Sanitation district smacked with $1.4 million proposed fine

June 19, 2012

John Wallace


Ratepayers in the communities of  Arroyo Grande, Oceano, and Grover Beach are facing increased utility bills to cover a $1,383,007 proposed fine for a raw sewage spill that occurred because of alleged mismanagement of the South San Luis Obispo County Sanitation District, according to a complaint lodged Monday by the Regional Water Resources Control Board.

In the complaint, prosecutors accuse district administrator John Wallace of not properly maintaining or operating the plant and failing to properly report incidents to regulators. Wallace is the owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo that receives from $50,000 to $80,000 a month for plant administration and engineering services.

“The water board’s enforcement team is proposing a reasonable penalty in this case based on the evidence, the law, and previous cases,” said Michael Thomas, assistant executive officer for the Regional Water Board.

“A preventable sewage spill of more than a million gallons is a serious issue, and one of the main purposes of enforcement is to deter future violations,” Thomas said. “Unfortunately, we were unable to reach a negotiated settlement with the sanitation district because, based on the facts and our experience, the district’s spill amount calculations weren’t reasonable. So we scheduled this matter for a public hearing, where the water board itself will decide the outcome.“

In addition, regulators accuse Wallace of using a methodology to estimate the 1,139,825 gallon spill that is “inaccurate and unreliable.” Instead of relying on approved spill calculation methods such as using computer graphs of influent at the time of the electrical failure and historical data, Wallace used eyewitness accounts of  sewage pouring out of manhole covers.

Shortly after the Dec. 19, 2010 spill, which was caused by an electrical shortage of outdated wiring that had been slated to be replaced for years, Wallace estimated 110,000 gallons of sewage had spilled into the community of Oceano, local waterways, and the Pacific Ocean.

Three days later, plant operators reported a 894,600 gallon spill to regulators. By Jan. 3, 2010, Wallace, using a  method created by his staff at the Wallace Group, reported the spill at 383,200 gallons. In 2011, following a notice of violation from state regulators, Wallace increase the reported sewage spill amount to 417,298 gallons.

In arriving at 1.4 million gallons, regulators took the approximately 3 million gallons of raw sewage entering the plant during the failure and subtracted almost 2 million gallons of sewage that bypassed the failed pump and entered the treatment plant (based on an effluent meter that operated correctly during the failure), according to the water boards’ technical report of the spill.

Regulators have set a tentative public hearing on the complaint for Sept. 6 at the water board office in San Luis Obispo. At the hearing, sanitation district officials will have an opportunity to argue against the complaint.

The district, which serves the residents of the Oceano Community Service District, Arroyo Grande and Grover Beach, is governed by a three person board consisting of one representative from each community.

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Most interesting that the Board canceled their meeting after this came out. Talk about non-transparency!

The Board should be calling an emergency meeting, not canceling meetings! If the people don’t go to their respective city council meetings and raise hell over this non-transparency and lack of public outreach, then they deserve what they get.

The public should be demanding accountability and answers, not putting up with canceled meetings.

You’re right on the money SLORider. Perhaps folks are intimidated buy a handful of dirtbag politicians but there’s nothing to fear. Attend the hearings and board meetings, voice your opinions and let them who’s in charge for a change. This is not a kingdom or tyrants who do at they please. The public elected them as trusted leaders,they have overstepped their bounds and deceived everyone. Its time to put the colluding SOB’s in their place.. If you don’t speak out NOITHING will change. The fine will be paid, your rates will be increased ,Wallace will never leave his cozy little deep pocket gold mine and history will repeat itself soon enough with another environmental disaster.

Seitz told the public this is the first spill is 25 years, that’s a blatant lie with documented proof that the plants CL2 system failed numerous times in the last decade sending Fecal Coliform loaded, partially treated sewage into the ocean. As a matter of documented fact for decades management purposely disallowed proper testing procedures for setting up Fecal Coliform monitoring so not to get a violation, “wiggle room” it was called. Seitz and Wallace knew damn well what took place and they have the audacity to say their honest and employee complaints are frivolous?

Doggin, there has been a lot of effort expended by folks to address the SSLOCSD issues. I’m not saying that we shouldn’t double-down now–with the water board bringing more focus on Wallace, Inc. and all. I’m just sayin’ here that CCN and local activists have been putting in the time.

The games the SSLOCSD plays at meetings is unbelievable. Come to the next one–I bet they will be at top form and ready for the Wimbledon of screwing taxpayers.

Your absolutely correct and defiance dosent even scratch the surface of their Motive operandi. They claim to be broke because of defending themselves from frivolous lawsuits or the illegal or unethical findings or regulators. If the individuals guilty would climb off their little ponies and admit their incompetent and have been lying thru their teeth, 5 cities would be 100% better off and hundreds of thousands in wasted tax dollars could be prevented. Ive been to several of their meetings or circuses if you will and cant stomach the lies and deception, Jerry Springer is less of an insult to the public’s intelligence.

The problem with you SLOrider aka Kevin P. Rice, is that you lost all credibility after your sleazy debacle with the doomed Ed Waage election campaign. Who could possibly trust you now, even if you, surprisingly, actually aren’t even purposely misleading the public?

You’ve become a toxic, shamed wannabe political operative Mr. Rice, and every wise politician and bureaucrat knows to avoid you whenever possible. Even for a good cause, you will do more harm than good. Sad, but true.

I should also hasten to add that Kevin P. Rice aka SLOrider , et al, lost credibility with many people long ago, after a string of incidents and behavior that many of us found despicable. The Ed Waage debacle was just another incident confirming what so many of us have known for a long time.

Dear Wise, Until you lose your shame and embarrassment of putting your name in public you possess no credibility or concern. Dark forces prefer to operate in the dark. Make your choice.

My name IS in the public, Kevin. People know me as WISEGUY. What more do you need to know? And why?

My credibility is just fine, thank you. No shame, no embarrassment.

Face it, in addition to all the crap you have pulled over the years, you, in your selfish, narcissistic way, totally screwed over Ed Waage and may have effectively destroyed his political future, all in your misguided, misanthropic effort to “help” when in reality you simply have a personal agenda against certain politicians and were using Waage to further your twisted ambitions.

Kevin, you have become the Typhoid Mary of local politics, carrying infection into each realm you stick your hands into.

Patently ridiculous on every account. Let us know when you wish to grow a backbone and debate openly and honestly.

No problem. I’ll let you know. But what is it that you wish to debate?

How about the topic of the article?

The one and only answer to this is that The Wallace Group should be the ones paying these fines and penalties. They are the ones who fudged the reports and fabricated statistics. Wallace is guilty as hell and all those people that have supported him will hopefully realize that Wallace is only looking out for Wallace and no one else. Crooked comes to mind. JMO

If Wallace is guilty, he should be responsible, as you say. It’s too much to ask the average citizen to recognize phony statistics etc. and oversee his operation. Doesn’t he have E&O insurance just for situations like this, if it was inadvertent? If it was carelessness, or worse, he should pay even more.

For the official letter of enforcement follow this link and open the first listed enforcement action item on the list.

If one were to assume the fine would be paid proportionally by the citizens of Arroyo Grande, Grover Beach and Oceano then the numbers would ROUGHLY be: (based on population – not rate payer numbers as Seitz has made it so difficult to get any info it would take a month of Sundays):

AG population 17,238 is 46% = $636,000 fine

GB population 13,200 is 35% = $484,000 fine

OC population 7,286 is 19% = $263,000 fine

Adjusted for number of HOUSEHOLDS per 2010 census:

AG households 7087 is 47.9% = $662,210 fine

GB households 5111 is 34.5% = $477,572 fine

OC households 7,286 is 17.6% = $243,225 fine

Please make your checks payable to:

Tony Ferrara

Bill Nicolls

Matt Guerrero

And your monthly check to:

John Wallace

correction, Oceano household is 2603

Why are OC and GB paying disproportionately more than AG?

Isn’t it interesting how only Jim Hill called for the bifurcation of the Wallace contract at SSLOCSD? Exactly whose interests were the other Board members looking out for? Who do they represent? Wallace or the rate payers?

Wallace is getting paid to defend himself. SSLOCSD just hired special counsel to defend Wallace.

More money will be spent defending Wallace, negotiating settlements and continuing to litigate than paying the fine and fixing the problems.

Rate payers lose again.

As posted here before, go see what information if any is listed on the Sanitation Districts website who Wallace just happens to be the webmaster for, or was until recently. One would think Seitz acting as legal council and public servant being paid by our taxes would be sure to provide transparency to those who pay his $15K a month as legal council. You’ll see nothing however because we’ve been lied to for 25 years about what goes on under their reign.

If you look around the county at small government agencies, you’ll see the Wallace-Seitz match-up quite frequently.

The NCSD – Santa Maria pipeline assessment district vote that failed? Guess who did the “assessment district engineering” for that project?

Dont forget about the Los Osos sewer debacle where John Seitz, the other D’bag is the attorney.

Jon Seitz is the d-bag attorney for NCSD, as well.

Coincidence? YOU be the judge.

Just think of a straw in the middle of a large milk shake and then they suck, suck, suck and continue to suck until it is all gone. Ha Ha Ha, hu hu hu, her her her. sounds just that crazy when gov fines gov.

I would like to say CONGRATULATIONS to CCN. They had the story right all along. Many would be surprised to known how many local’s have said that CCN had misreported this story. Looks like Karen was right on target, again.

What is most interesting is the Water Board. While there is no question this is a good decision, the Water Board management easily goes after Ranchers, the agricultural community, small property owners, small business owners and government agencies but leaves large corporations, such as oil companies alone. Management bureaucrats at the Water Board are dictators who pick and choose who they want to prosecute and fine. They are little dictators who have no real world experience but collect huge salaries and bark commands at small businesses. Someone needs to regulate the Water Board management.

You’re blowing smoke.

2 seconds with Google, first hit:

Look at the list:





Big Oil




You obviously do not understand government. Water Regional Boards are divided into areas. The citations you provided are from Regional Boards other than the one that represents this area. This Regional Board allows the major oil companies and corporations off the hooks.

Do you do the bidding for this Regional Board? Do your homework. Also, take a class in Government 101.

Where’s your stats, then? What experience do you bring to the table? Enlighten us, if you have a moment.

It appears when hodin is proven wrong he goes on the offensive. What kind of relationship does hodin have with the people at the regional water board? Why is he defending this local regional board? Can he be objective? hmmmm.

I have no relation with the water board, or dealings with the water board. I have followed the water board’s enforcement actions off and on for 20 years.

My motives for defending enforcement actions by the board are the same as for many of us:

— clean groundwater for drinking

— clean streams & clean oceans for fish and for swimming & diving

I don’t do this enforcement, you don’t do it, dante doesn’t do it. The board does it. They’re all we have at the moment.

Beyond that, inquiry, do you have a point to make?

I agree, R.Hodin.

We need the water board to do its job in investigating and fining the SSLOCSD/Wallace/The Wallace Group because that is the only way there will be change.

In addition, SSLOCSD/Wallace/The Wallace Group and the members of the SSLOCSD oversight board (all local politicians who are more concerned with bending over for their crony-in-arms, John Wallace, than in doing their job and ensuring the SSLOCSD is run under a policy of transparency, responsibility to the public, and ethics (including sending out contracts for bid and not just letting Wallace funnel them to his company, The Wallace Group) is now in the crosshairs of at least two State agencies.

This is how it started with the City of Bell investigation. At first it was a relatively small issue (compared with what they ended up charging Bell officials with), but it quickly mushroomed into obscene proportions once the state auditor, controller and AG got involved.

ATWT is doing what you do when you get stuck and can’t debate yourself out of a corner: he is personally attacking you and not your opinion.

It stinks no matter who does it.

I’m going to play devil’s advocate, and I am sure I will get flamed for it. But here goes.

If someone here has worked at the water board for enough time to know what issues they have to address, time deadlines, monetary issues, etc., please chime up.

Otherwise, let me just say that sometimes government agencies make what seems like screwball decisions which no one outside of the agency can figure out. However, most of the time it has to do with financial restrictions, grants available, agreements made between the water board members (privately) previously (i.e., okay, we’ll let this Wallace d-bag go this time, but by god if he doesn’t have a come-to-Jesus moment after this, we’re shutting him down), etc.

This is based on my own experience working at two local government agencies.

On the other hand, the water board can be as bad as some have said here.

Strangely enough, the Sanitation District meeting scheduled for tonight has been cancelled.

No doubt there are intense internal meetings going on to cover their backsides. They are probably discussing how they will present their side to the public legally. I wonder if they are looking at Wallace’s business insurance policy to determine whether it can cover the fine so the taxpayers don’t have to pay it. Awwww, the good old boy network at its best.