Sanitation district employee speaks out

February 6, 2016

John WallaceOpinion by Scott Mascolo

I am the first of two people to be terminated by former administrator John Wallace from the South San Luis Obispo County Sanitation District for standing up for what we believed was the right thing to do as a matter of ethics, morals and legality.

My employment with the district began in mid 1998 and ended in early 2011. I can’t comment on matters before 2001 and before Chuck Ellison retirement as it was a good place to work, but once Chuck left is when things turned ugly. I was very fortunate to work with many wonderful dedicated and talented individuals, hands on men and women who got things done.

As certified operators, the sanitation districts actual employees held more years experience in the wastewater industry than Wallace has been in business by about three fold. I have been a public servant for some 25 years specifically in wastewater operations, serving the public in the capacity as a plant superintendent, a mechanic, a lab tech, a collections worker and a shift supervisor.

To set the record straight John Wallace, during my employment at the sanitation district we worked for the public, not for you as you like to pretend. It was and is the residents of Arroyo Grande, Oceano and Grover Beach who pay those salaries, not you.

I could go on page after page detailing how literally with each project The Wallace Group failed in some capacity or another. From the Biogas Cogeneration unit that was headed for failure from day one and how Wallace’s representative told us not to speak of the short comings in the name of good public relations on that ribbon cutting day.

I remember the day one of Wallace’s own employees laughed as he condemned and critiqued the efforts of another Wallace engineers work on a particular multi-million dollar project under way at the plant. The failed Chlorine Contact chamber project the plant employees worked on for over a year to correct the many failed areas of the design and construction. The Methane Gas pipe bridge to nowhere. The electrical system improvements that were rolled over year after year, being billed and “engineered” year after year in spite of employee hazards, electrical fires and a potential for major process failure.

After the San Simeon Earthquake the plant suffered several areas of extensive damages. As expected, Wallace spearheaded the repairs which included excavations and pavement repairs around the plants headwork’s structure.

After the upgrades were completed every time there was any measurable rain a nice pond formed around the structure. We used to laugh as we placed a small rubber duck in the pond so it could float around. Of course, we hid the duck when one of Wallace’s staff came down so not to rub in the issues with their shoddy workmanship.

Unfortunately, at that pond were the two electrical pull boxes the rains of Dec. 2010 entered, tripped the shunt breakers, caused the influent pumps to fail which resulted in a massive spill. And that bargain basement emergency diesel pump that was sent back to the manufacturer four or five times apparently wouldn’t stay running. Well you can’t say you weren’t warned John.

As the years went on, frustration grew as we all watched less than satisfactory projects signed off on. The need for sometimes major rework on these engineered projects seemed never ending as well as overwhelming. Sanitation district staff was forced to correct the Wallace Group’s shoddy workmanship which took us away from much needed basic operational tasks.

It does not take an engineer or rocket scientist to know shit flows downhill, but we wondered sometimes if Wallace and his staff knew. It’s a basic concept for a working man, figure out what you need and build it to work as efficiently and financially beneficial as possible. This was never the case there in my 12 years. Wallace would have engineered a set of new tires for a work truck if given the chance to charge for it. sewage

One incident I’ll not soon forget took place somewhere around 2008. The Plant superintendent was out on long-term leave and I was approached by one of Wallace Group’s lead men who in Wallace’s words “spoke in the same voice” as he. Along with two other Wallace Group engineers, I was told, “We’re looking for work, what have you got”?

I was then taken from location to location around the plant while attempting to coerce me into agreeing to needless costly and unnecessary projects to provide work for the Wallace Group. From that point it was clear how things worked.

The saying about the $500 government hammer was never more evident under Wallace’s watch and apparently some of the board members liked it that way.

I believe many Americans feel our leaders have lost sight of what’s important in the name of public servitude and the sanitation district leadership was no different, so we reached out for help. We started with Grover Beach Councilman Bill Nichols, who on the word of somebody inside felt could be trusted. We discussed calling him to the plant for a confidential meeting but decided against this when our inside person became uncomfortable with prospect.

We decided there would be no harm in a letter to Nichols which was personally mailed by me. Bad idea as a couple days later Nichols was at the plant head hunting for whoever this pot stirring SOB was that was trying to expose the truth.

It wasn’t long after that Wallace was on the hunt and both Devina Douglas and I were terminated for refusing to go along to get along.

Those of us that worked under Wallace know the truth, the Grand Jury and Mr. Knudson’s report are right on the money and far from telling of every detail of Wallace’s supervision.

You have to ask yourself, what do those who exposed failures have to gain be speaking out? What do those who benefit from the situation have to lose?

It would seem if any of the politicians who backed the decades of wrongdoing were worried about being exposed as it would be career suicide. Without much effort one can conclude this is a opportune motive why allegations are disputed and down played.. Trust the facts on hand, there is no question in my opinion or the opinion of the other employees of the district, that Wallace took advantage of his position. It was a self dealing game designed to serve only one interest, The Wallace Group.

For Wallace to say he is proud of the service he provided, only shows how far away from reality Wallace has drifted.

John Wallace, do you recall that last meeting we had before I left the district? I expressed my concerns of the numerous flawed projects. Your response to me was “yeah, we seem to get a lot of that lately.”

It’s time to own up to the errors of your management Mr. Wallace, you have failed the public miserably and it’s time to apologize to the people of SLO County for taking advantage of a situation.

Ones political ties or position does not buy the trust or admiration of others. Only honesty and integrity will, and your far from a man of either in the eyes of many.


“Shit flows downhill”. Someone needs tell the Morro Bay City Council this. By the time our waterwater treatment facility is built, Los Osos will look like it’s sewer plant was built in the express lane. So many studies, so many experts and still no site!

I’m sorry for the South San Luis Obispo County Sanitation District’s problems but Morro Bay is well on the way to being on the road to nowhere.



No, YOU need to tell your city council this!

Get your ratepayer friends together and organize!

There’s plenty of information out there.

Get a copy of the Grand Jury Report.

Download the Knudson report (including the exhibits).

Watch the last two Sanitation District meetings online and take notes!

The sooner you get Wallace out (and it won’t be easy) the less likely you are to suffer as the SSLOCSD ratepayers have.

Good luck!


Building a new sewage treatment facility along the California coastline is an incredibly complex effort because of the involvement of a number of different independent authorities and bureaucracies with overlapping and often contradictory mandates. State Water Resources Control Board, Cal EPA, Regional Water Resources Control Board (Region 3), California Coastal Commission, Environmental Protection Agency, National Oceanic and Atmospheric Administration (Office of National Marine Sanctuaries) – Commerce Department, SLO County Planning, and the list goes on and on. Then you have to discuss funding the project.


All true. Prediction: Cayucos will have a new sewer plant up and running before Morro Bay.


Thanks for mustering the courage to write this. This letter is true public service.


The district is alive with the sound of truth

With songs we have sung for many years

The district fills my heart with the sound o

My heart wants to sing every song it hears

My heart wants to beat like the wings of the truth

That rise from the former employees

My heart wants to sign like a chime

That screams out about a crime

To laugh like a brook when it trips

And falls over stones on its way

To sing through the night

Like a lark who is learning the truth

I go to the truth when my heart is lonely

I know I will hear what I’ve heard before

My heart will be blessed with the sound of truthfulness

And I’ll sing once more


Barbara Nicholls doesn’t JUST still sit on the Grover Beach city council.

Oh, no no no.

She is the CURRENT Grover Beach alternate for the San District board.

How effed up is THAT?!?!


Unfortunately it’s as effed up as Shoals,

who’s going to smile and tell everyone he’s got to be fair…it’s the right thing to do,

and just how fair would it be to Mrs. Nicolls

when her husband hasn’t been convicted by a court of law?

Or some damn thing.

Remember, Shoals and Guerrero DID NOT WANT THE INVESTIGATION,!!

Mike Byrd

More damning than the Knudson report, being in the first person. Thank you Mr. Mascolo.

Now, if you would take this same statement and send it to the law enforcement agencies which received the Knudson report we ripped off rate payers would be deeply grateful.

Mr. Holly

I can’t believe that he doesn’t hold political office.


He’s making more than enough money right where he is.



Well written and I empathise with all those years you must have come home from work shaking your head wondering what side was up.

When JIm Hill was elected, many of his supporters knew about the wrong doing of Ferrara and Nichols ( whose wife is a sitting Council person in GB).

It time for their asses to be on fire.

And Tony thought losing the election and his presidency was awful.

The veil of “the rates were low” is ending now.


“Three things cannot be long hidden: the sun, the moon, and the truth.”



Thank you, Mr. Mascolo, for being willing to speak up. For all of the meetings, reports, investigations and excuses, your words seem to speak the truth, and validate what the people have been saying. (sory to all of Wallace’s “friends” who spoke of his good character…what do you say now?)

Sounds like Mr. Nichols has been part of this for a long time. He has reason to be concerned at this point, along with his fellow politicians Mr. Ferrara and Mr. Shoals. And, how many more were part of this at the beginning? I hope the FBI carries it all the way back, as I know there were other directors on the Sanitation District that went along with the ol’ boys club.

Owning up to his “errors” (or intentions?) is not enough. Mr. Wallace should be responsible to pay back the ratepayers he stole from.

And, thank you to Mr. John Clemons who has turned the plant around in just a year, and brought the reserves back up again. I can now see the light at the end of the tunnel.

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