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Volume 172 • Issue 69 | $1.00
mtdemocrat.com
Monday, June 19, 2023
More funds for road work in CAO’s budget Eric Jaramishian Staff writer
Mountain Democrat photo by Eric Jaramishian
Eldorado National Forest Engineer Rocio Espinoza, Forest Supervisor Joe Stout and District 2 Supervisor George Turnboo, from left, tour U.S. Forest Service land in Grizzly Flat that is proposed as a site to build a community center.
Restoring hope
landing community center for Grizzly Flat Eric Jaramishian Staff writer Driving through the forested community of Grizzly Flat, one is faced with a disheartening reality — the community has a long way to go before it completely rebuilds in the shadow of the 2021 Caldor
Fire. As talks continue to help the south El Dorado County town in that effort, one possibility seems to have gained traction. County officials are currently in discussion to secure a piece of U.S. Forest Service-owned land
off String Canyon Road to build a community center that could provide the community a beacon of hope while it recovers and rebuilds. “The biggest thing is this community needs something n See community center, page A6
Four things California can do as some home insurers retreat Grace Gedye Calmatters
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After State Farm declared in late May that it wouldn’t sell any new home insurance policies in California, people shopping around for new insurance had one fewer option. When days later it was revealed that AllState had quietly made the same decision last year,
Californians are now left wondering: How bad is this? And how should the state respond? The “crisis” in California’s insurance market was caused by “a laser focus only on affordability,” said Nancy Watkins, a principal at Milliman, an actuarial firm, at a legislative hearing June 14. The companies are operating with “very crude tools” at the expense of availability and reliability, she said. She said the current regulatory system is too rigid. “It’s like you’ve got your steering wheel locked straight ahead, you’ve got your speed set on cruise control, and now you find yourself on the Pacific Coast Highway,” she said. “What insurance company would agree to that?” Home insurance premiums in California are a little cheaper than the national average — and much lower than premiums
in other disaster-prone states like Florida and Louisiana. That’s without accounting for the fact that California has some of the most expensive housing in the country. California still has about 115 companies offering home insurance, said Michael Soller, a deputy commissioner for the state’s insurance department. As for whether more companies are likely to follow State Farm and AllState, “we don’t think that will happen,” he said. Consumer and insurance industry groups and other experts have ideas for what they’d like to see California do in the wake of the news — few of which they agree upon. Here’s the debate over four of those ideas.
Require State Farm to keep issuing new policies There’s disagreement whether this idea, backed
by the group Consumer Watchdog, is legal. The idea hinges on how insurance prices are regulated in California. Under current laws, insurance companies can’t just charge whatever they want: They have to submit their proposed rates to the insurance department, which they back up by explaining their projected costs, losses, revenue and more. State regulators can approve a company’s proposed rates, or deny them, if they think, for example, the rates are unjustifiably high, or so low that they could put the company’s finances at risk. Harvey Rosenfield, founder of Consumer Watchdog, said if a company suddenly says that it’s not going to take the same number of customers that it had projected when it got the department’s approval,
The El Dorado County Board of Supervisors unanimously approved the Chief Administrative Office’s recommended fiscal year 2023-24 budget Tuesday, which includes a $1 billion spending plan. The budget exceeds the board’s policy goal of contributing $5 million of discretionary revenues to road maintenance by $4.4 million through the board-directed use of local tribal funding, CAO staff reported. District 1 Supervisor John Hidahl praised the amount of funding allocated for road maintenance but also cautioned about overspending without identifying other sources of funding. “In the years past we weren’t able to put in as much money for road maintenance but I think we have stepped way up from where we previously were as a board and we are at the level where we need to stay at, but not increase it substantially until we identify some new funding opportunities,” Hidahl said. “We are able to do more now than we have in the past but at some point you have to go back to balancing and not just continue to put money into the things we know the public really wants but also fund other things that the public does not see.” Property tax revenue is expected to grow by 4% this fiscal year and sales and use tax revenue is expected to grow half a percent. The county hit its General Fund contingency goal and will use $4.25 in excess funds to address economic uncertainties and potential disaster responses. CAO analyst Emma Owens told supervisors the county could start to experience slowing discretionary revenue growth in property and sales and use taxes, a prospect CAO staff has warned the board about since the start of the pandemic in 2020. In the fiscal year prior, property tax revenue grew by 7% and sales and use tax grew 3.8%. “This is the first time in a few years we are seeing these discretionary revenues slow,” Owens said. “Maybe it won’t happen but that is what all the indicators are showing.” The board approved putting $13 million in excess General Fund contingency after receiving unanticipated fund balances during the pandemic, $5 million of which was used for Mosquito Fire debris removal. “If the board had not made that strategic investment in putting the funding in excess contingency and putting it elsewhere, we would have had some problems balancing the budget or meeting the needs of the Mosquito Fire during the last two years,” Owens said. “We are hoping to continue by carrying over that 4.25 million of excess contingency in this budget.” An estimated $247 million is needed for county buildings in need of replacement in the next 10-20 years, with investments of $10-$21 million a year in building maintenance. Increases in funding for planned capital projects are anticipated, however no additional funds have been identified. Addressing this, Hidahl noted working with the California State Association of Counties to identify grants and loans to help offset potential future deficits. CSAC has a service that have people help write grants and help lobby to get those grants assigned. “Because I’m hearing about all of this money that is out there from the federal and state government … I don’t know if we are getting our fair share,” Hidahl said. “I can’t measure that but there seems to be an opportunity there. Unless
n See insurance, page A6
n See budget, page A5
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