Mike Seitz resigns from sanitation district

May 21, 2015

sewerBy KAREN VELIE

San Luis Obispo County Sanitation District legal counsel Mike Seitz announced his resignation Wednesday shortly after an outside investigator began an audit of the sanitation district’s management practices.

In his letter of resignation, Seitz said he is stepping down because of impending litigation over water rights between two clients he has represented for decades. Seitz represents the Nipomo Community Services District which is in a disagreement with the Northern Cities Management Area of which the sanitation district shares members.

“It is with regret that I must advise you that I must resign from my position as the district’s legal counsel effective at the conclusion of the June 3 meeting,” Seitz wrote.

Over the past five months, following issues with Seitz following board direction, Hill requested several reviews of Seitz performance and contract.

At a Dec. 17 sanitation district meeting, the board unanimously voted to direct staff to seek a mitigated settlement with the state water board and to place a discussion of the settlement on the next agenda.

After staff failed to follow board direction and agendize the settlement of a $1.1 million fine with the state, the board voted at the first meeting in January to seek a review of Seitz’ performance and contract.

Seitz, who formerly worked as an attorney for the Wallace Group, has supported continuing the legal battle against the state’s fine. If the fine is paid, the district could then seek restitution from John Wallace and his engineering firm The Wallace Group.

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 water board then determined the spill was the result of mismanagement under Wallace and proposed a $400,000 settlement.

However, the board, at Seitz’ recommendation, elected to engage in a costly legal battle, a fight that the district did not expect to win, according to district records. As a result, by the end of 2012 the board had already paid about $750,000 to the Wallace Group, Seitz, and a team of lawyers to argue against the allegations of mismanagement and the proposed $1.1 million fine.

In addition, when asked about a previous settlement offer, Seitz said the state had never offered a $300,000 settlement, though he claimed the district had made a substantially larger settlement offer to the state. A statement state officials said is untrue.

On May 6, the Sanitation District Board voted unanimously to hire Knudson and Associates to pursue a financial and past managerial review of the last 12 years under Seitz and Wallace’s administration. During that meeting while in closed session, Seitz informed the board that he would be resigning in the near future.


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43 Comments

  1. Julie says:

    I have NEVER seen this before:

    Due to technical difficulties the Agenda packet for May 27, 2015 is temporarily unavailable. Agenda is posted in the window at the office at 1655 Front St Oceano, CA 93445

    (-4) 20 Total Votes - 8 up - 12 down
    • C.V. says:

      Oh Jules
      You are twisting your facts again. You HAVE seen this before.
      Besides, this means nothing.
      Go back to Los Osos where you belong.
      We’ve had enough of your “facts” that are at best half-truths.
      Buh-bye!✋

      (-1) 43 Total Votes - 21 up - 22 down
      • racket says:

        ?

        (7) 11 Total Votes - 9 up - 2 down
      • Kevin Rice says:

        Twisted facts??? The FACTS are OCSD is incompetent to post a measly PDF to a web page. OCSD acts as if a few gigabytes of storage costs thousands of dollars (2000 GB drives cost $69 now).

        My guess is “technical difficulties” means OCSD surpassed their 100 MB hosting limit (or whatever their ridiculously small limit surely is) and had to delete something to make space. Pathetic. Find a better hosting company. The 1990s are over.

        (9) 27 Total Votes - 18 up - 9 down
        • kettle says:

          Considering the OCSD uses wordpress and hosts on Slo’s own Digital West I am thinking the “technical difficulties” are more of a “Operator Error” or a “I have no idea what button to push” issue.

          That said, at work I have clients trying to email monster Pdf’s not realising email has limits, must be something wrong on my end….

          (8) 12 Total Votes - 10 up - 2 down
        • MaryMalone says:

          QUOTING KEVIN RICE: “The 1990s are over.”

          ————-

          The 1990s may be over, but kickbacks to the board and GM never go out of style.

          (0) 0 Total Votes - 0 up - 0 down
    • Julie says:

      Checking their website tonight it appears the technical difficulties have been overcome. Thanks Paavo.

      (-3) 19 Total Votes - 8 up - 11 down
  2. Paso_citizen says:

    :And will he be getting a not-so-small settlement (from taxpayers) to shut up and go
    quietly into the night??

    (4) 14 Total Votes - 9 up - 5 down
    • OnTheOtherHand says:

      If he resigned for the reasons given, I don’t think so. He was a contractor and had no real employee rights. Also, I doubt that Jim Hill would tolerate a coverup or subtle blackmail.

      (3) 13 Total Votes - 8 up - 5 down
      • kayaknut says:

        Would it be any different than the blackmail from the atheist’s?, and with that blackmail Mayor Hill folded like a house of cards.

        (-1) 11 Total Votes - 5 up - 6 down
    • analyticone says:

      Not in this case. He is a contractor, not an employee, so no contractual golden handshakes here.

      (4) 6 Total Votes - 5 up - 1 down
  3. falconbh says:

    After all these years we have never had a clear answer to why the insurance was allowed to lapse, the settlement that could have saved ratepayers a lot of money, and why the plant is now costing a lot less to run.
    Why do we always have to pay for investigations, when our elected officials should just be honest and provide the answers.They all worked very hard for many years to try and make this go away.
    I find the problems in the Sanitation District, Arroyo Grande, Oceano District, Five Cities Fire,all very costly mistakes in judgement under the color of authority that undermines the democratic process at the local level.

    (19) 33 Total Votes - 26 up - 7 down
  4. Julie says:

    I’m having trouble accepting the reason Seitz gave for his resignation. His firm has been counsel for both Nipomo CSD and SSLOCSD since each was formed. Why didn’t this “conflict” present itself much sooner?

    Seitz claimed that because SSLOCSD was considering a recycled water project that that may turn into water supply issues for Nipomo. Huh?
    Clearly there’s more to that story. Agenda’s all across the South County have been including the groundwater litigation down there, looks to me like the simmer is about to come to a boil as the drought continues and “water rights” become more and more important.

    Nipomo met today to adopt Emergency Stage III.

    (29) 45 Total Votes - 37 up - 8 down
    • CentralcoastRN says:

      When you are looking to change things, you have to look at the budget to look at the cost. There is probably going to be a LOT of missing money, and someone will have to explain where that money has gone.

      (10) 18 Total Votes - 14 up - 4 down
  5. Casinogal says:

    It is fortunate that Mr. Hill is taking an interest in this, but shouldn’t the basic credit go to those employees of SCSD who took Wallace to the Grand Jury several years ago and started the ball rolling for the demise of Wallace at SCSD. If you don’t remember, there were several employees who complained about the conflict of interest at that time and the GJ did find Wallace guilty of conflict of interest. Seitz at that time was acting not only as attorney for the District, but also as Wallace’s company lawyer and I believe, as Wallace’s personal lawyer. Nothing like having a co-conspirator to be doing the books!
    Yeah, maybe Seitz will now realize that the gravy train has left the station and he is not on it. But what do we have to do to get rid of both of them when they are still involved in other local CSDs? Like Los Osos?????

    (48) 60 Total Votes - 54 up - 6 down
    • justbeware says:

      If Los Osos and other CSD’s want Wallace & Seitz out, they’re going to have to raise a stink.

      (34) 48 Total Votes - 41 up - 7 down
    • agag1 says:

      The employees are critical to discovering the truth, but if Ferrara were still in charge there is no way in h*ll an investigation would have been approved. This matter was stalled out, but Hill seems to have reenergized the public.
      We shouldn’t underestimate the importance of ANY of those responsible for moving this along.

      (41) 53 Total Votes - 47 up - 6 down
    • Julie says:

      Jim Hill was the reason the Wallace Contract was bifurcated in 2009, because he saw the glaring conflict of Wallace the Administrator=Wallace Group the District Engineer.

      South County is lucky he decided to run against Ferrara late last Sept. Look at all the changes in such a short amount of time. WOW!

      (33) 59 Total Votes - 46 up - 13 down

Comments are closed.