A Portola Valley resident notified the town of plans to sue if the Planning Commission and Town Council don't rescind their votes to approve environmental studies supporting the town's housing and safety plan.

The threatened litigation by a limited liability corporation (LLC) controlled by Lloyd "Rusty" Day challenges the council's approval of the environmental review and zoning code amendments and seeks to have a “privileged and confidential” settlement discussion between Day and town officials. The Portola Valley Town Council is set to vote on finalizing its state-mandated housing element at a meeting on May 10.

“Rusty's letter threatens yet another litigation with (the) town unless the Town Council negotiates with him unilaterally and behind closed doors, an approach that undermines nearly two years of a democratic process at the taxpayer's expense,” Vice Mayor Sarah Wernikoff told The Almanac.

In a letter Thursday, May 4, to the Town Council and town attorney, Day, who is challenging the town through an LLC called PublicSafety4PVNow, said that the environmental review conducted by the town, called an initial study/mitigated negative declaration, is “deficient in numerous important ways.” PublicSafety4PVNow wants the town to undertake a full environmental impact report to assess the significant adverse environmental impacts that changes to municipal code and the elements themselves would have on wildfire risks, geology and transportation, the letter said.

The Almanac reached out to Day for comment on May 5, but had not received a response as of Monday afternoon, May 8.

The town is required to come up with housing and safety element plans to submit to the state every eight years, which were due Jan. 31. This latest round includes an obligation to plan for much more new housing than in years past, and San Mateo County municipalities have struggled to submit plans that meet the stricter state requirements.

“Given the catastrophic impact in recent years of the fires on the Coffey Park, Paradise, and Marshall communities, as well as countless others, it is essential that the wildfire impacts be thoroughly studied in accordance with CEQA (California Environmental Quality Act) to avoid a similar disaster,” according to the letter, written by Silicon Valley Law Group on behalf of PublicSafety4PVNow. “We believe that it would be beneficial if the parties had the opportunity to further discuss the issues raised in this letter to avoid any need for litigation to enforce the applicable CEQA requirements.”

The law firm said it appears the town filed a notice of determination for its approval of the environmental review with the San Mateo County clerk on April 12, thereby triggering a 30-day period within which litigation may be brought to challenge the town’s determination under CEQA.

The law group proposed a so-called tolling agreement, which establishes a deadline for the parties to negotiate before a plaintiff will file suit to enforce legal rights. In this case, it is set for June 11.

Without a tolling agreement, the law firm will file a petition for a court order to reference the town’s votes on the initial study/mitigated negative declaration by May 12. Mayor Jeff Aalfs said the Town Council has not yet signed the agreement, but will be discussing it at a closed session meeting on Tuesday, May 9.

The council met for two hours on May 2, to discuss threatened litigation, Aalfs confirmed.

"The town has now spent nearly two years in an open and public process to write a housing element that complies with our obligations under California law, while establishing robust measures to ensure safety and preserve our local values regarding rural character. That process included over 140 hours of meetings and dozens of town volunteers, hundreds of residents observing and commenting, and the involvement of our local partner agencies," Aalfs said in a written statement. "After the time invested by such a large segment of our community on this effort, it is unfortunate that a lawsuit funded by a small group of disgruntled residents has the potential to negate the work of a community."

The state deadline for the housing element was Jan. 31, but the council opted to continue working on its plan. It went up for a vote again on March 29. At that meeting, the council approved the environmental study, but three of the five council members said they didn’t feel comfortable sending the housing element to the state.

In public comments submitted ahead of the May 10 meeting, a number of residents urged the town to pass a housing element to avoid potential lawsuits from housing advocates and the so-called builder’s remedy, which could allow for residential development projects to move forward even if they do not comply with Portola Valley's development standards. Aalfs' statement included other potential outcomes, such as increased density mandated and monetary fines imposed by the state along with hundreds of thousands of dollars of "needless" attorney’s fees incurred by the town.

With recent staff departures, the town's small staff is stretched thin as they continue working to “meet the ongoing demands” of its as-yet unfilled housing element on top of their regular job duties, said resident Lorrie Duval. She fears more staff will depart.

“I am stunned and deeply concerned that after 18 months of hard work prior to December 2022, and now another three months in 2023, our town has not submitted an HCD-compliant housing element plan to the state,” she said, referring to the state's department of Housing and Community Development (HCD). “We risk losing the two things we all hold most dear: our rural character and our autonomy as a self-governing municipality. Please submit the current plan to the state.”

Resident Mark Fletcher said: “I do not want the town to risk having the state come in and mandate development. I do not want our town mired in budget sapping lawsuits. Please, pass the housing element now.”

Resident Angelo Aloisio posted comments defending the threatened litigation on PV Forum.

"Nobody is trying to bankrupt the town," he wrote. "The group appears to me to be knowledgeable in these matters and made up of folks who care deeply about this town, its residents, and our long term safety. I’m not sure I can say the same for our high-density housing advocates."

Aloisio added, "The lawsuit that will bankrupt the town is the one that comes to light after disaster strikes and we are found negligible in our duties related to safety and security of our residents having been made aware of the possible risks."

History of the LLC

Day is a director of the volunteer-led group Portola Valley Neighbors United, which was highly critical of the town’s handling of the initial study/mitigated negative declaration in an April newsletter.

The LLC threatening litigation was formed on Feb. 2, 2022 under the name Prudent Productions, according to public records, and Day is named as its agent. An agent is a person appointed to handle necessary government, tax and legal correspondence about the business, according to Forbes. Prudent Productions filed paperwork in Delaware to change its name to PublicSafety4PVNow on May 1.

Day has been involved in local fire safety-related issues. Last fall, Day sought a seat on the Woodside Fire Protection District board, which includes Portola Valley, but lost to incumbent Matt Miller.

The Town Council’s May 10 meeting agenda is online at portolavalley.net. The meeting starts at 7 p.m. at the Historic Schoolhouse, 765 Portola Road, and on Zoom.

Read the full letter PublicSafety4PVNow to the town at tinyurl.com/PVtownletter.