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.


This is why the 2 employees who were fired for trying to reveal the plants secrets should be recognized as “Citizens of The Year”, or some other form of recognition. Whistle blowers and honesty will straighten out corrupt employers, politicians and overspent budgets.


Powerful stuff Mr. Mascolo. You’re words help paint a more vivid picture, which leaves little doubt of who is telling the truth.


Thank you for the courage to tell the public about your experiences.


How much BS was Tony hiding?

Should we audit the AG invoices from Wallace as he obviously overcharges as part of his routine business.

Every municipalIty has contracted with Wallace Group. What do their bills say?

Oh my… This is quite a maze.

Ferrara, Costello and Guthrie knew about the overcharging and allowed Wallace to take care of everything.

Who at Grover Beach did the same?


John Shoals and Bill Nicolls.


The saddest part: I bet every good person working a government job can tell you similar stories. That’s a big reason why SLO government is such a joke: good people are afraid to speak out.


I’ve worked in the public sector for over 25 years, and I have yet to see an employee who was fired who didn’t deserve it. The real tragedy is the many more who continue to stay on the payroll who should be fired due to incompetence, laziness, difficulty getting along with others, and a host of many other reasons.


Mr. Shoals was the only board member to go up and shake Mr. Wallace;s hand.

Mr. Shoals you can claim you were for the investigation, yet we know better. And Mr. Guerrero just because you asked Mr. Knudson if he found fraud in his report, does not been he did not find fraud. I know why you asked and you ought to be nervous, you know the fraud you committed.

Let’s see if Mr. Shoals will now name a different alternate to the San Dist. If he does not it just shows he is going to try to protect his friend to the end.

As a rate payer I want to see the board and Mr. Wallace held responsible.

Mr. Wallace I don’t think you are going to look good in orange, you lying POS.


Why is it that everyone who had a close relationship with Tony Ferrara is tainted to some degree?



You were not alone in trying to reach out for help, there were others who did as well.

During his second term on the OCSD, Jim Hill, who served on the SSLOCSD board with Tony Ferrara, and Bill Nicolls, was concerned about a number of issues.

He new he couldn’t share his concerns with Jim Guthrie, Ferrara’s alternate to the board, it was clear they were quite close.

Instead, he made an appointment to meet with Joe Costello, an Arroyo Grande councilman he met.while working on formation of the FCFA.

Jim made copies of San Dist records (all available to the public) and took them to Costello’s home one evening in 2008 or 2009. He expressed his concern over issues about Wallace acting as both District Engineer and Distric Administrator.

He told Joe, “Your council needs to know about this, there’s a crazy conflict of interest, and I can’t get Ferrara to admit it.”

Jim never heard from Joe Costello again.

It wasn’t until Jim ran for Mayor in Arroyo Grande that he learned of the longtime relationship between Costello and Ferrara.

Anyone is free to contact Jim Hill at his home if you’d like to discuss. 481-5654


quite the eulogy Wallace…..enjoy your wine, your view and the public’s money.