Los Osos CSD bankruptcy counsel the week of Jan. 8 shelved a motion challenging a U.S. Department of Justice placement of former board member Richard LeGros on a panel of unsecured creditors. Qualms with the appointment arose during the public services agency's first closed door session of 2007, but talk of a legal challenge stalled before landing in court.
"We're focusing on more important matters now working together to get the CSD out of debt and get a sewer built," said CSD bankruptcy attorney Jay Michaelson.
Relations between the current board which swapped out a single member in the Nov. 7 election and the directors recalled in a special election in the fall of 2005 remain strained. Both sides of the aisle attributed the latest tussle to enduring bad blood.
Recalled board members helped found the advocacy group Taxpayers Watch and successfully propelled litigation challenging the constitutionality of Measure B a Sept. 27, 2005, voter-passed initiative to halt a then-underway sewer project.
Since the recall, members of the current board have complained that the group principally LeGros and former director Gordon Hensley continue to pursue obstruction tactics to prevent the generation of an alternative sewer model. Taxpayers Watch argues that, since the signing of Sam Blakeslee's assembly bill handed the wastewater project to the county, that's no longer the district's concern.
"The motion by the district was an overreaction," LeGros said. "I'm just a private citizen with extensive knowledge of the CSD and the project. They have nothing to fear from me, and they have no real justification for opposing my position on the panel.
"I think the district is coming to that realization, and that's the reason the motion was never filed," he said.
However, several acting directors consider the matter over attorney's fees in the Measure B suit unsettled, and that it would therefore prove premature, if not inappropriate, to place a group representative on the panel. According to attorney Michaelson, "If Taxpayers Watch does not have a claim, then they ought not be on the committee."
"We owe them (Taxpayers Watch) nothing until a court says we owe them something," director Julie Tacker explained of the district's interest in blocking the appointment. "Especially considering the representative they chose, who was the most recalled board member of all."
In that special election, 51.5 percent of Los Osos residents voted LeGros off the board.
The embattled appointee questioned this rationale as well. Ironically, he commented, the CSD board sealed the justification for his placement on the panel by denying a summer settlement over attorney's fees and listing Taxpayers Watch as a debtor in an October summary of unsecured claims.
That document shows record of a $35,000 claim for recuperated legal fees in the Measure B case but lists Taxpayers Watch attorney Kate Neiswender as the creditor.
The Office of United States Trustees the Department of Justice's administrative arm in bankruptcy proceedings authored the appointment of LeGros. The former director expressed that he hopes to help the district formulate a strategy to get out of debt.