Mike Seitz resigns from sanitation district

May 21, 2015

By 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.