Arroyo Grande mayor seeks sanitation district audit

December 5, 2014
John Wallace

John Wallace


Arroyo Grande Mayor Jim Hill has asked the South San Luis Obispo Sanitation District to initiate a forensic audit of the district in an attempt to recover the cost of a fine and mismanagement attributed to the former plant administrator.

At Wednesdays sanitation district meeting, Hill’s first action as a district board member was to place the request for an audit on the first agenda in January. The sanitation 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.

In 2013, amid allegations of mismanagement, John Wallace, the sanitation district’s former administrator, stepped down. Within months, the plant was operating cleaner at less than 50 percent the cost, according to financial reports obtained from the district.

Following Wallace’s resignation, former Grover Beach mayor Debbie Peterson requested a forensic audit of past practices in an attempt to possibly reimburse ratepayers for misappropriated funds. However, former Arroyo Grande mayor Tony Ferrara and Oceano Community Services District Board President Matt Guerrero voted against Peterson’s proposal, and it failed.

The current board consists of Guerrero, Hill and new Grover Beach Mayor John Shoals.The three are slated to vote on the proposed audit in January.

Under Wallace, the district regularly exceeded its more than $6 million per year budget and ran at a deficit. Currently, the district is running at less than 50 percent of its budget, with overages being placed in a reserve account.

For decades, Wallace acted as chief administrator of the district, and also as owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo. For years, the Wallace Group received between $50,000 and $80,000 a month from the district for a variety of engineering services.

In a 2010 exclusive, CalCoastNews detailed allegations that Wallace had been funneling thousands of dollars to his private engineering company, while concealing environmental violations.

In June 2011, the San Luis Obispo County Grand Jury said that the district board failed to recognize the conflict of interest between Wallace’s administration of the district and his private engineering firm, and that Wallace’s contract had never been competitively bid as required by law. The three-person district board led by Ferrara fired back a response saying that the Grand Jury’s allegations of district mismanagement “were largely inaccurate.”

The district currently owes the state a $1.1 million fine for a 2010 sewage spill determined to be the result of Wallace’s mismanagement. Several weeks ago, the district board under Ferrara’s leadership voted to sue the state over the fine. However, the new board is also planning to take another look at its previous decision to sue the state.



  1. doglover says:

    UPDATE on the OCSD meeting last night?
    Is Mary Lucey on the San District Board now?

    (0) 4 Total Votes - 2 up - 2 down
  2. wineguyjc says:

    Lets recap here: Al Moriarity – facing life for fraud, embezzlement and etc, Officer Limon (Convicted of importing contraband as a LEO), Officer Dow (Convicted of importing contraband as a LEO), Officer Pierce (Convicted of extortion, rape and etc), Scott Peterson convicted of murder, Kelly Gearheart (facing life for fraud, embezzlement and etc). What do all of these people have in common with Wallace – Proud Alum of Cal Poly.

    (-3) 31 Total Votes - 14 up - 17 down
    • MaryMalone says:

      Hey, I am a proud alumni of Cal Poly, and I am one of the more vociferous critics of Wallace and several alumni on your list.

      “Guilt by association” is a logical fallacy used by folks to make a point when they cannot make a point by more honest means.

      Visit The Fallacy Files ( for information about this fallacy and others. There are many websites about logical fallacy…this one I find one of the more common-sense and easy-to-understand descriptions.

      (1) 9 Total Votes - 5 up - 4 down
  3. Pelican1 says:

    Hey Tony!
    Me, Mick, and the boys were jammin’ last night preparing for the 14 On Fire Tour, and given all that has gone on recently, we all agreed to dedicate this classic to YOU.

    (-7) 15 Total Votes - 4 up - 11 down
  4. Julie says:

    I want to invite any and all to submit questions to SSLOCSD as they relate to the $1.1 million fine and the lawsuit. At their last Board meeting the Board agreed to answer what questions they could without revealing legal strategies.
    Submit your questiones here before the December 17 meeting.

    Amy Simpson
    P.O. Box 339
    Oceano, CA 93475
    Phone: 805-481-6903
    Fax: 805-489-2765

    (3) 21 Total Votes - 12 up - 9 down
    • Snoid says:

      Hi Julie, Id ask who will answer these questions for the public? Wont be Wallace or his staff, we’ve been there and done that. Isn’t Seitz, same BS story. Cant Be Gurrero or the new plant Super, they were not employed during the spill and dont have first hand facts. Gonna have to be one of the few operators who are left at the plant. The ones Seitz & Wallace threatened not to talk in fear of losing a job, well he did fire two of them remember. So who will it be? Cant be Ferrara or Nichols who sold everyone out to save Wallace’s ass. Somebody should request to subpoena or get a sworn affidavit from either the former Shift Supervisor or lab tech who know the truth.

      (7) 27 Total Votes - 17 up - 10 down
      • Julie says:

        I’m sure it will be Seitz; he’s the legal strategist. We’re you really expecting answers?

        (7) 29 Total Votes - 18 up - 11 down
        • Pelican1 says:

          Has he ever met a drink he didn’t like?

          (1) 21 Total Votes - 11 up - 10 down
        • MaryMalone says:

          Maybe if Seitz refuses to give us straight answers, Debbie Peterson would offer to explain it to the audience?

          (5) 11 Total Votes - 8 up - 3 down
      • MaryMalone says:

        Even though we can’t expect a credible reply from the likes of Seitz and Wallace, we can still log our questions and concerns, in the form of an email, so it will be on record that customers of the Sanitation District asked for answers for legitimate concerns and were ignored / lied to / side-stepped by ____ horse$hit (fill in the blank), etc.

        (10) 26 Total Votes - 18 up - 8 down
    • Julie says:


      (1) 9 Total Votes - 5 up - 4 down
    • TheNekkidTruth says:

      These questions have been posted to the Sanitation District Board members. As of today’s date there has been no response:

      Date: 12/10/2014

      To: Amy Simpson, Bookkeeper/Secretary
      South San Luis Obispo County Sanitation District

      Re: Public comment and questions for the Board Members

      Dear Board Members,

      In response to your most recent invitation to present questions to your Board, we’ve polled members of our group and would like to offer you the following questions:

      (on a side note: Mr. Guerraro’s email address as identified by the OCSD website returns mail as being invalid, Mr. Shoals email address is not identified on the Grover Beach website, and the email address provided at the last San Dist Board meeting for Ms. Simpson “”, was incorrect).

      1. Do the Directors review each invoice/warrant prior the regularly scheduled Board meetings

      2. During the 12/3/14 Board Meeting it was stated that “two Staff members retired” in October. Are the Board Members aware that this statement is false and that one of the former Staff Members did not retire but was “discharged”?

      3. Are the Directors aware that numerous complaints have been made concerning Superintendent Clemons regarding this pattern of becoming inebriated and obnoxious during his “after-hours” demeanor while out of town attending conferences?

      4. When was the position of General Manager advertised for so that a broader pool of applicants could be considered?

      5. What is the status of the District’s current N.P.D.E.S permit and how can a Master Plan be developed without taking into consideration what impacts permit compliance might have in regards to future treatment capacity?

      6. Will the Board commit to actively pursuing recovery of funds issued to John Wallace/The Wallace Group for sub-par, mismanaged, and double charged billings that were incurred during his dual role of District Administrator / District Engineer as well as recovery of any and all legal fees and fines incurred as a result of negligence and mismanagement as defined by the R.W.Q.C.B. A.C.L.?

      7. Was Board action taken to modify the Staffing Positions as specified per the Districts Annual Budget to allow for the position of “OIT/Intern”? If so, when did this action occur?

      8. Was the California Department of Motor Vehicles notified of the automobile collision that resulted in over $500 worth of damages to a District vehicle.

      9. Is the Board aware that Staff have made anonymous complaints (as allowed per law) concerning the ongoing extra-marital affair between Superintendent Clemons and Secretary Any Simpson.

      10. Have all Staff members received Sexual Harassment training?

      (3) 5 Total Votes - 4 up - 1 down
  5. marcusaurelius says:

    i bet an audit of the SCSD would turn up a lot of “shyt”.

    (11) 25 Total Votes - 18 up - 7 down
  6. Pelican1 says:

    Imitation is the highest form of flattery, but you clones get it all wrong because we are promoting the truth….you only lies.

    (-1) 15 Total Votes - 7 up - 8 down
  7. biteMe says:

    10. He’s nothing like the old mayor
    6. He’s honestLY A LIAR
    5. He COULD CARE LESS about the citizens of Arroyo Grande, OR ANYWHERE else!
    3. He PRETENDS TO listen
    1. IF HE DOESNT GET HIS WAY – He takes his (bat & ball) [or more likely – his wife & vodka]then abandons his position!
    What a guy! You folks don’t know ANYTHING about him, do you?

    (-28) 68 Total Votes - 20 up - 48 down
    • Pelican1 says:

      Oh tony…you are so done.

      (21) 33 Total Votes - 27 up - 6 down
    • panflash says:

      Tony the Fringe sings his theme song:

      Get a life Tony- you’re starting to look really, really, pathetic.

      (15) 29 Total Votes - 22 up - 7 down
    • MaryMalone says:

      Our ex-loser-vision mayor, Tony Ferrara, is still at it.

      (9) 25 Total Votes - 17 up - 8 down
    • Pelican1 says:

      He’s is a real nowhere man
      Sitting in his nowhere land
      Making all his nowhere plans for nobody

      Doesn’t have a point of view
      Knows not where he’s going to
      Never cared about Arroyo Grande
      Nowhere man please listen
      You don’t know what you’re missing
      Nowhere man, Arroyo was at your command

      He’s as blind as he can be
      Just sees what he wants to see
      Nowhere man, can you see us at all
      Nowhere man don’t worry
      Take your time, don’t hurry
      Leave it all till somebody else
      Refuses you a hand
      Ah, la, la, la, la

      Doesn’t have a point of view
      Knows not where he’s going to
      Never cared about Arroyo Grande
      Nowhere man please listen
      You don’t know what you’re missing
      Nowhere man, The city was at your command
      Ah, la, la, la, la

      He’s a real nowhere man
      Sitting in his nowhere land
      Making all his nowhere plans for nobody
      Making all his nowhere plans for nobody
      Making all his nowhere plans for nobody

      (2) 8 Total Votes - 5 up - 3 down

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