Gibson Under-Estimating Sewer Bills to Win Los Osos Votes

Supervisor Gibson, bidding for re-election in the June 8 Democratic primary against one other candidate and facing no Republican opposition, looked down his nose from his high chamber perch on supervisors row. “Some of our commenters today and in recent weeks have taken a bit of a free-form approach as they speculate about the costs of the wastewater project in Los Osos,” he preached to the gathering at the May 4 Board of Supervisors meeting. “My comments are aimed mostly at the public who might be listening…”

Then, one more time for the old folks at home in Los Osos living on their Social Security checks and quivering by the radio listening to Gibson’s reassuring little fireside chat, he told him how much they would have to pay each month for the County’s sewer project in Los Osos.

“Under a set of assumptions that our Public Works team has put together, the expected monthly cost of the sewer, the public part of that, is still around $200 a month (per “Prohibition Zone” homeowner),” said Gibson. “The on-lot costs of digging laterals and other things are variable, lot to lot, but based on basic funding assumptions were possibly another $50 a month. The best single-number estimate of the total cost of the sewer is somewhere between $200 and $250 a month per household.

“That includes assessments (of $25,000 per “Prohibition Zone” home) that have been made and the operating and maintenance revenues that would be established through a rates and charges hearing,” he said. “It’s all included in the same basic cost estimates.”

Then Gibson, the County’s cast-iron ramrod for the trumped-up sewer project, demonstrated why, under his watch as Chairman, the County became the biggest embarrassment ever in its checkered history, a citadel of one-way communication, cronyism and corruption, and why Gibson is the one of the most callous, calculating and wrong-headed supervisors the County has probably ever seen, considering the huge number of people impacted by his blood and guts politics.

With a nasty, humiliating and perfectly in-character firing back after public comment that afternoon, Gibson offered a final blast at his arch Los Osos critics, the most knowledgeable, sewer-wise residents of this sticker-shocked community, who have closely followed the County’s proposed project and are convinced that homeowner costs will eventually exceed $250 a month on their way to $400 a month – and that Gibson is purposefully under-estimating the already excessive costs in order to quell deepening community concern and better his chances at the polls on June 8.

“Again,” Gibson groaned tartly to the crowd and scared-mute fellow board members, “these issues have been explained a number of times before. I do realize it’s been a little while since we’ve had a formal (Los Osos) update [actually over five months] so we haven’t answered that question specifically recently. But I am almost 100% certain that that information (on monthly homeowner costs) is very clearly laid out in material that’s posted on the project’s web site, and if Mr. Wimer has trouble finding that material on that web site he’s more than happy to give my office a call because that’s again been made very clear very many times before.

“We’re hopeful that better financing can bring those costs lower,” Gibson added, “but we won’t know until we get there.”

With weak assurances like that from the man setting the sewer bill at $250 a month, older folks listening by the radio at home must have pressed repeatedly on their Life Alert necklaces. To hear from Gibson’s mouth that seniors will have to take $250 a month out of their average $1,000 a month Social Security checks to pay for the sewer is like Gibson telling his own mother she’ll have to make a choice between eating or moving. But Gibson doesn’t have to worry about that happening. He is a wealthy Cayucos land baron and fruit rancher and his family will never have to move, never starve from a lack of fresh fruit that dot his many acres like ribbons of colored candies.

Gibson’s remarks were delivered in response to that afternoon’s public comment, primarily from vigilant Los Osos Sustainability Group members Martha Goldin and Keith Wimer. Not only did they challenge Gibson and Public Works Director Paavo Ogren for what they said, but also for what they didn’t say and won’t say. Gibson and Ogren don’t say the $250 a month is not the end of it, or that sewer bills will ramp up every year, year after year, or that there will be more assessments to come. Nor do they mention that the rates and charges ordinance will be a blank check just like the Proposition 218 vote in 2007 is a blank check to add on more and more expenses without any more votes. They don’t mention rising costs from the uncapped project, from construction change orders and cost overruns – the way the construction giants like MWH massage the bills and play the profit game – as well as the cost of other expensive and essential fixes such as the cost of halting salt water intrusion, new water system infrastructures and improvements related to the sewer, eventual imported water, and constant, creeping inflation, the silent assassin that attacks both the price of construction materials and food in the market. Gibson doesn’t ever mention that the project without a price tag is going to push thousands out of town because, according to him, the sewer won’t displace anyone. It’s easy to see why he can never tell the truth.

Los Osos residents respond to any Board comments one week later because Gibson and the Board always get the last word at meetings.

Retired Judge Goldin’s comments were in response to Public Works Director Ogren’s Los Osos project update at the April 27 Board of Supervisors meeting, an update that Goldin called “often not quite accurate… incomplete or confusing.” Goldin questioned what the County will do if its Proposition 218 vote for undeveloped property owners’ $40 million share of the $165 million project funding does not pass or is not held at all.

“If (the Prop 218) doesn’t fly because they (undeveloped property owners) might not vote for it,” Goldin said, “then we have rates and charges. Rates and charges to complete a capital project? Under Prop 218 I think there’s a serious legal question. But putting aside the legal question, what are the ratepayers going to say about this?

“Do they know in addition to $200 to $250, or $300 a month, they might be zapped with another $50, $75 or some unknown amount in order to complete the capital project…? Of course they don’t know,” said Goldin. “And we did not have a true and correct answer (at the April 27 Los Osos update) to that question: What happens if there is a shortfall beyond the $127 million that is currently secured (to pay for the project)?”

Gibson responded that operating expenses were included in the $250, but he didn’t answer Goldin’s larger question, at least not in such a large room with so many people listening. How much more will they pay? It will soon be the answer to all of tomorrow’s questions: rates and charges.

Wimer spoke on the same subject. “As I understand it,” he said, “you decided to fund a 218 rates and charges assessment to cover some of the project costs that were originally supposed to be funded with a 218 on undeveloped properties. How much will the rates and charges 218 add to the $250 monthly homeowner costs currently estimated for the project?

“I believe people will be surprised to hear that cost of the project went up substantially above the $25,000 assessment and they will now be paying the additional amount in rates and charges. This cost increase does not bode well for the future,” he said. “The project continues to escalate. How much are property owner costs going to go up, and how will you prevent future cost overruns?”

After leaving without complete answers, which is a recent upgrade from the usual no answers, Wimer was back May 1 before Gibson and his four cardboard cohorts to rebut Gibson’s comments of May 4 regarding PZ homeowner sewer costs staying about $250 a month.

“SRF loan documents posted on the County’s web site shows average monthly homeowner costs are expected to remain about $250,” Wimer said with deadpan sarcasm, responding to Gibson pointing him to the County web site for information a week earlier, “despite the fact that total project costs went up about $11 million last year and current homeowners will pay about $40 million of project costs than originally planned. We will apparently pay these additional project costs through approval of a rates and charges 218, in part because the 218 on developed properties is apparently not scheduled in the near future.”

“Are rates and charges supposed to cover capital costs?” he questioned. “Why are existing property owners expected to pay for build-out conditions as shown on the 218 assessment? What would monthly costs be with a 0% SRF loan? We’ll pay $9 million a year with this (USDA) loan package in debt service alone. Maybe it’s not worth rushing the Coastal Commission process to get the USDA loan…

“A wastewater project, even for $25 a month, is not worth the money if the Los Osos water basin is not sustainable,” he warned. Wimer called for the County to “immediately implement a County-administered basin-wide management plan and ordinance with the expressed objective of reversing sea water intrusion and establishing a sustainable basin.

“The groundwater basin update recently released confirmed what the Los Osos Sustainability Group has been saying for a year, that seawater intrusion is accelerating and urgent action is needed… Ultimately the County is responsible … and must lead the effort.”

Gibson has always talked a big game in his bubble world, yet he doesn’t understand that winning the sewer wars doesn’t come with throwing red meat to a fan base that wants Los Osos residents Martha Goldin and Keith Wimer insulted and embarrassed, if not punished on the spot.

But if the Board was listening, you couldn’t tell. So far, every plea from Los Osos residents for a more cost-effective project has fallen on deaf ears. Perhaps the other board members are grateful that the sewer, with its long, bitter history, is not in their district. What political sense would it make for them to interfere in something 30 years dirty and none of their business? Quite the opposite. They’ve sought to reassure their nervous constituents that their tax dollars wouldn’t disappear down the black hole of the bottomless Los Osos sewer. One of the first political rules a new supervisor learns on the board is “NIMD” – “Not in My District” – and “Scratch My Back, I’ll Scratch Yours.” The supervisors could have been answering e-email on their laptops during Los Osos updates, surfing the web or playing solitaire. The rotten sewer is Gibson’s call, no one else’s.

During May 18 public comment, longtime Los Osos resident and developer Jeff Edwards complained that the County’s wastewater project does not address the saltwater intrusion that is menacing Los Osos’ drinkable water supply. “Ultimately,” he said, “Los Osos will face another $20 million to $40 million expense, most likely to import water, on top of the $165 million for the treatment facility. This is not acceptable.”

Edwards disagreed with Supervisor and Coastal Commissioner “Katcho” Achadjian’s recent Coastal comments that USDA funding was the best available funding for the Los Osos project. “(It appears that) the USDA funds are being pursued simply because it’s the most expedient way to repay the County the $7.45 million it’s outstanding,” he said.

“While it is a 40-year amortization period, the interest rate is approaching 4%, and on tens of millions of dollars that’s a lot of money,” Edwards said. “What happened to the State Revolving Loan Fund that we were able access at an interest rate that could be as low as 0% and have a term of 30 years? Why are we chasing the USDA money and using that as an excuse to expedite the project? It’s beyond me.

Edwards continued to lay siege to the County’s decision-making process. “Supervisor/Commissioner Achadjian cited the environment as a reason we needed to move along, in addition to the USDA money,” he said. “The current nitrate problem (the reason given for needing a sewer in the first place) pales by comparison to the seawater intrusion that is rapidly advancing. So are we going to solve a correctible nitrate problem, only to induce an irreversible seawater intrusion problem? It doesn’t make sense to me…”

Responded Achadjian, “I would not ignore the USDA loan at 4% because with this economy any preapproved loan is a blessing. We need to bear that in mind and keep that intact while we are looking for other monies that could be available for this project at a much lower rate.”

Gibson added that Coastal Commission staff scheduled its next meeting in June partly to deal with “timeliness issues” related to the USDA loan for Los Osos. “In addition to the USDA funding, our project team continues to explore all other potential sources of funding including the State Revolving Fund,” he said in his patented doublespeak with layers of disclaimers. “Each component in each different program and each different interest rate that might be available has a number of conditions and a maximum amount, and what we continue to do as we have all along is put together the most favorable financing package that we can to lower the monthly cost as best we can.”

Both Board members and public expressed confusion over the difference between the second Prop 218, on undeveloped properties, and its fate, and the emerging Prop 218 rates and charges ordinance, and how much of the undeveloped property owners’ $27 million share of project costs ultimately will be absorbed as rates and chargers on already assessed and overtaxed PZ homeowners of developed properties.

On April 27 Public Works Director Ogren said, “The project documentation shows that $27 million (of the $165 million estimated project cost) is relating to the undeveloped properties so it’s either going to be the second Prop 218 or connection fees that would relate to recouping the fair share that is allocable to undeveloped properties.

“…If the project ends up being higher in costs,” he said, “then I would anticipate that the additional is paid for through the monthly water bills, although the option of putting out another Prop 218 would exist, or maybe even a community-wide special tax to help spread some of the costs behind the Prohibition Zone and beyond.”

What if Los Osos ratepayers protested the County’s proposed rates and charges ordinance and forced it to a referendum, and what if that referendum fails to pass, like in Paso Robles? After trying five times over the past several years to raise rates, Paso Robles recently secured a rate plan to pay its share of the Nacimiento Water Project without having to dip into its thin reserves, although a lawsuit could still stall implementation. A $70,000 election measure last November rejected previous rates.

“The Prop 218 for the rates and charges is the protest hearing so they’re not actually voting yes or no. There would have to be a sufficient protest,” said Ogren. “In Paso (Robles) they’ve gotten through the protest hearing, but then the referendum provisions of Prop 218 kicked in where it took 10% of the registered voters to kick it to a referendum, and so the rate increase that the city had adopted nullified it.”

“If we found ourselves in that situation for Los Osos,” said Ogren, “we would be doing the exact same thing that Paso Robles is doing, and that is to restructure and re-tailor it to hone in on what the community preferences are in the restructuring of that, but we’d have to keep going…

“It would be understandable that your board would want to see that you’re good on that, that there isn’t a protest hearing or a referendum before you do the due diligence resolution (prior to accepting the project). If you adopt the due diligence resolution first and then we get into that rates and charges hearing, then we might find ourselves in the position Paso is in reworking it.”

For Los Osos to follow in Paso Robles’ footsteps of resistance, the public would have 30 days from County or LOCSD approval of new rates to protest them. At least 10% of registered voters would be needed to sign a protest and force the County or LOCSD to either rescind the rates or call an election. Such a situation in Los Osos could wreak havoc with the County’s timetable.

Fearing that a second Proposition 218 tax on undeveloped properties would not pass a vote of property owners still unable to build on their empty lots because of severe water issues in Los Osos, the County is looking to skip directly to a Prop 218 rates and charges ordinance that would capture some, if not all, of those lost assessment dollars with connection fees from undeveloped property owners. Any additional shortfall would presumably be picked up by “Prohibition Zone” homeowners, which is why, with no final price on the project in sight, Los Osos’ sewer activists believe Gibson is purposefully under-estimating the already excessive costs in order to quell strong community concern and better his chances at the polls.

Gibson publicly insists that sewer bills for the Los Osos Wastewater Project will top out at $250 per month per homeowner in Los Osos’ “Prohibition Zone” (PZ), and bristles at any suggestion it will cost more, but with consistently flawed estimates throughout the County’s EIR and Community Survey, some in Los Osos question both Gibson’s math and motives, believing he is playing politics with the lives of thousands in Los Osos.

Los Osos resident Steve Paige told the board at the May 25 Board of Supervisors meeting: “The economic model used to garner the 218 vote for the Los Osos sewer is no longer functional under the current economic circumstances. Considering that 40% of the homes in Los Osos now have no equity to pay for sewer improvements, the sewer project as the County proposes, is economically dysfunctional. The economy is not your fault,” he said, “but you are responsible for ignoring the problem.

“The issue is not about the type of loan we get, but the burden of the cost on individual homeowners. We must make Los Osos water management sustainable for the existing social classes here including fixed income seniors and middle class blue-collar homeowners…”

Paige requested that the Board ask the Regional Water Quality Control Board to give Los Osos a five-year waiver “to prevent causing a real estate collapse in Los Osos and allow the real estate market time to reset itself. This would give the County time to reinstate the design-bid-build process, a plan using existing septic tanks and a STEP collection system at half the cost and environmental impact…

“The plan on the table forces Los Osos homeowners to cover the economic costs of the County’s historic estimates for growth that ignores new facts about saltwater intrusion, a failed, austere economy going forward, and social sustainability,” said Paige. “We need a waiver to buy us time, we need STEP/STEG back in the design-bid-build process, and we need our rights to onsite primary waste processing preserved and not taken from us without economic compensation.”

The only good news for Los Osos “Prohibition Zone” residents to come out of all this institutional dysfunction is incompetence sometimes has its own rewards: sewer bills won’t start coming until late next year.

Said Ogren at the April 27 update, “We will not be able to start collecting assessments on property tax rolls next fiscal year 2011. That was the earliest year we projected that might happen. But with the CDP (Coastal Development Permit) not happening until June, there’s an August 10 statutory deadline that we simply won’t be able to meet, so the earliest we actually start collecting assessments on property tax bills will be the fiscal year 2011-12 budget.”

If Gibson loses the election, nothing will change for the better in Los Osos. The only other candidate in the race is even more reactionary, more extreme than Gibson. Either way, that’s as close to a guarantee of four more years of unbridled Tammany Hall-style corruption as you can get. How do you deal with a corrupt process and four other supervisors who refuse to intercede in the name all of they were sworn to uphold – and a Public Works Director in bed with contractors?

Gibson had a chance to save his legacy and save thousands from having to flee Los Osos and the homes they hoped to die in after a lifetime of paying their taxes and planning for retirement, but he didn’t do it. He’ll never do it. The sewer is coming, he says, and it will cost homeowners $250 a month. Just listen to him. He says it only when pressured, tired of being asked why, angry at having to be the face and voice of the sewer and the community it will destroy. Nothing will ever change unless Gibson wins at the polls and fires Gibson.


There, visitor, now you know. Having attended a San Luis Obispo County Board of Supervisors meeting to glean some insight into the County’s vision for Los Osos, and after listening to some of the comments of both Los Osos residents, board members and staff, you are now more informed about what’s in store for Los Osos. You have also discovered that there’s a war going on there, and that the war’s been going on for a long, long time, although you never heard about it on TV in LA or read about it in any newspaper. Maybe all this has only convinced you to move there – out of the “Prohibition Zone,” of course. Or maybe you didn’t wait for the show to end to get back in your car and drive away. After what you’ve seen and heard, you might want keep driving until you’re out of the San Luis Obispo County entirely and never come back except to pass through or over. And if you do come back, don’t forget to bring more money next time. And water. Plenty of water.

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