LandWatch filed lawsuit ‘based on two false claims’

LandWatch sued the Cambria Community Services District because, based on two false claims, it built a major desalination plant for year-round production of water for new development without a permit and without environmental review.

First, the district made false claim that Cambria was going to run out of water. In reality, the well levels were average and the district did not have any facts or analysis to support the claim, just the estimates of the district engineer who claimed in the same January 2014 board meeting packet that the water would run out in three months and in four to six months. In January the district said the emergency plant would be up and running in four months. District Engineer Bob Gresens testified to the court that the district estimated it would run out of water between mid-October and mid-December.

Most telling are the facts that the water never ran out and that the district did not build an emergency project to provide water for immediate need. The plant was not functional until the dry season was over.

Second, based on the “emergency,” the district falsely claimed to ratepayers, government agencies and Torrey Pines Bank Investments Inc. Western Alliance Bank of Arizona (owner of the desalination plant under an $8.8 million Installment Sale Agreement), that it was building a “brackish water” “Emergency Water Supply” project. The district told the community that the emergency plant would be prefabricated and portable, with above-ground pipes to produce water for existing customers only during the dry season.

Based on the claim that it was building an “Emergency Water Supply” project, the district exempted itself from competitive bidding. It exempted itself from public environmental review of the “Emergency Water Supply” project otherwise required by the California Environmental Quality Act. It evaded all coastal act resource protections by getting San Luis Obispo County to let the district build the entire “emergency” project on an “emergency” permit intended to expedite post-disaster construction.

By claiming to ratepayers and government agencies that there was a water emergency when there was none, and that it was building a project to address an immediate emergency when it was not, the district successfully evaded the bedrock protections of public money and public resources to build a major public works facility without public oversight and participation as required by law.

Now, as if it is standard government procedure to raise rates and borrow money for one public works project and build another, the district openly touts that it actually built the “Sustainable Water Facility,” a long-term water project for year-round use to provide water for new development with pipes buried in the ground. And along with brackish water, the district intends to use the plant to recycle/reuse treated effluent from Cambria’s wastewater treatment plant for “indirect potable reuse.” Needless to say, all of this was decided behind closed doors. The district’s idea of transparency is letting the community know what it’s doing after the fact.

LandWatch’s question now is what exactly does the bank own when it contracted to finance and own an emergency water plant for existing customers during droughts that turns out to be a producer of highly valuable water to facilitate new development on the coast?

Trying to hold the district accountable for its actions, LandWatch sued the district on the grounds that there was no emergency, that the district was not exempt from environmental review, that the emergency permit was invalid, and that the district built a project to provide water for growth without public oversight and without environmental and land use safeguards. The lawsuit was lost in part because, based on the district’s testimony, the court ruled that there was an emergency and that the emergency permit was valid. Unfortunately for ratepayers, the district spent huge sums of money on lawyers, adding a Southern California law firm to its local firm in order to win the suit.

LandWatch is grateful to the Stanford Environmental Law Clinic, to the clinic’s director, Deborah Sivas, and to the law students who represented LandWatch and the community of Cambria in this lawsuit.

This story was originally published November 2, 2016 at 8:36 AM with the headline "LandWatch filed lawsuit ‘based on two false claims’."