Gibson's Plan To Lessen Sewer Settlement Shock

Los Osian Facebook users, see how Bruce Gibson will help us with the ARB lawsuit settlement costs:
https://www.facebook.com/bruce.gibson.1069/posts/1604269509665995

There was a lot of talk about how the County was culpable in screwing this up resulting in a $9.95 million settlement to ARB, but this really is just hogwash. ARB was sneaky and low-bid one part of the two collection system contracts offered. Then they lost the other bid. When the work for that bid they won started to overwhelm what they planned for, they started to lose money, so they did a bunch of sketchy change orders, trying to squeeze the County for more $$$. 

The County had no choice but to accept ARB's bid and suspected that this was coming, but the law made them take it. (The other collection system bid was won by W.A. Rasic (remember the "WAR" logo on their equipment? No problems, on time, on budget.)

Gibson just posted tonight. He explained this plan this afternoon as his Los Osos Office Hours (February 22 - so I guess it is now yesterday afternoon.) He also outlined the plan again at the LOCAC meeting later, in the evening. He better get re-elected, or we might be screwed. No one else could possibly know the ins and outs of this sewer game is played to be able to figure out how to protect us from a backbreaking payback. Especially in negotiating with the state to try to lower our EPA loan down from 2%. Maybe the whole thing could be refinanced, saving us a bundle!

When he posts this information on his webpage, you might find it yourself before I post the link here (for non-Facebook users).

This was posted on Nextdoor today, which is from Bruce's Facebook page:

Bruce said: My position on the proposed settlement of the Los Osos sewer lawsuit: While I’m not happy about it, I will support paying the $9.95 million settlement from the county’s general fund reserves at our Board of Supervisors meeting on March 6. This is the final bill for constructing the sewer and it closes a long and contentious chapter in the history of Los Osos. Sewer rates will not be changed at the March 6 meeting. Assuming these funds are to be repaid to the general fund by sewer users, I will not support raising rates above the maximum levels approved by ratepayers in 2009. Any increase above the maximum levels would have to be approved by ratepayers. The details: Q: Where’s the money coming from to pay this settlement? Short answer: From the county’s general fund reserves. Long answer: On March 6, the action before the Board is to pay the settlement using funds from the county’s Solar Plant Mitigation Funds. These funds were collected in lieu of the sales tax that would have been paid if the solar panels and other construction materials for the big California Valley solar projects had been purchased in SLO County. They mitigate the sales tax loss (not the projects’ physical impacts) and currently total about $15 million. Q: How will this affect sewer rates? Short answer: The effect is yet to be determined. No change to sewer rates will be made on March 6. I will not support raising rates above the maximum already approved by ratepayers in 2009 in order to pay this settlement (see question below). Long answer: The effect on sewer rates depends on, a) the BOS as a whole requiring the sewer ratepayers to repay the reserve fund, which seems likely, and b) how the repayment is financed in terms of interest rate and length of loan. I am currently working with county staff and the State Water Resources Control Board on a refinancing proposal that might produce a minimal effect on rates. It will take several months to know whether this can be accomplished, but the SWRCB indicated at the time of the original loan that we could ask for a reduction in the interest rate below the current level of 2%. Another approach, among others, might be to structure the repayment as a loan from the county’s general fund. Q: What maximum rate increase could you support? Short answer: Any increase must be within the voter-approved rates. The maximum charge for a single family home could be raised by about $4.79/month under the currently approved rate structure. Long answer: In 2009, sewer users voted to approve a “rates and charges” ordinance under the provisions of Proposition 218. For a single family home, the rate is currently $44.06/month (fixed) plus $7.54/month per unit of water used indoors. A “unit” is 100 cubic feet or 748 gallons. The average home is charged about $157/month total – less than the $165/month we had originally estimated. The maximum fixed rate authorized in 2009 is $48.85/month or $4.79/month more than currently. The maximum average charge would then rise to about $162/month. Q: What if the BOS wants to raise rates higher? Short answer: The board would have to put any greater rate increase to a vote by the sewer ratepayers under the provisions of Prop 218. The ratepayers then decide. Longer answer: I won’t support even asking ratepayers for such an increase to pay this settlement. Q: Why did the county get sued? Short answer: A contractor on the sewer’s collection system, ARB Inc., submitted a low-ball bid to get the contract and then wanted more money for the work they were obligated to perform. Long answer: The sewer’s collection system (pipes in the streets) was so big that we split the contract into roughly equal halves. ARB was awarded the contract on one half, with a low bid of about $26 million – way under the next lowest bid of almost $35 million. This appeared to be a low-ball bid, but the county was obligated by state public contracting law to accept it. As work progressed, ARB claimed they were owed more money for the work they contracted to do because of conditions in the field that they claimed the county should have told them about. The strategy of increasing payments through unjustified change orders is not uncommon in public contracting. Q: So was the county at fault for this by being incompetent, inattentive or deceptive? Short answer: No. Long answer: The $26 million bid was clearly low when compared to the six competing bids, which ranged from approximately $35-$42 million. When ARB bid (unsuccessfully) on the other half of the collection system, their bid was $36 million. The county had stringent construction management procedures in place for both halves of the collection system. The contractor on the other half (W.A. Rasic, low bid of $29 million) made no unreasonable claims and completed their contract within budget. Q: Why is the county choosing to settle this lawsuit rather than fight it? Short answer: ARB claimed they were owed another $23 million. If this complex case went to trial, we would likely expend another $1.5 million in attorney and expert fees and risk an unsympathetic jury awarding them the $23 million they sought. We held our nose and agreed to a $9.95 million settlement to avoid that risk. Long answer: This case is extremely complex, involving the arcane details of construction practice and contract law. In four years of defending this litigation, we have already spent over $2.4 million on attorney and expert fees. The case was moved out of the SLO County courts and is being heard in Santa Maria, where juries are expected to be unsympathetic toward government.

Notice Of Completion!

Off of the Consent Calendar for the Board of Supes today,  December 6, 2016!

Consent Agenda - Public Works Items:

20. Submittal of a resolution authorizing execution of notice of completion and acceptancefor the construction of the Water Recycling Facility for the Los Osos Wastewater Project,Los Osos. District 2. 

The project has been completed $2,776,491 UNDER BUDGET and ON TIME!!! 

Bravo County of SLO - our District 2 Supervisor Bruce Gibson, former Director of Public Works Paavo Ogren for starting the job, and Project Manager John Waddell for finishing it - and the cast of dozens in SLO County offices who made this giant project a reality! Thanks to all of the many, many people who worked on the many individual parts to this giant project. 

This is a landmark moment for the County of SLO and a giant step forward toward finally addressing our polluted water problem. And especially toward reestablishing comity, once the cornerstone of Los Osos citizen's relationships. The dark, pre-sewer civil war is sunsetting into a lovely indigo underground pool of recycled water.

Dignitary Stuffed Ribbon Cutting Ceremony!!

It is now official. Our swanky new sewer has been officially dedicated, complete with an unexpectedly large boatload of people in govenment who got this plant planned, green-lighted, and funded. It appears that our sewer, for all its grief, or maybe because of it, is quite the public works star. And I will say, it is actually rather gorgeous!

So the ceremony got a bit of a late start, it was to have started at 11:00 a.m., but people kept arriving on the cool red bus rented to schlep us from the cemetery parking place (thanks Los Osos Valley Mortuary!) to the event building—sort of tall carport, the name of which I forgot to get.

Anyway, the official Town Criers were there and I wish I had recorded what they said; it was hilarious, detailed, well written and just plain sentimentally sweet. Thanks to whomever thought to have them at this ceremony - and thanks to Bev and Jerry Praver, you guys were great!!

Bruce Gibson was the Master of Ceremonies. Speakers included Congresswoman Lois Capps, UDSA Deputy Under Secretary Lillian Salerno from Washington D.C., former Public Works Director Paavo Ogren, Project Manager John Waddell.

Present but not speaking, former District 2 Supervisor Shirley Bianchi, District 4 Supervisor Lynn Compton, former State Assemblyman Sam Blakeslee, and representatives from various other state elected officials, sorry, I didn't get the complete list.

Thanks went out to a long list of people, including the members of the TAC - Technical Advisory Committee that met about a zillion times reporting out the facts that they found on the sewer issues - financial, environmental, and engineering.

Note: our USDA loan was the largest single amount ever expended by that department.

The cake was very tasty, btw—there were four of them. Here is what I saw (click on any image to see a larger size). AND, the drone hovered capturing the scene!!! Those of us who noticed, waved (I hope we don't get edited out)!!:

The Venue

Town Criers Bev and Jerry Praver

Bruce Gibson

Lois Capps

 Paavo Ogren

 John Waddell

 Fake Scissors

 Real Scissors

The Bus

 Shot  from the bus window - there is water in there now!

They are planting still, although most of it was completed.

 The sign in a ultra cool, hip and retro design!

Upcoming Sewer Town Hall Announced!

LOCAC, or the Los Osos Community Advisory Council, met Thursday night at the South Bay Community Center as it does almost monthly. County Supervisor Bruce Gibson, was in attendance as he is almost monthly. During his report to the Council and audience, he announced that there would be a sewer project Town Hall meeting on February 25, place and time to be announced. Topics will include the set up arrangements for financial assistance, and presentations, notably one by SLO Green Build on septic tank decommissioning.

Gibson took a tour of the facility Wednesday with state Senator Feinstein's staff and they all saw that a lot of vertical progress had been made, particularly when you are standing in the bottom of an oxidation-ditch!

The target date for substantial completion is March of 2016, although it could be completed earlier. So It is now time to begin the education for all of us, how those in need will get financial assistance and how we will know what to expect in our tank decommissioning.

SLO Green Build was tasked with developing a program to reuse our septic tanks for rain water catchment, so hopefully we will see what that is in February.

Mark you calendars!

The Gang That Couldn't Poop Straight

Well, you knew THAT title was going to appear here someday, didn't you!?

Defining "straight" in this case refers to being honest, being forthright, being open. "Poop" refers to work product, or in this case, the deflection thereof.

Much has been made over many months from the usual and long-standing sewer detractors about our sewer facilitators NOT being "transparent," and of our sewer project having "NO oversight!" Paavo Ogren, our soon-to-depart Director of Public Works (he is going to work in Oceano and will wear many hats there) has been accused of subterfuge, and our newly re-elected-by-a-landslide District 2 Supervisor Bruce Gibson has been hammered with accusations of mistruths as well. These are untrue accusations of course, but when you believe something strongly as these people do, you don't let facts get in the way.

I have been inspired by two things to write this column, the word "transparency" (thanks sewer detractors!), AND what Los Osos' new General Manager Kathy Kivley has been doing lately, that is, going through all of the old journal entries in the books and wading into the long misunderstood finances (by the public) to get a true accounting of what the District has, what it owes, and even what it owes to itself. So I have been doing a little financial sleuthing of my own, because as far as transparency goes, a nasty net of sludge covered what was going on with the District's finances starting on September 27, 2005. Nasty enough to get the SLO County Grand Jury involved back in 2006.

In fact, you really should read what was said in the Grand Jury Report about Los Osos. Start on page 77 of the report on Los Osos:
http://slocourts.net/downloads/grand_jury/reports/2005/final-2005-2006.pdf

Basically, the Grand Jury wanted to investigate if public funds, namely LOCSD funds, were used by the post-Recall LOCSD Board members* to pay off a law firm hired by a citizen's group, CCLO (Concerned Citizens of Los Osos) and Al Barrow (CASE - Citizens for an Affordable and Safe Environment) that had sued the LOCSD and the Central Coast Regional Water Quality Control Board and crafted Measure B (which stopped the sewer—but was later found to be invalid). All five post-Recall sitting directors had been heavily involved with the group suing the LOCSD and the Water Board, and in crafting and defending Measure B. This law firm (Burke, Williams and Sorenson, or BWS) was then hired by the LOCSD after the payoff. The settlement amount of the five cases was $488,617.

The Grand Jury wanted to see detailed time logs and billing records of the law firm and requested these documents through the SLO County Counsel's office—twice. What they got back was nothing the first time and the second time the documents were so heavily redacted it was impossible to determine anything. Billable tasks were left blank. Why? one would ask if you had nothing to hide?

These settlement negotiations were conducted in the Board's closed session meetings. They were handled between an attorney representing the LOCSD and an attorney from BWS.The post-Recall Board was given a single-settlement dollar amount. They were "...not offered, nor did they request any detailed information on the breakdown as to what activities were billed and included in the settlement amounts." Also, a Board member said to the Grand Jury that they wanted to settle the cases so that they could retain BWS for future work.

The Grand Jury felt that since public funds were used to settle the lawsuits, the public has a right to know just what legal services were rendered when.

Why wouldn't the Board want to see what they were being asked to settle? What public input or oversight was there? Where was the transparency in what they were doing?

Those questions still remain, along with an icky feeling of being had, either by stupidity or just plain dirty dealings. The Citizen's groups, CCLO and CASE could well have gotten nothing. The Grand Jury was stymied and never got us the answers we deserved.

In fact, CASE and BWS were stiffed later. They were among the 20 largest claims in the Bankruptcy and got pennies on the dollar:

So then a question remains.....where did all the money go that the LOCSD borrowed from reserves as GM Kivley has found, and "borrowed" from our tax monies for the CDF Fire tax payment and the Bond payment to Bank of New York?



If you are interested in reading the LOCSD's finely crafted response to the Grand Jury (by BWS's Julie Biggs, no doubt), it is on pages 29-33:
http://slocourts.net/downloads/grand_jury/reports/2005/responses-2005-2006.pdf

* The LOCSD Board was: Lisa Schicker, Julie Tacker, Chuck Cesena, John Fouche, Steve Senet.

Our Stalwart Bruce Gibson Wins Supe Seat Handily!

Someone who, from his position of elected official, has done all that he (or any superman) could, to shepherd through with much support and funding our contentious sewer project, was rewarded with his third term last night with 67% of ballots cast. Clearly, voters of the Second District are happy with his work in many areas, not just the Los Osos sewer, but since this is a sewer blog, I heartily commend his work for Los Osos and look forward to another four years. It takes a wise and patient man to sit through the tense discussions week after week and still positively support our sewer project. We are lucky to have him facing a task that few of us could stand.

The Mysterious Ordinance 3209

Really, Water Board give us a break!

Bruce Gibson spoke at the Central Coast Regions Water Board meeting on May 22, 2014 asking for the Los Osos Prohibition Zone CDOs to be rescinded. He was asked by the Board as to what the County could do to enforce compliance to hook up should they remove the CDOs.

This is when the mysterious Ordinance 3209 popped up which the Water Board apparently was unaware of (as was most of us too, although it was very public in its adoption if you were paying attention)!

This ordinance was introduced on October 5, 2010 and adopted December 14, 2010 by the Supes and you can read it off this link (it is toward the end of the staff report). Yes, it has TEETH!

http://slocounty.granicus.com/MetaViewer.php?view_id=2&clip_id=1002&meta_id=198936

Here's how it went down:

Tuesday, December 14, 2010

The Board of Supervisors of the County of San Luis Obispo, and ex-officio the governing body of all other special assessment and taxing districts for which said Board so acts, met in regular session at 09:00 a.m. 

PRESENT:	Supervisors: Bruce S. Gibson, Adam Hill, James R. Patterson, and Chairperson Frank Mecham
ABSENT:	Supervisor: K.H. 'Katcho' Achadjian

13

C-2

This is the time set for hearing to consider protests to an ordinance establishing a mandatory sewer connection requirement and sewer service charges for the Los Osos Wastewater project; and adoption of the ordinance if no majority protest exists; 2nd District.  (02:13 PM)

Staff Report

Chairperson Mecham:  opens the floor to public comment.

Mr. Tom Murphy, Mr. Hugo Conti, Ms. Gail McPherson, Dr. C. Hite, Mr. Don Bearden, Ms. Maureen Cormier, Mr. Bill Moylan, Mr. Bill Garfinkel, Ms. Beverley DeWitt-Moylan, Mr. Bo Cooper, Ms. Lacey Cooper, Mr. Al Barrow, Mr. Richard Margetson, Ms. Piper Reilly, Mr. Ben DiFatta, Mr. Chuck Cesena, Ms. Leslie Sands, Mr. Bruce Payne, Ms. Joyce Albright, Mr. Keith Wimer, Mr. Jeff Edwards, Ms. Julie Tacker, Ms. Linde Owen, Ms. Anna Easter, Ms. Elaine Watson, Mr. Alon Perlman, Mr. Dan Gilmore – Los Osos Community Services District General Manager, and Ms. Kathleen Jensen: speak.

A motion by Supervisor Bruce S. Gibson, seconded by Supervisor Adam Hill, to adopt the rates and charges ordinance, is discussed.  Mr. Warren Jensen, County Counsel, asks the Board to first make a motion finding a majority of protests was not received prior to approving the ordinance, with the motion maker and second withdrawing their motion.

Thereafter, on motion of Supervisor Bruce S. Gibson, seconded by Supervisor Adam Hill, and on the following roll call vote: AYES: Supervisors: Bruce S. Gibson, Adam Hill, James R. Patterson, Chairperson Frank Mecham NOES: None ABSENT: Supervisor: K.H. 'Katcho' Achadjian the Board finds a majority protest has not been successful having received 801 written protests.

Thereafter, on motion of Supervisor Bruce S. Gibson, seconded by Supervisor Adam Hill, and on the following roll call vote: AYES: Supervisors: Bruce S. Gibson, Adam Hill, James R. Patterson, Chairperson Frank Mecham NOES: None ABSENT: Supervisor: K.H. 'Katcho' Achadjian the reading of the proposed ordinance is waived and said proposed ordinance is read by title only and ORDINANCE NO. 3209, ordinance establishing a mandatory sewer connection requirement and sewer service charges for the Los Osos Wastewater Project, adopted. Footnote: If you have time to watch the video of this, don't miss the comments (rantings) by Tom (Reclamator, or as I prefer "Wrecklamator") Murphy! He cites the "National Standards Enforcement Agency" and some confused words about the County of SLO and $500 million! Always entertaining that Mr. Murphy!

Had a BLAST!!

The party to celebrate and thank our sewer construction guys was a huge success! It really was a happy, lighthearted gathering, the way I have imagined Los Osos was before the sewer war took center stage (I can only imagine from what I've been told by old-timers, I came here in April, 2005). This event has started the cleaning out of the cobwebs, acrimony and muck from community sewer discourse.

There was an art show featuring construction scenes drawn and painted by adults and kids, thank-you cards from a school class, a slideshow with shots from various neighborhoods and a really cool video put together from a day's work compressed into a couple of minutes, THREE cakes (the server used a miniature shovel to dish out the pieces), lots of BBQ-ed hot dogs and a variety of sodas, table decor of succulents in sand pails, a wall of photos, a free raffle for some of the art, music by the Zongo Combo, the reading of a cool sewer poem, and some observations from key people on the project; Bruce Gibson District 2 Supervisor, Paavo Ogren Public Works Director SLO County, John Waddell Project Manager, Jim Brantley Construction Manager, ARB's Project Manager and W.A. Rasic's Project Manager (sorry, I failed to write down your names). There was a remembrance of a much loved ARB flagman Ramon Camacho.

The event was created by Los Osos artists Joan Sullivan, Barbara Rosenthal and Jan French. Celebrate Los Osos (Pandora Nash-Karner and Mimi Kalland) helped to organize the event and with getting the sponsors. And various worker bees, myself included, signed up for behind the scenes tasks.

As we used to say where I used to work (creating catalogs of products), "copy smells, pictures sell," so I will end the words with some photos that I took.

PS A much larger sewer art show will be held around the time of project completion.