SLO County lodging legal action against San Simeon management

September 28, 2021

By KAREN VELIE

The San Luis Obispo County District Attorney’s Office plans to file a civil complaint against the the owner of the management company running the San Simeon Community Services District, according to a letter the county sent the district on Sept. 21. The complaint centers on allegations that Charlie Grace funneled district funds to his company, Grace Environmental Services.

The District Attorney’s announcement came after a 2020 investigation by the DA’s office and the California Fair Political Practices Commission into questions about conflicts of interest by Grace and the CSD board of directors.

Grace Environmental Services, a wastewater consulting and management company, entered into a professional services agreement with the district in 2016 that included providing a general manager. At that time, the district website listed Grace as its general manager.

In 2020, Grace also referred to himself as San Simeon CSD’s general manager. As the general manager of a government agency providing no bid contracts to his private company, Grace could have faced charges of conflicts of interest.

Earlier this year, Grace’s title was changed on the district’s website from CSD general manager to the general manager of Grace Environmental Services. That left the district without a general manager even though Government Code 61050 requires districts to have one.

At that time, Grace’s personal attorneys informed Deputy District Attorney Kenneth Jorgensen that Grace was not San Simeon CSD’s general manager.

“Importantly, we note that Mr. Grace is not ‘both General Manager of San Simeon Community Services District and … the principal of Grace Environmental Services, LLC,’ ” Grace’s attorneys told the district attorney’s office. “Mr. Grace’s firm, GES, is under contract by the San Simeon Community Services District to perform facilities and operations management, which includes some General Manger duties. Mr. Grace himself is not now, nor has he ever been, San Simeon CSD’s general manager as defined by the Community Services District Law.”

Jorgensen “spent a considerable amount of time with Mr. Grace’s attorneys attempting to understand the scope of duties Grace owed to the district as its general manager,” according to Jorgensen’s Sept. 27 letter to the district.

“Our investigation has culminated, and our office is in the process of preparing a civil complaint to be filed against Charles Grace and GES in Superior Court,” Jorgenson wrote. “Our office’s policy is to not comment on active investigations, but in this instance, we believe it is important to make an exception.”

Depending on the circumstance, since earlier this year, district officials at times have referred to Grace as a government employee, and at other times a contractor.

The San Simeon CSD board responded to Jorgenson’s letter by calling for a special meeting that includes a closed door session for a review of Grace’s performance, under Government Code 54957 (b) (1), which allows closed door reviews of public employees, but not of contractors.