Sanitation district board pursues an audit

January 22, 2015
John Wallace

John Wallace


After several years of voting against an audit, the South San Luis Obispo County Sanitation District Board voted 3-0 on Wednesday to pursue a financial review of the past 12 years.

Approximately 30 people attended Wednesday’s meeting. Attendees asked the council to approve the audit and to terminate its contact with embattled attorney Mike Seitz. The board agreed to allot $40,000 for an audit of the district’s finances with a goal of ensuring fiscal accountability in the future.

The board took no reportable action against Seitz who looked down with pursed lips while attendees claimed he failed to protect the ratepayers and the environment while supporting the plant’s former administrator, John Wallace.Sanitation district staff spoke of the importance of an audit in order to put into place policies to prevent future financial digressions. Staff said that under Wallace’s administration, chemical costs ran about $600,000 a year and under the current management chemical costs have fallen to $240,000 a year.

Under Wallace’s administration, former staffers at the plant said the company Wallace purchased chlorine from also provided top management perks such as inclusion in a yearly boar hunting trip.

In 2013, amid allegations of mismanagement, Wallace stepped down. Within months, the plant was operating cleaner at less than 50 percent the cost, according to financial reports obtained from the district.The board had previously voted against an audit with Oceano Community Services District President Matt Guerrero joining former Arroyo Grande mayor Tony Ferrara arguing against spending money to investigate past acts.

However, following the November election, the makeup of the board changed with Arroyo Grande Mayor Jim Hill and Grover Beach Mayor John Shoals joining Guerrero who under public pressure changed his anti-audit position.


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We walked a razor’s edge. We still are.

On January 17th, 2012, the City Council of Grover Beach (Item 6 on the agenda) considered Mayor Pro Temps Nicolls’ proposal to place the removal of Mayoral term limits on the upcoming ballot. This would have allowed John Shoals to run for another term, and it most certainly would have delayed the emergence of Debbie Peterson on important SSLOCSD reforms. Fortunately, the council shot down Nicolls’ proposal.

However, this proposal corresponded to Shoals re-appointing Nicolls as the city’s representative on the SSLOCSD for another year. One has to wonder whether there was some agreement between the two, because Nicolls had been on the hot seat for quite a while at the 2011 meetings and Shoals would only gain another year of discomfort and Surfrider accusations that Nicolls was stonewalling potential SSLOCSD progress.

At the time, Shoals would have either needed to take the SSLOCSD seat himself or appoint Phyllis Molnar, Debbie Peterson, or Karen Bright to the seat. All of them had previously been critical of Nicolls in 2011 council discussions. To protect Wallace, their appointment couldn’t happen, so 2012 was to be another year of Ferrara and Nicolls and Seitz and Wallace.

Shoals’ role at Wednesday’s meeting was damage control. Any time a representative spends an abundance of time thanking the public for their critical comments and then advocates to do the minimum, the public needs to be aware… very aware… that you need to keep an eye on that guy. It was also disconcerting that the board did not give Staff clear direction on what their expectations were going forward. Instead, they laughed and waited for the District Administrator to figure out what the board wanted.

I’m still trying to figure out what was so funny.

…and here’s Shoals was corrupt. All along Shoals was telling the Council that he was the one who got to make the decision as to who his alternate is. So even though a majority of the Council pleaded with him three times to put someone else on the board, he refused.

However, looking at the health & safety code, the presiding officer’s alternate is chosen by the COUNCIL or CSD BOARD, not by the presiding officer. The Council was within their legal rights to remove Nicolls but Shoals told them they were not and they believed him.

… and here’s John Shoals appointing Barbara Nicolls (Bill’s wife), who ran unopposed for her City Council seat, as his alternate on the SSLOCSD. One has to question how much information from SSLOCSD closed session is being leaked through Shoals to Wallace (via the Nicolls camp).

John Shoals should use recently expressed public concerns to change his alternate on the SSLOCSD.

Thank god that things are finally getting done. With any luck, have Jim Hill as mayor may be able to reign in Shoals.

Given that Shoals was on the board in the past when a lot of the questionable things were done and he supported it, it might be difficult to get him to change his tune.

oh he was very quiet that night with an explanation despite the apparent and obvious facts even to me who was just coming up to speed. Poor fella…..always feeling the tenor before blowing his horn….OBV.

Shoals has a vested interest in using whatever power they have to protect the cover-up.

Coverage in the Trib today.

Getting more difficult for them to ignore what’s going on in south county.

The stark contrast in plant performance under Wallace vs current management

can not be overstated, or ignored.

Progress is being made, but it will take a long time to turn this ship.