Sewer Scam!

How did Los Osos get here from there, from a shimmering vision of ponds to the oncoming locomotive of an industrial-strength centralized sewer, the most expensive per capita in US history?

Ever since the CSD opened in January 1999, Los Osos has been embroiled in a conflict filled with confusion and turmoil. Here is one view of some the key events and facts that led Los Osos to the County takeover in January 2007 and to the brink of the Prop 218 vote designed to lead to a “mandated” centralized gravity collection sewer. This chronology is not meant to be comprehensive, but it is still important that Los Osos residents and the County, for that matter, gain a deeper understanding what has happened—and still is happening—in Los Osos, and why.


In 1975 the Central Coast Regional Water Quality Control Board (CCRWQCB) created the Central Coast Basin Plan. It contained a number of observations and suggestions to help assure a safe, healthy water basin for Los Osos.

Included in the Plan:1) Conduct a survey of the entire Los Osos groundwater basin, 2) Determine high ground water levels that need to be pumped down and do so, 3) Survey all on-site sewer systems (septic tanks) in Los Osos to determine which units are sound, which require repairs and which require replacement, 4) Create an On-Site Sewer Maintenance Ordinance, 5) Determine if and where Cluster Plants are necessary and install them.

The County never followed through. Instead, they quietly began to move towards a central sewer. In 1982 they contracted the engineering firm Brown & Caldwell to install temporary groundwater monitoring wells at various locations in Los Osos. These wells had a legal life span of approximately one year or less.

On August 17, 1982, Brown & Caldwell issued their Preliminary Study Conclusions to the County Engineering Department: 1) No coliform found (no human bacteria.) 2) “…no apparent distinction between the character of groundwater from shallow versus deep wells.” 3) “Groundwater samples do NOT show characteristics attributable to seawater.” 4) “Groundwater samples, even those containing high nitrate concentrations, DO NOT exhibit chemical characteristics attributable to septic tank effluent…TDS and nitrates alone are NOT sufficient to link groundwater degradation with septic tanks.” 5) “We have NOT yet been able to establish the source of the high nitrate concentrations…we have NOT been able to link high nitrate with septic tank effluent.”

The County-ordered study of the Los Osos groundwater showed that there was NO evidence of nitrate contamination from our on-site sewer systems, yet they continued to say we needed a central sewer.

In 1983, the RWQCB issued Resolution 83-12 that state (“WHEREAS”): “The Regional Board recognizes increased difficulties in financing and affording major public works systems, such as sewage collection, transport, treatment and disposal projects; and (“WHEREAS”): properly planned and installed individual on-site sewage disposal systems can provide satisfactory wastewater treatment and disposal at a minimal cost; and, community on-site sewage disposal; and (“WHEREAS”): guidelines are needed for community on-site sewage disposal systems.”

Then on the same day the RWQCB issued Resolution 83-13 that said a selected area of Los Osos to be known as the Prohibition Zone (PZ) had to stop using their on-site sewers by 1988. The PZ boundaries were drawn by a RWQCB member, George Rathmill, who lived in Cabrillo Estates. Cabrillo Estates and Bay View Heights were excluded. Resolution 83-13 opened the door to the Prohibition Zone and what would follow.

The fact that the PZ was created without any proper science made no difference to the RWQCB, the County and eventually to the original CSD. There was an agenda and it didn’t have anything to do with our water, our on-site sewers (septics) or a safe future for Los Osos.

The fact that our on-site sewers were NOT polluting was even acknowledged by RWCQB executive director Roger Briggs in a December 14, 1984 internal memo to his then superiors, B. Leonard and K. Jones. Briggs states, “Groundwater analysis in Tables 2 & 3 do NOT indicate human bacterial contamination except in poorly constructed monitoring wells…Frank (DeMarco) inspected these wells last week with Percy (Garcia) and agrees there is a potential for contamination from surface runoff.”

Note: These wells were illegal by the time this memo was written. Under the law, the RWQCB was “mandated” to have the County seal them in concrete or bring them up to California Water Well Standards. They did nothing. Each day they remained open was a felony.

Despite a building moratorium to protect the water quality and supply, the County and RWQCB allowed over 1,140 homes to be built in the PZ, permitting those homes that actually created the density the RWQCB would later use to issue CDOs to homeowners for not building a sewer on schedule. At the same time, the construction blatantly violated the discharge prohibition to control pollution. The new construction created 25% more homes in the PZ. The reason for building those homes? To generate more property tax revenues to pay for a big centralized plant—to control pollution.

In 1990 the County began to quietly inch closer to a central sewer in Los Osos without seeking the consent of 51% (or more) of Los Osos voters as prescribed by California Water Codes 22170-22175. This Code makes it clear that the community being affected must be asked if it even wants a central sewer. We were never asked.

In 1992, the County quietly applied for an SRF Loan for $47 million dollars and received “tentative approval.” They did this in violation of California Water Code 13416 that requires a 51% voter approval to enter into an SRF Construction Loan with the State Water Board. This was never done.

In 1993 the County established the Technical Advisory Committee (TAC) and hired Black & Veatch to conduct a groundwater study. Black & Veatch Waste Scientific & Technology Corporation was sub-contracted.

In a September 20, 1993 letter from Black & Veatch to Percy Garcia, Water Quality Manager for SLO, they stated the following: “Approximately 98% of the nitrogen detected in the soil is immobile organic-nitrogen. Less than 1% was detected as nitrate-nitrogen. Organic nitrate-nitrogen concentrations are higher at a depth between 1 and 5 feet beneath sites covered with native landscaped vegetation than the same depth beneath septic system sites. Vegetation due to mineralization.”

They also said, “Nitrate concentrations are higher in the groundwater than in the unsaturated zones beneath the sites which suggests that additional nitrate-nitrogen is migrating laterally from off-site sources.” (NOT from septics)

In 1994, the County released their “Los Osos/Baywood Park Nitrogen Study” prepared by TAC. It was entitled, “Los Osos Soil and Groundwater Nitrogen Study.” Two key committee members, both highly qualified experts, were Los Osos’ own Dr. Tom Ruehr and Wade Brimm.

The Study showed that, “At the lowest sampling depth, which was well above the groundwater, there was at two out of three sites a lower concentration of nitrate in the leachate than in the groundwater itself. This is strong evidence that the nitrate is not actually reaching the groundwater.”

It also stated, “The data from all three (test) sites support the conclusion that de-nitrification occurs below the leach pits and leach fields. The increase and subsequent decrease in the nitrate N/chloride ratios at all three sites support the conclusion for nitrification followed by de-nitrification.”

The Study concluded there is NO evidence that Los Osos on-site sewers are polluting the Bay or anywhere else and further supports the fact that Los Osos does NOT need a central sewer system.

The facts were further enforced when three scientists from the USEPA, Dr. Kreissel and two associates, came to Los Osos and conducted groundwater tests. Dr. Kreissel also concluded that Los Osos does NOT need a central sewer.

Despite the facts, the County and the RWQCB accelerated their efforts to force the central sewer on Los Osos. The grassroots movement was born. Its organizers included Pandora Nash-Karner, Stan Gustafson, Gordon Hensley, Rose Bowker, Frank Freiler, Sylvia Smith and a number of other people who are currently involved in the effort.

On June 11, 1997, three leaders of the grassroots movement sent a desperate cry for help to then Governor Wilson. They stated in part, “If a sewer is built, 1) “Economic impact would devastate our community, 2) 50%, if not more of this community may be forced to sell their homes and move because of the high costs of the sewer, 3) These costs would essentially rob young families from providing pre-school, scouting, gymnastics or little league, 4) Older residents will be at risk of having inadequate resources for daily living. 5) Individual property costs as high as $145-$200 monthly, 6) Nitrate levels may not change for 45 years if at all.”

They further stated, “We thought it was State of California policy for water quality to be “consistent with the state goal of providing decent homes and suitable living environment for every Californian” (California Water Code Section 13412).” They concluded by saying, “Older residents will be at risk of having inadequate resources for daily living.”

Included with their plea to the Governor were cost comparisons between County estimates and what the letter writers stated as the “actual costs.” Cost of central sewer: County, $49 million. Letter Writers, $71.5 million. Residents to pay: County, $45 per month. Letter Writers, $145 –200 per month.

In 2001, the CSD said the central sewer would cost $87 million; actual, $200 million. The CSD said residents would pay $103 per month; actual, $200–$300 per month.

Two of the three men who signed the letter to the Governor were: Stan Gustafson and Gordon Hensley. Gustafson left town in mid-May of 2006. Hensley is a leader with Joyce Albright of Taxpayers Watch.

By late 1997, it seemed the County had finally backed away from the central sewer. Credit for this faux victory was given to the leaders of the grassroots effort, opening the door for their ascension to the position of local power and full implementation of their agenda. To do this they needed to create the CSD and become its Directors.

November 1998. A majority of votes created the LOCSD and elected Pandora Nash-Karner, Stan Gustafson, Gordon Hensley, Sylvia Smith and Rose Bowker as Directors. Their campaign battle cry had been “Better, Cheaper, Faster.”

The community had been told by the candidates (aka “Team Los Osos”) they would implement a ponding system that would do the job more effectively and would be “Better, Cheaper, Faster.” We believed them.

What we didn’t know was they had been told by the RWQCB that it was so flawed it would never be approved. Despite this, the new Board made a great public show around their flawed ponding system while at the same time finalized their strategy with Briggs to force the unaffordable, unneeded central sewer on Los Osos. This was key to their success.

The CSD and RWQCB had to find a way to neutralize community anger and interference. In late 1999 they did this by planting the seed camouflaged behind a 19-word declaration: “The Regional Water Quality Control Board has MANDATED that Los Osos build a sewer. Los Osos has no choice!”

“Mandated. No choice.” The community was helpless. Community anger focused on the RWQCB. To make it even more convincing and increase support, two RWQCB employees came to CSD public meeting and echoed the “mandated central sewer.”

Then the CSD quickly assured the community they would work hard to keep costs down, secure grants and a low-interest loan.

It’s very interesting to note that in a January 23, 1998 letter from Briggs to Nash-Karner, Briggs states, “It is not our policy, nor do we have the authority to specify the method of compliance.” Briggs was well aware that California Water Code 13360 strictly forbids the State and Regional Water Boards and the courts from “mandating” ANY SOLUTIONS. So were the CSD Board and their GM, Bruce Buel.

Nash-Karner and the original Board knew 10 months before voters created the LOCSD that the RWQCB could not “mandate” any solutions.

January 2001. This was a crucial time for the old CSD board. They were aware that if they failed to pull off this next coup it would be all over before it began. They scheduled an Assessment District vote for June and launched their campaign. Working in tandem was the Nash-Karner-led group calling themselves, “Vote Yes For the Sewer.”

For months leading up to the vote, Los Osos was bombarded with mailers from the “Vote Yes” group and “Messages” from the CSD, all filled with mis-information, distortions, and topped off with threats specifically meant to influence the vote.

For example they told the community that if the vote failed there would be “no SRF loan,” the County would take over and build a more expensive project, that individual residents would be fined as much as $10,000, the CSD would be fined $10,000 per day, and would be bankrupt within two weeks.

They also said if the vote failed the CSD would not be able to apply for the low-interest SRF loan. In another mailing they said if the vote failed they would lose the loan. Did they have a loan or not? The main theme throughout all the mailing from both entities remained the “mandated” sewer and “Los Osos has no choice.”

Their campaign worked. More than half the voters did not even vote because they saw no point. Of the 3,500 or so who voted only 650 voted “No.” The CSD, Shirley Bianchi and crew rejoiced and cheered.

It was later discovered that approximately 1,352 votes were controlled by 27 people, all of whom, with one exception, voted “Yes.” Many were part of the same group. It was also discovered that many people who voted “Yes” did so because they were afraid of the (non-existent) fines and losing a low-interest loan.

With this ill-gained victory the old CSD quickly moved to the next step, which was supposedly to complete the application for the SRF loan. In January 2002, Bruce Buel announced that the CSD has received approval for a $65.4 million dollar loan.

California Water Code 13416 required the CSD to secure 51% or more voter approval to enter into an SRF Construction Loan with the State Water Board. They did not do this. When later challenged the standard Buel/Bowker/Gustafson replies were, “The June 2001 vote satisfied that requirement.” It did not.

In April 2002, the “Total Recall” movement to remove all five Directors was announced. In May, the petition gathering began. Once again the Nash-Karner campaign went into full throttle and the CSD retreated into a defensive posture.

During this time a great deal of hard copy evidence began to surface that exposed and revealed a considerable amount of dubious activity and stripped away many of their protective barriers.

California Water Codes and the Federal Clean Water Act both state that before issuing and selling obligation bonds, a 2/3rds voter approval is necessary. State and federal laws also require that “…the project chosen must be affordable.”

These and other legal requirements were publicly exposed during the 2002 “Total Recall” effort. The CSD and the RWQCB finally admitted they had fabricated about the central sewer being “mandated” by the RWQCB.

They shrugged off the voter rights by stating that the June 2001 Assessment District vote satisfied all of those requirements and more. It did not. But that didn’t stop them. They believed they were impervious to legal prosecution.

In just 19 words, they shifted community heat off themselves and directed our anger and frustration against the all-powerful RWQCB. It was intended to clear the way for the old CSD and Bruce Buel to go full speed ahead in their plan.

There was just one problem. Under California Water Code 13360, it is ILLEGAL for the State or Regional Water Boards and the Courts to specify ANY method of compliance. There was NEVER a “mandated sewer” by the RWQCB. It was thrust upon Los Osos by the old CSD in a pre-arranged agreement with RWQCB executive director Briggs.

Despite a few voices confronting the old Board at public meetings and debunking the “mandated sewer,” they continued to tell the community that the RWQCB was forcing them to build the central sewer, that they “had no choice.”

In 2001 a grassroots effort filed a federal lawsuit against the CSD that would have stopped the project dead in its tracks. If in fact the RWQCB had “mandated that Los Osos build a sewer” and the CSD were looking for a safe way out without a backlash, this was it. All they had to do was NOT oppose the suit.

However, the CSD hired a large law firm from Sacramento that allegedly had the “right connections” in the federal courts. The CSD squandered more than $130,000. taxpayer dollars to quash the suit. They were successful. It was never allowed to be heard.

Finally in 2005 another recall effort to remove the three remaining Directors succeeded, but the debate was not over. The recalled Directors and allies regrouped under the banner of Taxpayers Watch, launched a wave of paralyzing lawsuits and worked with the RWQCB to levy fines against the Board and issue CDOs to individuals with the intent to bankrupt, dissolve the CSD—and impose a centralized sewer with a park at the Tri-W site in the middle of town.

The dissolution failed. The LOCSD lives, barely breathing perhaps, but still alive.

Compiled by Budd Sanford