Supervisors Offer Sewer Settlement With Tough Terms : Environment: The county would abandon its plans, but the city must move ahead with its own waste-water project and be liable for any claims resulting from the unbuilt system.

Los Angeles County officials this week formally offered to abandon plans for a comprehensive sewer system in Malibu, but under terms that drew a chilly response from Malibu’s leaders.

The Board of Supervisors on Tuesday unanimously approved an offer to give up on the sewer in exchange for Malibu’s moving ahead with its own waste-water treatment plan in the next three years.

However, as part of the proposal, Malibu would accept liability for any future claims that result from the county’s inability to install its long-proposed, $43-million sewer system.

And, in an apparent bid to protect itself from having to repay much of the estimated $9 million it has already spent in connection with the project, the county would have Malibu protect it from any claims on the county General Fund related to the sewer.

The county would agree to refund an undisclosed amount of money to property owners and others left over in a tax assessment district set up to help pay for the project.

Upon learning of the proposal, Councilman Jeff Kramer said the conditions “sound totally unacceptable.”

“If the county is looking to the city to bail it out of its own circumstances, I think that’s unrealistic,” Kramer said.

Kramer and Councilwomen Carolyn Van Horn and Joan House said they prefer to interpret the supervisors’ offer as the first step of a negotiation to end the county’s involvement in the sewer matter.

The other two members of the council, Mayor Walt Keller and newly appointed Councilman John Harlow, could not be reached for comment.

The proposal, sponsored by Supervisor Ed Edelman, whose district includes Malibu, and approved without discussion, caught several of Malibu’s leaders by surprise.

A consultant hired by the city released a report in March disputing the claims of county officials that leaking septic tanks pose a health threat to Malibu. The report concluded that the community does not need a comprehensive sewer system such as the county has long proposed.

Instead, consultant Peter Warshall called for a “cutting edge” approach to the city’s waste-water needs that relies overwhelmingly on continued use of septic tanks, something the county has asserted is unacceptable.

The report is expected to serve as the blueprint for Malibu’s leaders as they seek once and for all to rid themselves of the county’s ambitious sewer proposal and replace it with their own.

County officials were extremely critical of Warshall’s report upon its release. But Tuesday, the proposal offered by the supervisors called for Malibu to “implement the Warshall Plan or an equivalent plan within three years to provide for the health and safety” of Malibu residents.

Opposition to the county’s sewer plan served as the catalyst for Malibu’s successful drive to incorporate last year.

As part of a deal in which the supervisors finally dropped their opposition to Malibu’s incorporation, the community’s leaders agreed early in 1991 to come up with their own alternative to the county’s sewer plan.

As part of a so-called truce, the county agreed to halt its attempts to win final approval for its sewer system before the California Coastal Commission.

Because the county has spent an estimated $9 million on the sewer effort, however, city officials have expressed doubt that the county would be willing to give up the effort without a fight.

In approving Malibu’s cityhood bid in 1989, the Local Agency Formation Commission stipulated that the county would have control over the sewer system for up to 10 years after incorporation.

Observers have long viewed the provision as the likely focus of a pitched legal battle should Malibu and the county not reach an accommodation. Sewer opponents, as well as some county officials themselves, have expressed doubts about the legality of the provision.

Tuesday’s offer directs county lawyers to report back to the supervisors within 45 days on the city’s willingness to go along with the proposed settlement.