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Sanitation district slams San Luis Obispo County Grand Jury

September 28, 2011

John Wallace

The South San Luis Obispo County Sanitation District board fired back a response saying that the Grand Jury’s allegations of mismanagement at the district “were largely inaccurate,” which was posted on the Grand Jury website on Wednesday.

The South County Sanitation District provides sewer services to about 38,000 customers in Arroyo Grande, Grover Beach and the unincorporated town of Oceano. John Wallace is the chief administrator of the district and also owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo.

The Grand Jury reported in June that the district board failed to recognize this conflict of interest and to eliminate or, at minimum, mitigate the conflict of interest and that Wallace’s contract had never been competitively bid as required by law.

The three member district board said in its response, “The grand Jury’s depiction of the Board of directors as being as being generally unaware is both inaccurate and offensive.”

The board found no reason to follow the Grand Jury’s recommendations to hire an independent management and to evaluate and compare organizational and operational alternatives for the district.

Members of the local Surfrider Foundation said the directors’ response was “incomplete” and “disrespectful.”

“By institutionalizing these conflicts of interest, the board of directors may have indirectly contributed to multiple sewage spills and frequent water quality violations at their sewage treatment plant that discharges only 600 yards from the coast of Oceano and near Pismo Beach,” the group says on its website.

On December 18, as the result of influent pump failures, as much as 3 million gallons of raw sewage was dumped into Oceano neighborhoods, beaches and the Pacific Ocean.

State regulators responded in May and served the district another notice of violation because of the December spill and conflicting sewage release numbers. Wallace answered the violation in June and is awaiting the state’s response which could include fines of up to $30 million that would fall on the communities and the rate payers, and criminal action against district officials if it is determined they responded untruthfully.


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Someone mentioned this on the Trib site and I feel it needs posting here:

“The 1993 GJ report states that there is no conflict of interest between Wallace and the the District (San Simeon at that time,) because WALLACE WASN’T ASSIGNING HIS ENGINEERING FIRM WORK. It appears to me, he is doing that to the tune of approx $50,000 A MONTH, at SSLOCSD. It’s like comparing apples and oranges.


And didn’t someone mention that Wallace WAS eventually forced to chose between District Managing or providing engineering services at San Simeon because although the Grand Jury found there wasn’t a conflict of interest, the San Simeon BOD wanted to avoid the appearance of impropriety?”


Excellent point.


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I wonder how much John Wallace is charging the district to make the rebuttal to the G.J. report?


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That information can be found on the Districts website under the agendas/ board packs. As usual there is no transparency nor any indication of the hours its taken on this specific report. It is pretty comical they initially deny, then tell us, well were changing things as we go, and always have been, yet they also admit in 25 years nothing has changed on the contract. In a final word its now screw you Grand Jury you don’t know what a conflict of interest cause the infamous Mr.Wizzard (seitz) and his minions Ferrara and nicholes say so.

I can tell you there’s an wording indicating Wallace and some of his staff will personally be making a trip to Sacramento to discuss the NOV/ spill fines with the state and we can assure ourselves all charges will be billed back to the Sanitation District for travel time,mileage, meals etc even though Wallace admitted in a report that the spill could have been prevented if not for their neglegence.Gotta wonder if if they received a speeding ticket driving to Sac, if they’d have the balls to charge the tax payers for the fines related to that one, might as well its District related.

Perhaps the crap is about to hit the fan as the OCSD director has expressed deep concerns to their insurance going thru the roof or worst because of their part in the sewage spill back in Dec. There is a bright side to it all however, with the rainy season soon upon us the electrical system failure that caused the giant spill has reportedly been fixed..yahoo!!!. Good to know that the contractor is familiar with the plant and Wallace’s management style, after all he’s a former employee himself of the Sanitation District and FRM which is another one of Wallace’s other companies, gotta keep it all in the family ya know, incestious little bastards aren’t they?.

Although there’s no indication of this on the Board pack or Agenda (imagine that) there’s talk of one of the Wallace groups employees being appointed the Sanitation Districts new controller. What a convenient time as the Grand Jury, A/G? and God knows who else investigate the conflict of interest and corruption.


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