Report on John Wallace presents a cautionary message

January 20, 2016


After six months of investigative work, the long awaited report on past management practices and operations of the South San Luis Obispo County Sanitation District will be released and presented at the sanitation district board meeting Wednesday evening.

The report shows that the long time former sanitation district Administrator/Engineer John Wallace used that position to assign work to his own engineering company without competitive bidding in an obvious conflict of interest. Further, he assigned work that was formerly done by district employees as part of their normal job responsibilities to his own employees at considerable added cost.

Employees who brought up issues were threatened into silence or labeled as troublemakers.

The report shows that as a member of the board during some of those years, I identified the conflict of interest to the board and moved to bifurcate the administrator/engineer contract such that competitive bidding would ensue.

Also on the sanitation district board, former Arroyo Grande Mayor Tony Ferrara and former Grover Beach Councilman Bill Nicolls supported Wallace unquestioningly and voted not to change or even consider the situation.

I thought the conflict so egregious that I brought it to the attention of the former District Attorney, but was told a majority of the board would have to vote to have the situation reviewed, something that Ferrara and Nicolls would not support.  John Wallace

I also voted against assignment of work to the Wallace Group without competitive bids but was again outvoted by Ferrara and Nicolls. Even former District Legal Counsel Mike Seitz indicated to me that there was a potential liability issue because it couldn’t be determined whether “staff” were in fact employees of the sanitation district or the Wallace Group.

Unfortunately he did not bring this concern before the entire board nor did he bring up the obvious conflict of interest issues.

Believing that someone on the Arroyo Grande Council should know of the situation, I brought my concerns to former Councilman Joe Costello, but never heard that anything was ever brought forward.

I was also asked to testify before the San Luis Obispo County Grand Jury, and their comprehensive report confirmed a number of problems at the district.  The Grand Jury report was denigrated out of hand by Mayor Ferrara and most of the Arroyo Grande Council at the time including Ferrara appointee Caren Ray.

After I left the board, Oceano Community Services District representative Lori Angello also voted unsuccessfully against assignment of work to the Wallace Group. Subsequently former Grover Beach Mayor Debbie Peterson came on the board and took up the issues.

Eventually Wallace resigned.

The report presents a cautionary message to the sanitation district board specifically, and other councils and boards in general, about the need for thoughtful review of contract relationships and work assignments, and thorough review by truly independent auditors.  It should also underscore the need for citizen involvement and media coverage of issues in agencies that otherwise receive little to no attention.

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And breaking in the Tribune: Spreckles the Bear endorses Adam Hill.


She endorses him hoping that he can help support her bid for a Kale only juice store in City Hall.

what the

She may be juicing for a living sooner than she thinks! Maybe she will be good at it…


I am so freaking sick of the political corruption running rampant in slo. Where is law enforcement? Adam Hill and his group of gangster cronies are the next to go. That’s you too Wagstaffe.

“Fire Adam Hill!”

what the

Woot woot!


And don’t forget about John Belcher. I hope this does not overshadow him.


AG Bill Nicolls: disgraceful, but not surprising. Your wife is now smeared by association and should resign from the AG council. The Nicolls house has suckled enough.


Look, AG already has to claim KFB, and Guthrie.

Our unsavory past includes Ferrara, Ed Arnold, Lenny Jones.

If what we’re hearing is true, Caren Ray will run for mayor.

Dont blame AG for Nicholls too.

He and Shoals have some explaining to do in Grover.


Thank you for not “going with the flow” (like a dead fish or excrement).

Sadly, in today’s world, we say it takes courage to do this, when in fact, it is simply the right thing to do.

I sincerely hope this is not a drop in a bucket as far as turning over corruption in our local (and state) bureaucracies. May this NOT be the exception to the norm.


Mayor Hill,

You are to be commended for your service to the Sanitation District during the Wallace Years, and now again with Mayor Shoals and Matthew Guerrero.

I read the report

Arroyo Grande’s longtime mayor Ferrara, and Grover’s Councilmember Nicolls must now be exposed for their evil ways.

There is also the issue of Attorney Seitz.

It does not end there. There are others who also knew but allowed Wallace to continue stealing, stealing our money. For years and years it was allowed to continue.

John Shoals refused to remove Nicolls, Caren Ray downplayed a Grand Jury report. The councils in both cities are guilty by association. Are we to believe they knew nothing?



I don’t believe it stopped with just knowledge of Wallace’s wrong doings. I believe they lined their pockets with this dirty money as well. Why else go so far to protect him?

Jorge Estrada

The last comment, “the need for citizen involvement and media coverage” two good points. This is why I’m very troubled about the County Board meetings not being live on a radio channel. Most of our youth, those who will likely inherit many decisions made by local government, are at work and can’t attend public meetings but a pocket radio or a tunable device is a common place option.


And they could be on a radio station if the BOS did not require such a high price to broadcast the meetings.


Jorge, they are those of us who attend these meetings. In fact there is one tonight at the AG council chambers at 215 east Branch St at 6 pm.


‘A pocket radio or a tuneable device”

How about a new thing called the INTERNET.

Not only can you listen LIVE to the BOS meetings but you can also WATCH.

Go to this link:

Jorge Estrada

Sure I can do that and get fired for the abuse of a company facilities. I can listen to a radio channel on my iPhone but a radio is the most convenient for most.


Most of our youth will never use a pocket radio or tunable device.

Jorge Estrada

Most of the youth won’t move their ass until it gets kicked. They’ll learn if properly coached and given the chance.


Thank you, Mayor Hill, for your honesty and integrity. Wish more elected officials named Hill were like you!

Thank you, Karen Velie, for slugging it out to get the story published.


ditto that. Investigative reporting is a dying cause. thanks for keeping it alive.

Ben Daho

This ABSOLUTE corruption must end! over and Over and over. there used to be honor among men. This is an absolute disgrace. WHEN will someone gain the courage and say Enough already. I don’t care if it’s my family, I refuse to allow corruption. As a former Rotarian, the 4-way test was how i guided my life and it STILL to this day is how human beings should act.

It seems like Every single city around has some sort of issue, From sex in the office with subordinates, to skirting property taxes to Hiring a less qualified relative and ruining the lives of those suited for the job and blown off by nepotism.

when will those at the top stand up and say “ya know what, this can’t go any further, you pack up your shit and go home” and, the board tell them to go to hell when they threaten a LONG expensive lawsuit.

Over and over and over. King City was bad? Look at these people in the news. Years ago we got reamed by speculators on the energy B.S. when we had Rolling brown outs. We all paid a LOT more for our electricity. Did we get a dime back? Corruption and greed.

When we buy soft drinks, we pay PER bottle but when we return it, they pay by the weight. we CONSTANTLY are taking it the shorts.



Obviously an intentional lack of segregation of duties to favorably impact John Wallace’s quest for wealth.


Mayor Hill, your honesty and transparency is a breath of fresh air. I hope your other sanitation board members and AG Council members can follow suit, and remain honest and transparent with the public.

We all are working towards the same goal.


Some AG council members can not remain honest, that is why in this next election we need to remove the two members, Karen Barneich, and Jim Guthrie, who sat along with our former mayor, Tony Ferrara, and supported him while he allowed this theft of ratepayer money.


Kristen Barneich, not Karen.

But count Caren Ray among those who should never be given keys to the castle.

She’s as guilty as the rest who backed Ferrara without question, and is now part the group attempting to undermine Hill.

I’m waiting for the Ferrara supporters to come to his defense.

Where are you now?


they all went quiet. even on the internet troll site.

what the

Internet troll site? The Tribune? Oh, you mean Adam’s boy troll? They are just shell shocked, give them a minute and they will be running around like chickens with their heads cut off. One hand in the pants, the other in the cookie jar.