San Simeon needs an independent general manager

June 2, 2021

Michael Donahue


It is time for the San Simeon Community Services District to have an independent general manager.

The transformation of San Simeon to a normal district with an independent general manager that actively manages the budget and controls costs apparently requires an amount of dedication and time commitment that exceeds what the district’s directors are able to or willing to invest. Do our board members possess the accounting, and operations management skills to do this heavy lift? Do they have the resolve?

There is no groundswell of public anger evidenced at board meetings. The recent Budget Committee meeting drew just two members of the public. Our local democracy is drowning in a sea of public apathy.

This ethically challenged good old boy network headed by General Manager Charlie Grace overseeing his own company Grace Environmental Services has cost San Simeon rate payers hundreds of thousands of dollars in lost grants and may cost many thousands more in grant clawbacks.

Charlie’s lot line oops has cost ratepayers tens of thousands of dollars in rent, land survey fees and legal bills and perhaps even worse delayed water tank and other critical development projects by years. These delays have exploded district legal bills as individuals on the water wait list are asking the courts to intervene and grant the necessary will serve letters.

San Simeon’s response to the grant fraud and lot line oops has been to question was it really fraud and to argue who really owns the land in question. This approach has effectively put future grants and future development into the deep freeze while at the same time skyrocketing legal and consulting bills are pushing the district’s budget deeper into the red.

This “let the fox guard the chicken coop” approach with General Manager Grace overseeing his own company provides many opportunities for district ratepayers to be taken advantage of.

This matter of using the smallest filter units, inadvertently increasing overtime pay, overpaying for these filters as a result of failing to properly shop for these pricey items and successfully billing the district retroactively with no prior board authorization is just one of many examples where this conflicted arrangement costs San Simeon ratepayers dearly.

An independent general manager would never have consented to an automatic renewal of Grace Environmental Services operations and administration contract without a thorough cost analysis and the solicitation of competitive bids, but this is exactly what happened this year.

If the board and San Simeon residents fail to rectify this conflicted arrangement, San Luis Obispo County, backed up by the court, will force the district to have an independent general manager.

If the district fails to take corrective action promptly and the the San Luis Obispo County District Attorney is forced to step in, the district’s legal bills will go off the chart and all other critical district projects will be halted until this is resolved. This is extremely serious.

Michael Donahue lives in San Simeon and is concerned with the leadership.

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The General Manager’s position is most important and needs to be independent, NOT like what San Simeon has. In fact, Grace’s company’s (GES) contract says that he CANNOT be the General Manager because it would be a conflict of interest. The same contract says that he is the “fulltime” General Manager. I wonder about the law firms that the District has been using and if they have read the GES contract. It is so poorly done, and the Board just extended it for two years and blocked all cost analysis or contract changes. Blocking public or any cost analysis of General Manager Grace’s contract is something that no Director should have allowed, experienced or not. Only the Directors can demand this. This responsibility cannot be delegated or avoided.

Maintaining the conflicted arrangement with General Manager Grace and his company harms San Simeon like it did with the rescinded grants for a quarter million.

Now Chair Kellas and District Counsel Minnery are doing all they can to protect Grace for example by removing his Budget and Expense management responsibilities. This is the number one job of an independent General Manager. They snuck that change through because the other Directors are new, and they did not tell them what they were doing. The Directors should not be expected to do this, but they no longer have a choice especially with this latest change they snuck through. Some of us citizens can help, but an independent General Manager is required to manage costs.

As Michael points out, only the Director’s or the District Attorney Offices can end this fundamentally conflicted arrangement. The Grand Jury may also be starting an investigation of our District and is an outside group that could recommend change. I hope that three of the Director’s will start taking corrective action before changes are forced. Defending the status quo is not likely to be a continuing option.

I do not know but given the number of closed sessions, I would expect that one or more attorneys are telling the Directors that they can beat all these challenges, really and at what cost? The cost is not just in dollars, it is in trust.”

If Directors are meeting in close session and votes are taken this needs to be made public otherwise it’s a Brown Act violation.

This is nothing new, John Wallace stole millions from the rate payers at the SCSD all “legal like” by channeling it through his own company doing work for the SCSD. Dan Dow let him get away with it.

Get rid of them all.