The Rock Report: Invasion of the Town Snatchers

It has been alleged that San Luis Obispo County is the most corrupt in the nation. In the minds of many, a large part of that corruption is related to the way in which developers have managed to infiltrate local government agencies, putting “their people” in key positions in order to ensure a development-friendly environment, and even to funnel public funds into projects that will save them money and increase their profitability. In Los Osos, Morro Bay, and Cayucos, there seems to be considerable evidence to support these assertions. Numerous decisions by local governments, made in the face of significant and ongoing opposition by local citizens, seem to indicate that it is the welfare of business interests, not the welfare of the citizens, that motivates some elected and appointed officials and government staff.

How It’s Been Done Elsewhere – the Privatization of a City’s Water Supply

If the assertions regarding local government takeovers are true, we are not alone. It is not only developers who take over local governments to enhance their profits. In their book “Thirst,” which describes the worldwide takeover of water resources by private enterprise, authors Fox, Kaufman and Snitow describe the manner in which a large water company engineered the takeover of Lexington, Kentucky’s city government. Their objective: approval of a pipeline to bring Ohio River water to the town—to sell, of course. One local activist noted that, “The stated purpose was a backup water supply in case of severe drought. If you’re trying to solve the problem in the optimal, least-cost manner, you study all other alternatives. They didn’t do that. It was a straw man. They had already decided to build the pipeline. The rationale was devised later on.”   

The authors note that it was clear that the company’s “...goal was to get the existing taxpayers to pay for a huge expansion of its service territory into the farmland surrounding Lexington. The project was a developer’s dream, but a horse breeder’s nightmare.” They describe how the water company, using four different public relations and political consulting firms, created and implemented their strategy to defeat locals who opposed the pipeline. Tactics included the formation of a local coalition that masqueraded as a grass roots organization with broad local support. It was actually backed by local construction and real estate industries and the water company. To seal the deal, they engineered the takeover of the Lexington City Council by providing (indirectly) financing and management for the campaigns of the water company’s own candidates.

The Impacts on Communities

Once business interests manage to place enough of their people in staff, elected, and appointed government positions, they are able to use their power to override the will of the citizens. Many do it so quietly, and so well, that few people even suspect what is happening. Negative impacts, many of which have been seen in local communities, are what one would expect when there are numerous foxes guarding the chicken coop. In a community where a developer takeover has occurred, public funds are funneled into projects aimed at paving the way for new development at taxpayer expense. Public infrastructure is ignored, except as needed to support development, and falls into disrepair. Projects that violate local zoning codes are permitted through exceptions and variances, and sometimes just through failure to enforce the law. Projects incompatible with local goals and needs gain approval. Communities pay the price of this ill-advised development for many years to come. By now, some, if not all of this may be sounding rather familiar.  

Mortgaging a City’s Future – Morro Bay Development Impact Fees

Development impact fees, paid by property developers, are intended to help pay a community’s increased future infrastructure costs resulting from development. Morro Bay has, for some years, had much lower fees than other SLO communities, fees that critics said were far too low. Yet, during a previous administration, development impact fees were actually cut, and until 2007, remained static for years. Meanwhile, infrastructure costs were far outstripping the amount of money available to pay for much-needed repairs and enhancements. Council member Demeritt agitated for a fee hike and, eventually, a consultant was hired to do a study to determine the appropriate level for the fees. The September, 2007 Council meeting at which fee implementation was considered was attended by group of builders and developers whose behavior was described by some locals as “loud” and “unruly.”  Suddenly, in the middle of the discussions, Mayor Peters suggested that the fee amount recommended by the consultant be cut in half and raised later in a stepped approach. An apparently outraged Demeritt stated that she could hardly believe that the City would use taxpayer dollars to pay a consultant to determine the optimal fee amount, and then cut it in half. Demeritt and Winholtz resisted, but the vote to cut the fees was 3-2, and the reduced amount was approved.  

With their streets crumbling, service levels dwindling, and Police and Fire services clamoring for more funds to protect the community, many residents were outraged. They asserted that the fee cut had guaranteed inadequate funding for infrastructure and services in the present and in the future. Community outrage increased when, a short time later, those who had voted for the development impact fee cut refused to grant a similar break to sewer system rate payers, insisting on implementing the full increase immediately. This time, Demeritt and Winholtz attempted to engineer a stepped approach to the sewer fee increases, for the benefit of low-income residents, but did not prevail, leaving locals wondering why the financial security of the developers was so much more important to the Mayor and two Council members than the financial security of the citizens of the town.

Concealing an Infrastructure Disaster - The Morro Bay and Cayucos Sewer Systems

The Morro Bay and Cayucos wastewater collection systems are in a serious state of disrepair, and leaking raw sewage into the soil along miles of collection lines, and irrefutable, documented evidence of the problems has been publicized in recent weeks. The evidence, consisting of videotaped inspections of the lines, and accompanying logs, proves that the system has been polluting local waters for many years. This situation, recently investigated and publicized by local clean water activists Richard Sadowski and Marla Jo Bruton, was known to some City staff members, but never revealed to the public. After Sadowski and Bruton provided the evidence to the State Water Resources Control Board and the Regional Water Quality Control Board, the local board began investigating the situation.

Listings of videotaped inspections conducted, and statements from a prior Cayucos CSD employee indicate that such inspections were done as early as 1995, and continued over the years. The images on the inspection tapes show hundreds of misaligned and separated pipe joints, cracks and holes, many of which are obvious even to an untrained eye. The amount of sewage pollution from Morro Bay and Cayucos that has entered the ground water, Estero Bay and the Ocean has not been quantified, but it is clear from the evidence that the amount must be significant.

Who knew what, and when?  Given that Morro Bay and Cayucos staff members ordered the inspections and reviewed the results, it is clear that some staff members saw the evidence of the problem. A conscientious employee who knew of such a serious health and safety problem would be expected to immediately report it to the Council for action, but there is no evidence that this ever happened. Sadowski states that Mayor Peters was told by citizens, at a Januuary, 2005 meeting at the Morro Bay Community Center, that the City’s wastewater treatment facility and collection system posed significant health and safety risks to the community. Sadowski further states that in early summer 2004, he and another Cayucos Sanitary District employee made a lengthy presentation to FEMA and OES staff members, providing well-documented evidence of serious damage and deterioration in several miles of Cayucos sewer lines. He notes that Bonnie Connelly, of the Cayucos CSD, was present at that meeting.

Why was the state of the sewer lines in these communities kept quiet? Some Morro Bay residents believe that the reason was a desire to avoid a potential building moratorium that would stop development in the town. Recently, an additional possible motive was suggested. If it had been revealed that pollution attributed to Los Osos was actually coming from Morro Bay and Cayucos, it would have been difficult, if not impossible to force an over-priced sewer system on Los Osos. That community might then have been free to choose a simpler, less costly way of modernizing its wastewater treatment methods, thus foiling plans to create infrastructure needed to support major development in the town.

Paving the way for Developing a Community – the Los Osos Sewer Saga

Numerous articles published in prior editions of The Rock have made clear the reasons for the push to implement an over-priced sewer in Los Osos. Sewers pave the way for development, and if they cost enough, they can drive out thousands of citizens, lowering property values, and allowing developers to snap up homes and land at bargain prices. In addition, a “side effect” of the proposed sewer will be the need for Los Osos to import (buy) all its water, once the sewer is in place, thus generating business for a water company, and adding to the control that private enterprise has over water service.  

Events of the past several years would seem to indicate that the alleged developers’ “conspiracy” driving the “gold-plated” sewer project may extend far beyond Los Osos’ borders. The interesting new question is, “Is the developer takeover in Los Osos connected to the concealment of the pollution from the dilapidated sewer infrastructure in Morro Bay and Cayucos?”

Illegal, Under-the-Table Favors for Developers?  -  Alleged Building Activities in Cayucos

An active lawsuit, filed by a former Cayucos CSD employee, alleges that the Cayucos Sanitary District illegally granted “Will Serve” letters to developers of several parcels with significant drainage problems. In several areas of SLO County, particularly in LAFCO areas with special districts such as the Cayucos Sanitary District, issuance of a building permit requires the issuance of a “Will-Serve” letter. The letters are issued by public entities responsible for various public services, such as water, sewer and garbage pickup service. The Cayucos CSD is responsible for ensuring that a building project adheres to related local ordinances before issuing a “Will Serve” letter. Necessary tasks include review of building plans, verification that existing sewer lines can handle the added flow, and assurance that there are no drainage problems on the property that could impact sewer lines. The lawsuit identifies projects where severe drainage problems were present, and developers were not required to correct them prior to receiving finalized “Will Serve” letters.

The suit further alleges that one CSD member has illegally extended sewer lines in the community without proper review and approval, violating the local ordinance that requires a public CSD vote for all such extension

The Project That (Almost) Nobody Wants - The Morro Bay Roundabout

Morro Bay residents complain that a few Morro Bay City staffers and officials studiously ignored numerous and vocal citizen objections, and pushed through approval of a roundabout at the intersection of Morro Bay Blvd and Quintana road, one of the most unpopular projects ever undertaken in Morro Bay. Despite major, ongoing citizen opposition focused on evidence that this project will result in increased traffic accidents, the project is moving forward. The pattern continued at the February 26 City Council meeting.  With a number of speakers opposing the roundabout, and only one person (considered by many to be Morro Bay’s most outspoken advocate for developers’ interests) supporting it, the Council again voted to allow the project to go forward. Demerrit and Winholtz argued against the project, citing risks to public safety, but were defeated in a 3- 2 vote. Many are puzzled, wondering why the Mayor, two Council members, and a small number of City staff members supporting this project are so committed to it. Others believe they know why.  

Across the highway from the Albertsons shopping Center and the Morro Bay Blvd. and Quintana Road intersection is a piece of land known as the Tri-W property. Ordinarily, prospective developers of property, not the local taxpayers, are required to pay for the infrastructure improvements necessary to support development. Much of the new traffic, storm drainage, water and sewer infrastructure required will be constructed as part of the roundabout project

The Rock obtained a copy of two early documents describing plans for the site. The first is titled “Williams Bros. Pacific Coast Shopping Study, Project Description & Expanded Initial Study.” By Courtney & Associates Inc., The Morro Group, In., and Mid State Engineers Inc., dated September 1988. Contained in the document is a staff report by the Morro Bay Department of Public Works, dated February 19, 1988. Referring to an earlier proposal, the report notes inadequacies in plans for traffic circulation and signals, storm water drainage, water distribution, sewer collection lines, and other infrastructure needed to support the development. The document outlines plans to address these concerns. Proposed traffic circulation improvements include “ultimate widening of Morro Bay Boulevard to four lanes, Highway One overpass widening to four lanes, realignment of the interchange on-and off-ramps, and signals at the Ocean View Avenue/Morro Bay Boulevard intersection, at the interchange, and at Quintana Road/Morro Bay intersections.” It is further noted that, “It is assumed that the applicant will be reimbursed for the expenses over and above his fair share of the costs.”

The second document is a copy of a December 1989 study, the “Draft Environmental Impact Report, Pacific Coast Shopping Plaza,” prepared by EIP Associates. The document details extensive mitigation to address impacts of the development. Traffic and circulation,” and “Adequate turning radii for 18 wheeled vehicles shall be provided to delivery areas and at intersections and dead-end streets at the project site,” and “the project sponsor shall be responsible for providing and upgrading sewer lines serving the project.” With regard to water service and the estimated 40 additional WEUs required to support the project, it is stated, “Infrastructure costs shall be paid for by the project sponsor.” The document also contains a traffic study, which discusses issues related to signalization of the intersection. It should be noted that a Morro Bay City engineer stated, in a recent public meeting, that, in conjunction with roundabout construction, improvements to/replacements of water and sewer infrastructure under intersection will be made.

Some Morro Bay residents recall the presence of project sponsors at public meetings where plans for the intersection; a proposed roundabout, in particular, were discussed. Minutes from a Public Works Advisory Board meeting in March 2000 include the following comments: “Boucher stated there is an approved project for the other side of the highway, which involves widening of the bridge. The agreement states the costs would be shared by the City and developer, stated Boucher, but is an expensive project and staff would like to avoid spending the money if there is another mutual benefit option.” And “Marshall Ochylski, representing Tri-W, stated that his client’s concerns were 1) that there is adequate capacity to service their property and 2) if an adequate plan can be developed which didn’t allow a left turn off the bridge, they would prefer not to widen it either.”

Eight years have passed since that meeting. The intersection has not been signalized. The water and sewer infrastructure have not been improved, nor has storm drainage, and the Tri-W property has not been developed. Residents we spoke to wonder if the property owners might be waiting for something, noting that it is clear that, if the roundabout is built, whoever develops the Tri-W property developer stands to save a great deal of money.  

If You Don’t Like the Law, Change it (Behind the Scenes) - Morro Bay General Plan and Zoning Update Irregularities

The California Supreme Court has identified the General Plan as the “Constitution” for all future development. Morro Bay’s current General Plan, created with the input from hundreds of attendees at City workshops, states that, “The present human scale and leisurely, low intensity appearance of Morro Bay should be maintained through careful regulation of building height, location and mass,” and “The present human scale in building design and style should be encouraged in all future development and redevelopment in lieu of high-intensity or high-rise concepts.” Yet, the zoning has never been updated to provide a means to implement these requirements. A recent citizen movement to manage the size of homes in Morro Bay has been met with significant and sometimes unruly developer opposition. In response to disruptive behavior at one City workshop, the subsequent gathering was attended by a uniformed police officer, brought in to prevent a repeat performance.

Developer efforts to obstruct any controls over the size of homes have allegedly been in the works for years. Some Morro Bay residents state a belief that the proposed General Plan and Zoning Ordinance, now under review by the California Coastal Commission, was altered after public review was complete, and that some of the public comment submitted for inclusion with the package sent to the Coastal Commission was left out. In the Planning Commission minutes for November 17, 2003, the following citizen complaint is noted: “Colby Crotzer was critical that it had taken so long to get the General Plan rewrite and revision and also of the late in the evening placement on the agenda because it didn’t facilitate people participating. Crotzer said it was a signal to him that real participation of the public is not what the Commission is seeking. Crotzer said Crawford, Multari and Clark’s expensive work ($120,000) and expertise as highly respected professionals in the field had been butchered in the process of deletion and cited examples.”

In the “Public Review Draft General Plan/coastal Land Use Plan – Policy Change Matrix,” dated August 2000, are two significant deletions of material from the General Plan, allegedly made by a (then) member of the Planning Commission. It is stated, in the document that “Policy LU-15. The present human scale and leisurely, low intensity appearance of Morro Bay should be maintained through careful regulation of building height, location and mass” is “Repetitive. The intent of this policy has been included in policies for Downtown, Embarcadero and neighborhoods, and incorporated into zoning regulations.” It is further stated that “Program LU-18.1. The present human scale in building design and style should be encouraged in all future development and redevelopment in lieu of high-intensity or high-rise concepts” has been “Incorporated into the City’s zoning ordinance (through maximum building height, setback requirements, and maximum lot coverage.” Both provisions are missing from the copy of the document now under review.  

An examination of the proposed Zoning Ordinance tells a very different story than the one presented by the person(s) responsible for the deletion of this important material. One local citizen who reviewed the Zoning document noted, “The City has repeatedly indicated that the current revision of the Zoning Ordinance is not intended to modify the provisions of our current code, merely to consolidate and clarify existing policies. It is clear that Chapter 17.06 will make several significant changes to residential zoning throughout the City. The most important of these include: A significant reduction in front yard setbacks in the proposed RS-A zone, A notable increase in the allowable scale and bulk of development and decrease in required separation of residences in the proposed RS-C area which lies south of Morro Bay Boulevard, A significant increase in allowable density of development and maximum building height in areas which are currently zoned R-3. A reduction in the amount of land available for visitor-serving commercial and general office development, and A complete reversal of City policy with regard to the R3/S.3 zone.”

If You Don’t Like the Law, Find Someone to Help You Get Around it – Permit Facilitators and Developers Running Amok

The ability of some local permit facilitators to get their projects approved has left many locals scratching their heads and asking questions: Why is it that a few influential individuals can get projects approved when aspects of those projects fly in the face of local zoning regulations? How do they get permits approved when nobody else can?  Could it be that they have connections in local government?  

With a building moratorium staring him in the face, one prominent local permit facilitator/developer was able to gain approval for a number of building projects in Los Osos. The same individual also gained approval for a notorious Morro Bay project known as “Quintana and Main” or “Sundancer Village.” The property was initially described as three “unbuildable” lots. Somehow, that designation was changed, and construction was permitted. The plans were for 10 homes with six homes having attached second unit affordable housing residences. By taking advantage of the law that allows greater building density when a project includes affordable housing, approval was obtained for more homes than would ordinarily have been allowed. Then, after the increased density was approved, the facilitator/developer announced that since he had accumulated “mitigated credits” there would be no affordable housing.  

The “driveway,” which many residents say is, in fact, a street extension, was allowed by the City. Under a “driveway permit” Quintana Road was extended and a stoplight was placed at the “driveway entrance” on Main Street. Citizens complained to City staff that this construction violated National Pollutant Discharge Elimination System (NPDES) regulations for road extensions, but the construction was allowed to proceed.

Initial citizen complaints regarding fire safety initially went unheeded. The local fire department said that they could use the fire hydrant in front of Lemo’s Feed Supply and service the project with trucks on Main Street, and hoses taken up to the project. Major pressure from citizens finally forced the installation of a Fire Hydrant beside the “driveway.”

The building permit called for re-routing of a sewer lateral from an existing building on a nearby corner. Under a “re-route of a lateral permit” the developers extended the Main Street sewer line to service 16 homes. As one local expert put it, “Wow, that’s some lateral extension!” A City Engineer referred to it as a ‘cluster lateral.’ The Rock consulted with a local sewer line expert, who stated that “cluster lateral” is not a term or practice contained in the Sewage Guidelines building codes, and that the work was done by a construction firm owned by Enns Construction, a firm owned by Robert Enns, President of the Cayucos Sanitary District Board.

The removal of soil during grading was another major issue. Developers’ original estimates indicated that about 3,500 cubic yards of soil would be removed from the site. It has been alleged that site elevations in the project documentation are actually post-, not pre-excavation, and that stated slopes deviated significantly from reality. When concerned citizens complained to a City Engineer about the actual amount of soil being removed from the site, he stated that no City permit for soil removal was needed. The citizens were referred to the County. Research revealed that soil removal of 5,000 cubic yards.or more requires a County permit. No such permit for the project was found on file. The soil was taken to the Morro Bay Golf Course, which had no permit to receive the amount of soil that was deposited there.  

The concerned citizens monitored soil removal and took photos, estimating the total amount removed at between 15,000 and 20,000 cubic yards. Golf Course management said that the soil from the Quintana and Main project was just part of the Golf Course “dirt pile” that has always been maintained to fix dig holes created by golfers. The need for 15,000-20,000 cubic yards of soil to fill divots raised, in some minds, some interesting images of the golfers who use the course. Despite evidence of violations of the law, there have been no reported punitive actions taken, by the City or by the County, against those responsible for the removal of the soil, or the Golf Course management that allowed the soil to be deposited at their facility.  

Five units were constructed on the Quintana and Main site. They did not sell, and the remaining planned units were not built. The undeveloped portion of the property is now surrounded by a chain link fence, and is for sale.

Signs of Improvement?

The examples given in this article are the tip of the iceberg. Business interests still appear to hold our communities in a tight grip, and evidence is abundant. The situation in Los Osos remains the same, as of this writing. Most believe that without a miracle, thousands of residents will be driven from their homes by an over-priced and inappropriate wastewater treatment “solution.” The Cayucos Sanitary District appears to remain solidly under the control of local developers, and building in that community continues at a rapid pace despite the fact that the sewer infrastructure needed to support it is still in a serious state of disrepair. Recent publicity, generated by local activists, does seem to have prompted plans to make some major upgrades to the system, and residents were recently informed of plans for a major rate hike.

In Morro Bay, although the roundabout project continues in the face of major citizen opposition, there have been a few encouraging signs. Bowing to the demands of hundreds of neighborhood compatibility workshop attendees, the Morro Bay Planning Commission and Council have recently approved temporary measures that control the sizes of some homes in the town, and ordered a neighborhood compatibility ordinance to be developed. Yet, at the same time, the roundabout project continues on. The dilapidated sewer system continues to pollute local waters, and no one in an official capacity is known to have admitted this to be true, although, prompted by the work of local activists, plans for major repairs are in the works. Developers still seem to find ways to get what they want, although they are being told “no” more frequently.  

Complaints that Morro Bay City staff grant favors to some builders and developers are still being made, but locals cite encouraging signs that the Planning Commission and Council now seem to be taking the side of the residents on occasion. Some suggest this is because citizens have been organizing, and are making their feelings clear to their elected and appointed officials by attending public meetings in large numbers, and by launching letter- and email-writing campaigns. One recent example is City staff support of a builder whose projects, neighbors assert, have created major parking problems in their neighborhood. The builder was consistently supported by the staff, yet the same staff took a hard line with the owner of a property across the street, where half of a two-car garage had long ago been converted to living space by a previous owner. At meetings heavily attended by neighbors, the Planning Commission and Council did not accept staff recommendations, and took the side of the property owner, refusing to order that the living space be converted back to a garage.

There seems to be a message here. Powerful business forces will, if left unchecked, continue to run our communities for their own financial gain. Many of their actions have created and will create major problems that will be life-changing, in a negative way, for thousands. Inattention and apathy, and leaving activism for “the other guy” have to stop if control of local communities is to be regained by the people who live in them.