Cape Coral, Fla. Sues MWH for Defying Audit

The City of Cape Coral, Florida, is suing global contractor MWH Americas Inc., according to the January 11 edition of the Cape Coral News-Press, “for access to records it wants in order to complete an audit started in 2006… to satisfy questions of whether MWH overcharged the city for its work under a 1999 contract.”

The City of Cape Coral, Florida, is suing global contractor MWH Americas Inc., according to the January 11 edition of the Cape Coral News-Press, “for access to records it wants in order to complete an audit started in 2006… to satisfy questions of whether MWH overcharged the city for its work under a 1999 contract.

“The lawsuit asks the circuit court to declare the information public under the state’s Sunshine Law and to compel MWH to give the records to the city.”

(And if this next paragraph of the story sounds familiar to Los Osos residents, please don’t call us!)

According to the News-Press, “Before it was stopped two years ago, the $1 billion water and sewer project was packed with controversy as residents complained about assessment costs rising to $23,000 per property at one point. the assessment for a two-lot site in 1999 was $12,000.”

Cape Coral also asks for an “accelerated hearing,” which would “make the case a priority… and give MWH 48 hours to produce the records if the city wins its case.”

“It’s going tell us whether we did or did not get ripped. The people have a right to know what really happened here,” the article quotes Mayor John Sullivan.

Sullivan added that should the audit verify that MWH did no wrong, residents at least will “know the City Council did the right thing…”

“In 2006 auditor Michael Kessler of Kessler International asked for records such as change order logs, invoices and time sheet and payroll information for MWH employees,” the article said. “But according to suit, he didn’t get everything he wanted and what he received was heavily redacted.”

According to the article, MWH previously said it had supplied the records. MWH also said the information being sought was not required for Kessler’s audit, and that “it no longer has an obligation to participate in a reaudit of the contract because the project was stopped in 2008.”

Responded MWH in a statement on the suit: “MWH regrets that the City of Cape Coral Florida has decided to file a lawsuit in Florida state court to obtain MWH records that the City believes have been wrongfully withheld. To the contrary, MWH has cooperated fully with the City and provided thousands of records. However, MWH has declined to show the City’s auditor the specific names of MWH current and former employees, their social security numbers, addresses, and other personal information. With increasing concerns of identity theft, MWH simply cannot ignore the risk to its employees in allowing the release of such information. MWH is hopeful for a quick resolution of this matter by the court.”

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Failed Citizens for Clean Water/PZLDF Suit Boosts ‘Prohibition Zones’ Statewide

The consequences of the flimsy suit that sought to repeal CDOs targeting a random group of Los Osos homeowners could ease the way for more “zones” prohibiting septic system discharge. Judge’s ruling calls into question the quality and substance of CCW/PZLDF’s case against the Regional Water Quality Control Board.

The consequences of the flimsy suit that sought to repeal CDOs targeting a random group of Los Osos homeowners could ease the way for more “zones” prohibiting septic system discharge. Judge’s ruling calls into question the quality and substance of CCW/PZLDF’s case against the Regional Water Quality Control Board.

By ED OCHS

It was no surprise when Judge Charles Crandall ruled against Citizens for Clean Water aka Prohibition Zone Legal Defense Fund (PZLDF) and for the Regional Water Quality Control Board (RWQCB) in San Luis Obispo County Superior Court on Dec. 28, but the ramifications of the decision may ripple up and down state for years.

After almost five years in the County court system, it was just a matter of when, not if, the case would be tossed, and between Christmas and New Year, Judge Crandall finally put the PZLDF suit out of its misery. In doing so, though, now other small towns in California may experience the misery of “prohibition zones” – costly gravity sewers, tripling sewer bills and increased development.

Wrote Judge Crandall: “A thorough review of the administrative record, together with the video recordings of the enforcement hearings, shows that there is indeed substantial evidence supporting: 1) the establishment of the discharge prohibition; 2) violations of the discharge prohibition by named individuals; and, 3) a reasonable plan for bringing about compliance. That is all the law requires.”

CCW/PZLDF had sued the Central Coast RWQCB over the CDOs placed on select Los Osos homeowners who use septic tanks in the so-called “Prohibition Zone.”

While the ruling was predictable, given the court’s County bias, what was surprising was the bashing the judge gave CCW/PZLDF’s case. Judge Crandall thought so little of the CCW/PZLDF challenge brought by Los Osos real estate attorney Shaunna Sullivan and CCW/PZLDF leader Gail McPherson that his written decision reads like a cause for the CDO petitioners to seek new counsel on grounds of inadequate representation or conflict of interest. The legal team of Sullivan/McPherson threw a kitchen sink of claims, accusations and assertions against the court room wall – some perhaps true — but lacking hard evidence nothing stuck.

Beyond Due Process
In finding that “the actions of the Regional Board did not violate due process… (and that) the CDOs issued by the Regional Board are supported by substantial evidence, and are not otherwise deficient,” Crandall wrote: “The Court appreciates the mix of emotion, surprise, and helplessness experienced by Petitioners upon receipt of their CDOs. Nonetheless, the evidence belies their legal claims, which the Court finds are exaggerated… (and) the Regional Board went out of its way to provide due process of law…”

Other the other hand, Judge Crandall and RWQCB chairman Jeffrey Young may be the same person. However, it is precisely because Judge Crandall is a gushing RWQCB absolutist – he embraced the RWQCB reel of evidence like it was the new “Harry Potter” book – that it would be easy to simply dismiss the CCW/PZLDF stomping as an amateur, over-their-heads legal team colliding with a powerful, pro-sewer County judge, and half of that equation might still be true. But CCW/PZLDF’s legal team often appeared to help the defense more than they helped their clients.

Wrote Crandall on the general inadmissibility of “evidence found outside the administrative record… to show that an agency acted inappropriately” – and CCW/PZLDF legal team’s belated, disorganized attempts to bring forward evidence outside the administrative record to challenge the RWQCB:

“This Court has ruled on multiple occasions that Petitioners have not established the elements necessary to augment the AR (Administrative Record) with extra-record evidence. Although Petitioners continue to assert that documents were omitted from the record, these arguments were not raised within 10 days of the Court’s 2008 Ruling in a timely motion for reconsideration, and cannot be considered. Further, especially without supporting declarations, it is insufficient merely to allude to thousands of vaguely specified documents that appear never to have been considered by or presented to the Regional Board. Moreover, much of the information they seek to include is already contained in the AR.”

In what appeared to be another deadline snafu for Sullivan/McPherson, Crandall cited CCW/PZLDF’s argument that “on April 9, 2007, the RWQCB issued a Protective Order prohibiting further discovery”:

“However, the record shows that the Protective Order was issued in order to stop Petitioners from issuing or requesting belated deposition subpoenas of Regional Board staff. The Regional Board concluded that Petitioners had attempted “to use inappropriate demands for discovery to obstruct Central Coast Board proceedings in this matter.” Moreover, the deadline for the submission of written evidence was November 15, 2006, and the evidentiary hearings took place on December 14 and 15, 2006, and January 22, 2007, long before Petitioners’ tardy discovery efforts. The Regional Board did not act improperly in this regard.”

Judgment Analysis
As it turns out, the CDO victims had more to fear from McPherson and Sullivan than from the RWQCB. Had they simply put their CDOs in a desk drawer somewhere and forgotten about them, they would have been far better off today.

No years of anxiety over nothing, no health-degrading stress, heart attacks and strokes, no divorces, no money down the toilet for a cause that never was, money better saved for the massive future sewer bills – or a good property or civil rights attorney — rather than a real estate lawyer working for pro-sewer special interests.

Rather than live with the reality that the CDOs were merely a strong-arm tactic to pass the Proposition 218 assessment and nothing more, that the County is going to build a sewer – making the CDOs moot – McPherson unnecessarily kept the CDO recipients living in a constant state of fear and panic for five years — fear of $5,000 a day fines – retroactive to 1988 — fear of losing their water and their homes, that is to say, everything. Some residents in and out of the PZ donated money that went to paying attorney Sullivan – for what again? For the right to lose in court what would have never been lost by doing nothing? There was no moral victory to be had raising thousands of dollars from made-desperate PZ homeowners and a cash-strapped community to press a suit to nowhere. It would be senseless to appeal what was a senseless suit as it was waged.

The judge was underwhelmed by CCW/PZLDF’s case — and should have been. He backed the RWQCB, Resolution 83-13, the CDOs and RWQCB Chairman Young as good government, law, justice and patience. He did so, he claimed in part, because the CCW/PZLDF legal team offered little evidence to prove otherwise, either through failure to meet deadlines or by misdirection of their efforts.

CCW/PZLDF ignored available scientific evidence and expert witness testimony due to a tragic flaw in their case: Sullivan is a member of the SWRCB-backed Bay Foundation of Morro Bay. McPherson has stated that Los Osos is polluting despite a solid body of evidence to the contrary. Citizens for Clean Water was charged by McPherson with cleaning up that “pollution” and complying with law. In effect, however, by claiming pollution rather than challenging it with science, CCW/PZLDF basically stood in agreement with the RWQCB and left the judge no choice. Offering virtually no expert defense for the CDOs was legal suicide – just as sure as jumping from one of Morro Bay’s power plant smokestacks.

The Rock interviewed Piranha onsite system developer Dan Wickham in May 2006 about his participation in the CDO hearings and his reaction when he realized he was the only expert witness called upon by CCW/PZLDF to testify for the community.

Said Wickham, “Frankly, I was a bit surprised by the lack of professional expertise at the hearing, both from the perspective of the Regional Board, and from the community. I could understand the community’s lack of representation because it looked to me as if they had been abandoned by the ‘professional’ community. I have seen similar situations where non-professional citizens create their own expertise by dint of hard work and dedication. The cards are always stacked against them…”

McPherson has consistently used fear as a tactic to galvanize PZ homeowners and as a fund-raising ploy – even though the RWQCB clarified the possible fines to homeowners as essentially symbolic — $3 a day, if any, joked RWQCB member Daniel Press — if the sewer wasn’t built or in progress by January 1, 2011. But McPherson ignored this and continued to scare CDO recipients that the threats she contrived were real.

Wrote Crandall: “With respect to enforcement options, the CDOs at issue here require Petitioners periodically to test and pump their septic systems. Such a requirement imposes little more than normal maintenance obligations and cannot be considered onerous. The CDOs impose no fines whatsoever, as Petitioners recognize. Rather, the CDOs provide that “failure to comply with provisions of this order may subject the discharger to further enforcement action…”

“Before assessing civil liability, however, the Regional Board would have to hold another series of administrative hearings. If such hearings were ever to occur, the Regional Board would have discretion whether to impose penalties (and in what amount). Further, Water Code would require the Regional Board to consider such factors as the discharger’s degree of culpability, ability to pay, and other matters as justice may require. Of course, no such discretion has yet been exercised, and it would require another series of administrative hearings before the Regional Board would be able to do so. Moreover, if any administrative civil liability were imposed, it would then be subject to State Board review and Superior Court review. Contrary to Petitioners’ assertions, the CDOs contain a reasonable enforcement methodology that is designed to bring about compliance.”

‘Kangaroo Setting’
Videos of the hearings played a key role. According to Crandall’s ruling, “Petitioners’ counsel has urged that a review of the video recordings of the enforcement hearings occurring on December 14 and 15, 2006, and January 22 and May 10, 2007, would show evidence resembling a “kangaroo setting.” However, the documentary and video evidence does not sustain these assertions.

“What the videos demonstrate to the Court is that the hearings were conducted by the Regional Board with dignity, civility and forbearance. In what was occasionally a rude and sometimes hostile audience, Regional Board members repeatedly assured recipients of CDOs that all they had to do was to periodically pump and inspect their septic tanks until a community-wide solution was realized.

“To claim, as petitioners do, that they were subjected to the “full weight of the regulations for performing an essential activity, using the toilet, without recourse, believing that they could lose their homes” mischaracterizes what transpired. Even after a brief consultation with counsel (many of whom it appears were available to residents on an ongoing basis during the administrative proceedings), it should have become clear that the likely consequences of an adverse enforcement order were far less onerous than the loss of a home or criminal prosecution.”

It is unknown how much money CCW/PZLDF paid Sullivan over the span of the suit, how much was contributed by CDO recipients and others, or how much money was given to the suit by the LOCSD before payments were stopped by a new board majority. CCW/PZLDF was supposed to match the LOCSD’s contributions, but whether the CSD funds were matched by the CDO group, and how much, are also unknown except to CCW/PZLDF and the LOCSD. CCW/PZLDF is secretive about its operations, does not make its financial records public, and requires members not to disclose this information. As a non-profit organization CCW/PZLDF is protected from having to pay the state’s legal expenses.

PZLDF appears to have no spent no money testing individual CDO homes for pollution, or if they did they didn’t present it as evidence in court. Had they tested every home they might have been able to demonstrate accurate results, and might have proved that individually and/or collectively, the PZ homeowners may not have been polluting and are therefore innocent of the charges underlying
the CDOs. And if they weren’t then the judge would have had a hard time ruling that they were, in fact, polluting.

Failure of the suit could further pave the way for “prohibition zones” to be set up in other small towns in California, followed by MWH gravity-collection systems, exorbitant rates & charges to operate the overpriced systems, and development. There were good reasons not to launch a suit – for one, the County judicial system is tilted in favor of government agencies and is pro-gravity sewer for Los Osos. There is no way any County judge is going to interfere with the grand plan of the RWQCB and County as the project nears acceptance.

Roots of Failure
Failure of the CCW/PZLDF suit also raises questions regarding McPherson’s motives for launching the suit in the first place. Was it to win… or to lose and thereby allow “prohibition zones” to be more easily established, expensive sewers and increased development statewide?

Sullivan is listed as vice president on the web site of the Bay Foundation of Morro Bay, which works with the state-supported Morro Bay National Estuary Program, and is primarily funded by the California Environmental Protection Agency/State Water Resources Control Board/Regional Water Quality Control Board – the same RWQCB she was supposed to be prosecuting. Sharing the Bay Foundation board with Sullivan are such pro-Tri-W, pro-MWH-gravity advocates as Gary Karner (husband of former Tri-W project promoter Pandora Nash-Karner) and Bob Semonsen. McPherson is head of Citizens for Clean Water, a pro-development lobby. Since she moved permanently to Los Osos from Riverside, California, where she was former wastewater systems manager at the City of Riverside,

in 2004, McPherson has pushed for a regional plant for more development throughout the County. The judge even noted it as a distraction to the case:

“Petitioners were afforded additional time to present “common evidence and testimony” at the beginning of the hearing process, and they were given additional time (15 minutes) to cross-examine the prosecution team witnesses. Yet Petitioners devoted much of their time to “political” issues (e.g., support for a regional treatment system, or whether it made sense to issue CDOs to individual dischargers) rather than issues focusing on liability for site-specific septic waste discharges.”

McPherson puts fragile seniors, among others with health issues, through a show trial for the paper CDOs and then wastes the court’s time plugging a regional system! McPherson also strongly supported trusting the County process on the “blank-check” Proposition 218 assessment vote for $25,000 a home and for the promise-reneged-on co-equal analysis of alternative technologies — even though the process was clearly corrupt and  the outcome of gravity collection predetermined, which she should have been well aware of, since soon after the County took over the project County public works directors Noel King and Paavo Ogren stated emphatically that the sewer was going to be the expensive gravity collection system, and she had documentation.

So why the suit in the first place then? Why a real estate attorney with the RWQCB background and long-standing ties to the pro-gravity real estate community? And why a leader of a PZ homeowner group who does not live in the PZ and will not pay for the sewer, and whose background is over a decade as a gravity sewer plant operator?

As a result of a prior encounter with the law when she pleaded no contest at the time to falsifying records to help get her son-in-law a job as a sewer operator, McPherson’s operator’s license was temporarily suspended by the SWRCB – the same SWRCB she claims to be fighting against. She also has ties to former Assemblyman Sam Blakeslee, author of AB 2701, the bill that gave the County control of the sewer project. As leader of the Tri-W opposition and recall, and unofficial town boss from 2005-2009, she encouraged her hand-picked CSD board majority to work with Blakeslee, who has received campaign contributions from developers who occasionally work with global builder MWH Americas Inc., a County sole-source favorite that has been previously accused of bid-rigging in Los Osos.

Since news of the judge’s December 28 decision broke in the Tribune on December 30, Sullivan, McPherson and CCW/PZLDF have issued no public statement on the ruling, claiming through an aide that they don’t comment on ongoing litigation, although it’s difficult to see it as ongoing. The judge’s loud decision left no room for fools to return for more of the same.

Then there is the silence. As a sign of the mood at CCW/PZLDF, Calhoun’s Can(n)ons, a local Los Osos blogspot well known for supporting McPherson and the CDO’ers and discussing sewer issues, has imposed a blackout on the suit. Ann Calhoun, the site’s founder and webmaster, refuses to post about the suit and has deleted some bloggers’ “off-topic” comments seeking answers about the case. Calhoun is also listed on the suit as a petitioner.

Wrote one concerned anonymous blogger, “Get Real Osos,” on the site Sunday morning, expecting deletion after similar “off-topic” comments had been dumped: “I’d really like to know what’s going on with the lawsuit. What happened and any details you could provide. Many people, not just CDO’s, donated to the lawsuit and it would be nice to get some information rather than a black-out on the issue. It’s a shame to have to rely ONLY on the Tribune (with their bias and awful reporting.)”

District Supervisor Bruce Gibson has stated that when the County finally officially accepts the project sometime this spring he will ask the RWQCB to drop the CDOs. Nevertheless, as a result of the lost suit that shouldn’t have been, the Los Osos “Prohibition Zone” will now be in place forever.

Update: CCW/PZLDF filed an appeal of Judge Crandall’s ruling in March.