Calhouns Can(n)ons

Options First, Trial Later? Is that County Mummy Dearest I see standing there suddenly, all smiles and huggie-boos?


First, a May 12 letter to CSD General Manager, Dan Bleskey and Gail Wilcox, Assistant County Administrator, from Paul Hood, Executive Officer of LAFCO. This will be followed by my Nosey Parker Public Comment. And following that, a deliciously accurate recipe by Gail McPherson on just how one goes about dissolving a CSD.

The biggest puzzle to me in what appears to be Mr. Hood’s trial balloon proposal, besides it being curiously cart before horse-ish, is this: Why is the county being asked to play the role of the loving parent . . . now? I mean, the county was free to step up to “joint-partner” while the Great Blakeslee Compromise negotiations were underway. Indeed, they were free to “joint-partner” with various financing options even after the Blakeslee Compromise fell through, yet they said nothing. And when asked to sign on as either a Designated Party or an Interested Party for the CDO’s, their response was Talk To The Hand.

So far as I know, the only “county” response to the CSD efforts to move the sewer came in the form of an Oct 20th letter from Supervisor Shirley Bianchi to State Water Board Chair Arthur Baggett assuring him that “This is a particularly difficult situation since the current District Board either will not or cannot understand any government process. At one point I was asked if the political will exists here in San Luis Obispo County to assume the management of the project [Tri-W] if, for whatever reason, the District were unable to continue with it. Let me assure you that you have my full support, and I believe that the other Supervisors would give great weight to my position.”

In other words, screw the voters and since the newly elected CSD Board was too stupid to “understand any governmental process,” then they certainly weren’t an elected body that needed to be treated as a co-equal governing body. No, indeed. Instead, Mummy Bianchi could be relied on to go behind their backs and take matters into her (and Water Board Chair Baggett’s) own hands.

Oh, did I forget to tell you, Supervisor Bianchi is one of the LAFCO Commissioners, and to my knowledge, she has not excused herself from voting on the dissolution of The Good Old Too Stupid To “Understand Any Governmental Process” Los Osos CSD. Ah, yes, unbiased Mummy Dearest Redux.

So, pass the cheese, please. I smell something cooking here. Rats en brochette, perhaps? Which is why I have to wonder if The County now loves Los Osos ---like a glutton loves his lunch?


LAFCO’s letter:

Subject: Collaborative Options to Dissolving the District

Dear Mr. Bleskey and Ms. Wilcox:

As you know, a proposal to dissolve the Los Osos community Services District has been filed with the Local Agency Formation Commission (LAFCO). LAFCO staff is in the process of evaluating several different options regarding the Dissolution proposal. In analyzing this application, two options have been identified that would call for the cooperation of both the County and the District. These collaborative options could help resolve the situation if the County and District are willing to work together. The options are described as follows:

Option A: Divesture of the Sewer Power from the District. The LOCSD would voluntarily divest itself of the power to provide wastewater and sewer services and the County would voluntarily agree to provide this service. LAFCO approval of this action is required for this option to be implemented.

Discussion. If the District chose to divest the sewer power, they would continue to provide other services to the community of Los Osos; i.e. water, fire, street lighting, garbage, etc. The District would remain as the local agency that provides services to the community and may be able to manage the sewer at some point in the future, subject to LAFCO approval. The sewer power could be transferred to the County through the activation of this power under County Service Area 9. The County would not be obligated to assume the responsibility for the other services. The County appears to be in a better position in terms of resources and financial standing to complete the sewer project. Moreover, this action could be conditioned by LAFCO to limit the liability that would be transferred to the County. Current liabilities, loans, bonds and lawsuits would remain with the District because the CSD still exists, subject to LAFCO conditions for the divestiture as permitted by statute.

Option B: County and District enter into a Joint Powers Agreement. This option would give the LOCSD and the County the opportunity to develop an agreement that would create a “Board” or “Authority” to construct and operate the sewer. The County and District could work out the details of such an agreement that may limit liability and increase the chances that the sewer would be constructed in a timely and more cost effective manner. LAFCO approval of this action is not required for this option.

Discussion: A Joint Powers Agreement (JPA) would create a new governmental structure that may be able to obtain financing at a reasonable interest rate while limiting the liability to the County and the District. Through the Joint Exercise of Powers Act public, agencies may agree to assist one another using a Joint Powers Agreement that establishes a board, commission other agency to provide governance for the project. A joint Powers Agreement identifies roles and responsibilities for the agency. Under Government Code 6546, revenue bonds may be issued by the joint powers entity for the construction of wastewater facilities (6546(g)). It may be possible for a Joint Powers Agreement to be written contractually in such a manner as to limit the liability that might be incurred by the County or the District. The precise details of the JPA would be addressed if the County and the District decide to enter into such an Agreement.

LAFCO is interested in hearing from the District and the County with regard to the potential and feasibility of the above options. These options provide a way to work together to complete the sewer project in a manner that could be more cost effective and time efficient. It may be that after the sewer project is completed the facilities are transferred to the District for operation and maintenance.

We will be including a discussion of these options in the June 15, 1006 Staff Report to the Commission. An immediate response from the District and County regarding these alternatives would be helpful. If you wish the Commission to consider your input on these options, please provide a written response by May 22, 1006.

Thank you for your assistance in this matter. Please don’t hesitate to call me at 805-781-5795 if you have any questions.

Sincerely,


[Paul Hood]



And My Nosey Parker Public Comment to Mr. Hood’s letter

May 19, 2006

Paul Hood, Exec. Director
LAFCO
Commissioners & Staff
County Courthouse Complex, Admin
1042 Pacific St. Suite A
San Luis Obispo, CA 93402


Dear Mr. Hood,

I wish the Commission and all interested parties to consider this my public input on your May 12 letter re the Collaborative Options to Dissolving the District:

Your May 19 letter offers two options to resolve the question of Dissolving the CSD. I’m afraid I’m missing something. Aren’t there four or more options? 1) deny the dissolution petition for lack of substantiated and sufficient grounds to shut down a functioning CSD; 2) substantiate all the charges as sufficient reason for dissolving a functioning CSD; 3) Separate certain functions, i.e.”sewer power;” and 4) some alternative joint power or lead agency or some other negotiated and voter approved system; 5) some other option.

Since what LAFCO decides must be based on criteria that applies to all past, present, and future CSDs equally, I am deeply concerned that “options” are premature at this stage, and would caution that the LAFCO board needs to seriously think about precedent here.

It is no secret that a certain group of individuals wanted a particular type of sewer plant in the middle of town and when the community disagreed with that, these folks moved immediately to dissolve the CSD in hope that The County would immediately re-start a particular type of sewer plant in the middle of town. That they used LAFCO as a political tool to accomplish this one particular goal should give everyone involved with this matter cause for concern. The criteria for dissolving a functioning CSD needs to be based on solid, neutral ground, not political pique or hidden agendas.

So far as I know, the judge who has ordered an audit of the CSD’s books still hasn’t assigned an auditor to complete that task. In her March 24 letter, Gail Wilcox notes that before she can make a recommendation to the BoS “we would need further reliable information as to the true state of affairs at LOCSD.” . . . including various real and actual liabilities (not made up un-hatched chickens) and so forth. If you don’t have information from the audit yet, isn’t a “collaborative option” premature? If you don’t yet have accurate information, (and in the various contractual mediations, things can change quickly, one way or the other), I would strongly suggest, as Ms. Wilcox suggests in her March 24 letter, “that LAFCO take advantage of the provisions of Government Code section 56666, which allows for up to a 70 day continuance of the hearing.”

In Option A, of your May 12 letter, you state, “The county appears to be in a better position in terms of resources and financial standing to complete the sewer project.” THE sewer project? What sewer project? The CSD is now in the middle of a process of updating the wastewater report and depending on what the report says, THEN they’ll know what kind of project will be the preferred one to be presented to the community. Right now, there is nothing that can be called “The” project, unless, of course, you are referring to The [old] Tri-W Project?

In Option B, you again state that “an agreement that would create a “Board” or “Authority” to construct and operate the sewer.” THE sewer? Again, what project are you talking about?

In Option A, you note that divesting the sewer power would be done only if the action “could be conditioned by LAFCO to limit the liability that would be transferred to the County. Current liabilities, loans, bonds and lawsuits would remain with the District [emphasis mine] because the CSD still exists . . . . . .” while Option B notes that the Joint Powers Agreement would “be written contractually in such a manner as to limit the liability that might be incurred by the County or the district.” [emphasis mine.]

Why would Option A stick the district with all liabilities while Option B somehow limits that same District liability?

Option A notes that “The LOCSD would voluntarily divest itself . . .” while Option B says nothing about “voluntarily” entering a joint powers agreement. In presenting the options here, at this time, before the hearings even take place, are you really presenting the community with Hobson’s Choice? i.e. choose one of these options NOW, or else we will go ahead and vote to dissolve the entire CSD?

If that’s what’s really at work here, then shouldn’t LAFCO first offer the full case for dissolution on June 15 (if the proper audited financial information is in hand by then), with full opportunity to rebut their case, and only then suggest or offer options before or as part of a final recommendation?

Once again, I have serious concerns that what LAFCO may be considering must be done in such a way so as not to set an awful precedent – that of using LAFCO as a partisan political tool when the ballot box fails one particular group or another.

Sincerely,

Ann Calhoun


And now, on a lighter note. Some delicious thoughts to munch on by Gail McPherson. What the Irish call “joking on the square.” Or is it? [copy edited for blog posting with permission of author]



While the [recall] vote represented a rejection of the project at Tri W and the lack of acceptance of the exceedingly high cost of the sewer project, and lack of confidence in the [old] board majority, what would it take for the ousted board and a handful of spiteful supporters to dissolve the CSD and regain power?

Lost Credibility, Lawsuits, Claims and Debt, Frozen Funds/ Bankruptcy, and Individual Fines….That and more are the necessary in”greed”ients for a Taxpayers’ Watch Dissolution Recipe. Herewith a 10 point plan of how it works: (keep in mind that a CSD Success spells Failure to Albright and her ousted cronies)

You must ensure the CSD is embroiled in lawsuits and controversy from the first day they are sworn into office. Taxpayers’ Watch (formed from those who lost the election) filed the first of numerous lawsuits the day after the election, before the first ‘post recall’ CSD meeting.
Assure cooperation by Briggs and the Water Board to fine the CSD into bankruptcy. Public records documents between Briggs and members of Taxpayers’ Watch confirm they lobbied and got the Water Board to draft actions for $11 million in fines and individual CDOs as the election was being certified.
Stop the Funds -Assure a preemptive strike by contacting the SWRCB and informing them the board is thumbing their nose at the State and flaunting “they will never pay you back.” Use the 218 requirement to confirm CSD intentions. Request SWRCB pull funds and default on the contract, before speaking to the “lawfully elected lead agency” because they “know nothing about government.”

Project funding that could be reassigned to a project out of town must be aborted: The CSD had the authority to revise the project and the loan with SWRCB approval. Lobbying before the recall election would convince the SWRCB not to listen to the public outcry against the [Tri-W] project, which gave the SWRCB confidence that if they played ball with the old CSD the recall would fail and Voila! an unwanted sewer project would be funded and built.
Stop Negotiations to preserve funding and forward motion on the project. Torpedo-Blakeslee’s compromise-. A lower cost plant out of town was presented, and several parcels were identified. The CSD would be building now, No fines, No default, No lawyer’s fees. NO DISSOLUTION?? This recipe can’t let that happen!
Minimization and usurping lawful authority: Lobbying efforts to assure the SWRCB would NEVER recognize the new CSD as the lawfully elected LEAD agency for negotiations. Launch and maintain huge lobbying efforts to forever etch “anti-sewer-obstructionists” and Los Osos crazies into the SWRCB collective mind.
Announce dissolution and make promises that once the County takes over, there would be no claims or debt, no CSD fines, resumed low interest funding, agency “respect’ and peace will return to the people’s lives. Keep repeating “the recall was close, and not everyone voted”...get the fear factor with headlines about fines and loan default working and go gather signatures. Promise anything…dreamers never delivered on a single promise before except to promise that the CSD would be annihilated if they lost the election!
Anti Sewer Perception, Board is unqualified, inept and naive: Media and public agencies must never view the new board as being capable, (current board is made up of scientists, engineers, planners-all 5 with extensive government experience)
The CSD must never be perceived as in favor of a wastewater project, or capable of delivering one. Assign the 30 years of delays to them as well as millions in wasted public funds.
File more lawsuits against each one, and then claim it’s a waste of public funds to use attorneys to defend the district-as required by law.
Litigation must erode both the public funds and the confidence of the public.
Ratchet up the expenditures for required District legal defenses and then publicly announce the huge waste.
Make up the numbers, a few million on the construction claims, more on litigation. No one will stop to imagine it all can be tracked back to actions by the recalled board before the election to assure this very outcome.
Hide that the ousted Board had active litigation against agencies and individuals, before the election, which the new CSD fiduciary duty required and obligated them to settle at the lowest cost to taxpayers.
Exploit that positive settlement as wasteful and file another lawsuit for waste. Hide this CSD’s lack of fiduciary responsibility. Taxpayers’ Watch will grab the settled Measure B lawsuit, and drive up the cost again.
Keep the media and press focused to assure the perception by the courts and public is the CSD is “anti sewer” and then drum beat the rumor that the CSD was paying “friends” with settlement money.
Claims settled and debt reorganized stops bankruptcy. Freeze CSD funds so the board can’t defend the district against Taxpayers’ Watch myriad lawsuits. Better, assure they can’t deliver a project, settle claims or reorganize debt. How? Get the contractors who worked hand in glove with Taxpayers’ Watch to torpedo the compromise, to lobby the SWRCB and RWQCB against working with the CSD. (Also, do hide their substantial campaign contributions to help the old Board and hope nobody notices). Best of all, the contractors’ loyalty to the old board will be promised payments in the form of full claim recovery. Millions to the contractors, on a bid 45% over estimates, on contracts front loaded to drive up the debt. Yes, millions instead of the pennies on the dollar they’d get in a CSD settlement with the new Board. Reason enough for a Dissolution Recipe. Dinner is served.