History is repeating at South County sanitation district
March 28, 2017
Until four years ago, I was not involved in local government. After hearing about problems at the South San Luis Obispo County Sanitation District, I started going to meetings.
The plant has served Arroyo Grande, Grover Beach, and Oceano for over 50 years. Starting in 2000 things went downhill and reports of discrepancies involving board members started in 2002.
Between 2009 and 2011, the sanitation district settled with three whistleblowers who lost their jobs. Legal fees skyrocketed from $33,000 in 2005 to $413,000 in 2013 for the small sewer plant with 10 employees and annual revenues of $3 to $4 million. Reserves of $11m were drained, while the district broke promises to the Water Board to update the plant.
A spill resulted in a fine of $1.1m and Surfriders reported poor water quality. Meanwhile, the Grand Jury called out a conflict of interest.
Local officials questioned Arroyo Grande and Grover Beach mayors Tony Ferrara and John Shoals who refused to make changes and defended their positions.
Then Oceano Community Services District board member Jim Hill resigned because he couldn’t sanction the corruption at the sewer district and Oceano Community Services District. Fellow director Lori Angello continued to assert a conflict of interest but was outnumbered by Ferrara and Grover Beach Mayor Pro Tem Bill Nicolls.
In 2013, then Grover Beach mayor Debbie Peterson presented a review of the Grand Jury audit, and other reports to the board. The review highlighted red flags and suggested a forensic audit and restructuring the district. Soon after, John Wallace retired and the district was reorganized.
John Clemons, the current superintendent, was hired and a part time team of an administrator and two engineers. Within two months, the nearly bankrupt plant rebounded, halving chlorine costs and changing annual operating losses of $1m to income of $1m.
From 2013 to 2016, the plant ran very well, regaining financial stability and producing the best statistics since 2000. However, the board refused to do a forensic audit. After over a year of public pressure the board hired renowned investigator Carl Knudson to investigate past practices. Even with limited scope, Knudson identified multiple issues and recommended submitting his findings to law enforcement.
The board sent Knudson’s report to District Attorney Dan Dow. In February 2017, the DA’s office charged John Wallace with two felony and two misdemeanor charges of conflict of interest.
Late in 2015, the part time administrator retired and the board appointed John Clemons as acting administrator in addition to his role as superintendent.
In 2016, the board hired Gerhardt Hubner as a full-time administrator. Since then morale has sunk to the point of multiple investigations, a formal complaint to the board by two operators, and half the staff unionizing. Legal costs are averaging over $20,000 a month; far more than agencies much larger. The bylaws were amended to prevent any one of the three directors from agendizing any matter, quashing any minority view.
Hubner’s total package is $200,000 a year with full pay plus insurance for him and his family after three years. The board said his salary was offset because he could manage plant redundancy and reclamation projects. Hubner is a geologist; not an engineer, or a qualified sewer operator. He hires consultants to project manage. Many recommendations of investigator Carl Knudson have not been implemented.
Despite these red flags and public complaints, the board refuses to reprimand or remove Hubner. Instead, they have joined the investigation into the one board member, Arroyo Grande Mayor Jim Hill, who stood up for his principles and was vindicated by Knudson.
Hubner’s draconian approach to management, his rare appearances at the plant, lack of knowledge of sewer plant operation, and excessive legal costs are the past practices of John Wallace whereby staff and directors who didn’t fall in line with him were ostracized and disposed of.
The irony is that the investigation into the mayor of Arroyo Grande was raised the day the district attorney announced Wallace’s arraignment. Hubner goes way back with John Wallace, having worked with him on the cleanup of Avila Beach and throughout the county.
Mayor John Shoals supports Hubner and Wallace, as he has since 2002, voting against Hill at almost every turn.
For three years, Shoals refused to replace his designee, Bill Nicolls, whose wife is now the alternate for Mayor Shoals in Grover Beach, despite requests from the council majority. For the past two years, Shoals dragged his feet in settling the $1.1 million fine and over $1 million in legal fees due to the 2010 spill, refusing to consider an investigation until public pressure became unavoidable.
It takes research and diligence to stay engaged with the activities of local government. It’s the only way to prevent inequities and misuse of funds that we depend on for health and safety. Please take the time to exercise your responsibility to our community and pay attention – it will pay off for all of us in more representative government and honest representation.
The South San Luis Obispo County Sanitation District Board meets on the first and third Wednesdays of each month at 6:30 p.m. in the Grover Beach council chambers at 154 S. 8th Street in Grover Beach. Agendas for the meetings are available on the Sunday before each meeting. Past meetings can be viewed at SLO-SPAN.org.
Patricia Price is a long-time resident of Arroyo Grande and regular sanitation district board meeting attendee.