Sanitation board shuffle costing ratepayers

August 31, 2015

Screen Shot 2015-09-01 at 12.44.36 AMBy JOSH FRIEDMAN

It is often a mystery who will appear behind the dais at the next South San Luis Obispo County Sanitation District board meeting, and the shuffling of representatives is coming at a cost to ratepayers.

All three of the regular board members have missed at least one of the past three meetings. Oceano’s representative, Matt Guerrero, showed up to none of them.

Arroyo Grande Mayor Jim Hill and Grover Beach Mayor John Shoals each gave notice of their absences in advance of the meetings they missed. But neither Guerrero, nor his replacement, Mary Lucey, have announced publicly who will represent Oceano at the sanitation board meetings.

With rotating representatives, the district board has spent several meetings repeating discussions on the same issues, causing the length of meetings to increase from less than an hour to often more than three hours. The sanitation district covers the cost of staff and consultants to attend the meetings.

At the board’s Aug. 19 meeting, former IRS investigator Carl Knudson requested additional funds to complete an audit of district finances and managerial practices under past general manager John Wallace.

At a cost to the district, Knudson and an associate drove from the Los Angeles area to request an additional $22,000 for the audit. During an earlier meeting, the board had agreed that Knudson might need additional funding to complete the audit.

Prior to the Aug. 19 meeting, Knudson wrote a status report revealing some of the initial findings of the audit and explaining why he needs more hours and money to complete the investigation.

Nevertheless, the board postponed the decision to the next meeting, or possibly an even later date, because both Lucey and Grover Beach alternate board member Barbara Nicholls said they were not prepared to vote on the issue.

“I actually would feel better tabling this for at least till the next meeting or the meeting after that to look at it a little bit more closer,” Lucey said. “I would be supportive of maybe reviewing it a little closer, asking staff the questions I have and then moving forward. Because I just can’t see, I know there’s a value there of spending additional funds, but I have to make that argument because the report doesn’t make it for me.”

Nicholls said she supported Lucey’s suggestion of postponing the vote.

“I would be much more comfortable with Mr. Shoals, who has been fully briefed on all of this, to be the one to help make the decision,” Nicholls said.

Nichols made a motion to postpone the vote to a time when the three regular board members are present. District Manager Rick Sweet then chimed in with a suggestion that the board continue the item to its Sept. 2 meeting, and if regular board members are again absent, they could postpone the vote a second time.

The board voted 2-1, with Hill dissenting, to approve Nicholls’s motion and to follow Sweet’s advice.

Some critics, though, question whether Nicholls should have even voted on the audit item.

Nicholls’s husband, Bill Nicholls, is a past sanitation district board member. Bill Nichols served on the board at a time when complaints from sanitation district staff about overspending were ignored.

Since Wallace’s departure, the district’s wastewater treatment plant has been operating cleaner and at less than 50 percent of the prior cost.

During the first phase of the current audit, Knudson found that, under Wallace, the district wiped away 4.5 years of computerized accounting data, according to Knudson’s report. Knudson also released an estimate that the district paid Wallace and his engineering firm, the Wallace Group, more than $5 million from 2004 through 2013.

Knudson’s report was marked confidential, but Sweet placed it in the public board packet for the Aug. 19 meeting. Both board members and public speakers chided Sweet for doing so, saying he may have compromised the investigation by making the initial findings public.

Sweet resigned effective Sept. 11, and the district is preparing to search for a new manager. Board members and the public have accused Sweet of sidestepping board direction on items, such as the audit and an ongoing billing dispute. During an earlier meeting, Sweet said he had a relationship with Wallace, and he could not be a point person with Knudson.

Prior to hiring Knudson, the board debated the merits of an audit for multiple years. In similar fashion, the board has been grappling with a billing dispute for several months.

In June, the Oceano Community Services District demanded that the sanitation district sign a contract stating it would pay the OCSD approximately $22,000 a year for billing services. The OCSD then followed through on a threat to stop acting as a bill collector for the sanitation district.

At the last meeting, the sanitation board agreed to meet Oceano’s demand. As a temporary measure, the board voted unanimously to pay the OCSD $3,666 for the next billing cycle.

The cities of Arroyo Grande and Grover Beach also provide billing services for the sanitation district. Both cities bill many more sewage customers than Oceano, yet they charge less in totality than what the OCSD is demanding.

Additionally, San Luis Obispo County is offering to serve as a bill collector for the sanitation district. The county’s proposed price for billing services in Oceano is just $3,500 a year, according to sanitation district staff.

The county has also offered cheaper billing services for the Arroyo Grande and Grover Beach areas.

The sanitation district is considering the county’s offer, but has made no indication it would accept it. The board is hoping the finance managers of the three cities will meet and reach an agreement on billing rates.

The Aug. 19 meeting concluded with confusion over yet another issue.

Two district staffers accrued more unused vacation pay than district rules allow. In response, district management proposed increasing the vacation accrual limit from 180 hours to 240 hours. District management also said it would pay off the two employees to bring them below 180 accrued hours.

The proposal passed, but Lucey abstained from voting on the issue and at one point during the debate, she poured part of her drink on the carpet.

Prior to the vote, Lucey expressed concern that employees would decide to take six to eight-week vacations.

In response, a human resources consultant said district policy requires staffers to get permission from their supervisors before taking a vacation — thus, their absence does not harm district operations.

“I just don’t see any language protecting us from the six-to-eight-week vacations,” Lucey said before the vote.

Lucy also expressed concern that new employees would immediately build up unused vacation pay.

“We’re saying you can accrue up to 240 hours the first day you start working, basically,” Lucey said.

The consultant said that would not be possible until an employee has been working for the district for at least a couple years.

Similarly, sanitation plant superintendent John Clemons corrected Lucey during a testy exchange at the previous board meeting. Lucey mistook maximum limits for current levels of E. coli levels and chastised staff for endangering the community.

Clemons then pointed out that the report showed the plant’s fecal coli-form levels were 90 percent below the allowable limit.

The next board meeting is scheduled for Wednesday. The agenda again includes the audit funding issue and the billing dispute.


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Some people are born to lead, others are born and think they can lead. Some leaders have the servant leader mentality as well as the actions to back that up. It is clear that the “leaders” (word used very loosely) from Oceano do not know they can’t lead—which is dangerous. And because they do not recognize they cannot lead, they do not focus on the actual business of the people and, in turn, serve the people.


Pressure needs to be applied to this group to either figure out how to lead, or get out…and let people who can lead, do that. Egos are being protected, that is clear. What is not being looked after from the leadership (again, word used loosely) from Oceano, is the business of the people and the district.


It is time for this board to act and approve an increase in funds for the audit to be continued and completed. The ratepayers deserve answers. The ratepayers deserve to know how this district has been mismanaged. And the ratepayers deserve to seek compensation from the “leaders”, the Wallace group, John Wallace from his personal bank account, and from any and all players who had a a role in the mismanagement and the unnecessary rate increases.


Enough is enough.


Lucey is a train wreck. She’s concerned about employees getting 240 hours of vacation upon hiring? NO! The vacation is accumulated, then capped.

She’s worried about employees taking a 6-8 week vacation? NO, all vacations must be approved by supervisor.

She’s “super, super worried” about E-coli levels near the plant, hopes the water is being tested…yada yada NONSENSE! She either doesn’t know how to read staff reports or can’t grasp the difference between a reading and maximum limits. What a waste of time for everyone to wait as item after item is explained to someone who’s sole purpose is to KNOW what the heck is going on!

It’s obvious she has NO CLUE what she’s talking about, yet she sits on this board and is the Pres of the OCSD where she leads the pack of directors who seem happy to follow.

Sheesh, if this is the best Oceano has to contribute they are doomed and will drag the rest of us down with them.

A chain is only as strong as its weakest link, and Lucey is WEAK!


The District’s limit on fecal coli-form is 2,000 mg/L; the report Lucey was questioning reported the district had a high of 21 mg/L.


This weeks report shows the sampling at just 9 mg/L.


Justbeware and Citygirl, I applaud you for being polite and mindful with your words regarding Ms. Lucey. I do not think I could be as nice!


Ms. Lucey is wasting the time and money of the rateholder’s. We have been raped by these power hungry leaders approving more than $5mil to their golden boy, John Wallace. The people want answers, and she is implementing stall tactics. One has to wonder what she is afraid will come out?


Mr. Guerrero needs to take his responsibility seriously and start attending the meetings. Or, do the people the favor and step down, so a reliable representative can be put in place. This is wasting the time of Mr. Hill and Mr. Shoals, who are taking this seriously and want to see it move along and be settled once and for all. (funny, Ms. Nichols does not see it this way! She was willing to postpone, maybe to save her husbands reputation)


For the small amount Knudsen has requested, this MUST PROCEED.


Mary Lucey is an unqualified bloviating human being. She knows NOT what she speaks.

It is true that Matt Guerrero is less incompetent but only slightly. Two times zero is still zero.

OCSD remains a disadvantaged community due to the likes of elected and appointed members that do not know their heads from a pumpkin. I am certain if it were not for their per diem meeting pay they would not be Board members.

I hope the full Knutson report expounds on the management and the policies of the Boards of Directors for the past ten years and their dysfunction.


the audit may or may not find criminal activity but it needs to get done.

board member let down their community if they are not ready to vote.

if its politics as usual shame on them.


Some people can handle power and the responsibility that comes with it, others just think they can.


Whadda they care? And their money.


Director Lucey seems to have a real chip on her shoulder when it comes to Mr. Clemons.

Her E. Coli gaff is but one of her attempts to catch Clemons in a “gotcha” moment. She has yet to realize that she only succeeds in making a BIG FOOL of herself when she does this. Her argument is always something from left field, and makes absolutely NO sense to anyone but her or the occasional, equally uninformed spectator she brings to the meeting with her.

It is very unfortunate the residents have chosen Lucey to represent them. If they listen to her version of events their heads are undoubtedly filled with the nonsense she spews, all the while insinuating she knows what she’s talking about and everyone else is being unfair, is a bigot, racist or who knows what else.

She thinks nothing of telling a flat out lie, and when confronted, merely stares expressionless past speakers and audience members alike, or gives a “so what are you going to do about it?” shrug.

Oceano needs to step up and elect someone to the OCSD that will represent the residents in a meaningful way. Lucey is not the person for the job, and Guerrero is almost as bad, if not worse.


My money is on Goosey Lucy Mary.


I should have made clear that I think mary lucy will show on Weds night


Does Mary Lucy even read the agenda packet before going to a meeting, and is Matt keeping her in the loop in regards to the south county sanitation dist? It does not appear so.


Mary Lucy is very biased it appears.She seems to want to only represent Oceano when she sits up there, when in truth she should be representing THE district, and moving things along for the district and not just for her town.


Matt, Paavo and her have a very distinct relationship going on, and it is detrimental to this district.Between her coming in with a set mindset that may not have to do with the district and Matt sitting up there like an autistic child rocking back and forth and not paying attention, it is amazing anything gets done.


It was stated that the board would wait for the financial advisers of all 3 districts to meet and come back with a agreed upon plan. Yet at the last OSCD meeting, the board voted in favor of yet another contact that Paavo and Minnery drew up by themselves. One that I hope gets voted against at Weds night San dist meeting.


Oceano is the one who decided to stop billing for the San Dist and now they want it back as it appears they need the money, and they don’t want the public to realize they were being hosed by Mary Lucy and staff.They have not compromised at all yet they keeping crying about the hardship it will pose on the residents. Mary Lucy wants her cake and eat it to.


Maybe if she slowed down on the weed she smokes she could follow along with doing the business of the people like Mr. Shoal and Mr. Hill seem to want to get done. Oceano deserves what they get at this point. Maybe next time someone will run against Mary Lucy, someone who gives a darn about the town and not their own ego.