Oceano sewage spill much larger than originally reported

January 29, 2011


Documents attached to emails obtained by CalCoastNews indicate that a sewage spill last December dumped 3 million gallons of raw sewage into Oceano neighborhoods, beaches and the Pacific Ocean, more than 30 times what was originally reported. [PDF]

On December 19, storm water flowed through electrical conduits at the San Luis Obispo South County Sanitation District into pump motors which shorted out the plant’s electrical system, shutting down the plant’s intake pumps. The district serves the residents of the Oceano Community Service District, Arroyo Grande and Grover Beach.

Shortly after the spill, district administrator John Wallace reported to health officials that the spill dumped 110,000 gallons of sewage into the community. A few weeks later, he estimated the spill at 384,000 gallons.

However, a series of emails between Wallace, Wallace Group staff and sanitation plant manager Jeff Appleton reveal that those involved in calculating the amount of sewage spilled argued amongst themselves on how many gallons they should report and who would sign state-mandated accountings.

In a timeline and spill report attached to an email from Appleton to Wallace, Appleton says he determined the plant’s electrical failure caused a spill of 3 million gallons of sewage. A graph from the plant during the incident appears to support his estimation.

Wallace Group staff made some changes to Appleton’s computations, shown in blue ink, which lowered the spill amount from 3 million to 2,493,757 gallons of raw sewage.

A few days later, Wallace told Appleton that Wallace Group staff had reevaluated the spill amount using an approach that massively lowered the amount of gallons that Wallace wanted to be reported.

Wallace wrote in a December 23 email to Appleton, “As we discussed, our staff evaluated the potential quantity of influent that was spilled using incident data recorded during the event, plant flow data, an analysis of the hydraulic grade in the trunk and collection system, trunk and collection system storage capacity, manhole rim elevations, weather data, as well as standardized industry calculations to arrive at an initial estimated volume of 110,000 gal of overflow from various upstream manholes.

“These calculations remain plausible given interviews with the public, eyewitnesses of the overflow events in a number the affected areas, as well as staff from Oceano and the district that responded to the overflow event,” Wallace added.

Wallace insisted that Appleton use the estimating methods and numbers provided by Wallace Groups engineers, none of whom are qualified to run the plant or submit spill reports to regulators.

“You voiced a concern that the volume that engineering staff calculated was too low based upon your 25 years of experience and expressed that you could not submit the draft report to CIWQS (state reporting system) for the lower quantity but preferred that, if the lower amount was used, then I as the LRO (lead responsible officer) would need to submit the report,” Wallace says in the email to Appleton. “As you are the District’s CPO (chief plant operator), our calculations are prepared to provide backup information for you in support of your reporting requirements for this event.”

A week later, in another email, Appleton told Wallace that both he and the plant’s shift supervisor, Trini Rodriquez, felt uncomfortable signing the plant’s November required regulatory reports.

For more than a year, staff at the plant said they repeatedly voiced their concerns that the plant’s antiquated electrical system could lead to an environmental disaster–concerns they claim Wallace ignored.

Several plant staffers said they were not permitted to call in an electrician without either Wallace or staff at the Wallace Group’s approval.

The state water board can level fines of up to $10 a gallon for sanitation plant sewage spills as well as financial penalties for failing to comply to testing and management requirements of the State Water Resources Control Board (SWRCB).

For example, the SWRCB recently proposed fines [PDF] against Eco Resources Inc., operators of the San Simeon Service District Wastewater Treatment Plant and former operators of the Cypress Ridge Wastewater Treatment Plant, for among other infractions failing to properly test, monitor and report.

After finding themselves in trouble with regulators last year, Eco Resources dropped its name and began operating under its parent company’s name, Southwest Water.

The state’s settlement agreement asks Eco Resources Inc. to pay more than $26 million in penalties for environmental infractions, 1.5 million of which is for failures in San Simeon and Arroyo Grande.

Wallace Group designed the sewer distribution plan at Cypress Ridge, a residential community in Arroyo Grande.

The recent sewage spill in Oceano is another in a long list of problems that have dogged the plant, including a notice of violation from state regulators, law suits for allegedly terminating whistleblowers and a recent disciplinary action by the state against Appleton for instructing staff to manipulate effluent release numbers in order to make it appear the plant was operating in compliance with pollution and discharge requirements.

The Environmental Protection Agency estimates that between 1.8 million and 3.5 million people a year become sick from swimming in waters contaminated by sewer system spills.


I’m new to this site, and am approaching this issue from a different angle. Same destination, just different starting point.

It is not unreasonable to question whether Michael Seitz is the only Seitz acting in ways contrary to the public good.

My home is served by that wastewater treatment plant. I am ashamed of having that connection to the South County wastewater treatment plant. I have some familiarity with the issues involved, and will be involved in the future.

Thanks to all who have been on top of this.


Wallace’s staff told reporters Mike Seitz sits in on every Wallace group meeting, one has to wonder contrary to Seitz’s denial he’s Wallace’s legal council if he really is. If not perhaps Seitz is Wallace’s personal council/buddy and a share holder of the Wallace group and not the Wallace groups attorney. Seitz’s wife is one of Wallace’s HR people, Seitz is legal council to probably every municipal agency Wallace has his paws into. However it appears Seitz isn’t worth his weight in the area of employment law as Wallace is now using your tax dollars to pay for a lawyer from LA to defend him from his acts of Malversation,fraudulent behavior, extortion, or corruption by a person who holds public office or a position of trust. which has resulted in lawsuits filed against the Sanitation District and Wallace himself by the staff of the plant. Make a difference, show up at the Board meetings and be heard, you wont be alone.


Just as a correction of a fact that I see mistakenly related here: Seitz’s wife Sharron, no longer works at Wallace Group. She was laid off approximately two months ago. Carry on.



Word is Wallace and his cronies intend to have a “special meeting” Wed the 9th at 5:00pm at the OCSD office. How typical of the tactics of lately,cancel the normally scheduled meeting and hold a “special” meeting which under Brown act requirements only requires 24 hours notice making it difficult for the working man to attend the meetings. Public servants, acting in our best interest? I think not.


I hope someone from this site will attend the “special” meeting, take notes and come back here with a report for those of us who cannot attend in person. I doubt it will

be broadcast.


If you follow the money, the web of corruption will be revealed. There has been enough factual evidence of violations of the federal Clean Water Act that the FBI should send in agents to audit Wallace Group’s finacial books to determine who has benefitted from gifts, contributions and jobs.

The District’s legal counsel is Mike Seitz. Mr. Seitz’s wife works for Wallace Group in their HR department. Mr. Seitz has provided legal counsel for Wallace Group. Tony Ferrara’s wife worked for Wallace Group. How is this possilbe in the US!

Citizens should demand transparent government and require integrity from all of its elected officials and employees.


Its beyond question that in spite of the State’s letter of proposed disciplinary action against Appleton Wallace refuses to discipline or remove Appleton from his position as plant superintendent. This is the individual who is accused of several pages of violations using illegal or questionable practices in the performance of his duties. If this dosent raise some eyebrows what the hell will, What is Wallace trying to hide and why is he protecting this person?

Call Wallace’s place of business and demand Appleton be removed from power until his appeal if he chooses to appeal is settled. The Wallace group 544-4011 or jonhw@sslocsd.us You can also call the plant itself @ 489-6666 and voice your concerns.


Ok thumbs down crowd,what part of this do you feel is unjustified? Your obviously satan himself or a Wallace employee


Masterofpuppets, It’s very clear that cronyism & nepotism are alive & well in the Wallace Group as well as Oceano CSD. Amazing SLO County truly is the MOST CORRUPT county in the State of California!


This is horrific! I don’t even know what to say.

If you’d like to join me at the next City Council/OCSD board meetings, here are the schedules:

OCSD Board Meetings are held on the 2nd and 4th Wednesdays of each month at 6:30 p.m. in the OCSD meeting room at 1655 Front Street, Oceano. OCSD is directly across the street from the Oceano Depot, with parking in the rear.

Grover’s next meeting is Feb 7th, at 6:30

154 S. 8th Street

Grover Beach, CA 93433

AG meets Regular City Council meetings are held on the 2nd and 4th Tuesday of each month at 7:00 PM.


Please be advised that the SSLOCSD regularly scheduled meeting of

the Board of Directors for February 2, 2011 at 6:00 p.m. has been:




Sewer treatment in this county has been corrupt for decades. Nothing new here. The Pismo plant dumps raw sewage into the Pacific nearly every night between midnight and 4am and people wonder why the beach is always contaminated and air smells like sh*t. HELLO. Everybody has their hand in the till. Everybody gets taken care of. Except the environment and could-care-less taxpayers.


Good question on the environmental groups as several have been notified, sent documents and pleaded with to make a presence at the meetings since day one. Yet nothing in that way of support is seen. Perhaps a certain somebody is a Member of the Sierra club also, and like the rest of the ones kept in the dark have been fed lies being told everything is taken care of.


I find it interesting that someone has “thumbs down’ed” these environmental group posts. Secret naysayer, i implore you to explain yourself. Why do you not support the idea of getting other affected interests involved.


The Surf Riders will be here after dark as I hear there is a swell.

As far as the Sierra Club is concerned look at this list here http://santalucia.sierraclub.org/introduc.html#Officers2009 and draw your own conclusions. (cough Dalidio cough)


Fact: Wallace’s San District cash empire during its peak had over $12 million in the bank, yes a so called “non profit” government entity. Somewhere in the early 00’s Wallace engineered and managed projects were kicked into high gear, as of today the San Districts bank account has only a little over $4million left in it. In 06ish a Chlorine Contact chamber was built, original estimates came in at 1.2 mill, after Wallace was done with it is cost us over $2 million, and was taken off line for over a year because it didn’t function properly and ten of thousands in repairs were necessary. These were forced upon the plants staff so Wallace wouldn’t look so incompetent in their management duties. In 2010 the cost of the Chlorine alone was close to $400,000 because it still does not function as intended.

two Digester’s were rehabbed, this took over 5 years, cost you millions in rental equipment charges and additional chemicals to deal with another Wallace operations nightmare. The SCADA system Wallace claims will be “much better” has cost you over $60,000 and still does not work, You paid $16,000 in admin and engineering fee’s to Wallace to have the plants shop roof painted, that’s not including the cost of the actual painting. You’ve paid $$hundreds of thousands$$ in Head works upgrades, flood wall upgrades, a stand by diesel pump, flood gates to supposedly prevent what happened on Dec 19th, and still it happened because Wallace and his staff refused to plug some holes in the ground leading to the influent pump motors shorting them out rendering the pumping station useless.

Now you get to pay again for Wallace’s $80,000 per month mismanagement in the form of repairs covered under the “state of emergency” declaration. Your sewage damaged homes? Tuff crap, call your insurance company and submit a claim.

So where did the rest of this $12,000,000 go? At $1,000,000 per year for Wallace’s fee’s as engineer and Administrator its not hard to see is it?

Had enough yet? The go to http://www.sslocsd.org and look for the next Board meeting, the normally scheduled one for 2-2 is canceled but may be rescheduled for Wed 2-09-11. Come to the Board meetings, make yourselves heard and demand justice and the resignations of these so called public servants who are “dedicated to service”


Most homeowners policies do include some kind of “sewage backup” coverage. I would certainly file a claim and request subrogration against the Wallace Group as the proximate cause of loss was not likely to be deemed a covered peril. A class action suit isn’t out of the question, either.


Um, let’s see, $10 a gallon, at 3,000,000 gallons; does that equal out to $80,000 a month for how many years? Looks like the whole bunch is covered in “raw sewage” and most likely the communities being supposedly serviced by the OCSD is going to be on the hook for the fines that will be coming. How John Wallace does not get arrested, tried and convicted of fraud is beyond me. Holy crap indeed.


So what does it take?

What does it take to get Nichols and Ferrara booted off the so-called “oversight committee”?

What does it take to get Adam Hill, John Shoales, or Sam Blakeslee to look into this?

Tribune, hello? KSBY, hello? New Times, hello? Times Press Recorder, hello? Are you going to do anything about this story?

John Wallace wanted to underreport the damage by how much? And no one is investigating him?

What does it take, people? They’re rioting in the streets of Egypt right now, demanding their rights and their freedom.

Meanwhile in our own county John Wallace just keeps going cha-ching and runs the place like his own little fiefdom.

The only person doing anything about it is Karen Velie.

We should all be ashamed of ourselves for our collective apathy.


We seem to have an acute case of “collective apathy” on many issues in our country. Let’s get our heads out of the sand and look reality in the face. We must deal with the corruption in our local, state, and federal government personnel and agencies. We do not have the benefit of the naive .longer. Let’s pick up our adult panties and take care of the business of taking back in the most responsible way possible


What does it take? Easy answer there, it take community involvement. It takes going to the board meetings and showing these people they are being watched. It takes speaking out and voicing your opinion. It takes “maning-up” and not claiming to be “too busy” to attend. If YOU do NOT excersice your rights as a citizen and give your appointed officials the guidance and oversight they MUST have, you get what you deserve when they lead you like a lamb to slaughter. Commenting on Cal Coast is NOT ENOUGH!!!! Stand up in front of your board members and tell them what you expect of them. And if they do not follow the will of the people, VOTE THEM OUT OF OFFICE!!!

Ryan Miller

Thanks for the hello, kellygirl, and here’s a hello back to you.

To answer your question, we at New Times have been looking into and reporting on many issues related to the John Wallace/South San Luis Obispo County Sanitation District situation, and we will continue to do so.

Most recently, check out this week’s New Times (the Jan. 27 issue) on page 13. Or follow this link to the story with “Is a South County sanitation district corking whistleblowers?” as a subhead (posted Jan. 26):

(My apologies if you have to cut and paste it.)

So, yes, more people than you apparently think are investigating and “doing things” about what’s going on.

Thanks for your vigilance. Feel free to contact anyone at New Times directly (myself included) if you have any comments.


executive editor

New Times


Ryan, it’s nice to have you chime in. Unfortunately, the New Times, like most other media in SLO County rarely, if ever, pursues an issue in a way that creates lasting change for the better. Even under your great , late “journalistic hero” Steve Moss, The New Times rarely accomplished anything significant. Just stirring up the pot, getting reader’s tongues wagging, and then the paper moves on, with nothing much different than it was before.

Steve Moss truly liked it when things were screwed up. He didn’t particularly like change. Having a screwed up community was good for The New Times as far as he was concerned.

Atascadero for instance.

Where are the editorial voice campaigns for reform on anything? We don’t get that from The New Times or the Tribune.

The Shredder truly, in every sense, is a joke. Its irrelevant, it’s immature, and generally accomplshes absolutely NOTHING in the long run. Maybe if someone at New Times actually had the guts to sign his name to that Shredder crap, it might not end up as so much childish, stupid crap that gets us nowhere. How about you just stick your tongues out at wrong doers in our community and forget about wasting ink, because the New Times “hard hitting” journalism has rarely, if ever, been more than just sticking a tongue out at someone.

The New Times has done a decent job of stirring the pot, but for some reason nothing ever gets cooked.

Some of the reason we have so much corruption in SLO County is exactly because our local news media is so incredibly weak and self-satisfied and conceited.


The news media, or some of them anyhow, as its clear KSBY seems more interested in sports scores and the weather, is the only source exposing the corruption in this county and their hands are tied as they are not the law and offer the story. You, me and the public are the individuals who vote these politicians into office, if we don’t approve of whats going on we need to speak up loud and clear instead of making excuses why we cant attend the board meetings. I’m confident the likes of the DA, County Supervisors and local law enforcement all read the papers and watch the news yet nothing happens it seems. So you tell me what it takes to light a fire under somebodies butt besides contacting these agencies who all have been contacted and then some to launch an investigate, Id like to talk to them.


Have to agree with you about our TV news, kitten. If they couldn’t take clips off You tube or the Net, we wouldn’t have any National or International news at all. :-(

The papers are no better. The result, of course, is an apathetic, ignorant public – and elected, appointed officials who are inept and often, corrupt.

If we the people choose silence, nothing will ever change. So keep

speaking out.