Cambria CSD wins $1.75 million settlement in lawsuit over water treatment plant
A legal battle over the design and construction of a $13 million Cambria water treatment plant has been settled, according to documents approved at a Jan. 27 meeting of the Cambria Community Services District’s board of directors.
The district sued consultant firm CDM Smith more than three years ago and has been litigating the case ever since.
The so-called “action with prejudice” agreement calls for CDM to pay a $1.7 million settlement to the CSD.
In exchange, the district agreed to not pursue any further legal action against the firm, based on the allegations already made, unless “subsequent discovery of different or additional facts” are found about the case, details not covered by the settled suit.
As CSD counsel Tim Carmel said via email Feb. 13, “The release is limited to claims related to the complaint.”
The district also is allowed to recover, separately, “reasonable costs, including legal fees,” the attorney wrote.
As Carmel told district board members Feb. 11, the estimated legal costs for work done on the lawsuit — by his firm, Carmel & Naccasha, and by Rutan & Tucker of Costa Mesa — total about $250,000.
In his email, Carmel wrote, “There are no restrictions in the settlement agreement regarding how the money can be spent, but it must be accounted for correctly, just like any other governmental funds.”
When the suit was filed in 2018, the CSD estimated it had already spent about $3.5 million on the expenses it claimed in damages, which was the amount the district hoped then that it would recoup.
Cambria CSD sues over water treatment plant design
A major issue cited in the 2018 suit was CDM’s design and construction of a large, lined pond located off San Simeon Creek Road as part of the Sustainable Water Facility plant. The plan was to pump residual brine into the pond from the water treatment process, then use blowers to help evaporate the water to separate it from the solids.
The district charged CDM with breach of contract and professional negligence in executing the project, especially in the initial modeling, analyses and evaluations, research parameters, design and construction of the pond.
The district said the pond’s design, construction, repairs, redesign and modifications had cost the district about $2.5 million.
The suit says “critical to the feasibility of the evaporation pond was whether it could be designed in a manner that satisfied the legal prerequisites for such ‘surface impoundments.’ ”
That includes a minimum 5-foot separation between the bottom of the proposed pond and the “highest anticipated” groundwater elevation underlying the pond floor.
Eventually, “significant errors in the analysis” combined with a “worst-case 1,000-year storm” in 2017, and stormwater entered the pond, increasing the water elevation above level allowed by state regulations, the lawsuit claimed.
The Regional Water Quality Control Board subsequently issued a cease-and-desist order and levied fines. The regional board stated that failure of the pond to meet state regulations “highlights a flaw in the surface impoundment design and the hydrogeological assessments” provided by the design.
In the suit, the district also alleged that CDM hadn’t provided what it agreed to design and build — an emergency water project that could be converted to provide supplemental water to the community in non-emergency situations.
The project was to treat a blend of salt, fresh and treated wastewater, drawn from the underground aquifer. After that blend went through several different treatment processes, including reverse osmosis, the treated water would go back into the aquifer, and the brine would be pumped into the pond.
What will community services district do with brine?
During a severe drought, district officials expected that the CSD might run out of water for its ratepayers. So that wouldn’t happen, the district applied for and got from county planners in 2014 an emergency permit for construction of the plant.
Since then, the district has been pursuing a permanent permit that would allow the plant to be operated other than in emergencies, rather than only during dire water shortages.
The deadline for that application process has been postponed several times, as the CSD dealt with the pond problems and figured out alternatives for brine disposal.
The current plan, a costly one, is to truck the brine to a disposal site, perhaps in Nipomo or Kettleman City.
That plan has drawn public opposition, as has the plant concept from the get-go. However, directors elected in 2020 all said they endorsed continuing with the process to get the permanent permit.
