Junk Bonds: The Twice-a-Year Fleecing of Los Osos. . . Until the Year 2034

See that little graphic on the left? The one that reads "Taxing Agency?" Well, in the history of San Luis Obispo County, California, that little graphic, strangely, is one of... no... is THE best story, ever. Period.

What it is, is a screen shot I took of a twice-a-year tax bill that property owners in The PZ (by the way, I've come to love that acronym to describe the "Prohibition Zone" in Los Osos. The PZ. It sounds kind of cool, like, The OC, for Orange County, or, The IE, for the Inland Empire. The PZ, dawg!), pay, and, what that graphic also shows is exactly why my Homies in The PZ are being fleeced twice a year, and, according to SLO County officials, will continue to be fleeced twice a year... for the next 20 years.

Here's how:

I want to start with this handy, and kinda fun/kinda creepy (in a privacy sort of way), little tool that the SLO County Tax Collector's office makes available on its web site, found at this link:

http://services.slocountytax.org/Entry.aspx

And, what you can do at that interesting link is type in the name of any SLO County property owner, and, if you click through a few times, you'll eventually see the "View Bill" button. Click on that button, and presto, you can view any SLO County property owner's tax bill, right from the comfort of... wherever, these days.

Now, if you enter the name of a property owner in The PZ into the Tax Collector's kinda-creepy web tool, you'll see this line on their tax bill:

"LOCSD WASTE TREATMT $225.52"

See? That line is the exact line that shows up in that graphic above.

That line also happens to show up on nearly every property tax bill in The PZ, and ONLY in The PZ. Over 4,000 of them: "LOCSD WASTE TREATMT $225.52"

Here are a few choice examples I picked out:

Bill Morem, longtime Tribune editor, is a property owner in The PZ. Type the name "Morem" into the Tax Collector's little property tax look-up thingee, click around a bit, and BANG!: "LOCSD WASTE TREATMT $225.52" (Morem's one of my favorites in this story. I mean, he IS an editor at the Tribune, and it's me -- little ol' SewerWatch -- breaking the story... to him, that he's being fleeced twice a year. Great.)

Joyce Albright, a MAJOR supporter of the now-failed "mid-town" sewer plant/"picnic area," is a property owner in The PZ. Type the name "Albright" into the Tax Collector's little property tax look-up thingee, click around a bit, and BANG!: "LOCSD WASTE TREATMT $225.52"

One more fun example, and this one's a beautiful touch of poetic justice: Karner. The Karners -- the couple most responsible FOR "LOCSD WASTE TREATMT $225.52" (for another) 20 years -- are on the hook for nearly a $1,000 bucks year... for taxes... for a disastrous sewer non-project project, that THEY originally tossed together in their living room.

A "Socially Infeasible" "Strongly Held Community Value"

To get a feel for what a colossal disaster "LOCSD WASTE TREATMT" was/is, the following is just some of what three years (2007 - 2009), and $10 million dollars worth of careful SLO County analysis says about the former Tri-W "project" -- a "project" that the 1999 - 2005 Los Osos CSD spent (read: wasted) some six years and $25 million developing, and that called for a sewer plant/"picnic area" in the middle of Los Osos, and now, is a distant memory, that will never exist.

According to the County's Pro/Con Analysis:

- "(The LOCSD's Tri-W project's) downtown location (near library, church, community center) and the high density residential area require that the most expensive treatment technology, site improvements and odor controls be employed."

and;

- "It (The Tri-W sewer plant) has high construction costs..." ($55 million. The next highest treatment facility option is estimated at $19 million.)

and;

- "Very high land value and mitigation requirements"

and;

- Tri-W energy requirements: "Highest"

and;

- "Small acreage and location in downtown center of towns (sic) require most expensive treatment"

and;

- "higher costs overall"

and;

- "Limited flexibility for future expansion, upgrades, or alternative energy"

and;

- "Source of community divisiveness"

and;

- "All sites are tributary to the Morro Bay National Estuary and pose a potential risk in the event of failure. Tri-W poses a higher risk..."

and;

- "NOTE: It was the unanimous opinion of the (National Water Research Institute) that an out of town site is better due to problematic issues with the downtown site."

Furthermore, according to the March 2009, "Los Osos Wastewater Project Community Advisory Survey," conducted by county officials, "Only (9-percent) of (Prohibition Zone) respondents chose the mid-town (Tri-W) location (as their preference for the treatment facility)."

Additionally, in a June 2009 memo to the California Coastal Commission, the SLO County "Project team," writes, "The Project team, given the clear social infeasibility issue associated with Mid Town (Tri-W project) and the infeasible status of the LOCSD disposal plan [bolding mine], believes that if either of those options are deemed by decision-makers to be the best solution for Los Osos, then serious consideration should be given by the Board (of Supervisors) to adopt a due diligence resolution and not pursue Project implementation."

I have a question here: If building a sewer plant in the middle of Los Osos is so "socially infeasible" (I mean, of course), then why the fuck was seven years and some bazillion public dollars wasted on attempting to build one there in the first place?

Journalistically speaking, the answer to that question is excellent.

As I first exposed in my 2004 New Times cover story, and re-reported about a zillion times here on SewerWatch, the SOLE reason the 1999 - 2001 LOCSD wasted seven years and a bazillion public dollars on some crazy downtown "picnic area"/sewer plant, that thousand of PZers will be paying for over the next two decades, is, wait for it... (and, I realize it SOUNDS like I'm making this up, but I'm not): A "strongly held community value" that ANY sewer project for Los Osos MUST include a sewer plant that ALSO doubles as a "centrally located recreational asset," and, therefore MUST "meet the project objective of centrally located community amenities."

How... great... is...that!

On one hand, there's the 1999 - 2001 LOCSD wasting nearly seven years and a bazillion public dollars on some crazy downtown "picnic area"/sewer plant solely due to some bizarre, and completely unsubstantiated (of course) "strongly held community value" that any sewer plant for Los Osos must be constructed in the middle of town, just so the residents could more easily access the "picnic area" IN their sewer plant (hilarious, and, unbelievably, true), and then, on the other hand, nearly a decade later, we have SLO County officials calling the LOCSD's mystery "strongly held community value," "socially infeasible." (The amount of genuine humor that is found in this story -- a story about a public works project gone horribly, horribly wrong -- is amazing. And the really funny thing is, my Peeps in the PZ will be paying for that "socially infeasible" fake "strongly held community value" until the year 2034.)

Los Osos CSD account, Amphi Haber, recently told me in a phone interview, that over 4,000 PZ property owners are currently paying that $200-something annual assessment, for a public works disaster, and they are paying it twice a year on their property tax bill.

Over 4,000 PZ property owners, twice a year, until the year 2034.

"$1.1 million a year," Haber said, for "LOCSD WASTE TREATMT," that will NEVER exist.

"Yes. The property owners of (the) Los Osos (Prohibition Zone) are paying for a public works project that will never exist," Art Bacon, SLO County Tax Collector, and a PZ property owner himself, recently told me in a phone interview.

"Those were 30 year issuance bonds," Bacon added.

He explained that not only has a version of this line -- "LOCSD WASTE TREATMT $225.52" -- appeared on PZ property owners' tax bill since 2004, it will continue to appear on that property owner's tax bill for the next 20 years, and, according to Haber, that money is used to pay back the bonds that the early Los Osos CSD originally sold, to fund their now-failed, highly embarrassing, "mid-town"/"picnic area"/sewer plant disaster, that will never exist, and, according to state water officials, at a "a million gallons a day" for seven years, led directly to more water pollution than the Exxon Valdez and BP Gulf oil spills... combined, thousands of times over.

That line -- "LOCSD WASTE TREATMT $225.52" -- stems from an assessment vote in Los Osos back in the early part of 2001. The vote was successful, the assessment passed, and that's where "LOCSD WASTE TREATMT" first got locked into a PZ property owner's tax bill.

And it's that money, from that assessment, that is [present tense] funding the now-miserably-failed Tri-W sewer non-project -- a DOA-non-project that will never exist -- that the 1999 - 2000 LOCSD wasted seven years, and some $25 million of Los Osos' money pursuing (and that figure doesn't even account for the tens of millions of dollars that the various County, State, and Federal government agencies ALSO wasted tending to the LOCSD's Tri-W disaster.)

No doubt about it: The moment that assessment vote passed, in early 2001, that was that: "LOCSD WASTE TREATMT" was instantly locked into a PZ property owners' tax bill... for the next 30 fucking years.

"Summer 2000"

I recently sent an attorney this email:

- - -
Is this fraud?:

A local, elected government official, is also a professional marketer.

In her role as an elected official, she, using her professional marketing skills, writes and produces (using public funds) an official newsletter from that government agency, that she then mails to every property owner in her District.

In that newsletter, she gushes about how "on schedule" a huge public works project, that the District is proposing, is.

However, a few years later, subsequent investigation reveals that at the time the elected official produced that newsletter, the project that she's raving about in her newsletter had ALREADY FAILED, and her own government agency documents show she KNEW it had already failed when she produced that newsletter.

In other words, the elected official used the town's public money to produce a newsletter that lied to "every" property owner in the town, about a huge public works project, and those lies played a major role in tricking the town's voters into passing the assessment -- an assessment that they are STILL paying today (and will be paying for the next 20 years) for a public works project that never even came close to working, and, in fact, had already failed at the time of that newsletter.

A knowingly false newsletter, produced by an elected official, solely to dupe property owners into voting for a tax assessment, leads to the passing of that assessment, but the public works project that the assessment was funding, had ALREADY FAILED at the time of that newsletter.

Is that fraud?

Thank you in advance for your answer!
- - -

That attorney replied, "Yes, that is fraud."

Here's why I sent that attorney that email: I can now show, using just two official documents, how that 2001 "LOCSD WASTE TREATMT" assessment vote was based on nothing but fraud -- deliberate fraud, directly from the 1999 - 2001 Los Osos CSD. It just couldn't be any clearer.

The first of the two documents is the little known, yet surprisingly excellent (at least in the context of this story), "Los Osos Community Services District Alternatives Report for Wastewater Treatment," dated July 25, 2000.

On page 3, it reads:

"On June 20, 2000 the first workshop was held with the (LOCSD) Wastewater Subcommittee... The clearest result of the first workshop was that Resource Park (the 11-acre Tri-W site) was found to be the best site (for the LOCSD's mid-town wastewater treatment plant)."

That one line goes straight to the heart of why nearly every PZ property owner is being fleeced every time they cut a check for their property tax bill.

What that line shows is that by "June 20, 2000," the "drop dead gorgeous," "70-acre aquatic park/sewer plant, also planned for the mid-town site in Los Osos, that was heavily hyped by Nash-Karner from 1998 - 2000, with a "maximum monthly payment of $38.75," and was the "basis for forming the LOCSD" in the first place, AND solely responsible for killing the County's then-"ready to go" sewer project (an extremely important, yet, often overlooked, point in the entire history of the Los Osos sewer mess), had failed by June 20, 2000.

I mean, clearly, that one alleged workshop (a CRITICAL "workshop" that the LOCSD, these days, can't even document occurred. I recently sent a Public Records Act request to the Los Osos CSD, for all the documents associated with that one workshop, and, District Administrative Secretary, Ann Kudart, sent me this, "I can find no documentation responsive to your request."), already screams "FRAUD!," and I'm just getting started.

It was that ONE intensely important "workshop" -- a "workshop" that apparently never even took place -- where the LOCSD first locked in the 11-acre Tri-W site for their SECOND project, with absolutely ZERO public input. That date was, uh, allegedly "June 20, 2000," according to a District document, which means that the LOCSD's FIRST sewer disaster -- the fake "70-acre aquatic park" that was used by a small handful of community members to originally form the Los Osos CSD in the first place, in 1998... just so they could cash in, had already failed by "June 20, 2000".

Document #2, in the realm of SewerWatch, where a major theme here is how easily the public (and government officials, for that matter) can be duped into doing really stupid things, is great!

It's the District's first Bear Pride newsletter, from "Summer 2000," and it's that kind of "behavior based marketing" bullshit, that goes straigt to the heart of what SewerWatch is all about.

That so-called "news"letter [read: taxpayer funded propaganda] was written and produced by then-LOCSD vice-president, and professional marketer, Pandora Nash-Karner, and was mailed to "every property owner and resident" in Los Osos.

"I did design and produce (for FREE) the first two Bear Pride newsletters," Nash-Karner writes in an email obtained by SewerWatch.

In her very first LOCSD "news"letter, Nash-Karner does something that, after being saturated with it for the past 13 years, most Los Ososans are now VERY familiar with -- she uses her "behavior based marketing" to lie to every resident in Los Osos... using their public money, of course.

In that "news"letter, she's STILL hyping her long-dead "drop dead gorgeous" "70-acre aquatic park/sewer plant as "on schedule" ("The proposed project is on schedule." [page 2]) -- the same "project" that Nash-Karner, and her husband, Gary Karner, tossed together in their living room, in 1997, and then heavily sold to the citizens of Los Osos throughout 1998, and, according to Karner, was "the basis for forming the LOCSD" -- AFTER her own document shows that that disaster of a non-project had ALREADY failed... BEFORE she popped out that lie-filled "news"letter raving about how "on schedule" her already-failed disaster was.

By the way, that June 20, 2000 "workshop," that, apparently, never even happened, was a "workshop" of the LOCSD's "Wastewater subcommittee." Now, go to the last page on that "Summer 2000" "news"letter. It reads: "LOCSD Wastewater Standing Committee Members: Chair, Pandora Nash-Karner, LOCSD Vice-President."

The "date" on Nash-Karner's "news"letter is "Summer 2000" (already past "June 20, 2000") however, according to sources, the actual publication date is late July, 2000... a full month AFTER "June 20, 2000."

Incidentally -- and, because this point involves Your's Truly, and in a very cool way -- I'm sooooo flattered here: My first New Times cover story, that exposed how Nash-Karner's "70- acre aquatic park," "better, cheaper, faster" disaster was on the verge of failing, and then it failed, was published on July 6, 2000.

Without even knowing this, I know this: Due to the timing of that cover story, without question, the FIRST Los Osos CSD Bear Pride "news"letter, was a direct reaction to my New Times piece. In other words, I'm solely responsible for launching the Los Osos CSD's official "news"letters. How... cool... is... that?

In fact, if you really want to have some fun with the sequence-of-events here, the week following the publication of Problems With the Solution, New Times published a rebuttal to my story from... well, do I really need to say?

That rebuttal would prove to be nothing but lies. Every word, except maybe, "and," and "the." (and, thank you in advance, Rachel Maddow, for allowing me to steal your great joke.)

[Journalism lesson alert! It's at this point in the story where I like to show the important journalism lesson in play here -- the lesson of: "The disastrous consequences of giving 'fair and balanced' to the agenda-driven," journalism lesson.

I mean, look what happened there. Journalistically speaking, it's very interesting: My 100-percent accurate cover story is published, then Nash-Karner, of course, comes rolling in the very next week, with a 100-percent lie-filled response. New Times simply goes to the, "Hey, fair and balanced," card, publishes Nash-Karner's lie-filled response, and that was that. All local media, including, strangely, New Times, failed to perform the slightest bit of follow up to my intensely newsworthy story (and, hey, why should they? After all, the vice-president of the LOCSD is saying how "inaccurate" my 100-percent accurate story was, so, "I guess the freelance kid got it wrong, move along," right?) and the story just faded away, and it was right there, in the Summer of 2000, immediately following the complete failure of the Karners' disastrous DOA "70-acre aquatic park" scam, when the worse-than-nothing local so-called "media" completely went to sleep on this over-the-top newsworthy story, is when the Tri-W fraud began -- a fraud that the PZers are still paying for today, and will continue to pay for, for the next 20 years.

One more important, and very interesting, quote in Nash-Karner's response to my cover story makes the already foul stench of fraud associated with that 2001 assessment vote, overwhelming.

In her response, published on July 14, 2000, Nash-Karner is STILL selling her known-to-her-to-be-DEAD "aquatic park," despite the fact that her own Wastewater Subcommittee's documents show that that project failed entirely, at least one month earlier, during some alleged, 1-day, undocumented, behind closed doors, so-called "workshop," on June 20, 2000, that Nash-Karner allegedly "Chaired."

Flat-out lying -- right to the faces of the editors at New Times (which included Steve Moss at the time), to their readers, and, of course, and most importantly, to the people of Los Osos, again.

Giving "Fair and Balanced" to the agenda driven. A colossal journalism fuck-up.... just ask The PZ property owners that will be paying for that fuck-up... until the year 2034.]

So, to summarize, and to be perfectly clear here, the question of fraud involving the LOCSD 2001 assessment vote, boils down to this: Why would then-LOCSD vice-president, Pandora Nash-Karner, pop out a newsletter in late July 2000, where she raves about how "on schedule" her "70-acre" mid-town "aquatic park" is, where she also writes about how "an assessment vote will need to be passed" to fund her "on schedule" "project," when her own Wastewater Subcommittee documents show her DOA non-project had already failed a full month BEFORE that "news"letter.

There's only one answer to that question, and my Home-Boy, the above-mentioned attorney, nailed it: "Yes. That is fraud."

Fraud, designed to deliberately deceive Los Osos property owners into voting for the Tri-W scam assessment, and it worked.

There is simply no other explanation: Beginning in "Summer 2000," Nash-Karner used the people of Los Osos' money to lie to them, about really, REEEEELLY important things, in a deliberate effort to trick the property owners of The PZ into voting for an assessment for a fake project, that she already knew had failed, just so she could then cash in on that assessment money, and... it... worked!

"$50,000 Fixed Fee"

Just when you thought this wild story couldn't get any better... dear readers, I now present to you my bonus document: Pandora Nash-Karner's amazing, December 18, 2000, "Proposal for Consulting Services in connection with LOCSD Wastewater project."

The list of things that are SO wrong with that fascinating document is huge, but I do want to highlight a few quotes:

In her crazy "proposal," for a "$50,000 fixed fee" (of course), Nash-Karner's plan for an "information campaign on behalf of the Los Osos Community Services District" called for such marketing techniques as, "on-going proactive contact with members of the media who can cover the wastewater project," and, "the identification of opinion leaders," and, "a multi-tiered strategy for a Public Information Program that will effectively educate the community as a whole," and, "... customized strategies may include a full range of tools... such as... columns (in the local newspapers)."

1... 2... 3. Boom. Done. Three documents. Clear fraud.

And, that's why I find a certain type of PZer so fascinating these days: The PZ property owner from, oh, let's just L.A., that moved to Los Osos, in, oh, let's say in 2008, and is now paying that "LOCSD WASTE TREATMT $225.52" Tri-W scam assessment, every year, year after year, for the next 20 years -- for an over-the-top disastrous public works project/scam... that will never exist -- and, due to Nash-Karner's "tools" in ALL of the local media, those property owners, today, have NO IDEA why they are even paying that assessment, including Nash-Karner's long-time "tool," the above-referenced, Trib editor, Bill Morem. Hilarious.

Think about that, it's very interesting: Unless those new-comer property owners somehow stumbled onto SewerWatch and read up, they have no clue to the meaning of such critical phrases as, "bait and switchy," "better, cheaper, faster," "SWA Group," "Questa Study," just on and on, and what that means is that those property owners are being fleeced $220-something a year, and don't even know it.

Over 4,000 properties. Some $1.1 million per year... for a public works disaster/fraud, that will never exist.

Almost unimaginably... gets worse.

I recently phoned both the SLO County Auditor, Jim Erb, and the SLO County Tax Collector, Art Bacon, and asked them both the same question:

"What happens in California if a (30 year) property tax assessment passes, but, ten years later, it turns out that the assessment was based on nothing but fraud, and the project that the assessment was/is (funding), will never exist, BECAUSE the assessment was based on nothing but fraud? What happens to the assessment?"

They both had the exact same answer, "I don't know. I've never heard of anything like that before."

Erb also wrote in an email, "The assessment you are referring to is to repay Bonds that were issued by the LOCSD and were also approved by the voters of Los Osos. The money was borrowed and is being paid back, investors have in good faith purchased the bonds."

He added, "I do not know of a way to cancel the bonds other than to pay them off. If you believe there was fraud, intentional deception made for personal gain or to damage an individual, you should contact local law enforcement, the District Attorney, or even the Grand Jury may be able to help. That is exactly what I would do."

To which I replied:

- - - Hello Jim,

Thank you VERY much for your response, and, I realize that you would have no way of knowing this, but your response is actually funny.

The funny part is this:

"... you should contact local law enforcement, the District Attorney, or even the Grand Jury may be able to help."

That's funny, because I HAVE contacted ALL of those agencies about this amazing story -- over and over and over again, for the past 8 years (and even published numerous stories ABOUT me contacting them) -- and they ALL flat-out refuse to lift a finger on this tragic/amazing story -- a story that involves a blatant fraud that, to this day, is ripping off Los Osos property owners to the tune of $1.1 million/year, and will continue to fraud them out of over $1 million/year, until the year 2034.

Here's the HUGE, #1 problem in play here: The person that is directly responsible for the fraud is actually one of your SLO County government colleagues, former LOCSD Director, and current SLO County Parks Commissioner (appointed by Supervisor Bruce Gibson), Pandora Nash-Karner.

And, of course, Pandora is also close friends with the SLO County DA's office, and has close friends in the SLO County Sheriff's office [former SLO County "Under Sheriff," and former Los Osos resident, Martin Basti, comes to mind.]

To make matters much, MUCH worse, the Counsel for the SLO County Grand Jury is the County Counsel's office, the exact same Counsel for the SLO County Parks Commission, which means Pandora is a client of the same Counsel that also has the SLO County Grand Jury, the SLO County Board of Supervisors, AND the SLO County Sheriff's office as clients.

And that's the exact reason why I recently ended up on the phone with you and Mr. Bacon: to see if there was some OTHER process -- OTHER than the heavily conflicted SLO County Sheriff's office, Grand Jury, and/or DA's office -- to help Los Osos property owners from getting ripped off from a blatant fraud every time they cut a check for their property tax bill. But, apparently, according to you, there isn't.

Soooo, I guess that's that, huh? There's nothing that the SLO County Auditor, or SLO County Tax Collector can do... uh, either?

Very interesting. Well, at least I can now report that your offices know about the fraud.

Anyhoot.... Thank you again for the information. I really do appreciate you taking the time to do that. I'll now try to find a different route to get the property owners of Los Osos some badly needed justice.

Thanks again,
Ron
- - -

Finally, Haber (remember her? Los Osos CSD accountant), told me that the $1.1 million collected from property taxes in The PZ each year (because of line "LOCSD WASTE TREATMT $225.52," and that goes to repay those bonds from 2001 -- boy, that brings a WHOLE new meaning to the phrase "junk" bonds, yes?) is deposited to US Bank. There's a branch in Los Osos.

Haber also supplied me the name of the US Bank representative, Stephen Rivero, that oversees those particular bonds -- bonds, remember, that were originally sold to pay for a fraud of a project, that will never exist.

So, I took a reporting long shot, and emailed Rivero:

"Hello Mr. Rivero,

I'm researching a story on Los Osos, CA, and I was referred to you by the Los Osos CSD's accountant, Amparo Haber, involving a quick question I have about the bonds the LOCSD sold back in the early 2000s to fund their (now failed) wastewater treatment project.

Ms. Haber recently told me that about $1.1 million/year of Los Osos property owners' money is going to pay the balance on those bonds (until the year 2034), and I was wondering if you, or, perhaps, someone else in your office, could please supply with me the list of investors that purchased those bonds?

A pdf file would be great!

If you have any questions, please just ask.

Thank you in advance,
Ron
- - -

Not surprisingly, my long shot did not pay off. Rivero did not respond to my email.

But how great would that be to this story? The names of the investors that are cashing in -- to the tune of $1.1 million/year -- for a fraud of a public works project, that will never exist.

Now watch -- the dramatic ending: With this post, I've now shown, using nothing but primary source documents, how the property owners in The PZ, including an editor at the Trib, AND the SLO County Tax Collector, himself, are being fleeced every time they cut a check for their property taxes, and will continue to be fleeced for the next 20 years, by funding a "fraud" of a non-project that will never exist, and nothing -- absolutely nothing -- will happen.

The worse-than-nothing local (so-called) "media" won't lift a finger to report on this stunning story, the heavily conflicted SLO County agencies won't lift a finger to help the property owners of the Prohibition Zone, and the heavily conflicted local politicians won't lift a finger to seek a shred of justice for the fleeced... in The PZ, dawg.

###

[Originally posted on the blog, SewerWatch -- sewerwatch.blogspot.com -- 5/1/13]