Wallace purged sanitation district documents

December 15, 2014
Julie Tacker

Julie Tacker


To audit or not to audit? That is the question at the South San Luis Obispo County Sanitation District (SSLOCSD).

An audit may find accounting inaccuracies and/or other wrongdoing.

At this point, with so many questions left unanswered since the Feb. 2013 resignation of District Administrator — of 27 years — John Wallace, it would be prudent to examine what really happened to the district’s reserves. Millions of dollars in reserves were gradually depleted over the course of ten years; among the expenses was nearly $276,000 for engineering costs associated with the 2010 spill.

These monies were paid to Wallace’s engineering firm to prepare the administrative record for the water board hearing in Sept. 2012, in an effort to defend the district from punitive damages and damage to Wallace’s own reputation.

Once gone from SSLOCSD, it took four full months for Wallace to relinquish district files he had stored at his engineering office in San Luis Obispo. These files were the property of the district and should have been kept on site in the SSLOCSD district offices at the wastewater treatment plant in Oceano.
An audit may include delving into the very boxes Wallace himself charged $98.00 an hour to “review.” But that was after his staff of engineers and administrative assistants billed $42 to $108 per hour over four months to catalogue, label and box.

Invoices totaling over $15,000 describe tasks associated with returning the districts records to new management as “transition.” The invoices detail tasks such as; filing, document preparation, organize, reorganize, accumulate, label, purge and gutting binders.

An audit at this point will likely find that there are gaping holes in the district’s record. But, no one but Wallace really knows what was in those files before they left the SSLOCSD offices. There is no way for current staff to know if all pertinent and important material was returned.

The fact that district records may have been intentionally “purged” or “gutted” in any way gives rise to the argument in favor of a forensic audit. That the district actually paid Wallace/Wallace Group to do it is outrageous.

The new board members, Jim Hill and John Shoals need to take a fresh look at what’s gone on at SSLOCSD, identify it, take action accordingly and put measures in place so that it never happens again.


Are you listening Los Osos?


Oh, please. Los Osos didn’t listen when some warned against the Nash-Karner faster cheaper thing, didn’t listen when some warned against the Tacker-Schicker-Cesena board lying to mobile home part seniors about rate increases to win a razor thin recall victory, and cancelled a funded vetted sewer project costing nearly all homes $ 24,933 to get one started again.

And Los Osos didn’t listen when the same nutcase Cesena ran (Nov. 2014) to return to the board he bankrupted and cost his neighbors a fortune so we could have an overlook of a wasteland Tri-W original plant site with lovely metal boxes and overflow siphons. Los Osos elected him again.

Meantime Moron Bay let Irons doom THEM to a similar nutjob sewer relocation. Geez I wish people (voters) could make choices with the TRUE DOLLAR COSTS of nutjob leadership in their hands. Maybe we could have AT LEAST prevented Morro Bay/Cayucos “follow the Los Osos leader” foolishness.

Sorry to harp on it, but it makes one a little crazy when nutjobs (apparently includes Wallace) run amok with public dollars, and we unfortunates must pay later. I repeat for those not listening, my Los Osos property lost (was assessed) $ 24,933 plus interest due to LOCSD malfeasance in office, at the personal vote of Julie Tacker, Chuck Cesena, Schicker et al. These are costly lessons and I wish all of us had acted to remove Tacker, Wallace, and others, from the various power positions, at a sooner time.


LC, Wallace is in bed with the current board and that was my point. As for the wasteland at tri-w, it is an open field with walking trails, but you would prefer a full blown stinking crap processing plant with lots of noisy trucking activity up wind from most of the town. Now you got your wish, its just not where you wanted it. Like i’ve said before, if they would have listened to the research an adopted a step stag system it would have been immensely cheaper and we would be recharging the aquifer and holding back the salt water intrusion.

Reality Check

Usually when a top executive or even middle manager leaves the company, an audit or some review of the materials entrusted to that person / position is conducted. What happened to the SCSD Board on this one?

Seems that they were not using due diligence to oversee the manager of the district. Longevity in a position doesn’t automatically indicate wrong doing. Storing records off site and purging those records without the supervision or a superior in the chain of command or the Board in the case of the top manager creates a dereliction of duty on many fronts!


Don’t let a “Lois Lerner” happen to the hard drives, blackberry’s, and email!!! Backup all hard drives, and don’t let this guy in the building without an escort!


To audit or not to audit is a great title. The answer is AUDIT.

I’m however a little torn on the some other issues. I find it very unusual that an engineering firm was hired to catalogue, label and box files (to the tune of $42 to $108 per hour). But, at $15-$20 per hour and depending on how torn up the files were that’s not too out of line in my opinion.

Paying Wallace to review the files is a separate issue from organizing them and $98 an hour for an engineer is cheap these days. Where they chose to review, organize, PURGE or whatever also isn’t as relevant because not another living soul knows what was in them from what I can gather. Sounds like they were in a huge state of disarray to begin with.

Let’s get to brass tacks. If Wallace is criminally or civilly culpable let’s do this. If he’s not let’s quit gathering evidence.

Great opinion by the way Julie…this is just MY opinion!


What’s most interesting is that Wallace mismanaged the district with public funds, then WE paid him to “fix” (what he failed to maintain)(to do the damage control)…and all the while, he’s laughing all the way to the bank. It’s sick.


As the district’s administrator for 27 years, how would the files be in disarray? Wouldn’t it have been his job to have kept them neat and tidy in the first place?

The firm was not hired to do anything with the files, they shouldn’t have been in their custody — period!

I’m 100% certain NO BOARD DIRECTION was given to to purge a single thing. And to bill $98 an hour to “review” the records (being an engineer had nothing to do with it) on top of the scalping by the firm is a crime!

It’s going to take public outcry to get an audit. Tell the SSLOCSD board members that you expect it.


That is my point…it appears he “managed” for 27 years of deferred maintenance…then when the system broke WE had to pay him to fix that which HE had caused to break. On top of that, WE were fined and suffered the spill damage…which WE are paying for.



Does he still beat his wife? Where do you guys not look for a problem, or create one? Did you put spokes in the wheels of bicycles as kids? Twenty seven years of keeping utilities working should trump whatever you come up with to talk about. You just want have us trolls crucify another public figure. Do something positive with this site.


There is not enough nails or lumber to crucify all the public servants and elected officials that have been stealing from the taxpayers in this country!


slomike, I am assuming you live in SLO and are not a ratepayer in the South County. You realize, people just can’t make this kind of stuff up! Twenty seven years of keeping utilities working does not make for an honest person, it just means he had 27 years of people not watching over his shoulder responsibly. This is a main reason that Tony Ferrara is not in office (thus off the seat of the Sani District). The “good ol’ boys club” let things go way too long. (tag Nichols into this and keep an eye out of Shoals) They approved expenditures without proof. They allowed records to be taken off premises (and into the hands of Wallace) so that now a trail can not be followed.

The result? Our rates will be increasing three years in a row now. Why? To make up for the depleted reserves. Funny, once Wallace left, the reserves have been growing. Why did that happen? Maybe because the Wallace Group and his other companies are now not charging for unnecessary jobs, or we are getting more competitive bids/ rates now.

Trust me (and all the others) that we are not looking for a problem, we are looking for a solution to the millions that have been taken from the rate holders. I ask, why do you even read CCN if you feel this is all made up? Believe it.


I read this because it is my local liberal dirty pleasure. I enjoy the hyperbole, but the viciousness scares me for our area, our nation and our species. I see Compton voted to increase fees. Missed it here. Think she will vote for her own pay raise?


Whaaat? Compton doesn’t take office until Jan. 5th she hasn’t been able to vote on anything. The vote to raise the Supe’s pay is tomorrow. She’s sure to be watching.


No one went looking for a problem…it came oozing out of a sewer system that has NOT been properly maintained.


Nothing like trying to make a victim out of the John Wallace and the SSLOCSD former BOD to make for a rip-roaring message board.

You are blaming the victims here, dude.


I work both sides of the political fence on this site — depending upon the issues. This is one where the critics are right. I agree that the rhetoric gets out of hand at times but, unless you have some evidence that those of us following this scandal are wrong, you are being just as presumptive in your criticism of CCN and its readers as they sometimes are in their accusations of impropriety.

If you do have evidence that CCN, Julie Tacker and others criticizing Wallace on this site are wrong, please bring it forward. I am willing to change my position if I find new facts that dispute the ones that I have seen so far.

However, I fail to see how the SSLOCSD can run through a capitol improvements fund or ~$10M over 10 years without having some significant capitol improvements to show for it. That fund had been built up over many years of ~400K-$500K per year budget surpluses. Not only did Wallace fail to keep up those contributions toward the $15M which will soon be needed (or perhaps twice that for replacing the whole plant) but he raided the fund for unessential and over-priced projects, for attorney’s fees to fight fines his mismanagement earned and possibly other types of waste.


Wallace was charging the District between $600,000 and $950,000 per year for his services. This included engineering, construction management and administrative. This is a fact, there are invoices in the hands of many to show this. Then there was several defunct projects done such as digester cleaning and rehab that cost in the $millions. a new tank could have been constructed for less than the rehab on one of them. The chlorine contact chamber project bid at 1.2 million that cost over $2 million and had to be taken off line for over a year because it was so riddled with construction and operational flaws, the Biogas Cogen unit that cost hundreds of thousands and is now dead and has been for about a year. Every one of the mentioned projects has detrimental flaws that cost tens of thousands to correct after Wallace’s intentional management tactics. His own engineering staff laughed at the work some of their own engineers did and let slide as acceptable. There was over 20 of Wallace’s staff listed on one of the Wallace invoices during one period. For the question of Wallace making things run right, hardly. Wallace nor do any of his staff hold the required certification to operate a Wastewater plant. They did not make anything work, the plant staff does, and continues to do so, while fighting substandard Wallace projects that will haunt the public coffers for decades. Although Wallace liked to think everybody worked for Big John, nobody but his own employees do. Wallace had/has no business keeping San Dist documents including personnel files of San District staff, not employed by Wallace, at Wallace’s office.


Government Contracts – otherwise known as a license to steal.


Eisenhower’s tax rate help balance that sort of abuse


How is fraud due to lack of moral compass of those committing it and the loose purse strings and overall incompetency of government offset by high tax rates of individuals not involved in government contracts?


A forensic audit is necessary not only to investigate the mismanagement of the sanitation district, but just as importantly, but to find out WHO was involved. We need to know ALL the players in this scheme, what they knew, when, and for how long.

The subscribers must never again be used as a cash cow.


Yeah, I want names and numbers.


I agree that it would be good to know all these things but a “forensic audit” is not the tool to get some of them. It may not even be able to deal accurately with the financial transactions it is supposed to track if Julie’s speculations about Wallace purging the records is correct. It may take a DA investigation to get all the info we should have.



Please email me or the district either of us will send you the invoices I have.


The District needs to rebuild trust and public confidence after so many years of documented mismanagement , fines, and grand jury investigations.

Audit is one good first step in building confidence in this new leadership board.

The ratepayers should not be held hostage by the illegal violations of the law by individuals who should be held responsible for these actions.

Rich in MB

Someone should be doing Jail time over this obvious Fraud!


Years ago the waste water treatment supervisor for CMC went to prison for falsifying discharge records. Who knows…history might repeat itself.


And the best part of the story is when he got out of prison, he went back to work for the State as the wastewater treatment plant supervisor at Atascadero State Hospital’s plant.


I’m not at all surprised.