MWH President on Los Osos Sewer Woes: The Media Did It to Us


MWH Contractors president John Adams may have offered a partial explanation why the engineering-contracting goliath suddenly cut and ran recently from little Los Osos: the local media. And he wasn’t referring to The Tribune, which has helped defend MWH for San Luis Obispo County. In a March 14 email to Mayor Sullivan of Cape Coral, Florida, Adams finally, begrudgingly agreed to an audit of MWH’s accounting and billing for its work on the extensive Cape Coral Utilities Expansion Project, and at the same time chided the Mayor for statements attributed to him and others about MWH being “in trouble” for “potential criminal activity” in New Orleans and Los Osos.

MWH Contractors president John Adams may have offered a partial explanation why the engineering-contracting goliath suddenly cut and ran recently from little Los Osos: the local media. And he wasn’t referring to The Tribune, which has helped defend MWH for San Luis Obispo County.

In a March 14 email to Mayor Sullivan of Cape Coral, Florida, Adams finally, begrudgingly agreed to an audit of MWH’s accounting and billing for its work on the extensive Cape Coral Utilities Expansion Project, and at the same time chided the Mayor for statements attributed to him and others about MWH being “in trouble” for “potential criminal activity” in New Orleans and Los Osos.

Adams defended MWH’s work in Cape Coral, New Orleans and Los Osos, and blamed attacks on its business practices on the “mischaracterization of MWH’s work” in those cities by unnamed news sources:

“We understand that the characterization of our work in Los Osos, California and in New Orleans, Louisiana may be based on news articles or media reports that were later corrected due to factual inaccuracies or the lack of complete information. We want you to understand our work in those cities…”

The next day, on March 15, San Luis Obispo County Public Works’ John Waddell revealed that MWH had suddenly withdrawn from the Los Osos Wastewater Project, in part, because of the “controversy” in Los Osos surrounding its participation.

MWH’s unexpected, last-minute exit from the bidding process for the project has left the County with only one bidder on treatment, CDM, and one bidder on collection, Sundt Corp., after another short-listed contract, ARB, also hastily backed out. The loss of both MWH and ARB mark the collapse of the County’s truncated gravity-collection-only bid process, which followed the County’s aborted competitive design-build process.

The County had clearly favored Broomfield, Colo-based MWH, elevating them to the top tier of short lists for both the collection system and the treatment facility, and dismissing a documented complaint against MWH and Ogren by former LOCSD board president Lisa Schicker. Public Works Director Paavo Ogren had previously praised MWH in public without mentioning any other contracting firms, and while of late he had also minimally expressed “concerns,” MWH remained firmly entrenched in the bidding process until its stunning surprise exit.

Following is the excerpt from Adams’ statement explaining the “mischaracterization of its work in Los Osos.”

“Mischaracterization of our work in Los Osos, California”

“The community of Los Osos had a real and urgent need for a wastewater collection system and treatment facility. The California Regional Water Control Board had taken formal action to compel Los Osos to achieve compliance with regulatory requirements because groundwater quality testing consistently registered high levels of nitrates (caused by septic systems) in excess of drinking water standards. The California Regional Water Control Board expressed concern with potential health risks associated with the high nitrate levels.

“In 1999, MWH was hired by the Los Osos Community Services District to provide consulting services for its wastewater system needs. The decision to hire MWH was made by the Los Osos Community Services District Board at a Community Services meeting. As part of our work, MWH conducted community meetings for more than a year to gather feedback on the community’s needs and to ensure robust communication with the residents about the proposed project.

“The California Regional Water Control Board and the State Water Resources Control Board provided very positive feedback on our work. The California Regional Water Control Board said, “…your efforts … have resulted in a project that is not only technically, environmentally, and economically sound, but also reflects the input, values and support of the community. This is a commendable feat considering the history of wastewater issues in Los Osos.” The State Water Resources Control Board stated, “…the project recommendation was reasonable and cost estimates were justified.” The Los Osos Community Services District Board also publicly praised our work.

“There were residents of Los Osos who were not in favor of the project or the proposed location of the wastewater treatment facility. In August 2003, after the project was already underway, a Los Osos resident announced she would form a citizen’s group to block the project. In 2005, with construction already begun, a recall election of the Los Osos Community Services District Board was initiated and resulted in the replacement of three Board members. A decision was made by the newly constituted majority of the Los Osos Community Services District Board to stop construction of the project. At that time, certain The Los Osos Community Services District Board members made allegations of misconduct against MWH that were reported in the local press. These allegations were investigated and later dismissed by the San Luis Obispo County Counsel, who examined the evidence and issued a report on September 22, 2009. The County Counsel’s report stated that the contract was valid and that there were “No negative inferences justifiable” against MWH for its work. (

“Subsequently, the State Water Resources Control Board, who had funded the project, demanded repayment by the Los Osos Community Services District, and the Regional Water Quality Control Board levied a large fine against the Los Osos Community Services District for failure to comply with water quality regulations.

“The District later filed bankruptcy and the Governor of California signed legislation giving San Luis Obispo County the authority to proceed to complete the project instead of the Los Osos Community Services District.”

—Ed Ochs

Original report by Drew Winchester from the Cape Coral Daily Breeze.

Attached here is Adam’s complete email to Cape Coral Mayor Sullivan, which also offers explanations for the “mischaracterization” of MWH’s work in New Orleans as well as Los Osos: MWH President Letter to Cape Coral Mayor 3-14-11.

Bonus question: How many local Los Osos news sources writing critical articles about MWH can you name?

UPDATE: MWH Retreats From Los Osos as County Accepts Project


Los Osos activists couldn’t stop the County’s $189-million pork-barrel wastewater project from rolling through the San Luis Obispo County Board of Supervisors’ March 15 meeting, but they did manage to rid themselves of one long-time nemesis – construction giant MWH Americas.

CLARIFICATION: In a March 22 e-mail, County Project Director John Waddell wrote that MWH remains active in the project:“The County requested proposals for engineering design (professional consulting) services for the collection system. MWH did not submit a proposal, so they will not be completing the design/redesign of the collection system. After the design is completed, the collection system construction contracts will be put out for low bid and contracts awarded to the lowest responsible bidders.

“The pre-qualified short-list for the treatment facility under a design-build process includes MWH, CDM, and Auburn Construction.”


Los Osos activists couldn’t stop the County’s $189-million pork-barrel wastewater project from rolling through the San Luis Obispo County Board of Supervisors’ March 15 meeting, but they did manage to rid themselves of one long-time nemesis – construction giant MWH Americas.

In a carefully choreographed display of public unity, the County Board of Supervisors voted 5-0 to pass a required due diligence resolution implementing the Los Osos Wastewater Project – after five years and $8 million in questionable pre-construction expenses.

However, the unexpected news was quietly but dramatically dropped in chambers more than two hours into the County’s Los Osos update, following closed session, the remainder of interrupted Los Osos public comment, and two anniversary ceremonies for veteran County employees.

In a more far startling announcement than the anticipated 5-0 vote by the lockstep supervisors, it was revealed that MWH Americas had declined to bid on the project because of controversy swirling around the Broomfield, Colo.-based builder’s checkered track record in Los Osos. MWH’s retreat from Los Osos leaves only one bidder on the treatment facility, Cambridge, Mass.-based CDM, which takes that part of the project by default. CDM’s bid was not revealed.

Public Works Project Director John Waddell said MWH’s pull-out was a “business decision… Ultimately, in the last few days, actually before the proposals were due, two firms said they had decided not to propose. They did cite the overall controversy in Los Osos as one of the reasons.”

Though it doesn’t necessarily change the cost of the County’s overpriced project, MWH’s sudden exit is a victory for Los Osos activists who have long demanded MWH be purged from the current project for previous false billing allegations involving the halted 2005 LOCSD project. The collapse of the County’s short-list “short-cut” process – crafted by the County to circumvent open, competitive bidding — is yet another embarrassing failure for Supervisor Bruce Gibson and Public Works Director Paavo Ogren, who publicly praised MWH, as well as for the Board of Supervisors that blindly voted with Gibson every step of the way.

The other firm on the treatment short list to back out of the project as a result of the “controversy” was ARB Inc., based in Lake Forest, Calif.

Waddell attempted to explain that CDM was prequalified and its bid sufficient to begin negotiations. “In the RFP we asked all firms to submit their fee estimate in a separate sealed envelope, which CDM did. CDM did not know that the other firms were not proposing… It’s not a low-bid process but they had every incentive to be competitive.”

The bare fact still remains that only one company, CDM, is left to bid on the treatment end of the project and one, Sacramento-based Sundt Corp., on the collection system. The project started out with the County’s promise of open, competitive bidding and ends with one bidder on the facility from a prescreened short list of acceptable contractors. Without actual competition, and no matter what it does right in nthe future, CDM still may have to work under a cloud, created by the County, that it did not win the contract through competitive bidding and therefore cannot claim to be the lowest bidder.

Mecham’s Question
The only question on affordability raised by the five-man Board of Supervisors during the meeting was posed by Supervisor Frank Mecham. But his one question cut to that heart of the issue that should have been addressed – but wasn’t — in the 2007 Proposition 218 vote to tax what should have been the entire district, not a zone within the district; Prop 218 law only recognizes the entire district.

Mecham described his concern as “the equity issue (that) hasn’t been adequately addressed”: that a small group of homeowners have been unfairly targeted to pay for project.

“You have a community (project) that is focusing on a prohibition zone, but yet the full community of Los Osos will benefit by what’s going to happen here,” said Mecham. “You’re going to benefit by this by the improvements that will take place that will lend value, not only to the properties, but will also encourage some of the new development that will take place there from a commercial standpoint.

“So I still don’t understand why, if we continue to talk about community,” he said, “why the entire community of Los Osos was not participatory in the funding of this, because if they were, this in essence would reduce some of the costs. But that’s a decision that was made sometime back… The concern to me goes back to the issue of fairness: Is it fair to focus on one central portion of a community that the entire community going to benefit from?”

Mecham’s comment brought previously silent Public Work Director Ogren out of his front row seat to the podium. He agreed that “there are community-wide benefits that are going to develop as a result of this wastewater project… In developing the basics of what’s needed to finance the project and move forward, certainly the assessments and service charges are cornerstone to that.

“It certainly is permissible within Prop 218 and subject to voter approval within Los Osos to propose a special tax in order to help pay for those community-wide and general benefits,” he suggested. “Those (benefits) that are associated with… groundwater and environmental enhancement issues, those things that are reflective of general benefits, could be proposed in a special tax. That special tax could be on the ballots in 2012 even prior to the project coming on line. It would help allocate some of the costs on a broader community basis.”

Unfortunately, despite Ogren’s hollow admission of the County’s shortcomings in inaccurately identifying special and general benefits up front, practically no one in Los Osos would now vote to tax themselves one more dollar for the sewer. That includes the already previously postponed and deferred Proposition 218 vote on undeveloped properties, which has been now re-calendared for the third time, this time for later this year, according to the staff report, even though conditions that might result in the passage of a vote have not changed or improved. Meanwhile, the undeveloped properties’ $27 million share of sewer costs has been placed on already overtaxed PZ homeowners to secure the USDA and SRF loans.

Gibson admitted “this (project) is a tremendous burden to place on a community of any size.” As if he doesn’t place himself anywhere in the equation of responsibility, at the center of the maelstrom. He won’t acknowledge any accusation that he is singularly responsible for imposing that burden on the community through a calculated campaign of dishonesty and deception.

“The equitable distribution of these costs has a ways to go,” he conceded, blaming the RWQCB for his own poor decisions while citing Ogren’s idea for a special tax as one step to spread the costs. “The burden is placed on this community by forces outside even the jurisdiction of this board, and that is the authority of the Regional Water Quality Board to cure a pollution problem; and within the requirement to cure that pollution, the Regional Board did not give an escape clause that’s based on affordability.

“You can agree or disagree about the way the Regional Board
has set up the Prohibition Zone, but that is the framework under which we’re operating… We’ve made a series of steps, we have a series of steps before us that we can make some more progress on…”

Mecham then voted “yes” for the project with the rest of the board.

Gibson’s ‘Glibbrish’
In an encore performance of his thread-worn speech promoting the project to permitting bodies and regulatory agencies, Gibson once again took sharp jabs at public comment by Los Osos speakers, mixing in his usual combustible assortment of disparagement, fabrications, bravado and denials.

“Because we are at a particularly significant point in the development of this project, I’d like to walk through those (often repeated) things we’ve heard just one more time. These responses will be familiar to you and will be familiar to most, but there might be folks who are tuning in for the first time as we go here…”

In the face of clear evidence to the contrary, Gibson continued to claim that there is no cheaper alternative to the County’s gravity megasewer. “We’ve said this many times. We have no credible evidence before us that suggests that there’s a solution to this problem that is significantly cheaper to the one that’s before us.”

On the transparency of the process Gibson offered: “I reject that somehow information has been hidden from the public, from the community, that somehow we don’t have enough information to proceed and so we should yet again delay this project. That is absolutely in my mind not a supportable solution.

“For one thing we cannot afford to further delay this project. For the other, our staff and numerous other partners have engaged in a unprecedented public process of gathering information from the public, listening to public concerns, reacting to public concerns… The burden is in part because of the timing. As you’ve observed, costs have escalated, opportunities for outside money to finance this project went away quite a long time ago.

And finally: “We get the sense sometimes, or fairly frequently, that our (Los Osos) folks who comment frequently here observe us not caring or not listening… Whereas we listen to repeats of the same issues many, many times, (and) we have responded.”

At this point, it is unclear as to whether the more than 30-year-long Los Osos sewer wars are over, or merely moving into a new phase of protests, legal challenges, and wave after wave of special assessments.



New Los Osos Group Formed to Contest County Sewer Project

San Luis Obispo County is about to officially accept responsibility for building the Los Osos wastewater project, and as they do, a new Los Osos group, Citizens for a Sustainable Community (CSC), aims to hold the County accountable for the flawed, outdated EIR and gaping holes in its overpriced $186 million project. If the Water Board doesn’t request a Supplemental EIR, the group may sue.


A new Los Osos group, Citizens for a Sustainable Community (CSC), has been formed to argue that the County’s wastewater project for Los Osos is dangerously inadequate in addressing Los Osos’ most pressing water needs and, in the end, may offer only questionable benefit to the select homeowners paying for it.

Though the County as been in charge of the project for almost five years and made every key decision in advance, the County Board of Supervisors may vote as soon as March 15 to finally, officially — legally — accept ownership of the Los Osos project.

CSC has hired Santa Monica attorney Frank P. Angel, according to a fundraising email circulating in Los Osos from CSC member Larry Raio, “to look at our situation and ways we can turn this around.”

Wrote Raio, “(Our attorney) has found that a lot of new information of substantial importance has come to light since the Final EIR was submitted. This requires that subsequent or supplemental environmental impact report (SEIR) be prepared, and that the information in that SEIR be considered. Such a course of action is mandated by the California Environmental Quality Act (CEQA) and the State CEQA Guidelines (Guidelines).

“If the Water Board does not agree that a Supplemental EIR is required,” Raio wrote, “we will then look at our options, and we might decide to file suit… The CSC group and our lawyer believe strongly that there are many issues worth pursuing with the end result of having a project that we can afford and that truly helps keep our groundwater basin viable.”

Raio is a member of the Los Osos Sustainability Group, as are the core members of CSC. Among CSC’s leading concerns are project viability and affordability, accelerating saltwater intrusion, the County’s failure to provide any alternative solution, and the long-overdue implementation of a Basin Management Plan. Raio can be reached by email at:

Attached: CSC Attorney Letter to SWRCB and CSC Background Support for Supplemental EIR