City Administrator Dale Neiman will take the matter involving the Southeast Regional Wastewater Collection System to the council at its Thursday meeting, which will begin at 6 p.m. at Clearlake City Hall, 14050 Olympic Drive.
Neiman said that many people don't understand that the county owns and operates the system. “The problem's been around for 15 to 20 years, and it's the county's responsibility to fix,” he told Lake County News on Wednesday.
Neiman's report to the council on the issue takes up two matters at once – he's seeking approval of a proposed motion not to proceed with negotiations with the county and asking for direction to come back with recommendations to deal with the city's “severe financial constraints.”
The city previously committed $2.5 million in redevelopment funds to cover half the cost of the needed repairs to the system, which is under the auspices of the Lake County Sanitation District, as Lake County News has reported.
Those system upgrades would free up an estimated 3,000 connections, according to previous statements from county and city officials, and would service the city's Pearce Field airport property, part of which is the site for a proposed shopping center anchored by a Lowe's home improvement store.
However, Neiman's report states, “It is abundantly clear that at least two Board of Supervisors members will try and use their ownership and control of the sewer system to prevent Lowe's from locating in Clearlake. My conclusion is based on comments in recent newspaper articles.”
Neiman is alluding to Supervisors Denise Rushing and Rob Brown, both of whom came out publicly against the project.
However, on Wednesday Brown dismissed Neiman's comments as “ridiculous.” He added that he doesn't know why Neiman is referring to finding out about their opposition through news reports when Brown told him directly at recent meetings about his concerns.
Brown said Neiman hadn't recently talked to any county officials about the matter before putting out the report to the council – not even Lake County Special Districts Administrator Mark Dellinger, who has been discussing the sewer system issue with the city.
“We hear nothing from the city of Clearlake,” Brown said. “They offer nothing as far as willingness to cooperate or work with us” to solve the problem.
Neiman acknowledged not having spoken to Dellinger, saying he sent him the council agenda item on Wednesday morning. Dellinger couldn't be reached for comment Wednesday.
Rushing said the county is committed to upgrading the system and has been counting on the city and its redevelopment agency for assistance.
If Clearlake and its redevelopment agency can't meet the commitments, Lake County Special Districts will need to aggressively seek funding and structural alternatives, she said.
At Tuesday's Board of Supervisors meeting, Dellinger gave the board an update on the project, explaining that a combination of new system capacity fees, rate hikes and a possible loan from the state would assist the county in funding the sewer system upgrades.
Brown asked if the county was going into the project “knowing that there's a good chance that we'll be paying all the bill,” because he said Neiman was recommending going back on the city's commitment to participate.
Some of the other board members, including District 2 Supervisor Jeff Smith, who represents Clearlake, weren't aware of Neiman's report before Brown informed them of it.
Dellinger said the upgrade concept doesn't require the city's participation.
The state served the city with a notice of violation on the system, which has had spills of wastewater, and in order to comply with state requirements, “We have to show that we're committed to doing something longterm and this will get us there,” Dellinger told the board.
Neiman wants to wait before investing funds
Neiman said Wednesday that he doesn't think the city should invest the $2.5 million in the project until they know what kind of project they will have, what kind of return on investment is possible and if they can sell the airport property, which is one of the Lowe's project's required steps.
“You just don't do things on spec,” he said. “If you do, that's when you get in trouble.”
If the city puts the money into the sewer system, they'll also lose interest earnings on the money, he said.
Although the project will free up 3,000 connections, with hookup fees helping recoup the system upgrade costs, Neiman said those hookups would offer no return on investment. The vast majority of the connections would go to residential development on a first come, first served basis.
“The services cost more than the taxes the city gets for residential development,” he said.
He said those hookups could benefit the Provinsalia housing development, a plan for 665 housing units and a nine-hole golf course on 292 acres along Cache Creek, which the council approved at Neiman's urging last year.
However, he added, “I don't know if Provinsalia is going to move forward.” He said there is “really no project”; all that the city did last year was rezone the area and change the general plan to allow it.
“Provinsalia's in the exact same boat as all of the other vacant property in the city,” he said.
No tentative subdivision plan has yet been filed on that project, he said. “You can't count on something until it's actually submitted.”
The benefits from the Lowe's project would be significantly greater, said Neiman. “That project was directly related to the financial health of the city.”
Regardless of whether or not the Lowe's plan moves forward, Brown said the city should want to help improve the system for the residents who they represent.
“I think it's very unfortunate that his only solution for this is for him to take his ball and go home,” Brown said of Neiman.
Another issue for the city is the recently filed lawsuit by the Sierra Club Lake Group, which is suing the Clearlake Redevelopment Agency and developer KK Raphel Properties LLC over the Lowe's project, as Lake County News has reported.
The Sierra Club is alleging that the city violated state law by approving the project without an environmental impact report (EIR).
“There is no good news here – none,” Rushing said. “ I have always maintained that it is an ill-advised strategy to push this project through without full community support or an EIR as the law requires and this has proven to be the case. With or without this project the city of Clearlake would be facing financial disaster, it now seems that the moment has been accelerated by events.”
Neiman said the planned mitigations for the project total about $10 million. “I've never been associated with a project that had as much mitigation as this one did,” he said.
The Sierra Club lawsuit is affecting the project's timeline. Neiman said without the suit the project could be up and running within a year and a half, with engineering work starting right away. That would allow part of his salary and that of City Engineer Bob Galusha to be covered by tax increment funds, but that's no longer an option.
If the city is forced to do an EIR, it could take a year and a half to three years to complete. “The issues and the comments are going to be no different than what they were already,” he said.
He's recommending to the council that he return with suggested budget cuts at the council's meeting later this month. “We've got to do something. We just can't keep going in the hole.”
Brown said if Neiman's only concern is the Lowe's plan, then the county isn't there to help him solve his problem. But if the city is concerned about its constituents, the county will help.
“We're going to resolve this issue one way or the other, with or without them,” Brown said.
E-mail Elizabeth Larson at
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