Defeat of Sewer Rate Hike Dismays City Officials : Waste water: Some fear Thousand Oaks development will be halted by failure to expand plant. Attorney warns of lawsuits.

Development in this city could come to a virtual standstill as a result of a City Council vote last week rejecting a proposed increase in sewer rates to fund an expansion of the city’s waste-water plant, city officials said.

Without the expansion, Thousand Oaks becomes vulnerable to lawsuits from developers and corporations who were promised sewer hookups the city won’t be able to deliver, City Atty. Mark Sellers said.

“We’re exposing ourselves to significant liability,” he said. “You cannot impose a de facto moratorium on development by refusing to expand a treatment plant.”

Not only is there a liability problem, city officials say, but also serious health, safety and environmental concerns will arise if the work is delayed indefinitely.

But foes of the expansion plan--Mayor Jaime Zukowski and Councilwoman Elois Zeanah--say city officials are using scare tactics to secure a rate increase that they may not need.

The increase in sewer rates--which would have boosted residents’ monthly bills about 70%--was to be a key funding component for a $75-million upgrade and expansion of the city’s waste-water treatment plant at Hill Canyon.

The rate increase was denied last week when Zukowski and Zeanah voted against it, saying that they have too many questions about spending so much money to upgrade and expand the plant.

There have been plenty of 3-2 votes in Thousand Oaks since the two slow-growth councilwomen took office, but this one is different.

Because state law requires at least a 4-1 vote to raise the fees, the two women now have the means to halt the entire project, much to the dismay of their colleagues.

“They are holding everybody else hostage, including the residents of Thousand Oaks,” Councilwoman Judy Lazar said.

Zeanah and Zukowski say there are other ways of raising the money, namely by raising sewer connection fees for new homes from $3,900 to $5,300 to help fund some of the work at Hill Canyon.

The $75-million plan includes replacing old equipment, meeting federal environmental regulations, seismic upgrading, and expanding the plant’s daily capacity from 10 million to 14 million gallons.

City Finance Director Bob Biery said connection fees, closely tied to the economy, are not a reliable enough revenue source for the bond market to issue bonds.

“If you were going to buy a house and you could only count on certain revenues sporadically, what kind of credit are you going to get?” Biery said. “That is basically the parallel. You’ve got to have at least a steady income stream.”

The situation on the already-contentious council reached a new low last week when the sewer rate increase was rejected, with accusations being hurled among council members publicly.

The issue was put on hold until the Dec. 19 meeting, but no one seems to have any idea how to resolve it.

Other City Council members say they are willing to pay up to $40,000 to have an outside consultant review the need for the project if that will placate the dissenting councilwomen. Sellers said he would try to explain the liability problems in better detail. Director of Public Works Don Nelson says he is happy to go over the numbers again.

Earlier this fall, an 11-member citizens budget task force committee reviewed the whole financial plan at the council’s request. They visited Hill Canyon, proclaimed it aging and desperately in need of work, and approved the plan with flying colors. Task force chairman Otto Stoll said he isn’t happy with the council vote. “I’m really disappointed,” Stoll said. “I thought we gave the entire situation a pretty thorough review.”

But Zeanah and Zukowski remain steadfast in their claim that something isn’t right about the financial planning.

“The whole council is not doing critical analysis of what they are being told by staff,” Zeanah said.

“There are some council members who have accepted and they always do, whatever staff tells them. They don’t look back into history. Immediately, my antenna was raised when I heard staff say we need $75 million, and this is a crisis.”

After going over old memos and council agendas, Zeanah said she thought expansion of the plant should already have been taken care of with funds raised in the 1980s.

Not so, said Public Works Director Don Nelson. He said proposals have been approved conceptually, in 1987 and in 1991, but that no bonds have been issued to pay for needed improvements.

A $14-million project was completed in 1989, he said. But much work remains to be done on the facility, which was built in 1960.

Zeanah said she is troubled by how much the cost of expanding the project has increased over the years, from about $40 million in 1991 to $75 million now.

Nelson said the changes are a result of higher construction costs, new federal regulations and the overall aging of the plant.

A capital improvements project must be adjusted periodically, he added. “It is a dynamic process. It does not remain stagnant.”

Both councilwomen dismiss the talk around City Hall of raw sewage pouring into the streets. If anything, it seems to have heightened their resolve.

“Using scare tactics to get a vote makes me even more cautious about this,” Zukowski said. “It makes me question what is at stake here. I’ve never seen pressure like this before.”

With criticism against them building, it is unlikely the pressure will go away. Councilwoman Lazar suggests her colleagues are holding out to get something they want.

“Frankly, I think this is being used as a bargaining chip to get other fees imposed,” Lazar said. “I cannot understand how anyone would want to let things go just because they want to secure something else at this time. This is not a reasonable way to run a city government.”