Sunday, March 25, 2007

Meanwhile, Back On The Ranch . .

Note: Steve Paige has been busy looking at the assessment issues the county is now involved in for the Los Osos Wastewater Treatment Project. He's posted some of the related documents at on the Proposition 218 assessment vote -- his annotated"Prop 218 Hurdles and Challenges pdf" and the new "County Moritorium Agreement pdf." His comments posted with permission.

The newly formed TAC will be looking over "financial" issues as well as "engineering" issues. I'm sure Steve will supply them with his detailed critique of the assessment issues so there'll be another set of eyes on the page. HOW the 218 vote is structured will be important. Plus, if there were any problems with the old method of Assessment, or old data or old anything, I hope it'll be cleaned up before the new assessment process or else somebody'll call a lawyer. As for breach of fiduciary duty . . . that's a lovely exemption. And, for anyone subject to the new deed restriction agreement, that one's interesting as well. And so it goes . . . (Italicized portions of Steve's text originally highlighted in red.)

How to use your rose colored tax glasses.
By Steve Paige

Putting on your rose colored 218 tax vote glasses I invite you to follow the trail of the Counties manipulation of the 218 vote before the election so that you can be miffed a little bit like me. Originally I gave the County all the good will in the world over the sewer project but I have changed my mind as I look in the darkened legal corners of the County’s project management.

First darkened legal corner we look at with our special 218 tax glasses is the Wallace-County contract to come up with the tax report for the 218 vote. Looks like all the old Tri-W Swiss cheese 218 revenue report is coming baaaaak.

29. County-Provided Data and Services. The COUNTY shall furnish the
ENGINEER available studies, reports and other data pertinent to ENGINEER's services;
obtain or authorize ENGINEER to obtain or provide additional reports and data as required; furnish to ENGINEER services of others required for the performance of ENGINEER's services hereunder, and ENGINEER shall be entitled to use and rely upon all such information and services provided by COUNTY or others in performing ENGINEER's services under this Agreement.

I bet the Wallace attorneys started sweating bullets over the documents so the County came up with clause 32 so at least they won’t get sued by the County if the report is pure tax guano. Gee I thought the County was supposed to protect us the taxpayers and prevent the abuses of the last engineers report and revenue stream dog and pony show.
“Not responsible for breach of fiduciary duty” means you can screw up the math in the report and we won’t hold you to it.

32. Standard of Care. The ENGINEER shall be responsible for professional
negligence which is the exercise of skill and ability as ordinarily required of engineers under the same or similar circumstances. The ENGINEER shall not be responsible for warranties, guarantees, fitness for a particular purpose or breach of fiduciary duty and shall only indemnify for failure to perform in accordance with the generally accepted engineering and consulting standards.

Here’s the newest 218 tax twist. Say you want to go to the County to build a deck like my clients have. A deck and front entry mind you. Before February all you had to sign about the Los Osos Building Moratorium was a one page document that acknowledged that you knew about it.

But now you have to cloud the title of your property by recording a deed restriction that binds you to the following restrictions. This deed restriction never went before LOCAC, never saw the light of day, but instead bubbled up out of the darkness of County Council’s witches brew of semantic legalese. For the last three weeks I have been sent on a Kafka like wild goose chase to pin down where it came from.

Reading the indemnity clause with my 218 glasses on my take is that it is a “Regulatory Taking” by the County that is protected by the U.S. Constitution. While at the same time being a direct manipulation of the State Constitution Article 13D on tax reform by preventing residence from coming after the County if they back out of the Blakeslee Bill.
Think about it. If the whole good cop bad cop PZ sewer bust that the County and the Waterboard are playing on us goes up in smoke, who are you going to come after for “passive’ or ‘proximate’ negligence.

Read just the ‘red [Italics]and you will realize that and home remodel in the PZ will not be able to join in a class action against the County for allowing all those extra houses to be built and never coming up with a septic maintenance plan when your property is worthless in 2011. They are responsible for some of that nitrogen no? It’s easy to prove if you are only going after them for ‘passive’ not gross negligence. But woops, it’s in the deed restriction that you can’t go after them for that…….


Owner and his successors in interest agree to defend, indemnify and save harmless the County of San Luis Obispo, its officers, agents and employees from any and all claims, demands, damages, costs, expenses, judgments, or liability occasioned by the performance or attempted performance of the provisions hereof, or in any way arising out of this agreement, including, but not limited to, those predicated upon theories of violation of statute, ordinance or regulation, violation of civil rights, inverse condemnation, equitable relief, or any wrongful act or any negligent act or omission to act on the part of the Owner, or of the Owner's agents, employees or independent contractors; provided further that the foregoing obligations to defend, indemnify and save harmless shall apply to any wrongful acts, or any passively negligent acts or omissions to act, committed jointly or concurrently by 'the Owner, the Owner's agents, employees or independent contractors and the County, its agents, employees or independent contractors. Nothing contained in the foregoing indemnity provisions shall be construed to require indemnification for claims, demands, damages, costs, expenses or judgments resulting solely from the negligence or willful misconduct of County or its officers, agents, employees or independent contractors. Invalidation of anyone of the restrictions contained herein by judgment or court order shall in no way affect any of the other provisions which shall remain in full force and effect.

It’s not the location silly, it’s the tax spin.


Anonymous said...

A fiduciary duty is the highest standard of care imposed at either equity or law. A fiduciary is expected to be extremely loyal to the person to whom they owe the duty (the "principal"): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents. The fiduciary relationship is highlighted by good faith, loyalty and trust, and the word itself originally comes from the Latin fides, meaning faith, and fiducia.
When a fiduciary duty is imposed, equity requires a stricter standard of behaviour than the comparable tortious duty of care at common law. It is said the fiduciary has a duty not to be in a situation where personal interests and fiduciary duty conflict, a duty not to be in a situation where their fiduciary duty conflicts with another fiduciary duty, and a duty not to profit from their fiduciary position without express knowledge and consent. A fiduciary cannot have a conflict of interest. It has been said that fiduciaries must conduct themselves "at a level higher than that trodden by the crowd

Mike Green said...

That above my friends, is what the county is NOT requiring from the Engineer.
Thanks Steve for the cold shiver up my spine!


Oh,that was me posting above, the info came from Wikipedia. I hit the anony button by mistake.

*PG-13 said...
This comment has been removed by the author.
Shark Inlet said...

Ann and all,

Considering the evidence about the solvency (or lack of) just posted over in the Trib Forum (were we told?, please right-click to open in a new window), are you going to post a diatribe about how the LOCSD GM and board didn't reveal this information to the public at either the March 15 or March 22 meetings? One would presume that you would be opposed to withholding information ... even by those on your side ... just because you won't want to be logically inconsistent.

Frankly, I am troubled that our board and GM are, as a group, so unaware of financial realities.

This is just another example of the train wreck Ann writes of ... those who report on, comment at and comment on board meetings are just as blissfully unaware as the board is about finances. The two standout exceptions would seem to be Joe Sparks and Ricard Margetson. Other than these two, we can only blame ourselves for the train wreck.

Thanks, Ann, for the metaphor that is so fitting.

Thanks also, Ann, for your part in ignoring financial realities in your role as cheerleader .... even though you've been asked directly to take an interest or to at least take some time to learn about the things you're commenting on ... thanks so very much for your role in making things worse.

*PG-13 said...

Thanks Steve.

Curious. When the TAC appointee's were announced I was sorry to see Steve wasn't selected to serve on the TAC. I respect and appreciate the focus and creative thinking he has brought to this dance for some years now. Now I wonder if he might not serve greater purpose outside the gut of the monster. Sitting on the committee his analysis and commentary probably wouldn't be as visible as it is when he serves as a commentor.

I also just finished a quick scan of the TAC Rough Screening Report on the county website. At 121 pages its a lot of info. But its the first time I've seen so much of this info compiled and discussed together. Something like this is what I was hoping one of the CSD's woulda done. (sigh)

4crapkiller said...

Good stuff Steve Paige. Thank you!

Apparently the county wishes to cover their fanny and remove liability for the previous fiasco of allowing homes to be built with permitted septic systems. This would be, of course, for anyone trying to build something new. I seriously doubt that any court would find that the elimination of liability went all the way back, and not just to the new addition etc. Time and place do prevail. It would seem that the deed restriction would be permit specific.

I went to Steve Paige's site. Very well done. Great documentation.

Many of his comments may have validity. However, when I got to California Constitution, Article 13D, section 6, c, which covers exemptions, I noticed a comment suggesting that the exemption of using fees was only for a NEW FEE on an already existing system.

I do not think this was the intent of the legislature otherwise the exemption would not have been extended. All of your comments fail with this exemption on sewer systems should a court find that it was applicable to a future sewer. As a matter of fact, I do not think any new sewer construction could take place if not for these exemptions.

I was left with one key thought about his web page.

What are you trying to accomplish here?

1. Convince all the property owners that CDOs are illegal?

2. Do not vote to assess themselves for a sewer because the county is screwed up and not adhearing to the law?

3. We should do like you and separate our waste?

4. We should spend our individual treasure to fight an admittedly hopeless battle against the water board, Blakeslee bill, and the county?

And lastly, I wonder if it is in our best interests to stall this thing off for 30 years, if we can, through legal wrangling, or just let the county build a sewer. I also wonder if the CCRWQCB can go judge shopping and require us to shut off our water when 2011 rolls around.

Good work however. Human excellence! Everyone should read this web page carefully.

Anonymous said...

I just scanned the rough screening report by the county. Wish I had something like this to look at A LONG TIME AGO. Anyone who wants to truly be informed should read this report. It really does cut through the urban legends. I also found it interesting that as I read through it I could see where the seeds of some of the legends had been planted. Good reading for sewer junkies!

Mike Green said...

The rough screening report is quite a read!

Sure wish we had a TAC way back at the formation of our CSD

PG "sigh"

I'll second that sigh.

Anonymous said...

Thank you, Steve. Chilling is a good description. It's more than obvious that if we don't go along we are screwed. It's that simple.

Anonymous said...

I get the feeling that the County's plan is to make us a regional crap collector for the rest of the area. We approve a 218 and they build a big regional center. To save costs, they could just carve abig ditch from SLO and flush it all down our way. Any overflows and we would have a brown bay. Breathe deep the gathering crap....

Mike Green said...

Ok I'll admit it, I spent way too much time today reading the TAC rough report and internet researching lines of interest.
Here is one interesting site concerning biosolids disposal,
I do think that a somewhat local regional site needs to be in the works, but I'm not sure if the TAC and/or Los Osos will be equipped to address this in any way except costs.
As far as I can see costs associated with current biosolids disposal may not apply in the very near future making this estimation of costs somewhat speculative and possibly drastically different. It will be interesting to see how the next TAC report addresses this.

Mike Green said...

Sharkey bubbled:"Frankly, I am troubled that our board and GM are, as a group, so unaware of financial realities"
I hear you Sharkey! thats why my hair stands on end when I read this:
ENGINEER shall not be responsible for warranties, guarantees, fitness for a particular purpose or breach of fiduciary duty.
History repeats?

Anonymous said...

This CSD is more than "so unaware of financial realities"

It appears they are going to declare insolventcy next month. In doing so, the 218 becomes somewhat moot if it fails. The project could not be returned to a non-entity. All that will have happened since the recall is a costly delay in the inevitable.

Shark Inlet said...


This is exactly why I am so troubled when Ann writes about how we ought to pay attention when she is the prime example of someone who claims to be paying attention but is so gosh darn unwilling to consider any financial questions.

Frankly, it is quite difficult to be an expert in the many areas one needs to be an expert in just to have an informed opinion ... but one cannot legitimately blow off inconvenient statements just because they are beyond one's prior background and still claim to have a reasoned opinion.

For example, if you believe that global warming doesn't exist (perhaps because you don't want to deal with the lifestyle changes necessary to be a responsible adult if global warming is occurring) but someone, an air chemist, comes to you and presents you information about why you should change your belief. Your choices would appear to be three. You could convert, investigate further or just say that they are speculating and attempting to calculate the number of angels who could dance on the head of a pin and just ignore them.

I would suggest the only reasonable choice would be to investigate further. To simply switch one's point of view because someone who is "smart" tells you to do so shows you probably aren't wise enough to have reasoned point of view to begin with. To refuse to consider the new information is even less wise than to switch without further investigation.

Now, if a raving lunatic with a tin-foil hat comes and tells you that you should wear one too to avoid the mind-rays of the Martians ... you would appear to have the same three choices. But the wise person would probably wait for further evidence on the Martian mind-rays and the efficacy of tin-foil before switching points of view.

What's the difference between the air Chemist and the tin-foil lunatic? Nothing if they're both right or if they're both wrong. On the other hand, if the air Chemist is right and the only benefit of the tin-foil for our balding street-corner lunatic is to keep the rain off ...

The upshot is this. With the exception of Sparks, the current board has been unwilling to listen to financial discussions without sticking their thumbs in their ears and saying "Na na na ... I can't hear you". It would seem that some of our favorite commentators and friends (including Ann and Ron) have done exactly the same.

Have these actions on their part been justifiable? Only if those of us who argued that voting for the Recall and Measure B were off the wall like the lunatic with the foil hat. If there was a reasonable chance that we were right, Ron and Ann should have listened and investigated further before making up their minds. They didn't. They ignored us. The recall board should have actually asked the community before stopping the project. They should have paid attention and considered the arguments carefully before taking any rash action. They ignored us.

Essentially ... even though Lisa tells us that she believes that she made the right decisions based on the facts she had at the time (remember her rant at the end of the last meeting), Lisa should admit that she should have considered more carefully the consequences of her actions before taking them. She should apologize to our community for causing such pain as we'll likely face as a result of her desire to stop the project. While she was bemoaning the RWQCB's unwillingness to work with the people I couldn't keep from asking myself what she did as a LOCSD boardmember when the people were asking her desperately to consider what they were saying before stopping the project.

Okay, rant over. Even if Lisa and Ann and the rest apologize it won't make much difference now.

The question, as Mike points out that engineers have their "acts of God" clause. The question is whether a consulting firm can be successfully sued for willing acts of deception. I would suggest that if the County ends up holding any of the LOCSD bag, they should have the right to sue Wildan and BWS. Ripley, I believe, is in the clear because they did their job as they were charged to do. If the ultimate project cost comes in higher than the current engineering estimates, it would not be a surprise to me because as we continually see here in Los Osos ... if it can go wrong, it will.

Someone will sue the County and stall things for a year and then another lawsuit will happen for another year of delay and then yet again. Ultimately, I suspect it will be 2012 before any project is fully approved and lawsuit-free and by that time, we'll be lucky if things run less than $500/month per household.

Mike Green said...

Sharkey Bubbled:

"acts of God" clause

That I like

Very Good Very good!.

It's great to hear from you again, but I do question your opinion that Ann holds so much sway, I don't think so, Heck, at this rate why don't we hold out for 1000/ month
Even Crappy thinks another thirty years of delay might be possible.

The "Wizards of Glacial Review"
have served us well so far.

Of course , I'm kidding, lets concentrate on the important work. look at the TAC report, let us know what you think.

4crapkiller said...

So you think I am so smart? I originally thought this was an impossible situation. So far in the near future it only seems that the LOCSD as an entity is impossible. I do think we will have a sewer, and the property owners will get behind the county. The big question is improvement in property value. How long can the property owners in the PZ wait for the question of CDOs to clear judication? Steve makes some powerful arguements, or at least leads us to them.

The other big question is liability for past actions to the county. If the LOCSD goes belly up, it is not in the county's interest: in essence they will be stuck. They knew this with the LAFCO meetings. That was the fix.

But if belly up and non existant, who will put the liability on the county? They certainly bear partial responsibility for the problem. Better support Tax Payers Watch.

Mike Green said...

Crappy, Why would supporting an organization that is in arrears with the county help Los Osos?.
Perhaps an organization without baggage would be better?
Cargo Cult!

Anonymous said...

The people who instigate and support these lawsuits seem to be on the lower end of the economic scale in LO. They LOOK like they are "defending" the poor, but in reality seem to be effecting the economic cleansing that they purport to stop.

Anonymous said...

How do you spell Insolvent, like the CSD is in full collapse...

The Los Osos services district’s bankruptcy attorney is asking the county to bail out the nearly insolvent agency by buying or paying for the contentious midtown parcel once slated for a sewer plant.

Even if the county doesn’t use the so-called Tri-W property as the site for a sewage-treatment plant, the county should buy the land to pump millions of dollars to the bankrupt services district, and then resell the parcel or put it to public use, according to a confidential letter to the county.

The letter — which was posted anonymously Monday on a public forum on The Tribune’s Web site, — outlines two complex scenarios under which the Los Osos Community Services District could pay off its creditors and still have enough money to keep operating.

Attorney Barry Glaser, representing the county in the bankruptcy proceeding, confirmed the letter’s authenticity.

He declined to comment on it because of ongoing discussions between both parties. Most district board members and other agency officials also declined comment.

Thank you Lisa, Julie and Chuck for your financial management! Now there is no local government. If the 218 vote were to fail, won't we see the State step in? Yes, our locally elected officials certainly performed to the best interests of the community!

Anonymous said...

"The people who instigate and support these lawsuits seem to be on the lower end of the economic scale in LO. They LOOK like they are "defending" the poor, but in reality seem to be effecting the economic cleansing that they purport to stop."

Truer words have never been spoken on this bolg.

Anonymous said...

I'd like to see Ann defend the Lisa Board now.

Won't it be fun to see what fantastic spin she can put to the righteousness of the Board continuing to spend money on yet another lawyer - this time Shaunna Sullivan, when they knew they were insolvent! Go Ann! Oh, while you are at it, how about some comment on the Board's tranparent governance! We have to find out about this stuff first on the blogs, then in the paper!

Churadogs said...

Inlet sez:"If there was a reasonable chance that we were right, Ron and Ann should have listened and investigated further before making up their minds. They didn't. They ignored us. The recall board should have actually asked the community before stopping the project. They should have paid attention and considered the arguments carefully before taking any rash action. They ignored us."

Not surprisingly, Inlet seems unaware of what I have been writing about for years: Unfortunately, the community didn't pay any attention, which is why I have to laugh when posters start whining about how I'm responsible for the Fall of The Roman Empire. Inlet also forgets to add that the RecallED Board had ample opportunity to "ask the community," via a 218 vote and refused. They also had ample opportunity to do as I had suggested all along, present the community with a fair guestimate of two plans, with a fair guestimate of a price tag attached, full discussion of pros and cons, then hold a 218 vote (what I called long ago the CHinese Menu Method -- take your pick, vote your choice, then pay the bill) but the old board didn't do that either. Nor did they hold off pounding gazillions into the ground, an action which I was utterly opposed to, if you recall. It's fine to imply that you think I'm some sort of looney wearing a tinfoil hat, but you really should go back and re-read all those columns that were repeatedly headed, "Oh, Lucy, Jooo Gotta Lotta 'Splainin' to doooo" and ask yourself a simple questions: Was what I was asking to be 'splained important enough for the community to DEMAND AN ANSWER AT THE TIME, when things could have been changed or fixed? If they didn't, then the train wreck was set and no amount of hollering on my part could have stopped it.

Mike Green sez:"
It's great to hear from you again, but I do question your opinion that Ann holds so much sway, I don't think so,"

Ah, now there's a man who's been paying attention!

Another Anonymous sez:"Oh, while you are at it, how about some comment on the Board's tranparent governance! We have to find out about this stuff first on the blogs, then in the paper!"

Presumably, you've read today's posting. None of this is "new" to me or to anyone who's attended CSD meetings or been reading the Trib this past year. This was all tossed around months ago at CSD meetings, in the paper. Why is anyone pretending this is some new thing? The budget report and the CPA stated clearly at that meeting that the CSD might be able to limp along but had no margin for error if something goes ker-floooey, a condition that NO CPA likes to see.

As for Steve's posting, I can only hope that Steve will be able to present and discuss the info with either Rob Miller or the TAC or Paavo (and all the county lawyers) because if any of the problem areas can be ironed out NOW, it may indeed save another lawsuit later. One thing about what's supposed to be happening now with The Process, is a chance to do this right at the start and avoid the legal/engineering/weirdiosities that put the previous project under assault and ultimate collapse.

Shark Inlet said...


If you have the right to blame me for the fall of the roman empire ... because I'm lazy ... I have every right to blame you. Presumably if you weren't lazy you would have taken the time to read and understand the various financials. You didn't.

The fact that just before the recall, a few of us were able to predict what would happen as a result of the recall but you blew us off begs the question ... what else didn't you bother to study before weighing in with an opinion?

Ann, please don't think I am blaming you in particular ... I am blaming everyone who didn't bother looking into the details.

You think I am saying something different than you. Not so. I am saying the same thing but pointing out that a key question is the finances, something that you've been blissfully willing to ignore.

4crapkiller said...

To Mike Green:
There is only a very moderate chance that TW can help. I think anything run by McPherson has absolutely no hope, but at the same time I hope beyond hope that there is hope. But this is only for the CDOs. If a competent lawyer could be found to take the case on pro bono, I would feel better about chances of success.

It is clear that the bankruptcy situation will only be solved by lots of money from the property owners or cargo. Since the property owners, or a hunk of them do not have the money, or not certainly willing to spend it on an inept district, and to bail the LOCSD out will take an assesment vote with 2/3 of the property owners voting in favor: there is no choice but to twist the dials and chant Cargo Come! Hello, hello, do you hear me, do you have money on the flight. Hello, hello.
Standing by, please respond?

I don't even get any static! But "I believe that cargo will come! Big packages of money from the sky, falling gently by parachute."

We will need the money to sue the lawyers for errors and omissions.