CARLSBAD — The new-look City Council is moving forward with a new vision and direction for the city.
During the City Council’s Jan. 8 meeting, Councilwoman Cori Schumacher was elected, 3-2 along party lines, as the next San Diego Association of Governments board director, ousting Mayor Matt Hall, who held the position for years.
In addition, council newcomers Barbara Hamilton and Priya Bhat-Patel will serve as the two alternatives for the city to SANDAG.
But the Democratic majority wasn’t done, Bhat-Patel was elected as mayor pro tem and to the North County Transit District board of directors, while Hamilton is the alternate.
The process, which has been in the city code for years but never followed, has been a priority for Schumacher since her election in 2016. And with a majority Democratic council, the new faces and vision was implemented.
However, Hall stressed the importance of the new state-mandated housing numbers for San Diego County increasing to 171,000 and had been asked to serve on the Regional Housing Need Allocation committee. During his pitch, Hall said 15 of the 18 mayors serve on the board.
“That would give us a position on the committee to see how the allocation may or may not go … and how to distribute those numbers,” Hall said. “It’s been said by a staff member that we could be looking at as many as 10,000 new units in the city of Carlsbad,” Hall said.
Councilman Keith Blackburn supported Hall’s nomination, saying his experience and established relationships would give his vote more power and influence. However, the council opted to move in a new direction.
In response, Schumacher said her nomination to the SANDAG board (she also served on SANDAG’s Regional Planning Committee and League of California Cities, among others), will provide a new perspective to the powerful board and issues such as RHNA.
She also said the new Regional Housing Need Allocation chair, Encinitas Mayor Catherine Blakespear, said the committee is on hold due to so many new members on the SANDAG board.
Schumacher also railed against previous directors for their failure of to detect SANDAG’s overestimation of the TransNet 2 tax in November 2016, as discovered in a story by the Voice of San Diego.
Gary Gallegos, the former executive director of SANDAG, resigned last year due to the scandal. Voice of San Diego reported Gallegos and high-ranking SANDAG officials hid the forecast shortfalls of $4 billion. SANDAG had estimated the new tax would raise $18 billion, but it was defeated in the 2016 election.
Additionally, the original TransNet tax, passed in 2004 and enacted in 2008, had brought in 25 percent less revenue in than projected, as of 2016, according to the Voice Of San Diego.
“The previous relationships are different now,” Schumacher said. “What it’s leaving us is with an $18 billion deficit. It was an accounting error that executive director at the time hid and the board members at SANDAG at the time supported that executive director instead of asking hard questions.”
Hall will remain on the board of the San Diego County Water Authority, a position and board he has also served on for years.
The collaboration between the authority, the city and Poseidon Water led to the opening of the Carlsbad Claude “Bud” Lewis Desalination plant in December 2015.
The re-organization of the council members to specific boards did not appear to be a surprise to the five-person body. Even though Hall soundly defeated Schumacher in the mayoral race, Hamilton and Bhat-Patel won their respective races in Districts 1 and 3, thus flipping the balance of power on the council.
As part of the new vision, the council also unanimously approved researching its investments in fossil fuels and potentially divesting from those companies as a method of staying in alignment with the city’s goals and values.
“Since we have a Climate Action Plan in place where we are trying to achieve 100 percent renewable energy and zero waste by 2035, I wanted to see if there are different corporate agencies we could invest in with a similar return,” Bhat-Patel said.
City Treasurer Craig Lindholm said the city pools its investments with the Carlsbad Municipal Water District, Housing Authority of Carlsbad and the city’s Public Improvement Corporation.
Additionally, the city’s investment policy is more conservative than California Code guidelines, Lindholm said, which makes it tougher to find suitable investments.
Lindholm looks at the safety, liquidity and return on investment for each investment, with each carrying a maximum maturity of five years. Diversification is another key and important to the city.
Currently, the city’s ROI on its investments is between 1.8 and 1.9 percent and about a two-year maturity, Lindholm said.
Also, the policy requires a higher credit rating for the corporate notes in the portfolio and mandates an AA rating by two of the three primary rating agencies. Lindholm said less than 1 percent of corporate notes issued qualify.
Regardless, the council directed Lindholm to research other potential investments the city could buy in to and divest from companies such as Chevron and Exxon Mobil.
Bhat-Patel said the potential new investments did not have to be specific to green energy companies, but rather those whose goals and values align with the city’s.
“It’s fairly limited to financial, pharmaceutical, energy and a few others,” Lindholm said.