Sanitation district lawsuit venue in dispute
March 4, 2015
By KAREN VELIE
Amid a request by the South San Luis Obispo County Sanitation District Board to negotiate a settlement which would end an ongoing lawsuit, the state has filed for a change of venue for the legal battle.
The California Attorney General’s office will ask a San Luis Obispo County Superior Court judge Thursday to change the venue to Sacramento. According to the motion, “the potential for undue local influence is real,” the motion says.
If the state is successful, rate payers in Arroyo Grande, Grover Beach and the Oceano Community Services District could see an increase in rates, the motion says.
In 2010, failures at the sanitation district resulted in 384,000 to 3 million gallons of raw sewage flowing into Oceano homes and the ocean. The Central Coast Regional Water Quality Control Board then determined the spill was the result of mismanagement.
On April 20, 2012, the state proposed a settlement that included a $400,000 fine and the requirement for the district to spend $375,000 on specific plant upgrades.
On May 16, 2012, the three sanitation district board members, Oceano Community Services District President Matt Guerrero, Grover Beach Councilman Bill Nicolls and Arroyo Grande Mayor Tony Ferarra, rejected the state’s settlement offer in closed session.
On June 6, 2012, the sanitation district board discussed an anticipated timeline and a proposed strategy developed by then district administrator John Wallace, district legal counsel Mike Seitz, and outside legal counsel Melissa Thorme that included multiple appeals over the state’s fine. In their timeline, Wallace, Thorme and Seitz do not consider winning their battle against the state.
The district then paid about $750,000 to Wallace’s engineering firm, the Wallace Group, and a team of lawyers to argue against the allegations of mismanagement and the proposed fine.
In Nov. 2014, the district board voted to file a lawsuit against the state over the fine.
Then in December, the district board led by its new president, Arroyo Grande Mayor Jim Hill, directed staff to work to settle the fine. However, staff failed for months to follow board direction.
Then on Feb. 18, Seitz announced that the district had sent a settlement offer to the state.
Nevertheless, the district has not dropped its suit against the state.