Calhouns Can(n)ons

Tribune Viewpoint:

Below, the Nov 12, 08 “Viewpoint” by Julie Tacker, CSD board member, printd n the Tribune under the headline, “Setting the record straight in Los Osos.” Posted with permission. (A poster on this blogsite calling himself Richard LeGros (recalled CSD board member?) noted in the comment section of a previous post, that the courts have just decreed that the CSD’s insurance company is supposed to pay the legal fees of the CSD members to defend against this latest Tax Payers Watch lawsuit (the one suing 5 CSD members personally.) If correct, for now, that particular tax-payer bleed-out has stopped. For now . . . . )

“A Sept. 23 article by David Sneed describes the “daunting challenges” facing the Los Osos Community Services District election, as water, financial and sewer woes.
I disagree with several statements in the article.

It states that the sewer responsibility “has passed from the district to the county.” In fact, residents in Los Osos and countywide are anxiously watching the county process as general fund monies are floated ($6 million so far) in the pursuit of a wastewater project. County supervisors have yet to pass a resolution (required by AB2701) to formally accept the project — expected sometime next year.

Once passed, the $127 million or $25,000 per household tax can begin to be collected to recoup the county’s investment. It is only then that the district can proceed with its Chapter 9 bankruptcy, where claims and most litigation have been stayed.

Furthermore, the article states that the sewer is a “key component” in “helping the district get out of bankruptcy.” Bankruptcy protection only applies to old debt (brought on by the recalled board’s reckless decision to break ground on the project just days before the election). Bankruptcy debt will be divided among creditors; funds will come from available assets left from that failed project.

Frozen SRF (state revolving fund loan) funds and real estate related to the project, i. e. easements and pump station sites (including the Tri- W site if the county chooses another treatment site or chooses a STEP collection system) will be sold.

The article also suggests a nexus from taking over the sewer after its construction to “restoring the district’s solvency.” Law requires sewage treatment fees to be treated as enterprise funds (only enough can be collected to cover the cost of services provided). Simply put, there will be no “profit” from a sewer system to pay old debt.

Also, while the article correctly states, “Injecting treated wastewater into the aquifer is one way to prevent seawater intrusion,” it fails to mention that the current county proposal will not achieve this objective. The use of treated wastewater to recharge the basin will be left up to the purveyors to analyze and engineer and pay for in a shift of financial burden from the sewer to the water bill. Those who trust the county’s process are enjoying a dog-and-pony show that likely will not resolve seawater intrusion issues.

The article barely mentions the real crisis issue facing the district today: litigation brought on by vindictive recalled board members (aka Taxpayers Watch). The cost to defend lawsuits levied against current board members, including myself, is eating away at district reserves. This litigation was relieved from stay because it did not necessarily involve the district. The district is obligated to defend its directors; consequently the district is involved. Funds to defend are coming from property taxes paid throughout the district and rates and special taxes paid by properties within its water and drainage districts. This seriously jeopardizes the quality of service provided to residents. The current tally on expenses surrounding this single lawsuit is expected to top $500,000.

Taxpayers Watch was unable to dissolve the district in 2006. Its recent legal antics may accomplish it by bleeding the district into insolvency.


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Julie Tacker “