Vengeful LeGros Is April Fool

Former Los Osos Community Services District Director Richard LeGros’ stinging press release on Thursday, April 1, announcing the Taxpayers Watch settlement was peculiar. It was peculiar because LeGros misinterpreted the terms of his own settlement. Unsurprisingly, LeGros’ vitriol toward the “CSD5″ overwhelms any substance that might be found in this incomplete agreement.

LeGros claimed that the settlement recovered $1,310,301.52 that had been “misappropriated” by the “CSD5,” when it doesn’t actually say that at all.

As a part of the agreement that was released by LOCSD legal counsel Jon Seitz last Thursday, the claims — made by Taxpayers Watch — against the individual defendants (Lisa Schicker, Julie Tacker, Chuck Cesena, Steve Senet and John Fouche) were dropped [see 1(c) under "The Settlement"]. Adding to that condition, the settlement disclosed a No Admission clause on page 3, which reads, “This agreement does not constitute an admission or acknowledgment by any Party of any liability or of the validity or invalidity of any claim or cause of action in the TW action, the SWRCB Action, the Bankruptcy Action or the Measure B Action.” The presumption of liability does not exist in the materials, which — ironically — were sent to me by Richard LeGros. He should be aware of that clause, and I’m sure he is.

The $1.3 million figure that’s being tossed around is a product of fuzzy math turned maniacal. Here is a cost breakdown of the monies involved in this agreement.

Under the agreement, the LOCSD’s insurer, American Alternative Insurance Company (AAIC), would pay $348,150 to the State Water Board and $55,000 to TW attorney Kate M. Neiswender. The total amount of payment from the AAIC comes to $403,150. There is no benefit (or “gift” as LeGros calls it) to Los Osos taxpayers in that exchange, as that money will not reach any homeowner who would be paying for the wastewater treatment facility. Like all insurance companies, the money coming out of AAIC is through the CSD from taxpayers who are paying insurance premiums, which are likely to be raised as a result of the settlement.

Burke, Williams & Sorenson (BWS) would pay $65,000 to Neiswender and $30,000 to TW attorney Philip A. Seymour’s attorney fees and costs. The total for attorney costs comes to $95,000. No taxpayer benefit there, since had then been no TW suit there would have been no legal costs. The settlement also shows that BWS has agreed to drop their claims as a creditor of the District. The total amount of invoices from BWS (combining the claims filed on May 7, 2007, June 6, 2008 and July 7, 2008) comes to $812,151.52. However, since this settlement has not been approved by the bankruptcy court, this amount is purely hypothetical. The actual cost will likely be reduced in bankruptcy by possibly 10%-20% (or even less than 10%) of BW’s billed expense ($81,215.15 – $162,430.30 or less). Again, no significant taxpayer benefit on a net savings of $81,000 after years of acrimonious haggling and legal bills. Even if the bankruptcy court were to approve the agreement as is and the District received $812,151.52, the LOCSD would receive 39% less than what LeGros claims. And that’s based upon LeGros’ fantasy spin, not the reality of the settlement language.

Under this agreement, if the agreement is signed by all parties — because it hasn’t been — and if approved by the Bankruptcy court, we won’t know how much money will supposedly go to the LOCSD to “balance the books,” or if any money even exchanges hands at all. We don’t even know who or how the money would be collected and sent to the LOCSD. We don’t know how much, if any, real savings each homeowner in the Prohibition Zone would receive, if the money somehow does find its ways to the CSD.

For the sake of argument, let’s use LeGros’ claim that the homeowners would directly earn savings from the agreement and give the $812,151.52 to all 4,700 property owners in the Prohibition Zone. If the agreement gets approved by the Court and $812,151.52 is waived by BWS, each home would hypothetically save around $172.79. These “savings” would not even cover one month of the looming sewer bill if you base the cost on the County’s extremely conservative estimate of $200/month. If everything in the settlement agreement would run like clockwork and these “savings” would come to fruition, homeowners would have to pay $77.21 for the first month of the sewer cost. Will the LOCSD being sending every homeowner a check for $172.79? According to LeGros, however, the damages received would be sent back to the LOCSD, not individual homeowners. Once again, no direct taxpayer benefit.

When LeGros tells you that homeowners would be receiving $1,310,301.52 in savings, he’s misappropriating the truth.

What started as a vengeance suit by Taxpayers Watch has now morphed into no-liability settlement agreement that could ease the financial crisis of the district. I appreciate the fact that TW would be dismissing its claims against the defendants, but LeGros’ slanderous prejudice against them is purely unfounded, and so was TW’s case against the “CSD5″– and so is the “savings” he claims that homeowners would get when everything is said and done.

Taxpayers Watch has constantly provoked the defendants since they initiated legal conflict against them on October 3, 2005. For nearly five years, as the Los Osos wastewater project debate raged on, TW continued filing claims against the LOCSD and the “CSD5″ individual defendants. At long last, the settlement agreement appears nigh. Clearly, no parties emerged victorious except for the lawyers, but the feud and the cost of the feud will live on as LeGros’ scorched earth TW “press release” preceding the settlement document declares anew.

Whether or not the agreement is finalized, homeowners will remain in the crossfire and become an unfortunate casualty in the sewer wars. There are no savings, just words, and no savings on words. In the war for retribution that consumes them, Taxpayers Watch and recalled board director LeGros have proven to Los Osos that they have nothing to give that they didn’t take and nothing to say that isn’t said in vengeance.

– Aaron Ochs

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