Sunday, October 15, 2017

Los Osos CSD municipal bond fraud question for SLO County Assemblyman, Jordan Cunningham

Hello Assemblyman Cunningham,

I'm a blogger in SLO County, and I'm researching a story involving a property tax assessment in Los Osos, a community in your District.

Now, I noticed in your recent mailer, titled, "Fire Tax Flames Out," that you write, "For years Sacramento has unfairly targeted some residents with an annual $152 Fire Tax. The Legislature finally repealed the Fire Tax, starting next year."


"This victory puts an end to the unfair burden on homeowners... "

And, on your Facebook page, at this link:

... you write:

"Californians pay too much in taxes. I'm proud to have worked to repeal the unfair Fire Tax on homeowners. Starting in 2018 we can all say good-bye to the Fire Tax."

With your focus of "unfair" property taxes, I'm now curious about your take involving a "special assessment" that appears on about 4,100 Los Osos property owners' tax bills as, "LOCSD WASTE TREATMT," for about $250/year.

First, a little background: The story that I am now researching involves a current SEC investigation into the Los Osos Community Services District for municipal bond fraud, and a key piece of evidence in the SEC's investigation is the LOCSD's "Summer 2000" newsletter, that I have made available for public download at this link:

Now, in that newsletter it describes (in detail) a sewer system that the LOCSD had been developing (for the previous two years -- since its inception in 1998) for the community of Los Osos -- a so-called "STEP/STEG" collection system with a "70-acre" treatment facility in the middle of Los Osos, comprised of several large ponds.

Additionally, the "Summer 2000" newsletter goes on to describe the 70-acre ponding system as "on schedule."

The newsletter also states that for the District's "better, cheaper, faster" sewer project to move forward, that, "yes," a property tax assessment vote would have to be passed by Los Osos property owners, and then the newsletter went on to outline a series of dire consequences that would result if the assessment did not pass.

The newsletter, along with a lot of other LOCSD marketing material during the run-up to the 2001 assessment election, did the trick, and Los Osos property owners passed the assessment a few months later.

However, as my previous investigative stories (including two New Times cover stories) on this subject clearly show, including at this link:

... a March 7, 2001, LOCSD report shows that the 70-acre ponding system that the LOCSD told "the residents and property owners" of Los Osos was "on schedule" in "Summer 2000," had actually completely failed by early February 2000.

A few years back, I asked an attorney if the above-scenario -- where a government agency produces a newsletter that states that a public works project is "on schedule," when the agency's own documents show that the agency was fully aware that the project described in the newsletter (in detail) had completely failed some six months earlier (and, frankly, was never even close to being a feasible option in the first place) -- constitutes fraud, and he told me, "Yes."

Furthermore, that property tax assessment vote that the District's newsletter heavily promoted for a "yes" vote (an election violation, by the way [Stanson v. Mott]), and that was eventually passed back in 2001 to fund a known-to-the-LOCSD-to-be-fake "project" (that never even came close to being built) allowed the LOCSD, in 2003, to sell nearly $18 million in municipal bonds, and those bonds are (present tense) 30-year bonds, that are secured by the roughly $1.2 million per year that is collected (by SLO County government) from those roughly 4,100 Los Osos property owners (at about $250/year) due to the "LOCSD WASTE TREATMT" assessment -- an assessment that doesn't expire until the year 2033, for a failed, fraud-based non-"project," that will never exist, of course.

In other words, the LOCSD's completely fraudulent "Summer 2000" newsletter -- and I mean, like, every word in that newsletter is a complete and easily documentable lie, and that was obviously produced by the District solely to trick Los Osos property owners into passing the assessment -- is STILL 100-percent relevant today, and will continue to be 100-percent relevant -- 100-percent in play -- until the year 2033, and, frankly, beyond.

So, with all of that in mind, my question is, considering that you call the "Fire Tax" an "unfair burden on homeowners," and that the community of Los Osos is in your District, what is your take on the "LOCSD WASTE TREATMT" assessment?

I mean, I'm assuming that the Fire Tax, at $152/year, was actually being used for SOMETHING, unlike the "LOCSD WASTE TREATMT" assessment, at about $250/year, which is funding nothing but a fraud for the next 16-plus years, so I'm very curious on what your take is on the "LOCSD WASTE TREATMT" assessment.

Finally, I want to point out that there is a massive stack of primary source evidence that shows that at least one of the LOCSD Directors in 2000, would/did benefit financially from the passage of the LOCSD's 2001 wastewater assessment.

Again, my question is: Considering that you refer to the "Fire Tax" as an "unfair burden on homeowners," what is your take on the fraudulent "LOCSD WASTE TREATMT" assessment, that's paying for absolutely nothing except to pay dividends to municipal bonds investors, on the backs of more than four thousand victims in Los Osos, including numerous low-income seniors?

What's your take on THAT tax assessment, and will you now work to repeal it?

If you have any questions regarding this email, please just ask.

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P.S. In my own beautiful editorial policy of (what I like to term) "open source journalism," I have cc'd this email to numerous media-types (and others), and have also published it on my blog, at this link:

Thanks again.