SLO County to review sanitation district books

July 22, 2011

John Wallace

The San Luis Obispo County auditor-controller will evaluate two new employment contracts for engineering and administrative services at the South San Luis Obispo County Sanitation District as part of a review of the district’s financial records. [TimesPressRecorder]

The review was spurred by a grand jury report that concluded there is a conflict of interest existing between John Wallace, the administrator of the South County wastewater treatment plant, and his engineering firm.

During the 2009/2010 fiscal year, the report says, Wallace and the Wallace Group received $836,000 for administrative and engineering services. At a similar size plant in Paso Robles, those costs ran under $200,000 during the same period.

Jurors recommended that the County auditor review the district’s financial records. In addition, the grand jury asked the district board to consider hiring independent management and that it evaluate and compare organizational and operational alternatives for the district.

The board rejected the suggestion and opted instead to bifurcate Wallace’s contract into two separate documents — a single contract for administrative services and another for engineering work.

Gere Sibbach, county auditor-controller, said his office is planning to begin a review of the district’s records on Aug. 1, which he expects to complete before the end of the year. At that time, Sibbach will send copies to the Sanitation District directors, grand jury and Board of Supervisors.

The district provides sewer services to about 38,000 customers in Arroyo Grande, Grover Beach and the unincorporated town of Oceano.

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Hmmm. interesting who all Seitz Brothers were working for when the Wallace deal was cut. Oceano, Grover, Arroyo Grande. Who employ’s them now? Is the Seitz brother that works for the Sanitation Dist.Also the same one that represents the Wallace Group.? One thing is for sure, anytime Wallace is making money, Seitz is too. Is this same Seitz one of the attorneys of record for A.G as well or perhaps one of his associates.?

Jon Seitz works for, at least, Paso Robles and the Nipomo CSD.

He also represents Los Osos CSD & has from the beginning.

It’s amazing how long this has been going on. That he can be the admin and the engineer is just a joke. What are these politicians thinking by allowing such a blatant conflict of interest to go on for so long. This guy has had it made. It’s as if a cities park and rec manager hired his landscaping company to maintain the parks. Crazy stuff.

In the original contract the cowards drew up with their cronieism crayons it says Wallace is to provide engineering and admin services. Recently Mr Shites provided a document he prepared that states “as you know, Mr Wallace has a very limited ability to self direct engineering services”. That being the case one could assume the employees of the San Dist were requesting Wallace take over, guaranteed this is not the case. Engineering is entirely self directed by Wallace or his employees “staff”, and the preparing of the agendas is done by Wallaces Ms. Burkette. These are prepared before any board member see’s or is aware of what needs to be done in the way of engineering services. So Wallce and HIS “staff” recommend themselves $850,000 of engineering for last year and Wallaces buddies, ferrara and Nicols sign off cause he so wonderful and a great friend. Drawing up two contracts or cutting the other in half with scissors will acomplish nothing as far as correcting the obvious conflict who everybody but the crooks themselves clearly see.

Anyone else find it strange that three actual San district employees, the plant super,shift super and lab tech have been ousted and are taking/have taken legal action against Wallace for his ethics in management, yet Wallace who is responsible for multiple notice of violations and one grand jury investigation is still there sucking the last of the now only $4,000,000 in the Dist’s account dry?. Be prepared taxpayers for a huge rate increase when the NPDES permit expires in a few more years and Wallace says the Dist is now underfunded for a much needed major expansion which is already in the planning stages.

SLOChuck Sayeth: “Engineering is entirely self directed by Wallace or his employees “staff”…”


Indeed, Wallace wouldn’t even allow Appleton to update a plant safety manual.

“bifurcate Wallace’s contract into two separate documents”

All this means is that Wallace will get TWO checks instead of one!

Actually, at this point, I wish Wallace would be bifurcated. His BS nonsense and corruption is getting REAL old.

Yes, there certainly does need to be an outside investigation. If the County Auditor fails to do what is right, this matter can be formally referred to the D.A., and if he also fails to take appropriate action (and I suspect he will), then all local resources will have been exhausted and the Attorney General can be brought in. That is what is needed.

In this County, the only way to get justice for taxpayers is to use State agencies. Our so-called County justice system is a complete farce.

When pigs fly….

TTo expect that an audit by the county would be anything other than a SAFE controlled one quarter segment , is eating the same feed as Henny Penny was when the sky was falling. In fact it would take the sky falling to ensure a true comprehinsive audit by the county.Without the enablement of the verious county department heads, The glut of money and power at the expense of those most disadvantaged could never occure. John Wallace, Toney Ferrero, and others well placed in the county and their minions have been feeding at the trough of Oceano for decades. The Debouchery that has occured with the Sanitation Dist. and the Oceano District has been and is Criminal. To expect that the D.A. would do anything is also more Henney Penny.The countys audit will be milktoast at best. Without the County’s emissary’ Wallace and all those bottom feeders could not be as successful at skimming an skamimg their wealth and the minion’s such as Nicoles and others gather the crumbs of recognition amoung themselves. When will the rate payers say enough.

I don’t know if this is how it works at the State level, but sometimes, in a legal case, one has to do certain steps (i.e., have a certain type of hearing) before one can advance to the next level.

It’s like a video game only far more expensive and not nearly as much fun.

With the corruption in Los Osos (Kelly-Ogren conflicts of interest), the SLOCo DA’s office might actually have pressure on it to diffuse the growing public belief that the SLOCo government and regulatory agencies exist solely for John Wallace, upper echelon of county management, etc.

In other words, I always hope for the best sailing, but am prepared for a storm, anyway.

I think, if a County investigation was not first done first, and, instead, we started lobbying the State to investigate it without the County investigation, the State would just kick it back to the County level, anyway

This is just my guess. Others may have more definitive information.

So MANY thoughts come to mind over this situation, but all I can say is…


This is great! Sibbach has been around about as long as Wallace. I wonder if he can really do an impartial audit. When he is doing said audit, perhaps he should check out who exactly is ‘the staff’ who approved any expenditure listed. Is ‘the staff’ the staff at the treatment plant, the staff of the board, or is it Wallace Co staff, or Seitz is ‘the staff’?????

Makes quite a difference in who approved any expenditure and ‘the staff’ certainly covers a lot of people. including Wallace himself…………

If the auditor-controller was going to really do an “independent audit,” the County would have had him do one a LOOOOONG time ago.

This is just more lipstick on corrupt, gluttonous pig.

VALLYBEAR Sayeth: “Is ‘the staff’ the staff at the treatment plant, the staff of the board, or is it Wallace Co staff, or Seitz is ‘the staff’?????”


Good point. For all we know, Paavo Ogren may be the “staff” they will use.

I wouldn’t mind being a fly on the wall when Wallace-the-Administrator meets privately to negotiate contracts with Wallace-the-Engineer.

I think it will go something like this:

ADMINISTRATOR WALLACE: “Engineer John, you’re simply FABULOUS!

ENGINERING SERVICES PROVIDER WALLACE: “No, Mr. Administrator Wallace, YOU are simply fabulous!

[repeat ad nauseum]

That’s a real cozy deal that Mike Seitz hammered out for Wallace! What a scam, after all THESE years, Seitz “decides” the “correct” way to solve the “problem” with Wallace is to split his contract into TWO Contracts! How’s THAT for skirting the law??? Having Sibbich “investigate” is like the fox guarding the hen house…It won’t work…there needs to be an “OUTSIDE” investigation…