Town Tattler : Publications: Most neighbors just don’t want to talk to outsiders about The Balance Sheet, which many call ‘that rag.’

TOPANGA CANYON — These days, the second week of the month swoops down on Topanga Canyon with all the foreboding of a full moon over Transylvania.

That’s when the normally civil gossip of this mountain village turns into shrieking denunciations and outraged denials.

The consternation is about an eight-page newspaper, The Balance Sheet, dedicated to “stirring up controversy and saying upsetting things about some people in the community.” It caught Topanga by surprise in December when it showed up in each of the town’s 2,900 mailboxes.

Combining the venerated American tradition of the town crier with a Libertarian viewpoint, a streak of dark humor and the voice of a banshee, The Balance Sheet brazenly promised to expose “how the good ol’ boy network appears to control the town by two means: The power to reward and the power to harm.”

No one was spared, nor was any particular decorum observed. A county Health Services Department inspector who had been summoned to investigate a property owned by the publishers--Kathleen Kenny and Art Starz--was quoted as telling a patron in the town cafe, “Tell Miss Kenny I will be at her house next week with the sheriff, a witness and a bazooka.” The inspector said the comment was merely a joke.

Even more biting was the attack on popular Topanga architect Bob Bates, who is also a longtime officer of a civic group called the Topanga Assn. for a Scenic Community. The Balance Sheet reported that Bates had been seen cashing a TASC check in the local market to pay for two bottles of red wine and $70 of Lotto tickets.

Bates declined to comment to The Times, but, in a letter published in The Balance Sheet later, he said the check was reimbursement for out-of-pocket expenses and denied buying wine and Lotto tickets. The Balance Sheet insisted that the story is true, saying its reporter witnessed it.

With barbs such as these flying about, most people in Topanga just don’t want to talk to outsiders about The Balance Sheet--generally referred to as “that rag.” Even the editor of the town’s established newspaper, The Messenger, declined comment, except to say, “My heart goes out to you as a reporter.” Those who would talk said they simply hope the journalistic venture will soon go away.

The origin of all this spleen appears to be a festering dispute involving several neighbors on Cave Way, a leafy one-lane cul-de-sac of tightly packed homes.

From disagreements about such concerns as killing gophers and growing roses in place of native plants, the conflict escalated to a disputed property line and allegations of illegal building, progressing along the way from name-calling to rock-throwing, rifle brandishing and complaints to county authorities before one of the combatants turned to the ultimate weapon--desktop publishing.

Reaction to the newspaper was swift and equally shrill. The second issue, out in mid-January, contained an obituary page for their advertising revenue, publishing letters of several merchants pleading to have their ads withdrawn. Beside them was a transcription of a phone message that one advertiser received from longtime resident Joel Axelrod, warning, “We . . . will talk to friends urging them to never have any contact with you or your commercial ventures unless you contact the community and disavow any contact with ‘Balance Sheet.’ ”

Axelrod did not return phone calls from The Times.

In some ways, The Balance Sheet is only an extreme manifestation of the type of neighborhood dispute that is not at all uncommon in Topanga, a collection of dwellings--from antiquated shanties to space-age mansions--scattered along circuitous backcountry roads. Inhabitants follow the credo that one should live and let live--as long as no one crosses the line.

“In Topanga you could walk nude down the street smoking dope and no one would notice you,” said Gary Harryman, an agent for Malibu Realty. “But God help you if you cross over their property lines, pester their dogs or molest their garbage cans. Then you’re in trouble. I don’t think they’d hesitate to shoot your ass.”

The disputes that sparked The Balance Sheet pit several residents against Kenny and Starz, her longtime boyfriend. The couple bought four small lots on Cave Way in the early 1980s after returning from a two-year cruise to the South Seas on a 27-foot boat. Kenny, 51, and Starz, 56, put their savings into the Topanga properties while supporting themselves by selling a book that Kenny wrote on celestial navigation and a marine flare device that Starz invented.

They bought three lots at a county auction and the fourth later, two in Kenny’s name and two in Starz’s so they wouldn’t come under county requirements to consolidate contiguous lots.

On one lot, they built their dream home, a 660-square-foot, one-bedroom hexagonal tower, the maximum allowed by the California Coastal Commission. Though the finely crafted house, echoing a Thomas Jefferson design, will be featured in the April issue of Fine Home Builder magazine, Kenny said she got her first taste of neighborly disapproval when a photo of the house turned up in the window of the TASC office, with the words, “This is what we don’t want in Topanga.”

Kenny said she felt wounded by the experience, especially since no one ever told her why they objected to the house.

Real trouble didn’t start, in Kenny’s view, until her once-friendly neighbors gradually became aligned with the Topanga Assn. for a Scenic Community.

“Like a lot of people, they eventually got indoctrinated into the club,” Kenny said, characterizing the group as being on the far-out fringe in matters from architecture to psychic empowerment.

“They like little old shacks, is what they like,” Kenny said. “They’re irrational. They’re into pyramid power.”

The neighbors did not respond to The Times’ request for an interview. And Susan Nissman, chairwoman of TASC, declined to comment.

Relations heated up some more when Kenny and Starz filed for a permit to build on a second lot in August, 1990, just before stricter land-use standards promoted by TASC went into effect.

The permit application for the house on the second lot was delayed more than two years. In the meantime, as a result of complaints from a neighbor, the county cited Kenny and Starz for rebuilding an old structure on one of their other lots without a permit.

Kenny and Starz filed a permit application that is pending and have hired a lawyer who is considering filing a lawsuit against the county, contending that old structures throughout Topanga have routinely been rebuilt without permits. In fact, three other structures on the block also have been cited as illegal.

Kenny, a former private investigator and X-ray technician, said she began to suspect collusion between TASC and the county agencies.

The final straw for the couple came in November when the county informed Kenny and Starz that their application to build a house on their second lot had expired and they would have to reapply. Two days of furious writing brought out the first issue of The Balance Sheet, intended, Kenny said, to bring some balance to the community.

In it, Kenny, an intense woman who indulges an admitted bent to “over-analyze,” and Starz, an affable man who smiles a lot and speaks sparingly, detailed dozens of slights, insults and abuses they say they have endured.

“Our lives day by day have been torn apart by gossips and do-gooders in this town,” Kenny wrote.

A blow-by-blow of the alleged harassment had dozens of items, including 12 visits by the county Department of Health Services, four by sheriff’s deputies, seven by other county agencies and one by the U.S. Bureau of Alcohol, Tobacco and Firearms, the latter on a complaint that Starz was illegally selling firearms. (He says he has a U.S. permit for his flare device.)

Kenny and Starz did not get much sympathy for their suffering. Carolyn See, the novelist, left a message: “Please keep your hate rag out of my mailbox, take your craziness elsewhere. I swear you guys are worse than a possible golf course.”

“It’s really against the spirit of Topanga, which is be free and easy and don’t get crazy,” See said in an interview. “The fact that someone can do a paper like that, is the downside of the fact that everyone can have a personal computer.”

The first barrage of calls was nothing compared to the following month, when Kenny and Starz set up their answering machine to play the threatening message received by a Balance Sheet advertiser and printed a note in the paper promising readers, “Terrorist recordings may be heard 24 hours a day . . . “

The phone rang incessantly for days, Kenny said.

The second issue introduced broadside attacks on the neighbors, without actually naming anyone.

In one article, Kenny lambasted the Coastal Commission over a three-story house just completed on a lot adjoining hers. She once owned the lot but sold it, she said, after being told by Coastal Commission staffers that the the commission’s slope-intensity formula would allow no more than 600 square feet. Then the commission granted the buyer a permit to build a house of 1,641 square feet.

Kenny then published a map of the property, outlined the slope-intensity formula and sarcastically asked readers to explain how the commission decided the larger house was acceptable when her proposed one was not. She offered $1,000 to anyone who could figure it out, confident that no one could.

Another Balance Sheet article, weaving a convoluted tale about an elderly woman who lived unhappily in a nursing home until her death, appeared to link a neighbor to a scheme to gain title to the woman’s house through conservatorship proceedings. (The neighbor declined comment but switched phones before saying he would have nothing to say, explaining that he feared Kenny and Starz were monitoring his portable.)

Those few Topangans who consented to talk about the paper said they were shocked by such reports.

“There is so much innuendo and half-truth in there, implying things that aren’t true at all about her neighbors,” Harryman said.

“She’s a vicious person,” said another real estate agent, Marty Brastow.

Brastow said the community has adopted the strategy of ignoring The Balance Sheet, “until they run out of money or they get bored, whichever comes first. . . . People generally talk about it for a couple of days and say, ‘Did you see that stupid thing, or did you see that nasty thing they said about so and so?’ and, ‘Isn’t it ridiculous!’ and ‘Forget about it.’ ”

The Balance Sheet did fail to come out on schedule in March, providing its detractors brief hope that Kenny and Starz had worn themselves out. But it wasn’t so.

The fourth issue finally arrived, its muckraking nastier than ever, directing its latest attack against a county building inspector.

Kenny vowed that the delayed publication was no sign of flagging energy. She blamed a computer virus that erased all the copy, forcing her to rewrite the whole edition.

She was pretty sure someone put the virus in her computer by telephone modem.