Los Osos sewer project tainted by ’expired’ crime
April 22, 2009
By DANIEL BLACKBURN
County planning commissioners Thursday will consider a proposal for construction of Los Osos’ contentious wastewater project, a mission now shadowed by a documented crime.
Despite the existence of substantial evidence of unlawful backdating of key contract agreements, executed by now departed officials of the Los Osos Community Services District (LOCSD), county planners are moving toward a decision that could ratify what critics are calling “a fatally flawed procurement process.” Several formal complaints by district officials to San Luis Obispo County District Attorney Gerald T. Shea, starting in 2005 and detailing allegations of potential conflicts of interest and other unlawful activities, were eventually brushed aside.
Chief Deputy District Attorney Steve Brown, in a response to citizen complaints, acknowledged in 2006 that “falsification of a public record by a public employee is a felony,” and that a criminal act relating to the backdating apparently had occurred. But Brown declined further investigation by determining that a three-year statute of limitation had expired.
The backdating of the contract in question happened in 1999. Bruce Buell, who at the time was just coming into his job as general manager of LOCSD, has admitted to backdating the contract at the request of Paavo Ogren, then district interim manager and now San Luis Obispo County’s director of public works.
Ogren was temporarily running Los Osos district when contractor Montgomery Watson Harza (MWH) of Broomfield, Colorado, was retained by the district for wastewater project management in early September 1999. Ogren did not sign the pact, nor did any board member. Instead, Ogren waited several weeks for Buell to begin his stint as the new district manager, and then told Buell to backdate the MWH contract.
Buell, in an explanatory memorandum he wrote in 2006, said the request was part of “unfinished business” and that Ogren “advised me that I should pre-date the agreement to accommodate the work actually done by MWH at the board’s request.” Buell’s action was witnessed at his request by LOCSD employee Karen Vega, he said in the memo to another incoming LOCSD chief, Dan Blesky.
“Buell was not an agent for the district and had no authority to execute the contract and he had no authority to backdate the contract,” Blesky wrote to his directors in 2005.
Buell has since left LOCSD and currently manages Nipomo’s community services.
Ogren, now lead county plotter for Los Osos’ wastewater treatment future, also has become somewhat of a cheerleader for MWH, helping elevate it in recent days to the county’s “short list” of preferred designer-builders of any eventual facility.
Former chairman of the LOCSD’s board of directors Lisa Schicker believes that MHW’s current participation may eventually jeopardize the entire sewer project. Schicker and other residents question the role of MWH in the Los Osos project, suggesting that numerous conflicts cloud any future project plans’ legal status.
Schicker wrote in a recent memorandum to county supervisors that “it is a big mistake to consider any continued relationship with MWH, considering the illegal contract… pending investigations and lawsuits, and a potential conflict on interest with [Ogren].”
Gail McPherson, executive director of Citizens for Clean Water, said her group espouses “third party oversight” for the Los Osos project.
“We should back up, disallow MHW’s participation, and pick from the [county-designated] top four engineering firms,” said McPherson. “It’s important that [supervisors] take action quickly and avoid problems.”
MHW, despite its controversial role in the equally-mercurial LOCSD wastewater development process, was boosted recently to the top grouping of the county’s list of preferred contractors to complete the Los Osos project. This has occurred even though MHW and LOCSD are themselves entangled in myriad disputes and litigation — which could now involve the county.
The Los Osos district tried to cancel its contract with MHW in August 2006, asserting breach of contract and violations of state law, specifically the “California False Claims Act, Government Code 12650.
Alleging a list of conflicts of interest, the LOCSD letter of termination to MWH said the engineering firm “has knowingly and with malice actively worked with… third parties contractors… regulatory agencies… and other third parties in a manner not in the best interests of [LOCSD].” District officials then filed a claim against MWH, seeking repayment of more than $6 million. MWH has sued in response and all litigation is pending.
County supervisors were called upon April 7 to approve a $558,000 contract with Carollo Engineers for engineering consulting services for the county’s new master water plan.
Lou Carella of Carollo Engineers once was employed by MWH, now has become a Los Osos project engineer, and helped recommend MWH be placed on the county’s design-build short list.
Supervisors voted 4-1 to approve the Carollo contract and a staff recommendation to arbitrarily move MWH up on the list of preferred engineering companies bidding for participation.
First District Supervisor Frank Mecham cast the lone dissenting vote, saying that “if there are allegations in there that reference any kind of an illegal act, then I don’t want to vote for it until county counsel has had a chance to look at it.”
Mecham said Wednesday he didn’t feel right about ignoring issues raised by Schicker and others regarding legitimacy of contracts and the type of wastewater collection method that will eventually be employed.
He also said he was not familiar with the matter of Buell’s contract backdating activities but that “it’s certainly something I want to know more about.”