Council OKs Sewer Agreement : Government: Liability for abandoned project would be shared by Los Angeles County and the city, which would assume 100% responsibility by 1997.

A long wrangle with Los Angeles County over sewers was wrapped up Monday when the Malibu City Council approved a settlement agreement that requires the city and county to share liability for the abandoned sewer system.

The five-member council voted unanimously to accept the 16-page agreement and it is expected to go to the County Board of Supervisors for approval on Tuesday.

The agreement “puts a chapter in this city’s development behind us,” Councilman Jeff Kramer said.

Even before incorporation, residents were 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. The east Malibu sewer was to have been the first phase of a comprehensive, regional sewer system.

County officials contended that leaking septic tanks posed a health and safety hazard, and that a sewer system was needed. Residents argued that 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 finally incorporated in 1991.

Since the sewer district was established four years ago, the 2,200 residential and commercial property owners in the district have been billed more than $12 million. Although not a shovel of dirt has been turned, the county expects to have paid out nearly $11 million for engineering, legal and other fees by the time the project is shelved.

In May, 1992, the county offered to formally abandon plans to build the sewer system if the city implemented its own waste water management plan, but the sticking point for Malibu’s council and residents was a requirement that Malibu accept liability for any future lawsuits that result from the county’s inability to install its sewer system.

Negotiations dragged on until early this year, when the county angered residents with an order to pay their delinquent sewer taxes or face foreclosure proceedings. The county withdrew the ultimatum and a new round of meetings produced a county offer that was submitted to all of the city’s property owners for an advisory vote in March.

Property owners who responded to the survey overwhelmingly recommended that the city accept the offer. However, the council and the Malibu Township Council, a community group that filed a suit against the county before incorporation, expressed concern about the continuing liability issue.

The revised agreement, which must be approved by the city, county, Malibu Township Council and Malibu Country Estates, another community group that filed suit, was reached earlier this month and presented to the council this week for approval.

The settlement calls for the city and county to share liability according to a formula that increases the city’s responsibility over a period of years. Under the formula, the city’s portion of any court judgments will increase from 50% for the quarter ending Aug. 30 to 100% beginning Dec. 1, 1997.

Still, several residents urged the council not to approve the agreement because of the liability provision.

John Perenchio, a prominent Malibu landowner, said the county initiated the sewer system and the major financial obligation should remain with it.

“I just wonder what you’re getting us all into,” Perenchio told the council.

Councilman Jeff Kramer, who had opposed earlier proposals because of the liability issue, said negotiations over the last two months have “sufficiently narrowed the risk to the city.”

The risk that a landslide could be caused by waste water put into the ground during the county’s administration of Malibu is exceedingly small and decreases even more over time, he said.

The agreement ends all assessments of property owners in the district due after the April 10 tax bill. It also gives delinquent property owners a year from the date of the agreement to pay delinquent taxes. The settlement further stipulates that any funds remaining in the district after the sewer assessment district has been dismantled will be returned to property owners in the district.

The council also agreed Monday to explore ways of partially compensating those in the sewer assessment district for their costs for the unbuilt system.

The city is legally prohibited from making gifts to individuals out of the city’s general fund, but some council members suggested that the city explore giving residents of the district a tax break on the city’s waste-water plan.