Sanitation district meeting canceled after four no-shows

March 9, 2015

By KAREN VELIE

A special meeting of the South San Luis Obispo County Sanitation District scheduled for Monday evening was canceled after two representatives and their two alternates said they would not be able to attend. A quorum of at least two board members is required in order to conduct a meeting.

At last week’s meeting, district legal counsel Mike Seitz said that settlement negotiations with the state had failed. Board President Jim Hill then called for the Monday special meeting to in order to discuss the ongoing lawsuit against the state over a fine for a large sewage spill.

Two of the three board members, Oceano Community Services District Director Matt Guerrero, and Grover Beach Mayor John Shoals, said they had conflicts and could not attend… as did their alternatives, Oceano Board President Mary Lucey and Grover Beach City Council member Barbara Nicolls also said they had conflicts.

Guerrero, Shoals, and Nicolls’ husband Bill Nicholls, were on the board while former sanitation district administrator John Wallace was accused of funneling engineering work to his private firm, the Wallace Group. After Wallace stepped down amid the allegations of mismanagement, the plant ran cleaner at almost half the cost.

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 and offered 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, then-Oceano Community Services District President Matt Guerrero, then-Grover Beach Councilman Bill Nicolls, and former Arroyo Grande Mayor Tony Ferarra, rejected the state’s settlement offer after meeting in closed session.

Instead, the 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 admitted they did not consider it possible to win their battle against the state.

Nevertheless, 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 shortly before Ferarra was voted out of office.

A month later, under a new board president, Arroyo Grande Mayor Jim Hill, the board voted to seek a settlement instead of pursuing litigation.

Even though Hill spoke out about Seitz’ failure to move on the board’s direction, it took more than two months for a settlement to be offered to the state… a settlement that was not accepted.

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