Saturday, December 03, 2005

How To Make $50,000 In Three Minutes

Here's my get richer quick scheme. It has to do with the equity you have in your Los Osos home. I guarantee that if you do your homework, present your information to the new Los Osos CSD board and request them to tow the line on proposition 218, your property will be worth that much more when the next sewer is funded.

Your equity under fire. While you were squabbling over where to put the sewer and how it was to be designed one of the biggest tax assessment scams in the history of California was going on right under your nose. Over $100,000,000 dollars of our equity was potentially assessed in conflict with California Constitutional law.

The cover up continues. The SRF lender, the State, has called for a two thirds vote on the Los Osos sewer project. It's a tacid admission that the loan paper trail hides the fact that you were being ripped off. I'm doggedly persuing the paper trail but it will take time. Here's the potential list of State Constitutional law violations stealing your assessment rights:
  • Original loan application states NA for “Not Applicable” where asked if vote was taken.
  • No input is made as required on the SWQCB input checklist about voters.
  • No division of general vs. special taxes.
  • Engineers report eventually characterizes revenue stream as an assessment.
  • No vote on cost increase from $47 to $69 Million Approved by resolution.
  • No section 4 compliance on increased funding resolution.
  • No bifurcation of special vs. general taxes on increased funding resolution.
  • No mailing of calculated assessment with voting card on increased funding resolution.
  • No record of vote on increased funding resolution.
  • No vote on cost increase Resolution from $69 million to $97 million.
  • No section 4 compliance on second increased funding resolution.
  • No bifurcation of special vs. general taxes on increased funding resolution.
  • No record of vote on increased funding resolution.
  • SWQCB requests August 25 2005 LOCSD supply “Reimbursement Resolution”.
  • No Resolution was ever supplied.
  • Agency Reimbursement Resolution is missing in contract documents, Exhibit L.
  • Loan is funded anyway.
  • SWRCB attempts to repair reimbursement policy of the LOCSD after the fact, by unilaterally demanding a 2/3 vote.
Here's where the State Constitution could save you seventy dollars a month and increases your equity by $50,000.The original engineering report charcterizes project funding as an "assessment" and the criteria for the SRF federal loan is that a portion of the money MUST go to Estuary improvement to get the loan. (The figure I have been hearing is 1/3).

Then according to prop.218 your sewer bill would be reduced by that 1/3 because that money is required to come from the "general tax" fund and cannot be billed to your property as a "special tax". You just took three minutes of your time to point out the fact to the new LOCSD. Your sewer bill just went down by one third. Your property equity just went up by $50,000. Look at the home prices in Morro Bay and Cayucos. Home prices in Los Osos are way less. If you push for prop.218 compliance they will rise to be more in line with like properties in the area. But you must do your part.

The project is halted because about $100,000,000 dollars of it was slid under the Prop. 218 table. It's a total fallacy that the new board scuttled the loan. The SWRCB got cold feet on their Prop. 218 'negligence'. THEY are the lender responsible for all the paper work being straight. THEY got frightened about this loan. The State is supposed oversee and administer the loan so it is in compliance with 'state law'. That's a little like letting the fox watch the sewer house. What we ended up with was a fox caught red-handed with prop 218. shredded in its jaws. Why do you think they are NOW demanding a 2/3 vote on the sewer project? They really have to go back to the base cost of the loan when the loan application was turned in and start from square one.

The loan needs to be rectified with State law. And that's where you can make $50,000 in three minutes. Not only can we decide what is an affordable sewer, we also can set a limit on what will be spent. Any cost increase has to again be approved by the voters. It's all in prop. 218. EPA benchmark cost for your sewer is 4% of your income. They are the original lender. So figure that is about what you should pay. The Code is here: ARTICLE XIII D

Here's where you can protect your home equity. These are the requirements for assessments under Prop. 218. The measure places extensive requirements on local governments charging assessments. Specifically, the measure requires all new or increased assessments--and some existing assessments--to meet four conditions.
  • First, local governments must estimate the amount of "special benefit" landowners receive--or would receive--from a project or service. Special benefit is defined as a particular benefit to land and buildings, not a general benefit to the public at large or a general increase in property values. If a project provides both special benefits and general benefits, a local government may charge landowners only for the cost of providing the special benefit. Local government must use general revenues (such as taxes) to pay the remaining portion of the project or service's cost, i.e., bay pollution improvments.
  • Second, local governments must ensure that no property owner's assessment is greater than the cost to provide the improvement or service to the owner's property. This provision would require local governments to examine assessment amounts in detail, potentially setting them on a parcel-by-parcel or block-by-block basis.

  • In the present assessment scheme 25 foot lots are bunched with 50 foot lots.Not meeting the 'greater than' requirement in Prop. 218 because potential buildout of a 25 foot lot is 1/2 that of a 50 foot lot. Your lot with a height restriction should be treated likewize. It limits your square footage for the benefit of the general public. These calculations were never made in the engineers report. Costing affected lot owners thousands of dollars in equity.

  • Third, local governments must charge schools and other public agencies their share of assessments.
  • Currently, public agencies generally do not pay assessments.

Ready to get to work? I don't care what the color of your sewer skin is. I'm an equal opportunity employer. Betcha never made $17,000 Dollars a minute before.

Your homework is here. You want to help me? Contact: mongoboo at charter dot net.

14 Comments:

Blogger Shark Inlet said...

While some (or many) in Sacramento may not have looked carefully over all the details in the SRF contract to begin with, the fact that the LOCSD broke the contract sort of makes your points moot.

When the LOCSD stopped (even temporarily) the construction they violated the terms of the deal. No matter how much Ann and Dan would like us to believe otherwise, the contract language is very clear ... only the state has the authority to order a temporary "stand down".

You may be on to something here, but I can't see how we can leverage it now that our LOCSD has essentially failed to follow through on their obligations.

9:45 PM, December 04, 2005  
Anonymous Anonymous said...

Sharkey, something has been bothering me greatly, If the only "entity" that could legaly stop construction on the TriW site was the SWRBC (water gods).
Then why did they stop?
Publicworks says its because the contract is between the CSD and the contractors, you say the CSD did not have that auhtority. At what microsecond did the deal fall through? When the contractors,( I don't blame them a bit for being jittery)Said "Get your poo toghether, or we are outa here! No more work because the CSD says so?" (even though we could LEGALY keep going and feeding at our 50% overestimate trough?)
That sounds decidedy un captitalizial, uncrapitaliz, uncapitaliexpealidouciose, oh heck, you know whatI mean. Those people are REAL sharks_ maybe you can give me an insite?Mike Green

10:01 PM, December 05, 2005  
Blogger Shark Inlet said...

What I understand about the SRF contract is that the LOCSD is the contractor for the project which the state owns. The SWRCB has the authority to change aspects of the project which it owns ... the contractor cannot unilaterally change the project. (Sort of like when you hire a company to paint a bathroom they cannot paint the living room instead without your approval and still expect to get paid.)

The LOCSD has an agreement with three construction firms to do the work. They are formally subcontractors. They follow the orders of the LOCSD which is charged in the SRF contract to get the collection system and TriW plant online.

Unless the CSD goes to the state and says "we want to change the project in this particular way ... do you approve" and the state actually does approve, the CSD has violated terms of their agreement with the SWRCB. If the CSD wants to break their agreement with the state and tell the contractors to continue with some work or to pay the contractors to do nothing, the state doesn't care one bit ... they are just not going to pay.

Again, if you hire a painting firm to paint your bathroom but they choose to paint the living room instead ... the firm should still pay their employees for their labor. Furthermore, if the painter's boss says "don't do anything to paint the bathroom, but I'll pay you anyway" but doesn't get paid for painting the bathroom it would seem that the painters may feel in a bit of a bind ... they've done exactly what they've been asked to do by their boss but their boss is pretty clearly not going to have any income to pay them back for their efforts (or at least their time). It won't be too long before the painters just up and leave the job ... who would want to work for a boss who won't pay you?

Whether Steve's point about getting out of the SRF deal is dead on right or not (newsstandgreg and Ann seem to believe him, but lawyers I know are much more hesitant), it does seem that something fishy happened with the loan in Sacramento. I can't figure out whether it was intentional or simply an oversight.

Furthermore, whether Steve is right or not, we are most definitely in a bind. Whether you want to blame the previous CSD or the SWRCB staff or the RWQCB or the CCC or those who have filed lawsuits in the past or the current CSD directors, one must admit that we are in a most serious bind.

I have the tendency to remember only the most recent past when assigning blame. Whether the previous CSD and the state screwed up left and right, by the time we got to October 1, the new group was pretty much the group forced into making decisions. My question is ... are we better off now than if the current CSD board had not stopped the construction and chose not to fight Measure B? I would suggest "no", but in the long run, we'll see how things play out.

Maybe we'll get lucky and this new board can pull a rabbit out of their asses but it really doesn't seem very likely.

Some would brand me as a supporter of the previous board and the TriW site and as someone who is willing to overlook the many ways that our community has been screwed by folks at the state level. While recognizing many of the problems are not our fault, we have most certainly made many of them ourselves. As an example, we formed a CSD who did what they said they were going to do ... put in a plant downtown ... and then after it was too late to change course we decided to vote them out and put in a new group, a group who promised to stop construction and start the whole process all over. While not in love with TriW (Ann will hammer me for saying this), I believe it to be a huge mistake to start all over because the extra delays will cost us big dollars even if we aren't fined.

11:35 AM, December 06, 2005  
Blogger Spectator said...

This comment has been removed by a blog administrator.

3:45 PM, December 06, 2005  
Blogger Spectator said...

This has been an excellent discussion. In the meantime we nned to save the property owners from a gift of $450,000 in public funds to lawyers and litigants who fought the previous csd and LOST their cases but put their cases on appeal. Now the LOCSD wants to settle the suits. I have heard that $125,000 is maybe going to Al Barrow who has cost the taxpayers a fortune in the past with suits against the LOCSD that failed (lost). If true, this is a criminal outrage.

3:54 PM, December 06, 2005  
Anonymous Anonymous said...

Sharkey, Thank you, I too suffer from short term blame dementia, Maybe we should start a support group? Mike Green

9:18 PM, December 06, 2005  
Blogger Steve Paige said...

Thanks for the good discussion. Were I find myself is at a crossroads. Two totally different issues. The location and history of the sewer, its 'rancor' and local players. And the rock nobody wants to uncover, Prop 218 irregularties. 2/3 vote means "Assessment" not user fee. Assessment means tax separation where the general public pays for some of the benefit to the watershed and National Esturary. I think our past failures are really hard to pin on the people of Los Osos. I believe that the forced time line was part of the problem like the now LOCSD claims. It's time to take a breath and allow the loan to seek its own level with respect to the State Constitution.

4:51 PM, December 07, 2005  
Anonymous Publicworks said...

Here's an interesting thought.

The loan is legal, and it is a user fee. So you are not obligated to pay a fee, unlike an assesment. So, you don't have to hook up. If they try to force you to hook up, it becomes an assesment, but it's not because it's a user fee.

You still have to do something about your poo-poo though.

You still have to deal with the enforcers if you don't hook up.

Now if only one person hooks up, does he owe $135 million??

No wonder the state wants an assesment.

8:26 PM, December 07, 2005  
Anonymous Publicworks said...

Los Osos has more than it's share of blame.

The CSD formation was a Los Osos decision - that one can't be pinned on anyone else (well the idiots on the Coastal Commission get an assist).

8:45 PM, December 07, 2005  
Anonymous Anonymous said...

A Los Osos Decision? That's Good!
I would like to make a simple supposition
That when you make a decision based on untrue statements, it is quite possible that your decisions will be wrong. In fact, it's almost inevitable. This is nothing new.Mike Green

9:10 PM, December 07, 2005  
Anonymous Publicworks said...

Your statement is exactly right.

Elections are like houses, Buyer beware.

9:47 PM, December 07, 2005  
Blogger Steve Paige said...

Public works said the loan was legal. I disagree,you can't call the loan an apple then an orange to "provide new athority to raise taxes". The Constitution states: "Nothing in this article or Article XIIIC shall be construed to:(a) Provide any new authority to any agency to impose a tax,assessment, fee, or charge". In Court the burden of proof is with the State.

5:13 AM, December 08, 2005  
Anonymous Anonymous said...

I know that hardley anyone will read this old blog.
But ,for fun I sometimes do.
Anyone else?
Anyway, I just had to get in (possibly) the last word,
Elections are nothing like buying houses, at least around here.
There is a little thing called "disclosure"
I get quite a chuckle remebering when I bought my home in Los Osos, The seller had to disclose that the sewer that was going to be built soon, would cost me about 10K.That was 1990,Mike Green

7:34 PM, December 09, 2005  
Anonymous Anonymous said...

Hey shark- You say the CSD can not change what they submitted to rwqcb well the previous board sneakily changed the tri W plan constantly it morphed from an underground plant to a huge towering sludge factory. Now that what I call a change in contract. If you talk about painting an bedroom and then expect to get paid for the living room too That exactly what the previous board did to us . So ?

11:02 AM, February 27, 2006  

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