Residents Hear Details of Tax Settlement Plan

A mostly subdued crowd of about 50 residents gathered Tuesday to hear the details of what may be a historic settlement of Malibu’s long fight with the Los Angeles County government over sewers.

Since before incorporation, the residents have been fighting the county over a special tax district the county set up in 1989 to collect taxes from east Malibu property owners to build a $43-million sewer system.

County officials contended that leaking septic tanks posed a health and safety hazard and a comprehensive sewer system was needed. Residents said such a large system was unnecessary and would invite too much development. The dispute became a central issue in Malibu’s long fight to break away from county control. The coastal community was incorporated in 1991.

The special council meeting this week at the Malibu High School Auditorium featured lawyers from the city, county and community groups who talked about the terms of the proposed settlement and answered questions from residents.

Essentially, the county is offering to drop its plans to build a regional sewer system and stop all assessments for the project on the 2,200 residential and commercial properties in the sewer district if the city will agree to implement its own waste water management plan.

The city must also agree to accept liability for future claims against the county that result from the county’s inability to install its sewer system.

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The meeting was intended to help residents decide how they will respond to a survey sent out by the city March 17, asking every property owner whether the city should accept the settlement offer from the county or pursue the matter in court. The 6,500 surveys to advise the city whether to sue or settle are due back to the city, postmarked by Friday. The city must make a decision by June 30, the end of the fiscal year.

Resident Jeff Jennings urged the city to negotiate hard to limit the city’s liability.

There’s an “enormous iceberg of potential liability” lurking in the liability clause that may not surface for years, he warned.

If Malibu residents decide to reject the offer and opt to try to recoup some of the taxes they have already paid to finance the never-built project, they will have to litigate.

In a letter accompanying the survey, City Manager David Carmany noted that, should the city take the county to court to seek full or partial assessment refunds, the county’s litigation costs would be charged to the assessment district. Also, the county will “likely proceed to implement the sewer system, assessments will continue . . . and supplemental assessments may also be levied.”

Resident Alex Mirosav said he had come to the meeting to try to get some answers to his questions, but he was still mulling over how to answer the survey.

“I guess the deadline (Friday) is going to make up my mind for me,” said Mirosav, whose home is in the assessment district.

Paul Berning, who also lives in the tax district, seemed resigned to accepting the county’s settlement offer. Berning said he was going to vote for the settlement offer, adding that nothing he had heard Tuesday had changed his mind.

“You can’t beat government,” Berning said. “It’s the best we can do.”

Ollie Dwiggins, a 26-year resident of Malibu, said the settlement issue is volatile because “we didn’t get anything for the taxes paid into the district.”

Dwiggins, who has stopped paying the assessments as a protest, said she was disappointed in the meeting because the county’s attorney wouldn’t give a full accounting of the district’s finances.

Judith Fries, the county’s principal deputy council, said she didn’t have the figures with her, but the county could disclose how much has been raised in taxes and how much the county had spent. The county has previously said that property owners will have been billed more than $12 million by the end of the 1992-93 tax year, and the county will have paid out nearly $11 million for engineering, legal and other fees by the time the project is shelved.

But Fries said the county could not disclose how much it will contribute of its own money to close out the district and satisfy the bondholders who purchased more than $34 million in county bonds to build the sewer.

Councilman Jeff Kramer noted that the county and the assessment district are public entities and asked Fries why a full accounting could not be made.

Fries said a full accounting would be made after the district had been closed out, but the county’s contribution could not be revealed during negotiations because of lawsuits filed earlier by the city and several community groups against the county. The county’s counsel had also advised the county not to discuss how the county will satisfy its obligation to bond holders.

Fries said the question facing Malibu is not what the county does to settle the bond debt, but what the city will get out of the settlement.

“I believe this is a good settlement for the city and county--the best settlement that can be reached,” Fries said.

“It’s time to let bygones be bygones,” she said.