars.

Say you’re eligible for a $40,000 grant if you provide matching funds in the same amount, and you want to build a $100,000 project. That means you’ll need the match plus an additional $20,000 to pull it off.

But say you only have $10,000 in your budget for such a project. You’ll have to come up with the other $50,000 somehow. That’s when you get a loan, the government equivalent of putting it on plastic.

Cambria’s Sustainable Water Facility carried a total price of $12.9 million — minus a $4.16 million state grant. One way of looking at this: The Cambria Community Services District just saved more than $4 million on the purchase price. But looking at it a different way, the CCSD is still shelling out close to $9 million for the project, which — no matter what you think of the project’s merits — is a huge amount of money for a community of barely more than 6,000 residents.

Whether you’re for or against the SWF, there are only two factors to consider when deciding to fund this (or any other) government project: 1) Can we afford it? 2) Is it worth it?

As you’ll notice, one factor conspicuously absent from that list is the availability of grant money. Of course, you have to include the grant into your hypothetical equation, but if you still can’t afford a project after a potential grant is included, you can’t afford it. Period. End of discussion.

Same goes if you’re being offered a discounted price on a project. If you can’t afford it, you can’t afford it.

Lending and library

CCSD board President Amanda Rice used the Costco argument to explain her vote against spending nearly $1 million to purchase and convert the old Cambria Library into the CCSD’s new offices.

“I don’t know how long it’s been since you’ve been to Costco, (but) if I’ve only got 20 bucks, I can’t buy 40 dollars worth of toilet paper,” she said. “We can’t take every opportunity because we feel like it.”

The board ultimately voted 3-2 in favor of the purchase, the bulk of which ($562,000) will be in the form of a loan that the district — and, by extension, its ratepayers — will be paying for about 15 years.

The majority pointed to the new building’s more central location, the advantages of buying rather than renting and their assessment that it was a good deal in voting for the transaction. All these are perfectly valid points if the deal meets the two criteria above. If the district can’t afford it, though, especially in the aftermath of the $8 million-plus commitment to the SWF, it doesn’t matter if it’s a good deal.

(The majority and minority were at odds over whether the district could, in fact, afford the purchase; my intention is not to side with either group, but merely to point out that the equivalent of flashing blue lights isn’t enough by itself to warrant it.)

Limited time only

Did Cambria’s health care board react to the same sort of flashing blue lights in voting to pursue a grant it thought could help the district relocate its ambulance crews near the Cambria Fire Station? Maybe not, but the “limited time only” factor does seem to have been in play.

According to minutes from the April 19 meeting, where trustees voted 3-2 to pursue that grant, board President Bob Putney commented that there was “a window of opportunity” to solve that problem — a window that would close if the board failed to act.

The board reversed itself in May with a 4-1 vote against seeking the grant upon discovering that the FEMA/Cal-OES money could only be used to cover storm damage to the existing ambulance station, not to build a new one.

While saying the board wasn’t necessarily “out of step” in the initial decision, Putney did add, “Maybe we just talked about the alternative prematurely.”

It’s possible that the equivalent of such sales tactics as coupons, limited-time offers and blue light specials never entered into any of these decisions. But these sales tactics wouldn’t have become time-honored traditions of American consumer culture if they didn’t work on human beings.

And public officials, like the people they represent, are only human.

  Comments