SLO County CSD bounces $42,500 check to landowner for lawsuit settlement

A bounced check is the latest episode in a long-running dispute between a San Simeon landowner and the town’s community services district.

The San Simeon Community Service District issued the $42,500 check to Ron Hurlbert of Nevada, the first of two partial payments on a lawsuit settlement for the district allegedly encroaching on Hurlbert’s property.

The check — which the district’s Interim General Manager Patrick Faverty says was issued Nov. 8 following the CSD board’s closed-session approval of the settlement the day before — has since cleared, but it took a while.

The delay wasn’t because the district didn’t have the funds, according to the GM. Instead he said it was simply a matter of timing, including depositing funds, mailing the check to Hurlbert in Nevada and having a couple of federal holidays in the middle.

Even though Hurlbert has the money now, he and Faverty still disagree on other dates and additional issues that continue fueling the set-to.

Hurlbert said he believes he should have had the check by Oct. 30.

While the agreement’s concept may or may not have been agreed to between the two men in late October — depending on who you ask — Faverty said Friday that as general manager, he had no legal authority to approve or sign the document, and had to wait to write the check until his board officially gave him the approval to do so.

That didn’t happen, he said, until a closed session on Nov. 7.

Faverty said they issued the check the next day, knowing “that we’d be putting the majority of our income from water sales into the bank” before the check would reach Hurlbert.

“I take full responsibility for this,” the GM said. “I did make a mistake in issuing the check before I made the (water sales) deposit.”

Hurlbert, meanwhile, said he received the check and deposited it the next morning. His bank told him two days later that the district’s account had insufficient funds to cover it.

“And that didn’t surprise me at all,” he said.

When notified the check had bounced, Faverty said he told Hurlbert to “tell his bank to redeposit the check, because the money was there.

“But he said they wouldn’t do that,” Faverty said. “I was going to be gone the following Monday and Tuesday, so I suggested that I call him the following Wednesday, so he could tell me what he wanted me to do.”

There are procedures that a bank has to go through before redepositing an insufficient-funds check, Hurlbert said.

Faverty left Hurlbert a voicemail message that Wednesday, he said, but he didn’t get a callback.

After that, “we kept checking to see if the check had been redeposited and cleared,” Faverty said.

“Finally, it did on Monday,” he said — another date on which the two men agree.

Now, Hurlbert wants interest on his money for the time between when he believes he should have had it and when it cleared. He estimates that would be about $500.

“There’s no late-fee or penalty written into the agreement,” Faverty told The Tribune on Friday. “And I have no authority to pay one.”

Attorneys for Hurlbert and the district are conferring about that aspect of the episode, although the landowner says he’ll take the CSD to small claims court if necessary.

Bounced check was payment for lawsuit settlement

The district and Hurlbert have been negotiating for more than a year about the SSCSD’s 2015 water-purification facility being built in the Pico Avenue right of way.

Hurlbert doesn’t believe that was legal, adding that “now there’s a giant orange tank between my view of the ocean and the ocean itself.”

The CSD eventually created a vehicle turnaround area by putting gravel on a vacant lot owned by Hurlbert. The district’s previous general manager, Charlie Grace, did that without asking the property owner for permission to do so, Faverty said.

Since then, “the district has put up a nice rope-and-redwood-post fence, so there’s no turnaround on his property anymore,” the general manager explained.

“There really is enough space there to turn around,” he said. “It’s not too hard.”

Hurlbert has owned that lot for nearly three dozen years and wants to build on it. He even filed a hardship-exemption application to build, jumping ahead of other property owners who’ve also been on the district’s wait list to build for decades.

Some others have taken the same hardship-exemption action, Hurlbert said, and one took the issue to federal court and won.

Last year, the CSD’s board took a series of steps to lift a decades-old moratorium on issuing new water meters, a ban that had been in place due to a shortage of quality water during dry spells.

The water-purification facility was designed to help overcome that quality issue by treating a blend of salt, brackish and treated wastewater, but it doesn’t really provide any new water to the district.

The bounced-check dust-up is just one of a series of conflicts, problems and legal issues the troubled district has gone through in recent years, including: flip-flop shifts in the board’s makeup; having to split the district up into five tiny voting areas due to a new state law; lawsuits and charges filed against the former general manager and his firm by the district attorney; and roiling disagreements in the tiny community about the future of it and its CSD.

The CSD’s final check to Hurlbert is due in January.

The agenda for the CSD board’s next meeting Thursday will include discussions about the bounced check and the serious record-keeping issues the new general manager and his staff have faced since they took over in June, he said.

The agenda for the meeting — to be held via Zoom and in person at 6 p.m. at 1350 Main St., in Cambria — will be available on the district’s website by Monday, Faverty said.