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Sunday, October 05, 2008

Mr. Young, Meet Sheriff Hedges, Hedges, Mr. Young. Where’s Mr. Murphy?

The following letter was sent to the Chairman of the RWQCB after the Moylans (one of The Los Osos 45, who have a CDO on their home) received this ginormous official-looking packet of paperwork from Mr. Murphy. To date, I know of nobody in the community who has received even an email alert, or a Fraud alert or anything on this, even though Roger Briggs and/or Harvey Packard have email addresses on a whole bunch of folks here in the community. To my knowledge, no attempt was made to contact anyone to let them know there was a “fraud” alert. A standard press-release was sent to the media, but I sure didn’t see anything in the Tribune, nor did I get an email, did you?

Sorry, folks, but the RWQCB needed to do better than this, as the letter below spells out. Once again, indifference or incompetence? Or both?


To: Jeffrey Young, Chairman CCRWQCB
From: CDO#R3-2006-1041
Re: CCRWQCB refusal to redact personal information re: CDO #R3-2006-1041
Date: October 1, 2008

On January 30, 2006, we received via post a Proposed Cease and Desist Order, including information on requesting and obtaining redaction. Following the instructions provided we submitted a request for redaction to avoid any negative consequences arising from public access to our personal information.

On February 20, 2006, we received an email from Lori Okun, prosecution team counsel, denying our request with the following statement:

You have requested non-disclosure of your name, residence and mailing address, and APN. However, you have provided no information to support that request. Cases interpreting the Public Records Act state that speculation of harrassment is not sufficient to justify withholding this type of information. Accordingly, the Water Board is required to disclose this information in response to Public Records Act requests and intends to do so this week.

A copy of this email is included in the record compiled by PZLDF.

On September 17, 2008, Mr. William Moylan met with Mr. Harvey Packard regarding the status of the CCRWQCB enforcement actions against Prohibition Zone homeowners. As an aside Mr. Packard stated that a Mr. Tom Murphy had submitted a public records request concerning Prohibition Zone residents facing CCRWQCB enforcement.

On September 29, 2008, we received via post a packet of documents from Advanced Environmental Systems, Inc. (AES, Inc.) threatening legal retaliation if we did not agree in writing within 60 days to install the Reclamator Service ™ at a cost of $24, 941.19 to be paid over a term of 180 months at a rate of 10% per annum. This packet included quasi-legal documents containing the personal and property information that we had requested be redacted in 2006. The CCRWQCB has a copy of the AES, Inc. documents.

The CCRWQCB’s refusal and failure to grant us redaction at the outset of its enforcement actions against us have exposed us to pernicious harassment, blackmail, and fraud by AES, Inc., with which we understand Mr. Tom Murphy has an affiliation. For two days we agonized over this new threat engendered by the CCRWQCB’s original enforcement and by Ms. Okun’s precipitous decision that paved the way for AES, Inc.’s correspondence. On October 1, 2008, we received a forwarded email containing a CCRWQCB press release notice that AES, Inc.’s actions constituted fraud. Directly affected by these developments, we have received no personal communication from the CCRWQCB in this regard.
The CCRWQCB’s 2006 decision to deny our redaction request discounted and dismissed our very real and legitimate concerns about the harassment we might encounter were our personal information to be made public. Our names and property information have been readily available to anyone with a public records request who might wish to harass and harm us or in some way profit from CCRWQCB enforcement against us as AES, Inc. has now done.

Chairman Young, you promised months ago to revisit enforcement following a successful 218 vote, but you reneged. Your failure to suspend enforcement actions in the wake of the successful 218 vote has directly resulted in our continued exposure, not only to CCRWQCB enforcement, but also to random harassment, blackmail, and fraud from the public at large. Your failure to act on the Prohibition Zone enforcement is directly responsible for our exposure to this recent threat from AES, Inc.

It is not enough that the CCRWQCB sent out a press release repudiating AES, Inc.’s actions. It is not enough that the CCRWQCB created the appearance of protecting the public when it has not ensured protection of the public. As a public agency, the CCRWQCB has an obligation to protect the people. Your agency must take responsibility for those you randomly targeted and in turn have exposed to other predators. Your agency has a duty to find out exactly whom AES, Inc. has contacted and to ensure without delay that those who have received the Reclamator Service ™ packet know that it is fraudulent.

It was you, Chairman Young, who said that the actions brought against us thus far were not criminal. If, indeed, we are not criminals, then we demand the protection of our privacy to which we are entitled as private citizens. The CCRWQCB owed us protection from the exposure we have faced since the beginning of the individual enforcement proceedings. This exposure has now manifested itself in the form of AES, Inc.’s threatening correspondence. The CCRWQCB set the original conditions precipitating this outcome. The CCRWQCB is responsible for rectifying the damage which this exposure has caused us.

The CCRWQCB has put us in harm’s way. Though a CCRWQCB staff member offered a verbal apology for this current breach, no apology can compensate for what has happened to us as a result of CCRWQCB policy and actions. We demand more than an apology and a press release. You must take immediate steps now to protect us from AES, Inc. and from any future perpetrators who would try to profit from the enforcement actions you have taken against us.

We demand that you protect us. We demand that you advise us in writing of how you intend to protect us. We demand that this entire matter be referred to the SWRCB, and we demand a copy of the SWRCB response. In addition, since the CCRWQCB does not approve the Reclamator Service™ as a way to meet CCRWQCB requirements for onsite systems, we demand your assistance in finding an onsite system to meet our CDO mandate. The time limits set forth in our CDO require our compliance in obtaining CCRWQCB approval and installation of an onsite system if the county system is not timely approved and built. We need to move forward in meeting the CDO mandate to avoid the fines stipulated in our CDO #R3-2006-1041, and we require the assistance you are bound by your own regulations to provide.

Your prompt reply is anticipated.

Cc:
John Hayashi, Board Member
David Hodgin, Board Member
Dr. Monica Hunter, Board Member
Russell Jeffries, Board Member
Dr. Daniel M. Press, Board Member
Gary Shallcross, Board Member
Tam Dudoc, SWRCB Chair
Sullivan & Associates


Meantime, over at Sewerwatch . . .

Ron Crawford’s posted “My Follow Up To My Open Letter To Tribune Executive Editor Sandra Duerr . . .” at www.sewerwatch.blogspot.com

33 comments:

Shark Inlet (a.k.a. Stiv Neener) said...

Ann,

If the police arrest someone for purportedly violating a law, should the police be blamed for opening these folks up to unscrupulous actions by bail bondsmen? I would think that one could only make this argument if the police both knew that the charges were unjustified and if they knew the bail bondsmen were trying to unfairly take advantage of those utilizing their services.

Moylan's letter is a complaint. You ask that the RWQCB have done something more and that to not do more is indifference or incompetence or both. My question to you, Ann, is this ... without arguing the legitimacy of the CDO (which is not the issue you raised), what should the RWQCB have done differently?

Mike said...

Impressive... first we tell the RWQCB what a bunch of fools they are, we even form a defense league to sue them, we shout that there will be no sewer in Los Osos, and we tell them with no uncertainty that they couldn't possible enforce State Laws on the Independent State of Los Osos, and now our resident sewer lawyers wring their hands and now demands:

"We demand that you protect us. We demand that you advise us in writing of how you intend to protect us. We demand that this entire matter be referred to the SWRCB, and we demand a copy of the SWRCB response. In addition, since the CCRWQCB does not approve the Reclamator Service™ as a way to meet CCRWQCB requirements for onsite systems, we demand your assistance in finding an onsite system to meet our CDO mandate. The time limits set forth in our CDO require our compliance in obtaining CCRWQCB approval and installation of an onsite system if the county system is not timely approved and built. We need to move forward in meeting the CDO mandate to avoid the fines stipulated in our CDO #R3-2006-1041, and we require the assistance you are bound by your own regulations to provide.

Your prompt reply is anticipated."

It doesn't take a lot of imagination to see all the Water Board members laughing at the adacity of Los Osos now DEMANDING assistance....

Certainly AES, Inc is a nuisance, as have been Riley and the other miracle systems, or using Lisa's wonder word, holistic solutions to treating human waste pollution in Los Osos, but to DEMAND (6 times) that the very State Agency who's task is to ENFORCE Clean Water Laws to now somehow solve our problem... Come on LO sewer lawyers, the State Board you have been so nasty to are the enforcement arm of the State, they don't design systems, they don't make the laws...lawyers like yourselves made those laws...!!! Now to DEMAND is a bit late... go do your homework, review your lawsuit against them, and then go find the correct venue to shutdown the AES.Inc's of the world...you'll have a lot more sucess fighting ALONG SIDE RWQCB against the snakeoil sales ....and then start listening and backing the County Process and knowledgeable engineers... there will be a real sewer in Los Osos...!!!!

Richard LeGros said...

Ann,

You posted on Thursday, October 02, 2008, the following question to Taxpayer’s Watch:

“So, the question I asked a few postings ago, still pertains: Just what benefit does this lawsuit bring to the taxpayers, except the bills? I mean, Taxpayers Watch, whoever that is besides Gordon Hensley, claims they’re looking out for the Taxpayer. So, please ‘splain, just what and how does the Taxpayer benefit from this lawsuit, no matter which way it breaks? So far, nobody has ‘splained that.”
POSTED BY CHURADOGS AT 7:20 AM
+++++++++++++++++++++++++++++++++++

I answered the following:
+++++++++++++++++++++++++++++++++++
Ann,

Here's your answer Ann;

The BENEFIT to the taxpayer /community will be the return to the LOCSD +/-$2,000,000 misappropriated (read robbed) by Tacker, Schicker, Cesena, Senet and Fouche. I assume you want your tax dollars returned, Ann. So do I.
So do thousands of other folks.

Think of it this way. By law, the CSD5 are obligated by their oath of office to SPECIFICALLY SPEND your property taxes collected to pay the Fire Fee and the Bond Assessment ONLY TO PAY THOSE DEBTS.....PERIOD! No grey area in the law here………(truncated)

So there is your answer.

-R
9:04 AM, October 02, 2008
+++++++++++++++++++++++++++++++++++
Ann,

The TW lawsuit, and Judge LaBarbera’s ruling thereto, is/will be based solely on the actions/policy decisions of the CSD5 as they responded the circumstances they found themselves in 2005-2006. Period.

How the CSD5 got into those circumstances is not relevant.

For the CSD5 to use said circumstances as a reason that 'forced' them to violate their oath of office and the law is only an 'excuse' and not a viable or winning defense.

The actions of past CSD boards or citizen groups are not on trial here; no matter how hard the CSD5 try to make it so.

The core question is this:

"CSD5, you had the property owner's property taxes in hand; so UPON WHAT LAW / LEGAL BASIS DID YOU JUSTIFY YOUR DECISION TO NOT SPEND THE PROPERTY TAXES ON THE CONTRACTUAL OBLIGATIONS THEY WERE COLLECTED FOR?"

Ann, if you can state a law that permits the CSD5 to violate the law, let's see it. I am sure the CSD5 would love to see that law too.

-R
8:22 AM, October 03, 2008
+++++++++++++++++++++++++++++++++++
To date you still have not addressed or answered the CORE QUESTION I posed to you. Your answer would be appreciated.

-R

Ron said...

Thanks for the link, Ann.

And speaking of open letters and SewerWatch, the Moylans' excellent letter stuck a chord.

It reminds me of another open letter I wrote, this one to Roger Briggs, on 10/18/2005. It's linked here:

http://sewerwatch.blogspot.com/2005/10/briggs-blown-opportunities.html

Bev wrote:

"It is not enough that the CCRWQCB sent out a press release repudiating AES, Inc.’s actions. It is not enough that the CCRWQCB created the appearance of protecting the public when it has not ensured protection of the public. As a public agency, the CCRWQCB has an obligation to protect the people."

That is such a key point.

In my open letter to Briggs, three years ago, I wrote:

"Roger... allow me to give you a quick refresher course (on what happened in the run-up to the election that formed the Los Osos CSD in 1998):

Throughout 1998, you and your staff (work) closely with the Solution Group. You tell them over and over again, that the sewer plan they whipped up over cocktails in a living room is not going to work in Los Osos.

Then, you sit on your hands and watch as the Solution Group's marketing campaign, developed by Pandora Nash-Karner, bamboozles Los Osos into believing that the deeply flawed project they whipped up over cocktails is "better, cheaper, faster" than the county's just about ready-to-go project.

In the run-up to the 1998 election that formed the CSD, the Central Coast Water Board staff -- that you were in charge of, Roger -- barely lifts a finger to counter Nash-Karner's aggressive, prolific, and less-than-accurate marketing efforts -- no community meetings, no flurry of badly-needed press releases, almost nothing from the Water Board staff. Just some wrist slapping, at best.

The Community Plan forms the CSD and gets Pandora Nash-Karner, Stan Gustafson and Gordon Hensley elected."


Without question, because of the RWQCB's continued laziness in actually protecting people, if the AES Inc. folks were to hire Nash-Karner as their marketing director, 87-percent of Los Ososans would soon be installing the Reclamator.

The Moylans wrote:

"... we demand your assistance in finding an onsite system to meet our CDO mandate."

They have already identified one, and even considered "requiring" it in Los Osos.

I wrote about that at this link.

And, as soon as I caught them on that, they started backpeddling away from their documented claims.

And two years later, the composting toilet question has yet to be resolved. The RWQCB whines that it's the county's decision, and the county whines that it's the RWQCB's decision. And, so, we all just get run around in circles by those two agencies, on that critical, critical question.

And if that question ever gets resolved the way it should -- according to RWQCB documents -- then I just don't see how Los Osos will ever have a sewer system...

... just like I predicted, here.

I just missed the date of my prediction. However, had county officials simply read SewerWatch, instead of wasting two more years and $6 million more dollars studying a community-wide sewer system, I would have nailed the date.

Sewertoons said...

I would imagine that installing some "alternate" system, if approved by the Water Board, would get them off of one's back. I would also imagine that if one were to sell ones house this "installment" would serious diminish the pool of potential buyers. If one needed to sell in a hurry, good luck. Composting toilets that need a ladder to mount and the necessity of clean-out may not appeal to all. For most of us, our home is our biggest investment. To diminish that investment for a solution to an harassment that will be gone one a real sewer is in place, be it STEP or gravity, seems foolish.

This posting also brings again to the forefront that "no sewer" is still alive and well in Los Osos. Watch out.

Mike Green said...

Sharkey bubbled:
"If the police arrest someone for purportedly violating a law, should the police be blamed for opening these folks up to unscrupulous actions by bail bondsmen?"

If the police randomly chose a few perpetrators among a known group of lawbreakers, all breaking the same friggin law, in order to set examples, I would say thats a pretty good case for redress by those few people.

The random CDO's are just plain wrong, Everyone in the PZ should get the same treatment.

And the lazy good for nothing sheriff should be going after Murphy like he did to the pot shops in Morro Bay and the Chicken ranch in Nipomo

Churadogs said...

Amen, Mr. Green, Amen. Oddly, the RWQCB spent endless amounts of cash mailing CAO threats to EVERYONE in town, (remember that colored paper you got some time ago?) but won't lift a finger to send a Fraud PR Alert to those same folks? Pllluuueeeze Or immediately notify by email or snail mail the 45 they have singled out to prosecute? Plluuueeeze.

Richard LeGros said...

Ann,

You have asked that others have alot of splain' to do...I have.

So why do you avoid splain' yourself when you are given the answer to your 'question'...or do you not really seek answers; you just wanna Bitch N Moan.

See you in court Wednesday...it will be a baaaaaddddddddddd day for the CSD5.

-R

Osos Change said...

It would also be a bad day for you, Richard, because it also means we could sue you for public waste if this suit sets precedence.

Baby Bear said...

Fact or Fiction??

Recently I had an opportunity to see the "Package" that was sent out by Mr. Tom Murphy, AES, Inc. I remember him doing business under the name of "AES Discharge Elimination Service" this past year. I was curious as to why he is now doing business under the name of AES, Inc. When trying to locate "AES, Inc." registered to do business in the state of California I found no registered business license! Hmmm since this information is updated by the state every 8 days I found this very perplexing. Also on recent ads placed by Mr. Murphy in the local paper I noticed a "TM" (trademark) next to the word "Reclamator". Once again I did a little research and found no registered trademark information for the "Reclamator". Hmmmm....Fact or Fiction?? Maybe the county's or state's attorney general can straighten this out.

Mike said...

Could...??? "We", (PZLDF?, Ann?, Ron?, Gail?, Lisa?...who is "we"?) WOULD have to also PROVE (something you are very short on...) that the pre-recall directors did something illegal...that would be something different than actually developing a PLAN, obtaining Land, Designing a State of the Art WWTF, obtaining all legal approvals and permits, and obtaining funding... They didn't paid over-priced lawyers or declared bankruptcy... Gee, they actually started to build the long over debated sewer...

The TW suit is very strong and based entirely on real Law, not on wishful thinking, hand wringing, tears and a desire to derail the legal process or blame everyone else for the failure of this CSD...

...but if you have PROOF, then don't you think it would have been on the table sometime in the past 3 years while this CSD delayed abd delayed and delayed and delayed this court date...????? Go right ahead and spend your money, just this time, please don't spend CSD money....

Richard LeGros said...

Ann,

Still waiting for your answer to the CORE QUESTION:

"CSD5, you had the property owner's property taxes in hand; so UPON WHAT LAW / LEGAL BASIS DID YOU JUSTIFY YOUR DECISION TO NOT SPEND THE PROPERTY TAXES ON THE CONTRACTUAL OBLIGATIONS THEY WERE COLLECTED FOR?"

-R

Richard LeGros said...

Good Afternoon,

Judge Labarbea has issued his TENTATIVE RULING on the Motion for Summary Judgement filed by the CSD5to dismiss the TW lawsuit, as posted in its entirety below:

In short, the judge has tentatively DENIED summary judgement on the issues of the settlements and the CDF fire payment, and tentatively GRANTED summary judgement regarding the bond payment source.

On Wednesday, Oct 8, the TW attorneys will present arguments as to why the granting of summary judgement on the bond payment should be reconsidered and reversed. No doubt, the CSD5's attorney will argue to reverse the DENIAL of the other two issues.

It will be a fascinating day.

Overall, TW is pleased.

+++++++++++++++++++++++++++++++++++
Proposed Tentative Ruling on Motion for Summary Adjudication

Taxpayer’s Watch v LOCSD, et al., CV 050862

Plaintiffs’ second amended complaint challenges the propriety of certain expenditures approved by the individual defendant members of the Los Osos Community Services District. Code of Civil Procedure §526a provides standing to a taxpayer to challenge any illegal expenditure of, waste of, or injury to, the estate, funds, or other property of a county, town or city.

Plaintiffs seek to compel the individual defendant members of the LOCSD to personally reimburse the District for the challenged expenditures.

[W]e start with the general principle that expenditures by an administrative official are proper only insofar as they are authorized, explicitly or implicitly, by legislative enactment.... [S]uch executive officials are not free to spend public funds for any 'public purpose' they may choose, but must utilize appropriate funds in accordance with the legislatively designated purpose." Accordingly, a public official who controls public funds may be held personally liable to repay improperly expended funds if he has failed to exercise due care in permitting the expenditure. (Stanson v. Mott (1976) 17 Cal.3d 206, 226-227)

A cause of action under Code of Civil Procedure section 526a will not lie where the challenged governmental conduct is legal and conduct in accordance with regulatory standards “is a perfectly legal activity.” (Coshow v. City of Escondido (2005) 132 Cal.App.4th 687, 714).

Even though Defendants’ motion for summary adjudication ultimately seeks to establish that the challenged expenditures were lawful, the court is mindful of the fact that under Stanson v. Mott, an illegal expenditure is only one element of liability. If the expenditure is found “unlawful”, Plaintiffs must still prove an absence of due care in making the expenditure and resulting damage. (Stevens v.Geduldig (1986) 42 Cal.3d 24, 35)

In Stevens v.Geduldig, the trial court found that the chairman of a Governor's tax reduction task force had been negligent in contracting to use funds provided by the State Department of Social Welfare for purposes unrelated to that department and that the Director of the State Health Care Services Department had been negligent in authorizing the chairman to enter into consulting subcontracts on behalf of that department.

The Supreme Court reversed the trial court’s judgment against the two officials. Despite finding that the expenditures were improper, the court ruled that subsequent reimbursement by the Governor’s office eliminated all damages attributable to the negligence of the defendants.

When the only illegality is the source of the funds, and the state has subsequently corrected its error and transferred funds from a proper source, we see no reason to require a repayment that would unjustly enrich the state treasury and leave the contractor without compensation for services rendered. Stevens v.Geduldig (1986) 42 Cal.3d 24, 35

To the extent that plaintiffs, at trial, rely upon the theory that the expenditures are unlawful, they will have the burden to establish Defendants’ lack of due care and resulting damage. Whether Defendants were negligent and whether the District suffered actual damage because of the payment of its legitimate obligations will, no doubt, figure prominently.


Fire Protection Fee:

The District paid $760,000.00 to the CDF to continue fire protection services. In June of 2006 the operating fund was insufficient to cover that expense. The District paid the fee from funds transferred from the District’s LAIF Account. Plaintiffs contend that the LAIF fund was originally derived from the 2002 Wastewater Project Bond Sales and was not a legal source of funds to pay the CDF fire debt. Therefore, the expenditure was illegal.

Defendant’s Material Fact 5: In reliance on the declaration of Lisa Schicker and Exhibit Q, defendants assert that the LAIF account was a legal source of revenue to pay this obligation because at least $760,000.00 (earmarked for fire and water reserves) remained in the account.

Exhibit Q is a document that shows the deposits and expenditures of LAIF Account -1011. The disbursements are only identified as “transfers to op”. Defendants assert that sufficient fire and water reserves remained in the LAIF account because all of the other disbursements were made solely for purposes of the wastewater treatment plant.

Exhibit Q is simply insufficient to prove that sufficient fire and water reserves remained in the LAIF account if for no other reason than the document lacks any detail concerning the expenditures identified as “transfers to op”.

Paragraph 13 of Bruce Buell’s declaration disputes Fact 5. He states that, in 2002, the Board adopted Resolution No. 2002-48 that authorized repayment of the interfund loans with bond proceeds. (See Exhibit C) He further states that the repayments were completed shortly after the bond proceeds were received. Therefore, no funds in the LAIF account were fire and water reserves at least up to the time that he was placed on administrative leave in October of 2005.

Fact 5 is not adequately established by the evidence. A more detailed accounting could prove that fire and water reserves were maintained in the LAIF account and sufficient money remained at the time the Fire Services payment was due. However, Exhibit Q is inadequate because there is no description of the real nature of the disbursements from the LAIF account. Moreover, Buell’s declaration disputes the assertion that fire and water reserve funds remained in the LAIF account.

Accordingly, the motion for summary adjudication on the issue of the Fire Protection Fee is denied.


Bond Assessment Payment:

The District paid $716,000.00 on a bond assessment payment from its Reserve fund in the LAIF account.

Under the terms of Resolution 2002-33 and the bond agreement, bond payments were to be made with assessment revenues held in the Redemption Fund. Where there is a shortfall, payments were to be made from a Reserve Fund. [See Exhibit A at pages 10-11; Exhibit R where MBIA demands payment from the reserve fund and Buell declaration at ¶8(c)]

There is no dispute of fact that the reserve fund was a legal source of payment of bond payment. As such, that expenditure is legal. Plaintiffs fall back to an argument that the expenditures that depleted the Redemption fund were illegal. That issue is not tendered in the prayer of the complaint or in the motion for summary adjudication.

Accordingly, the motion for summary adjudication on the issue of the legality of the Bond Assessment payment is granted. There is no triable issue of fact that payment was made from a legal source of the budget.


Settlements:

Government Code §1090:

The District settled five separate lawsuits on November 23, 2005. Concerned Citizens of Los Osos was the plaintiff in three of those lawsuits.

Plaintiffs’ second amended complaint alleges that the settlements were collusive or sham settlements. Specifically, paragraph 13 complains that the dismissal of the Measure B lawsuit pending on appeal with a payment settling that case was improper. The complaint further alleges that defendants had personal ties to the organizations that benefitted from the settlements and that defendants benefitted directly or indirectly from the settlement payments. Paragraph 14 alleges that the Board used state money from the State Water Quality Control Board’s Revolving Fund program designated to pay contractors who worked on the project. Paragraph 21 alleges that the settlements were paid without legal cause.

Defendants’ motion argues that none of the individual board members were in violation of Government Code §1090 because they derived no financial or pecuniary benefit from the settlements. Government Code § 1090 codified the common law prohibition of public officials having a financial interest in contracts they make in their official capacities. The purpose of this section is to prohibit self-dealing, not representation of the interests of others. (See Breakzone Billiards v. City of Torrance (2000) 81 Cal.App.4th 1205, 1230 and 1231 )

Plaintiffs attempt to dispute Fact Number 23 with Plaintiff’s Exhibits 12 and 13. They are proffered in an effort to establish that Schicker and Tacker received indirect financial benefits in the form of compensation because they were “covert” members of CCLO.

The exhibits consist of copies of email communications between Schicker and Tacker on the one hand with attorneys Parker & Hawley as well as Julie Biggs on the other. The exhibits establish that Schicker and Tacker were in communication with the above referenced attorneys concerning the status of and strategy for handling of the litigation.

The email correspondence with Parker & Hawley also reveals discussion concerning the need for payment of attorneys’ fees and costs to keep the litigation going. The tenor of the communications relate to CCLO’s obligation to keep the account current. Exhibit 12 establishes that CCLO’s lack of money to finance the litigation, in large part, led to Parker & Hawley’s withdrawal.

The settlement agreements of the CCLO lawsuits (Defendants’ Exhibit K) establish that the settlement covered fees for services through November 15, 2005, a period that would encompass Parker & Hawley’s representation. However, the evidence does not establish that Schicker and Tacker received a financial or pecuniary benefit from the settlements because these exhibits do not establish that they were personally liable for fees incurred by CCLO. Moreover, according to the email communications, Keith Swanson appears to be the party who was responsible for keeping the accounts current on CCLO’s behalf.

Footnote 1 of plaintiff’s opposition makes reference to Schicker’s signature on CCLO’s contract for legal services. Plaintiffs state that the contract is not presented in the opposition because there is a dispute about its admissibility.

Plaintiffs’ points and authorities also make reference to Schicker’s deposition where she states she signed a contract in a representative capacity. This does not establish any personal liability for the attorney’s fees incurred.

There is no evidence presented that would establish that Schicker obligated herself to be personally responsible for the payment of attorney’s fees.

Plaintiffs raise no dispute to the assertion in Fact 23 that Fouche, Senet and Cesena had no pecuniary or financial interest in any of the settlements whatsoever.

Based upon the evidence presented in the separate statement of facts, plaintiffs have not adequately disputed Fact 23.

Fact 27 states that no defendant was an officer, director or member of CCLO at any time that BWS represented CCLO in the actions. Although it is not clear from Exhibits 12 and 13 when Burke, Williams and Sorenson undertook representation of CCLO, Julie Biggs is associated with that law firm. Communications with Biggs are set out in Exhibit 13. Those communications do involve some strategic decisions concerning the ongoing litigation. The evidence contained in Exhibit 13 could lead a reasonable trier of fact to conclude that Tacker acted as a member to CCLO because she participated in what appears to be confidential communications. Therefore, Fact 27 appears to be disputed.

Plaintiffs also argue that the settlements were improper as a gift of public funds in violation of Cal. Const., art. XVI, § 6, despite the fact that the pleading does not make this specific claim. Finally plaintiffs argue that the settlements were paid from an illegal source of funds.

Gift of Public Funds:


[T]he settlement of a good faith dispute between the State and a private party is an appropriate use of public funds, neither wasteful within the meaning of section 526a, nor a gift barred by article XVI, section 6, because the relinquishment of a colorable legal claim in return for settlement funds paid by the State is good consideration and accomplishes a valid public purpose. County Foundation v. Irvine Co. (1983) 139 Cal.App.3d 195, 200

Where funds are expended pursuant to a settlement agreement in exchange for wholly invalid claim, no “public purpose” is achieved. Such an expenditure violates the gift clause of Cal. Const., art. XVI, § 6. Orange County Foundation v. Irvine Co. (1983) 139 Cal.App.3d 195, 201

The court in Jordan v. California Dept. of Motor Vehicles (2002) 100 Cal.App.4th 431 followed the rationale in Orange County Foundation when it invalidated an arbitrator’s award of attorney’s fees in the amount of $88,000,000.00 when a statute limited such an award to $18,000,000.00. The court reasoned that, because the attorneys had no colorable claim to fees in excess of $18 million, any payment over that amount served no public purpose. (Jordan v. California Dept. of Motor Vehicles (2002) 100 Cal.App.4th 431, 451)

The issue of whether the settlement of the five cases constitutes a gift of public funds is not raised in the motion for summary adjudication. Therefore, the motion does not trigger plaintiff’s burden of production of evidence nor does it dispose of plaintiff’s entire claim.

However, to prevail on the theory that the settlements were an improper gift of public funds, plaintiffs will have the burden to establish that each settlement was of a compromise of a wholly invalid claim.

"[C]ompromise of a doubtful claim asserted and maintained in good faith constitutes a sufficient consideration for a new promise, even though it may ultimately be found that the claimant could not have prevailed." (Union Collection Co. v. Buckman, (1907) 150 Cal. 159, 163) Thus, surrender of a possibly meritless claim which is disputed in good faith is supported by valid consideration.(Stub v. Belmont, (1942) 20 Cal.2d 208, 218)

The court is mindful that there are numerous reasons to settle and resolve pending lawsuits, even those that have little or no merit. The issue of whether the settlements constitute a gift of public funds requires a very narrow inquiry. It is not an invitation to retry the merits of each compromised lawsuit nor does it provide the opportunity to examine the propriety of the reasons for the settlement. The key issue is whether there was a compromise of a knowingly unfounded claim. (Orange County Foundation v. Irvine Co. (1983) 139 Cal.App.3d 195, 200)


Source of Funds for Settlement:

Plaintiffs challenge the settlement payments on the basis that they were drawn from the State Water Quality Control Board Revolving Fund. Here again, plaintiffs have the burden to establish the elements of illegality and lack of due care on the part of the defendants. This would require the same analysis as set out in Stanson v. Mott. Plaintiff will have the burden to prove expenditures from an illegal source and negligence resulting in damage.


Failure to Request Corrective Action:

Defendants assert that plaintiffs failed timely request corrective action. There are triable issues concerning whether this was a futile act.

Conclusion:

Accordingly, the motion for summary adjudication of the claim related to the payment of the fire service fund is denied. Fact 5 has not been adequately established by the evidence and is disputed in the declaration of Bruce Buel.

Defendants’ motion for summary adjudication of the claim related to the bond fund is granted. There is no dispute of fact that the source of the payment was a proper and legal source.

The motion for summary adjudication of the claim related to settlement of litigation is denied. Fact 27 is disputed. Moreover, the facts, even if undisputed, do not dispose of plaintiffs’ entire claim.

To the extent that the motion is based upon a contention that plaintiffs failed to timely request corrective action, there are triable issues of fact concerning whether the effort would have been futile.
The brief incorrectly refers to Exhibits 11 and 12.
+++++++++++++++++++++++++++++++++++

-R

Howie said...

Richard brayed:


"It will be a fascinating day.

Overall, TW is pleased."


It will be a "fascinating day" when you are led away in cuffs ... when you have to explain how you moved up to a house on the hill on $6K a year ... when folks know you, the "Great Numbers Guy" (with Sharky the Fixer) have yourself slipped into personal bankruptcy and screwed people for added good measure ... So ... you are what? A hyena?

Let's be clear for all you cats and chicks who already know, or don't yet know, about Taxpayers Watch ... Taxpayers Watch is the rotten-to-the-core recalled board starring Richard LeGotti and Gordon Hemsley, Pandora the Grafter, and their mutant larvae Mariah Kelley and Marshall Tri-W O'Chillski. Have I said it yet? If you have any of these in your house, call the Orkin Man!

By the way, who exactly is Taxpayers Watch. When you ask, depending who's asking, they have 3400 supporters but 12 members whose names change like Richard's online identities.

So, if Richard says, "Taxpayers Watch is pleased," who exactly is pleased, Richard?

And why did Stan run out of town so fast? Tell us that story, Uncle Richie. I want to hear it... Then I promise to go to bed.

Sewertoons said...

WOW!! We are back in Junior High school again!!

Did you finish your homework howie? No more blogging until it's done!

Mike said...

Hang in there 'toons... I wouldn't bet on TW losing this battle...

Sewertoons said...

Thanks Mike! I won't! I was in an interesting conversation today and something I had forgotten about was brought up. I now wish the circumstances around even managing to make the Fire Payment at all were part of this case. The jeopardy that little oversight put us in is not well known but pretty scary.

Shark Inlet (a.k.a. Stiv Neener) said...

Toons,

Are you referring to Dan Blesky making a money transfer between two accounts without the issue being approved by the board and later the board retroactively approved his action on a motion that was not properly agendized or announced and without proper public comment?

Or was it something else?

Richard LeGros said...

HowLie, (Howl-EE) or (how-LIE)

You made me laugh! Thanks for the very funny start to my day.

-R

Richard LeGros said...

Ann,

Still waiting for your answer to the CORE QUESTION:

"CSD5, you had the property owner's property taxes in hand; so UPON WHAT LAW / LEGAL BASIS DID YOU JUSTIFY YOUR DECISION TO NOT SPEND THE PROPERTY TAXES ON THE CONTRACTUAL OBLIGATIONS THEY WERE COLLECTED FOR?"

-R

Ron said...

'toons wrote:

" Composting toilets that need a ladder to mount and the necessity of clean-out may not appeal to all."

'toons, why is it so hard for you to think?

Don't you see, the composting toilet alternative doesn't have to appeal to all.

If just one household in Los Osos goes the composting toilet route (and it's entirely their choice as the property owner to go that route), and then get an exemption for the sewer assessment, which they should easily be able to get (why should they have to pay for a sewer system if they don't need to hook up to it?), then, trust me, EVERYONE in Los Osos will go the composting toilet route, because no one is going to want to pay $Ginormous bucks/month just so they can flush with water.

That notion has GOT to scare the daylights out of realtors in Los Osos.

After a year of frustration trying to get my question answered, I just sent the following e-mail to SLO County officials, Bruce Gibson, Paavo Ogren, John Waddell, and Mark Hutchinson, in hopes that at least ONE of them might answer my excellent, critical question:

Hello Paavo, or John, or Mark, or Bruce... please answer the following question that I originally sent on 10/21/07, yet never received a reply:

Why can't a homeowner in Los Osos install a composting toilet system, considering that the RWQCB's "Item 19," linked here, states (bolding mine):

- - -

Require Alternative Waste Disposal Units – The Regional Board could (through General Waste Discharge Requirements, Cleanup and Abatement Orders, or Cease and Desist Orders) require use of alternative waste disposal units (in Los Osos).

Advanced treatment units (for improved effluent quality), portable toilets and/or composting toilets (for reduced discharges, as discussed in previous section regarding prohibiting black water discharges) could be required. Such units could be required for existing discharges using Cleanup and Abatement or Cease and Desist Orders, or for new discharges using General Waste Discharge Requirements.

Pros: For those existing discharges where such alternatives are implemented, water quality improvement will occur. If General Waste Discharge Requirements are adopted by the Regional Board which authorize development of vacant lots, then this method may also provide benefits similar to those described under the 'Rescinding Resolution No. 83-13' section above.

Cons: Widespread implementation of this alternative would result in more costly waste treatment and less effective water quality protection than that offered by the community sewer. However, it remains one of the few alternatives, which can result in water quality improvement and is not subject to Coastal Commission approval.
- - -

That documented statement from the RWQCB tells me that "widespread implementation of this alternative" is possible, it "will" improve water quality, and "remains one of the few alternatives, which can result in water quality improvement and is not subject to Coastal Commission approval."

How am I wrong?

So, what's stopping a property owner from printing out Item 19, ordering a composting toilet system on-line, installing it, and becoming 100-percent 83-13 compliant in about a week?

I wrote a column on this subject, here:

http://sewerwatch.blogspot.com/2007/01/is-there-rosa-parks-in-los-osos.html

This subject is extremely interesting, and documented, yet county officials act like Item 19 doesn't exist at all. I don't understand.

Thank you in advance for your prompt response. (Please don't make me wait another year before I have to ask this question again.)

Thanks,
Ron

- - -

Frankly, it leaves me shaking my head that someone in the PZ hasn't printed out Item 19, and gone the composting toilet route already.

Maybe they have.

Trust me, if someone ever does that, LO will never have a sewer. Never.

Churadogs said...

Richard sez:"It will be a fascinating day.

Overall, TW is pleased"

Thanks for posting the tentative ruling. Uh, TPW is pleased? I thought you were absolutely positively gleefully anticipating the CSD5 would be hauled away and put into PRISON! This posting is as I figured it would me, dismiss X&Y&Z, look in more detail to M&N&P & etc. Nobody got hanged. Which must really be upsetting to you. Geeze, I was sure you had a victory party prepared for last week, with drool running down your chin in anticipation. At least some of your postings indicated that. Well, interesting is right.

as for your question above: Isn't that what the trial will determine?

Richard LeGros said...

EXTRA! EXTRA! EXTRA! EXTRA!

Ann Calhoun's priceless quip of...'as for your question above: Isn't that what the trial will determine?'..... whispers a weak, whimpy, tail-dragging, scared, 'run-away and hide', 'La La La...I don't hear you', 'I don't know', non-SPLAIN' answer to the CORE QUESTION. LOL

You comment on very thing else in the universe...soooooooooooooooo

Still waiting for your answer to the CORE QUESTION:

"CSD5, you had the property owner's property taxes in hand; so UPON WHAT LAW / LEGAL BASIS DID YOU JUSTIFY YOUR DECISION TO NOT SPEND THE PROPERTY TAXES ON THE CONTRACTUAL OBLIGATIONS THEY WERE COLLECTED FOR?"

-R

PS: Ann, this is a civil lawsuit only, so no jail time here.

Sewertoons said...

Ann's friendship with the 5 must be getting in the way of clear understanding on what this is about. Considering she is money savvy and not wanting to frivolously spend on extras, I don't quite get why us having to pony up the missing money is not an issue with her. Whether or not the money spent out of the bond reserves is admitted to trial isn't the point of what I am saying here. While replacing the money didn't happen in the one year period required by the bank, they have apparently given us more time, we STILL HAVE TO REPLACE IT - meaning PAY THAT PAYMENT TWICE - that is you and me, Ann, and the rest of us in the PZ!

Churadogs said...

Sewertoons, crying about paying everything twice is laughable. What, no complaint from you about the millions the previous board pounded into the ground -- and wasted? We'll all be paying for THAT for a long, long time. Yet not a peep from you over that? Odd. This community will be paying a whole lot of unnecessary money for a long time due to the disasterous train wreck set in motion and helped along to the cliff by a whole series of players, from the Solution Group through the CCC to the Waterboard to the pre and post recall boards to citizens groups to a bad decision by the pre-recall board on blocking the Measure B vote and so on. The list is long and the total price tag added to by all players. Whining over this is like stepping away from a train wreck and whining because you sprained your little finger. Compared with the massive mess behind you, it's hardly worth quibbling about.

Richard LeGros said...
This comment has been removed by the author.
Richard LeGros said...

Ann,

Answer the SPECIFIC question asked and not retort with your usual choo-chooing down the 'train wreck' track. Or do you lack es"steam"?

Still waiting for your answer to the CORE QUESTION:

"CSD5, you had the property owner's property taxes in hand; so UPON WHAT LAW / LEGAL BASIS DID YOU JUSTIFY YOUR DECISION TO NOT SPEND THE PROPERTY TAXES ON THE CONTRACTUAL OBLIGATIONS THEY WERE COLLECTED FOR?"

-R

Mike said...

Had the CSD5 considered ALL the consequences of halting a LEGAL public works project AND had the CSD5 actually had an alternative PLAN, we would not be faced with the millions in debt being left as the legacy of the infamous CSD5...

There was no "train wreck" until the CSD5 thru the switch and deliberately ran the train into a rock solid cliff with not plan yet drawn for the tunnel out of town...

Nice try Ann, but the money was given out to the CSD chrony's... where is your indignation over all the sole source agreements given to the lawyers... and have you ever answered just how much the CSD has paid to YOUR own PZLDF lawyers...???? 25% of infinity $$$$... 50% of infinity... 100% of the unlimited legal bill...????? How come YOU won't answer....??? YOUR name is on that lawsuit...!!!!

Watershed Mark said...

Proposition 218 was a proposition in the state of California on the November 5, 1996 ballot. Prop 218 significantly changed local government finance.

Prop 218 amended the California Constitution (Articles XIIIC and XIIID) which, as it relates to assessments, requires the local government to have a vote of the affected property owners for any proposed new or increased assessment before it could be levied. The Proposition was passed by California voters on November 5, 1996, and the assessments portion placed in effect on July 1, 1997.

http://en.wikipedia.org/wiki/California_Proposition_218_(1996)

Seemed a little clarity was in order...

Watershed Mark said...

In the past, the local government agencies were not required to obtain ballot approval from the property owners before levying street lighting assessments; only council approval was required, even if there were significant protests. Government agencies affected by Proposition 218 are counties, cities, and special districts.

Watershed Mark said...

http://www.lao.ca.gov/1996/120196_prop_218/understanding_prop218_1296.html

Just like old times...

Sewertoons said...

Ann says:
"What, no complaint from you about the millions the previous board pounded into the ground -- and wasted?"

Why would I complain about that? That is your complaint because you didn't like the project or didn't want a project. Hard to tell since you seem to think we need to prove that each and every house is polluting (an impossible expense)- or that you think busting up the PZ - at this ridiculously late date with the Shaunna Sullivan case -- will actually work. If the PZ is busted up, we start from square one on a sewer and we'll both be dead by the time anything is done about the pollution in Los Osos.

Those millions you are miserable about were going to get my house a sewer and get the Water Board off my back. Those millions were NOT wasted until the current Board (sans Joe) stopped the project. I was fine with gravity and fine with "mid-town," too.

So I am complaining that the money I pay 2x year on my tax bill is not getting me much. I am paying that and now I ALSO get to pay for a whole new project. And what each of us will get to pay on the bankruptcy - who knows.

I didn't live here when the first sewer project was proposed, but knowing what I know now, I would have jumped on it. Were you here then? Did you want a sewer then? And later, if here, did you vote to have a CSD or support the County project then?

Sewertoons said...

Oh and by the way Ann, does your non-answer mean you are OK with making that bond payment twice because it was part of the oh-so-transparent-process that stopped the sewer?