Sanitation district flips, seeks settlement with the state

December 19, 2014

After picking a multi-year legal fight with state officials, the South San Luis Obispo County Sanitation District is now seeking to settle a $1.1 million fine levied against it.

In 2010, 384,000 gallons of raw sewage flowed in Oceano homes and the ocean, and the Central Coast Regional Water Quality Control Board later determined the spill was the result of mismanagement. After the regional water board reached its determination, it offered the district a settlement.

At the suggestion of plant administrator John Wallace, the district declined the settlement. The district then paid about $750,000 to Wallace’s engineering firm and a team of lawyers to battle the fine and allegations of mismanagement.

On Oct. 24 of this year, the state water board rejected the sanitation district’s petition for an appeal of the fine. In turn, the district board voted to file a lawsuit against the state.

But, following the November election, the makeup of the board changed. On Wednesday, current board members Arroyo Grande Mayor Jim Hill, Grover Beach Mayor John Shoals and Oceano district board member Matt Guerrero voted in closed session to pursue a settlement of the fine with the state.

“The board unanimously voted to direct staff to proceed forthwith to seek a mitigated settlement with the state water board,” Hill told CalCoastNews.

District legal counsel Mike Seitz announced the news Wednesday in a report on closed session action.

Seitz, who formerly worked as an attorney for the Wallace Group, said that the district had not been offered the $300,000 settlement from the regional water board. Seitz claimed a higher amount came up during past closed session discussions.

He also said he did not know how the settlement offer became public, and that the disclosure violated closed session rules.

Though the district is now pursuing a settlement with the state, its lawsuit is still effectively in place.