Wallace Group no-bid contract on lame duck agenda

November 24, 2014
Mayor Tony Ferrara

Mayor Tony Ferrara


Arroyo Grande Mayor Tony Ferrara is slated to give a no-bid contract to two engineering firms for consulting services before he gives up power over the city’s agenda and council.

Tuesday’s Arroyo Grande City Council meeting marks the final council schedule and meeting Ferrara will control. The 10th item on a packed consent agenda is a proposed six-month extension of a two year contract for both the Wallace Group and Water Systems Consulting.

Though the agenda says there is no cost involved in extending the two agreements for on-call engineering services, in the past 12 months the city has paid the firms over $200,000. From Dec. 1 through Nov. 30, the city paid Wallace Group $110,564 and Water Systems Consulting $91,518, according to city records.

Ferrara came under fire this summer after allegations he attempted to coverup an alleged sex scandal between then city manager Steve Adams and a subordinate employee. Ferrara and Adams later claimed police officers lied about an incident involving Adams and the subordinate in an attempt to manipulate salary negotiations.

John Wallace

John Wallace

In addition to allegations of a coverup, questions about mismanagement and waste of public funds resulted in Ferrara being unseated after 16 years on the council.

In particular, the public questioned Ferarra’s leadership role on the South San Luis Obispo County Sanitation District Board. The sanitation district serves the residents of the Oceano Community Service District, Arroyo Grande and Grover Beach and is governed by a three person board consisting of one representative from each community.

In 2012, the state water board determined that a more than 384,000 sewage spill was due to careless and improper maintenance of the district by its administrator John Wallace and his engineering firm the Wallace Group. The state then levied a $1.1 million fine.

Ferrara stood by Wallace and the Wallace Group claiming a San Luis Obispo Grand Jury report that found a conflict of interest in Wallace’s administration of the plant was faulty and arguing against the state water board’s findings of mismanagement.

In Feb. 2013, amid demands for a complete audit of Wallace’s financial management, Wallace resigned as administrator of the sanitation district.

Before he stepped down, the sanitation district regularly exceeded its more than $6 million annual budget. Under a new administrator, the district’s costs are less than 50 percent of its budget, district records show.

Tuesdays Arroyo Grande City Council meeting is scheduled to begin at 6 p.m. at the council chambers at 215 E. Branch Street.

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Josh Payne

Is it just me, or does this reek of corruption?


Silly Josh, this IS Wallace and Ferrara we’re talking about.


It sure does and–because the system of checks and balances that a city council, city manager and the city’s legal counsel are supposed to provide to control the thuggery of a manipulated mayor like Ferrara are completely absent in AG–it just makes the corruption so very easily accomplished and so omnipresent.


I wouldn’t be surprised if Tony’s next job is with Wallace & Associates as payback for the sweet contracts.


It might be fun to come up with job titles for his business card:

No bid contract consultant

VP Public Relations

Chief Arborist

Try it. It’s fun



First AG Mayor to be ousted by a Write-In candidate

Former President of the League of CA Cities


I think that your second option is most likely although the last one is worth a chuckle.


I would like to know how much in kickbacks Tony has already received from Tompkins and Wallace. I am sure it is a princely sum.


Furthermore, was Tony Ferrara the “Cory Pierce” of his department, but just never got caught? I am sure this man has a sordid history.


Follow the money.


You are right on, marcusaurelius


This decision will speak volumes about the Mayor’s legacy and whether the remaining council cares about Arroyo Grande. It will be a morally defining moment for the community.

Hopefully, the mayor and council have heard the people and are willing to change direction and head down an honorable path to our future.


Nice going away present – paid for by your money.


The council vote on this should make it clear where the concerns will be of three council members who will still be on the council in December, if their concerns are for the outgoing mayor and his desires then they will vote for the contract, if they are for the citizens of Arroyo Grande then they will vote to postpone this until the new council is seated. Nothing about this contract can not wait for the new council to vote on.


I agree. Indeed, it will be a terrific indicator on who should be recalled.

Rich in MB

Tony’s like a kid passing the Candy Bowl for the last time, he just can’t resist grabbing into the candy bowl of public money one last time.


I think we should read part of this story at the meeting on Tuesday as well as analyticone’s statement—that is, if neither Dan nor analyticone mind—–people need to know the truth—I realize that the contract is only for a six month extension, but we don’t have to let this stand—we can say our peace and work for change.


Please use it if you like. This is a public forum, so the comments aren’t private, and I posted so the information can be used for the benefit of the community. Thanks for asking.


The City should also consider its Fats Oils and Grease (FOG) program.

Wallace charges about $78 per hour for the service because they charge engineering rates. The sewer district (SSLOCSD) is also trained to do the FOG inspections and clean out, but only charges about $40 an hour.

In addition to saving the cities and businesses money, switching would save time and money because when the Wallace Group provides the service, the District has to pass through Wallace Group charges to businesses and then process payment to the Wallace Group. Keeping it in-house at the sewer district is a simpler, cleaner process.

The other benefit is that by switching to the sewer district to do the FOG program local businesses will be served by a local contractor, the SSLOCSD, providing greater accountability. Essentially, taking it in-house with the sewer district removes the middle man.

OCSD has switched over to the SSLOCSD to do the job. Why haven’t Arroyo Grande and Grover Beach done the same for their residents?


NCSD also used, and may still be using, Wallace for its FOG program.

You are correct…Wallace’s charges are ridiculous.

Mike Byrd

I’m not familiar with this program. Are you saying Wallace does the exact same thing as south san but for twice the price? If so, how in the world do they justify using Wallace?


The FOG program applies to agencies which supply water to customers….like AG.

Currently, most FOG programs focus businesses, since on fats since they are the “low-hanging fruit”…the individual customers who dispose of the most FO&G down the drain.

I have seen a few programs that have a separate program to inform homeowners, but they are few and far between, and do not get the heavy focus on decreasing the amount of FO&G they put down the drain.

Providing FOG programs as a contractor is a real moneymaker. Most of the materials and interventions provided by a company like Wallace can be canned and just rolled out with each new city. There may, of course, be some modifications, but not many.


When I got the list of approved contractors,

I immediately discounted him–

my choice was clear–anyone but Wallace.

Not only are his rates higher,

but you can bet any maintenance or repairs would be as well.


hmmm….maintenance and repairs? isnt that a budget item to collect from the taxpayers but to perform as little of as possible? “gravy”


I was referring to personal FOG compliance, not looking for taxpayers to pay our way!


Let’s read the list of approved contractors for the record—I have a great little speech discussing the legal reasons for having a non-bid contract…and I seriously doubt that this situation meets any of the criteria…again, more bad legal advice from Carmel?? I am only guessing.

I think we need to hit them with factual information and be relentless…this does not have to stand. Even though it only extends for six months, that is six months too long.

Wallace is done in the this town and we need to send that message tomorrow night. Ferrara is done and we also need to send that message (again). The council needs to learn that the citizens of AG have a solid understanding, even if we have to piece it together because of a lack of transparency, we will find out what they intend to keep secret—we will expose them for the poor leaders they are, and we will mount campaigns for new leaders. They need to learn they are replaceable and that we will replace them if they continue to operate as they have–we will hold them accountable and we have to remind them of that tomorrow.


Santa Maria and Avila also gave Wallace his marching orders.


Ferrara seems to have a compulsion for defending his cronies, even past the point of overwhelming evidence of wrongdoing…WHY???

Look at the recent incident with Steve Adams, a longtime ongoing affair violated city policy–yet it was allowed to continue under Ferrara’s watch.

Look at Ed Arnold, Ferrara continued to stick up for him until he was practically led away in handcuffs.

Sooner or later Wallace will go down, it just a matter of time, yet FERRARA can’t seem to make the break so many others already have. WHY???


If I remember correctly, Ferrera’s first career was as a policeman and they typically value loyalty before ethics. It is the main reason that I don’t entirely trust cops.

Many are otherwise good people but this tendency to defend someone who is demonstrably bad due to “loyalty” or “brotherhood” or whatever needs to be turned around. It is probably too late to expect Tony to do so but I hope that people currently in a position to change that culture work to do so.


QUOTING LEANN: “…again, more bad legal advice from Carmel??”


The relationship between a city attorney and mayor/city council, in my experience, is this: the city council/mayor tell the attorney what they want to do, and the city attorney MAY advise them on it, including advising against it.

However, when it comes down to it, the city attorney’s job is to find a legal way for the mayor/city council to do whatever it is they want to do.

Ethics and whether it is good for the city’s people almost NEVER enters into the decision-making process.

What CAN enter into the decision-making process is if the people of the city get infuriated and active enough to put the fear of god into the city council and mayor.

The city attorney? He is just a very well-paid whore, and will do whatever services demanded.


What most public agency attorneys don’t understand is who they work for. As public employees they do not work for the Council. They do not work for the Agency. They do not work for the District, not even for the City. They work for the People who formed the institutions. Their role is to protect and defend the constitution of the state and our country and the rights of the people. They are hired and report to the board, or council, and the board and council are elected by the people to represent the people.


True, but the people’s elected representative are the one’s who hire and fire them. It is naive to expect them to put the public interest before the interests of the council/mayor/etc. If one does so, he/she is not likely to retain that position for long.

If you do see a public agency attorney giving good ethical advice, it would be one of the truly rare and exceptional ones that value their public reputation more than their paycheck. (Unless, of course, that advice is specifically requested by the elected officials.)


Maybe the second half of Wallace’s fee gets donated to charity?


I didnt know measure G was a charity. Big Yes on G flying in front of Wallace’s building pre election period.




Yes. When Wallace ran the plant he contracted out the service to the Wallace Group. That’s one of the few payments that still goes to him. When he retired the new SSLOCSD superintendent trained up District staff to do the same job and now they’re all set to do it, but Arroyo Grande and Grover Beach don’t seem to be interested.

Basically the job is to go around to restaurants to inspect their disposal of fats, oils and grease and dispose of them for the restaurants.

It has the potential of being a great scam because the inspector is also the one who gets paid to fix the problem if a problem is found. The reward for identifying problems is getting paid to fix the problems, just as Wallace and county counsel have done and continue to do at SSLOCSD with their inept engineering and lawsuits. The bigger the mess up, the higher the paycheck.


Oops. I said ‘county’ counsel. I meant the counsel for the District, Mike Seitz who’s been raking it in at the plant for 25 years. Another conflict of interest – he’s paid hourly so big problems and multiple lawsuits mean big paychecks – over $200,000 one year.


Perhaps that superintendent should “train up” the Bookkeeper/Accountant so she can do her job and the District won’t have to pay an outside consultant $3500 a month for Human Resource work. The former Bookkeeper/Accountant was very competent and performed both jobs very well for many years.

Why can’t the current Bookkeeper/Accountant perform the duties? They’re part of the job description. Why should the Ratepayers have to pay for an employee who’s underperforming and incapable of doing the very basic duties of the position? Is there something else going on at the Sanitation District that Tony Ferrara is covering up again?

If you review the District’s past warrant register it looks like the superintendent goes to “A LOT” of training seminars, conferences, trade shows (where he spends lot’s of time “after hours” participating in the local “night life”) and submits “A LOT” of request’s for per diem, travel reimbursements, etc. Perhaps he should look for some classes for his Staff.

Didn’t Steve Adams have quite a few “questionable” reimbursements? As a City manager I guess it’s somewhat understandable, under certain circumstances. The head of the sewer plant livin’ large on the Taxpayers dime? I don’t think so.


The new SSLOCSD director has been on the job less than a year and it takes time to undo the mess that Wallace left behind. This is currently a part-time gig for him as he still works as an engineer for the City of Santa Maria. You might want to suggest this to the new BoD once they are in place or to the engineer, Rick Sweet.


$78 an hour? Have you hired a plumber or an auto mechanic recently? Actually, I do squeeze my mechanic down to about that, but I went to high school with him and he still whines. If the SSLOCSD is charging $40/hr ratepayers are subsidizing the difference. Unless the worker is making $10/hr or less. The guy (or girl) on the front lines billing rate supports the whole company and is about 1/4 of the employee’s take home pay before taxes, at best. Benefits, taxes, equipment, vehicle, office staff, rent, insurance…you can go on. What in government is called a “full recovery rate” (and rarely fully recovered, hence you pay general taxes) starts at over $78/hr and can go much higher, particularly for public safety personnel.


Good question to ask the district. As I understand it they are charging at cost to the district. The next meeting is Wednesday December 3rd at 6:00 p.m. Ask the superintendent this one.


Unlike a private business that does nothing but plumbing or auto repair, there wouldn’t be as much overhead if this is a job that could be done by existing employees. $40 an hour may be on the low side for recovering costs but $78/hr. still sounds way too high under the circumstances.


Let me guess…

This is going to be another one of Ferrara’s “there’s nothing to see here folks–keep moving” items, just like we were led to believe about Adams and McClish.

Is it more of the same, or here we go again?


For the best interests of AG, it needs to be “here we go again.”

Since Wallace’s co-conspirator, Tony Ferrara, is surely supporting this, I have a feeling Ferrara may come out from hiding and actually run the meeting.

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