Posted on 23 February 2021 By Charming Evelyn – Chair, Water Committee
Tents propped in Echo Park, Los Angeles John Nilsson all rights reserved
Who would think it? Ocean desalination intersecting with affordable housing?- Yet it has, in a little known state government agency called the California Debt Limit Allocation Committee (CDLAC).
According to the website description, The purpose of CDLAC is to implement Section 1301 of the Federal Tax Reform Act of 1986 and Section 146 of the Internal Revenue Code which imposes a limit on the amount of tax-exempt private activity bonds which a state may issue in a calendar year (i.e., the annual state ceiling).
Bonds are issued by the State to generate income, in some cases there are municipal bonds and in others private activity bonds. Municipal bond funds benefit communities, private activity bond funding, benefits private businesses. Both municipal and private bonds are tax exempt with a difference: the payment of principal and interest is the responsibility of the private business, not the government agency. Private Activity Bonds are issued to attract businesses and labor to a region in order to derive a public benefit, which would qualify the bond for tax-exempt status.
At the commencement of the New Year the committee must meet to establish and announce its allocation and distribution for that year, including the ceiling cap. Legislative priorities are:
- Qualified Residential Rental Project Program
- Single Family First Time Home Buyer Program
- Qualified Public Educational Facility Bond Program
- Waste/Recycling Exempt Facilities Financing
- Pollution Control Industrial Development Bond Financing Program
We need affordable housing, yet in January it came to our notice that Poseidon had applied under the housing allocation bond for $1.1 Billion to aid in the building of the Huntington Beach Ocean Desalination plant! We don’t need a project that will harm the environment, increase water rates, and divert monies that should go to affordable housing to help our homeless population in California. California represents 20% of all homeless people within the US, 66,000 and 7, 000 in LA and OC respectively. The pandemic has exacerbated the situation by causing more families and individuals to slide into homelessness faster than ever.
Proposed site of Poseidon Desalination Plant Huntington Beach, CA John Nilsson all rights reserved
If Poseidon did get that funding, then CA would miss out on an additional $770 million subsidy for affordable housing from the Federal Government. We could not and will not allow this to happen.
On January 15th 2021, Water Committee members and other environmental organizations were in attendance at the CDLAC committee meeting; 191 activists strong, calling in to denounce and #StopTheRealSteal, in this case Poseidon. CDLAC calendared the matter for 2022. There were no supporters for Poseidon during public comment, and though we may have had a small victory, it is only temporary. We must remain vigilant! (Sign up here to receive meeting notices from CDLAC)
Homelessness is costly, it takes a toll on all of us in many ways: mentally and emotionally, including economically, environmentally, stressing the health care and criminal justice systems. Trash, human waste and other refuse from homeless encampments pollute waterways and our public city spaces. Since public restrooms and trash receptacles are limited, and because many businesses prohibit the homeless from accessing restrooms, people experiencing homelessness are forced to use whatever location they can find to dispose of their trash and other waste. This uncollected waste is a public health hazard and contributes to additional city costs.
The primary purpose of private activity bonds is to generate local jobs. Poseidon’s desalination plant would generate a few permanent local jobs but more temporary union jobs and would raise water rates to 4 times what is being currently paid, all the while delivering water contaminated with boron, that would mostly go into storage. Boron is a by-product of the ocean desalination process. That is the wrong kind of investment for the community.
This project would cause permanent harm to marine life and disturb the ASCON superfund site during construction. It would add even more health hazards to the community, a community already suffering from the harmful effects of cancer due to the Superfund site. There are many communities within Orange County and LA County that have water wells impacted with PFAS/PFOS, hexavalent chromium 6, and 1-4 dioxane. The cleanup of those impacted wells should take precedence over Poseidon.
The State needs every penny that it can find for affordable housing. It should not spare a penny, especially from an affordable housing account, for an expensive and environmentally harmful desalination plant which will exploit a public resource for private gain. We should all be outraged!
It should be noted that Governor Newsom sits on the CDLAC board overseeing decisions, and a recent spate of articles have illuminated a spotlight on the connections between the Newsom administration, Poseidon and ex-parte communications of some board members of the Santa Ana Regional Water Quality Control Board. The same board to vote on granting Poseidon a permit.
#StopTheRealSteal
Get involved with the Water Committee by signing up to their water discussion forum here
Charming is also the Vice-Chair of the Environmental & Social Justice Committee for the Angeles Chapter
“The 1986 Federal Tax Reform Act imposed a limit on how much private activity bonds can be issued in a state each year. The limit is determined by a state’s population, multiplied by a specified dollar amount. CDLAC was established to administer the allocation of this bond ceiling or “cap” and to make certain that the total amount of private activity bonds issued does not exceed the limits established under federal law. Through CDLAC’s administration, the State ensures that this limited resource is efficiently used to finance projects and programs that both provide a public benefit and contribute to the economic vitality of California.”
Related – LA Times: Newsom pushes private seawater desalting plant over local and environmental opposition