SLO County’s $9.95 million settlement in Los Osos sewer lawsuit

February 14, 2018

San Luis Obispo County has agreed to pay $9.95 million to a Los Osos Wastewater Project contractor who filed a law suit demanding payment for uncompensated construction work. The settlement agreement is slated to go before the SLO County Board of Supervisors for final approval on Tuesday. [Cal Coast Times]

The County is working with state and federal partners to explore low-interest funding options in an effort to avoid potential rate increases in Los Osos because of the settlement, the county said in a press release. In the end, the residents of Los Osos will be responsible for covering the cost of the settlement.

“We have the best interest of Los Osos residents in mind,” said Wade Horton, SLO County’s chief administrative officer, in a press release. “Trying this case in court would take significant time and money and wouldn’t benefit the people of Los Osos.”

In its lawsuit, ARB alleged that inadequate planning by the county caused its workers to undergo numerous tasks not accounted for in its contract. County officials then refused to compensate ARB for the extra work and instead threatened to withhold payments for contracted duties.

Sewer workers discovered numerous underground facilities and construction interferences including an Indian burial ground, that were not noted in contract documents. After ARB submitted change orders, the county retaliated by threatening to withhold compensation for contractual duties if the firm did not make concessions on its claims, according to the suit.

But, ARB did not concede its demands. The firm filed an official claim, which the county denied, and then sued in 2014 for breach of contract and breach of implied warranty.

Two months later, the county filed a cross complaint saying ARB had failed to follow procedures and inform the county regarding the increased costs.

In March 2013, ARB workers encountered a Chumash burial ground while digging trenches in its construction area. The workers then hand-dug the area to avoid damaging human remains and Chumash artifacts.

ARB likely incurred additional costs, as well, by piping water it removed from trenches to a field in the center of town in order to help replenish the aquifer. The other sewer construction contractor, W.A. Rasic, merely dumped the water it extracted into Morro Bay.

“I hold my supervisor, Bruce Gibson, fully responsible,” said local activist Julie Tacker. “He was warned during construction and did nothing about it.”



  1. SLO_Johnny says:

    If they had built the sewers in 1982, the district would have received Federal and State financing and could have avoided tens of millions of dollars in additional costs. But, a handful of idiots decided to fight with the State Water Resources Board.

    (4) 4 Total Votes - 4 up - 0 down
    • NorCoMod says:

      Very true. They were unwittingly aided and abetted when SLO Public Works appointed George Gibson as project manager and liaison to the community of LO.

      (0) 2 Total Votes - 1 up - 1 down
  2. Jorge Estrada says:

    Thankfully this Oh Sxxt is on the ratepayers of Los Osos. The other residents of SLO County have no benefit, vote or liability for this stroke of genius. Certainly Mr. Gibson will be the first to place liability where the benefit resides. The grant money will be a miracle if it happens, until then the ratepayers are guaranteeing the settlement. I curious about how their property disclosers will be affected, that will the 20-20 reality.

    (-1) 7 Total Votes - 3 up - 4 down
  3. Myself says:

    If you all would notice the way the article is written the contractor did all that was necessary on this job, no one has a crystal ball to see what is underground on these type of projects, you bid the plans as they come out and issue change orders when necessary to the owner for extra work, there really is no fault in this other than the county has to pay up for the extra work involved.

    (6) 10 Total Votes - 8 up - 2 down
  4. c.d.cox says:

    This is what happens when you get political appointees i.e. Costal commission,water board commission to name a few. If they would enforced septic maintenance we would not have needed a sewer.But then someone would have got a payoff would they?

    (3) 11 Total Votes - 7 up - 4 down
  5. jimmy_me says:

    Hey Bruce Gibson, your plan seems to be working. Keep raising the cost of the sewer and pretty soon you’ll force all the old and poor people out of town. Ka-ching.

    (10) 14 Total Votes - 12 up - 2 down
    • copperhead says:

      Gibbs was too busy banging his secretary to keep track of the contract. Has the Los osos sewer exceed bostons “big dig” in cost and corruption yet? That’s what we get for electing incompetent fools.

      (9) 15 Total Votes - 12 up - 3 down
  6. jimmy_me says:

    Stupid, incompetent county employees running the show. Put a sewer in a California coastal community? Even idiots could predict that you’d run into Chumash artifacts and ground water issues. I absolutely sure ARB knew they would run into these issues, but were smart enough to underbid the poorly written contract knowing that they could sue later to increase their profits. Why did SLO county put someone who does not have an engineering background in charge of the project? SLO County: they’ll never take you to court no matter how bad you screw them.

    (1) 9 Total Votes - 5 up - 4 down
  7. jimmy_me says:

    Why does the county cave in on these matters? Doesn’t the county have lawyers on the payroll that could deal with this and create a better outcome? The message this sends out to contractors hired by the county is do the job, get paid, sue, and get paid some more. Bruce Gibson took credit for the sewer in his last set of campaign propaganda; why does he allow the continued screwing of the Los Ososans who are forced to pay for the sewer? Stupid, corrupt county government rears its ugly head yet again.

    (4) 10 Total Votes - 7 up - 3 down
    • kayaknut says:

      SLO County counsel is Rita Neal who philosophy is “Why work hard when you can get paid the same, and even raises, to just just sit around, shovel loads of other people’s money at a problem to go away and then go home early, and never have to worry about losing your job”

      (9) 9 Total Votes - 9 up - 0 down
    • rukidding says:

      The county doesn’t cave in because they are at fault. This is just another case of the county council being incompetent. If the contract had been written correctly and had competent people on staff this could have been eliminated. Just because someone has a job title doesn’t mean that they are all knowledgeable in their field. That is unless it’s government because they are rarely held responsible for their errors.

      (4) 6 Total Votes - 5 up - 1 down
  8. rukidding says:

    OK! Who is the person who is in charge of this and is responsible for this outrageous act that in the end the rate payers and taxpayers will have to pay for. Time for an independent investigatrion and find out who the culprit is and they need to be held accountable for their negligence. Enough is enough.

    (29) 35 Total Votes - 32 up - 3 down
    • kayaknut says:

      Even if they find out who is responsible for costing the rate payers 9.95 million since they are in the public sector there will be no real consequences for their actions, there never is 99% of the time. All that an independent investigation will do is cost evenmore money.

      (8) 10 Total Votes - 9 up - 1 down
      • rukidding says:

        You are correct that usually nothing happens and that is why they keep getting away with it. Like I stated, enough is enough. It’s time that the taxpayers demand that corrective action takes place. The Peter Principal should no longer be accepted.

        (5) 7 Total Votes - 6 up - 1 down

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