Settlement Reached in Dispute Between Sanitary District and Larkspur

A year-long legal battle between the town of Larkspur and the Ross Valley Sanitary District has finally reached a settlement with everything, essentially, returning to the way it was.

"We go back to being partners," said Daniel Schwarz, Larkspur town manager.

Larkspur, meanwhile, is out some $16,000 in legal fees from this fight and the sanitary district has to cover its own undisclosed legal costs. This issue is unrelated to the massive sewage spill earlier this month near College of Marin.

After such a long fight, the challenge is whether both parties can truly work civilly again.

The disagreement arose more than a year ago after the sanitary district decided to build a new Supervisory Control and Data Acquisition facility, controlling and overseeing the flow within the wastewater pipes, at the district's property at Larkspur Landing. The district began the work without getting permits from the city, citing a government code allowing various entities to build essential infrastructure without having to go through local permitting processes.

"It's common. It's used throughout the industry," said Brett Richards, sanitary district general manager, including an instance where the sanitary district used the same government code to rebuild a pump station in Larkspur.

Larkspur officials, however, maintained the district needed to acquire the proper permits from the town before beginning construction and code enforcement officers attempted to shut down work on the property.

"What's nuanced here is what is allowed under the code," said Schwarz, arguing that both sides had some arguments about what did or did not constitute infrastructure.

A Marin County judge issued a temporary restraining order after Larkspur brought legal action against the sanitary district, stalling work while the district requested the case be moved to a different location for a fair hearing. The case was transferred to Alameda County, where "the judge made a rather harsh criticism of the city," said Richards.

Almost immediately, settlement negotiations began.

The sanitary district collects wastewater for San Anselmo, Fairfax, Larkspur, Kentfield, Greenbrae and San Quentin and delivers it to the Central Marin Sanitation Agency in San Rafael for treatment.

At the time the town of Larkspur decided to bring a legal injunction against the sanitary district, there was talk among Larkspur council members about seceding from the sanitary district. Larkspur was annexed into the sanitary district in 1993; before that it operated its own sewage services.

Schwarz, who took over as town manager in May, said he wasn't here at the time and can't speak to any hostilities, but agreed with Richards that the recently-arrived at settlement has opened new lines of communication between the town and the district.

The settlement requires both parties to pay their own legal fees – slightly more than $16,000 for Larkspur – and in the future, Richards will communicate with the city manager and explain any projects taking place within town limits. However, Richards explained, just because he will communicate with Schwarz doesn't mean the sanitary district is seeking permission or, necessarily, permits from the town.

"We did not agree to ask permission. We didn't waive any of our rights," said Richards.

Will that be enough for the town not to seek legal action against their own sanitary district in the future?

"We'll have to cross that bridge when we come to it," said Schwarz.

This is not the only legal settlement the sanitary district is in the process of negotiating. An 11-year legal battle over a different portion of the district's Larkspur Landing property is "hopefully wrapping up right now," said Richards.

The district has been at odds with developer Campus St. James Larkspur LLC, which agreed to purchase the property for close to $12.5 million in 1999 and planned to build condos and a hotel on the site. What followed was a prolonged battle over contamination on the site and whose responsibility it was to clean up the soil. In April 2010, the developer finally pulled out of the deal and announced they would sue the district for reparations. According to Richards, settlement negotiations are underway, but cannot be discussed.

The sanitary district has come under criticism for its large legal expenses recently. A report from County Counsel cited the district's legal budget as $204,000 annually, compared to the $15,370 legal budget of the Central Marin Sanitation Agency. That doesn't include the $1.4 million the district budgeted for the legal dispute with Campus St. James over the Larkspur Landing property.

The district has long maintained that it doesn't seek these legal challenges, but is force to defend itself and its property.

Now that settlements are underway, the district may be back on track to smaller legal bills.