San Simeon officials knowingly deceived a grant provider

November 11, 2020

San Simeon CSD Board Chair Gwen Kellas

By KAREN VELIE

The National Fish and Wildlife Foundation (NFWF) accused the San Simeon Community Services District of knowingly applying for a grant they were not eligible for, according to an Oct. 23 email rescinding the grant. The NFWF also alleged that the district failed to comply with guidelines after the grant was approved.

After discovering multiple conflicts of interest, activist Julie Tacker reported her concerns to the providers of $250,000 in grants to the district. In addition to confirming the conflicts of interests, the NFWF discovered the district and its consultants knew they were ineligible for the grants, but decided to move ahead anyway

“I believe the district knowingly committed fraud,” Tacker said. “And the evidence supports my opinion.”

In early 2019, a group of consultants and several district officials began eyeing a portion of $29 million in grant funding the NFWF was providing for “restoring coastal and natural estuarine systems.” Initially, the district was seeking funding for “cleaning Padre San Juan Creek,” but later decided to request funding for restoring the current sanitation plant site, according to district emails received through a record’s request.

A few months earlier, the district entered into an agreement with the California Coastal Commission regarding work done on its sanitation plant without necessary permits. The district agreed to mitigation which included moving the sanitation plant away from the coast and restoring the site. In exchange, the district received an after-the-fact permit for the work.

On May 8, 2019, the San Simeon board voted to pay Wood, an energy services company, $10,500 to write a grant application seeking funding for the restoration of the sewer plant site.

But NFWF grant funds were not available for projects involving mitigation or settlement agreements, something both the consultant who applied for the grant and district officials knew, according to district emails.

“NFWF funds may not be used to support ongoing efforts to comply with legal requirements, including permit conditions, mitigation, and settlement agreements,” Marie Laule, an employee of Wood, wrote in a July 2, 2019 email to San Simeon CSD Board Chair Gwen Kellas and General Manager Charles Grace. “However, grant funds maybe used to support projects that enhance or improve upon existing baseline compliance efforts.”

In her email, Laule gives Kellas and Grace three options:

1. Continue on without disclosing or questioning the ineligibility.

2. Inform the NFWF of the issues and let the grant provider determine whether or not to approve the grant.

3. Pull the grant application because of ineligibility.

They district decided to move forward with option one, according to district records.

After discovering the email chain, the NFWF rescinded the grant.

“Moreover, we have additional information that indicates that your organization was aware of the ineligibility of the project and continued forward in seeking the NFWF award,” wrote Daniel Strodel, general counsel for the NFWF, in an Oct. 23 email to the district. “Accordingly, for all of the above reasons, I am notifying you herewith that the award has been rescinded.”

San Simeon CSD General Manager Charlie Grace

In his correspondence with the district, Strodel also voiced concerns over conflicts of interests with Grace and Kellas and awarding contracts without the bidding process.

First, Strodel questioned District Board Chair Kellas’ promotion of a project adjacent to condominiums where she lives and has a significant financial interest. Also, Charles Grace allotted $22,400 to Grace Environmental Services, a waste water consulting and management company he owns, in another potential conflict of interest.

In addition, while the district planned to allot $16,000 to Oliveira Consulting, $86,600 to Wood and the $22,400 to Grace Environmental Services, none of the contracts were put out to bid.

In an email on Oct. 27, Kellas voiced concerns about losing the grant that she helped submit, and the damage it could do to their reputations.

Kellas asked if the “team” could set time for a conference call, noting they could not discuss the issue at the next board meeting. More than a year earlier, the FPPC told Kellas she had significant conflicts of interest and that she should not participate in discussions or voting related to restoration of the sanitation plant site.

“I see Wood, the District and Jeff as a team in a District that can only survive through grants; therefore, we need to pull apart in minute detail as to what happened and ensure it does not happen again,” Kellas wrote in the email to Jeff Oliveira of Oliveira Consulting, Grace and Laule.

However, both Grace and Oliveira agreed not to try and salvage the grant.

“I agree with Charlie, the NFWF guidelines were pretty clear on funding for projects required as conditions of approval (i.e.,’mitigation’),” Oliveira wrote in an Oct. 27 email to the group. “This will have a domino effect with the OPC grant as well, since that funding was tied to the NFWF grant matching funds requirement.”

In the summer of 2019, San Simeon applied for and received confirmation they would be getting $125,000 from the NFWF and a matching $125,000 grant from the Ocean Protection Council. Both grants were rescinded because of ineligibility issues and failures to abide by conflict of interest rules and bidding requirements.


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ajdury

Well this is just embarrassing!


Downypaso

Sadly, in a county district run by Bruce Gibson, where Gibson sets the example, this is to be expected.


aye-caramba

This is a good article. Well researched. It is obvious that leadership here decided to try to get dollars very unethically, and possibly illegally. This happens a lot , sadly. Thinking that the CSD is “too small” and “really unnoticed”, they went forward with the ruse. Dangerously, they likely thought getting the money would be risk free if caught. Resignation is in order absolutely, referral to the DA for fraud. This is about protecting public integrity,


Julie

Let’s put this in perspective. This is less than one acre of land. They were seeking a total of half-million to study moving the WWTP to only a handful of possible locations and restore/landscape the site. This was ONLY to study alternatives. It wouldn’t have built anything. A half-million of study dollars would have been of great interest to the parities involved.


The grants were to have come from the Feds and the State. San Simeon is a recognized Disadvantaged Community, they are eligible for many grants, just not these. Why did the powers that be chase something that wasn’t intended for them? They are the ones wasting the community’s money.


Had they been eligible, $250,000 could have gone a lot further if the contracts had gone out to bid, sole sourcing harms the community by not having competition. No, greedy hands were in the pot, it’s called “self dealing” and it’s illegal.


Additionally, the Chair of the Board was advised that she had a material conflict of interest on all things related to restoring the WWTP site and should have been recusing herself on all things associated with these grants, but, no, she, herself jeopardized the grants and the district’s reputation by falsifying information/lying by omission to get these grants. The link to the FPPC’s advice letter is here:


https://www.scribd.com/document/483899276/Kellas-FPPC-Advice-Final-a-19-155


Charlie Grace is also asked for FPPC advice, but not until he had already been part of the action, thus the FPPC refused to provide an advice letter and is now investigating his conflicts.


This matter is not over. The outcry from the community members who attended yesterday’s Board meeting made it very clear they want to be reimbursed for the monies sunk into this endeavor and the Hearst matter that has an open price tag hanging on it. There are also cries for Kellas and Grace to resign. Here! Here!


Kalifornia_Bud

Throw them in jail. That’s the only way these people will learn.


aft50s

From Charlies Grace’s Webpage;

“We maintain the highest standard of fairness, ethics, and integrity in all that we do while producing positive results at every level”.


Yeah right, not this time.


Last Individual

Henry Kissinger said, “Corrupt politicians make the other ten percent look bad.” I think in SLO County at least, he was being quite generous. It’s probably more like 1% or possibly 2% (that’s me being generous).


MrYan

So the polluting sewer stays on the edge of the coast with no new funding source in site? Got it.


In the long run the LOCAL tax payers will be on the hook for this. Julie’s efforts will result in; millions in additional expenses for delaying the needed new sewer project, financial hole for the CSD wide enough to drive a Mack truck through, reduced services within the district as a result, and a tax increase in the future to pay for this mess. That is a good days work.


The cure is worse than the disease in this case. Saving thousands – costing millions. Again!

Julie Tacker Sewer Killer Tax Hiker is a more apt moniker in my book.


Jorge Estrada

California has thousands of inmates costing the taxpayers millions annually, forever? Following the law and ethical behavior with the public trust has a cost too. Money will be saved by teaching our officials that they are not above reproach and in some cases will pay, personally, for their malice.


Cindy

The sewer will be moved within 10 years. What Julie stopped was a group wanting taxpayer funding to pay for their plans, no work just $250,000 in plans paid to a group of crooks. You sound like someone Julie caught cheating or stealing in the past.


Last Individual

Oh, I see now. Corruption is okay as long as it is pursuant to accomplishing something that is (in your opinion) a good thing.


ajdury

1) Grant money is NOT *free* money. It’s OUR money, redistributed.


2) Taking taxpayer dollars under false pretenses is not okay. It’s theft in the civilian world and it’s theft in the government world.


3) Taking grant money that you don’t deserve causes there to be NO grant money (again, OUR frigg’n money, people!) for those that DO need it/deserve it. If the college-aged children of celebrities are in error, our government agency is in the exact same error.


4) Blaming the person who reported the malfeasance is such a misdirection of accountability as to be shameful. You must be the guy that believes what a woman is wearing causes her to be assaulted. Not a very enlightened way to get through life.


5) Thank you Julie, for always working to turn over those dark, dank, mossy rocks and expose the undersides to the sunshine of transparency. KEEP AT ‘EM!!


Julie

MrYan,


Shoot the Messenger — that fixes everything (sarcasm intended).


The grants were to have come from the Feds and the State. San Simeon is a recognized Disadvantaged Community, they are eligible for many grants, just not these. Why did the powers that be chase something that wasn’t intended for them? They are the ones wasting the community’s money.


Had they been eligible, $250,000 could have gone a lot further if the contracts had gone out to bid, sole sourcing harms the community by not having competition. No, greedy hands were in the pot, it’s called “self dealing” and it’s illegal.


Additionally, the Chair of the Board was advised that she had a material conflict of interest on all things related to restoring the WWTP site and should have been recusing herself on all things associated with these grants, but, no, she, herself jeopardized the grants and the district’s reputation by falsifying information/lying by omission to get these grants. The link to the FPPC’s advice letter is here:

https://www.scribd.com/document/483899276/Kellas-FPPC-Advice-Final-a-19-155


Charlie Grace is also asked for FPPC advice, but not until he had already been part of the action, thus the FPPC refused to provide an advice letter and is now investigating his conflicts.


This matter is not over. The outcry from the community members who attended yesterday’s Board meeting made it very clear they want to be reimbursed for the monies sunk into this endeavor and the Hearst matter that has an open price tag hanging on it. There are also cries for Kellas and Grace to resign. Here! Here!


slocorruptionhater

The ends do not justify the means. Say no to corruption, period.


IronHub

So… $22,400 to his own consulting company, with no bid? Charlie Grace, can you define “criminal fraud?” Smell the corruption? Dan Dow? Where are you?