San Simeon CSD considers protecting manager from financial liability

November 29, 2021

By KAREN VELIE

The San Simeon Community Services District Board will consider indemnifying its district manager, shortly after the state discovered the community could seek reimbursement for funds spent under an illegally executed agreement. Currently under an investigation by San Luis Obispo County prosecutors that could result in fines and legal costs, the district’s manager is also facing approximately $400,000 in liability over the illicit contract.

As manager of the district, Charlie Grace negotiated a contract with Grace Environmental Services, a private company he owns. Grace then used his position as the head of the district to funnel money to his private company.

On Nov. 18, the California Fair Political Practices Commission (FPPC) voted to have Grace pay a $4,500 fine for illegally sitting on both sides of the negotiating table.

The FPPC commissioners also agreed to bring back for clarification in January, whether or not voiding the contract requires a civil court action. The district is entitled to recover any compensation that it paid through the voided contract, according to the Government Code. If the contract is voided, the district could recover the $393,734 in compensation it paid Grace from Jan. 2016 through Dec. 2020.

On Monday’s agenda, Grace listed Government Code §54956.9(d)(2), which is an occurrence that might result in litigation against the district, as the reason for holding the discussion about Grace Environmental Services’ request for indemnity in closed session; without public scrutiny.

When asked why the district was holding a closed door session about a private company under a code that only allows threats against the public agency to be considered in closed session, San Simeon district legal counsel Jeffrey Minnery noted the possibility Grace could take future legal action against the district.

“I am aware of no direct threat of litigation from Grace Environmental Services, however, facts and circumstances do indicate that litigation might occur if the district does not address the indemnification issues,” Minnery responded.

Minnery did not respond to questions about whether or not indemnifying Grace and his private firm would be a gift of public funds. Minnery said he had “not been granted any authority to speak on this matter.”

San Simeon is a small, disadvantaged community with under 500 residents that sits on the coast between Cambria and Hearst Castle.


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womanwhohasbeenthere

As usual the taxpayers, the forgotten ones, are left out of this and will ultimately pay the bill.


Julie

Why isn’t Grace asking his own insurance company to cover his a**?


kayaknut

Why should he if the ratepayers/taxpayers can be made to pay back his theft?


obispan

Grace clearly isn’t the only one corrupt and has told the board if I go down you go down.


horse_soldier
MBwaiter

Same one. He is incompetent and quite frankly an idiot. Just look where else he has been…Avila, Oceano, SSCSD, IWMA…Its really sad this guy is allowed to practice law.


SLO Friend

Minnery and the firm he works for represents a number of the small districts/organizations who are having trouble with their electeds or staff – Port San Luis Harbor with Commissioners who bully and harass, IWMA and San Simeon with staff problems, just to name a few. All reported on by Cal Coast News, Thanks Karen and Cal Coast.


mazin

“When asked why the district was holding a closed door session about a private company under a code that only allows threats against the public agency to be considered in closed session, … district legal counsel Jeffrey Minnery noted the possibility Grace could take future legal action against the district.” Well that seems like a bumkiss rationale. Under that standard, a lot of meetings could go closed door, a parade of imaginary horribles standard. Tell me, how many members of the current San Simeon Community Services District Board were serving on the Board at the time of the “mistake”?


MrYan

The district can simply ignore the fact they provided a gift of public funds, to this individual, and not pursue repayment for their error. Indemnification can’t be applied to a non existent employment contract. They hope to ignore it.


The voided contract for his Corporation business could produce litigation where indemnification could apply.


Ben Daho

Please rephrase that an pretend I’m 5


MrYan

The board has two separate legal issues to deal with; paying for a CEO when there was a non-existent employment contract (gift of money), and voiding a board approved contract with a Corporation.


Ben Daho

Right in front of our very eyes.


“San Simeon is a small, disadvantaged community with under 500 residents that sits on the coast between Cambria and Hearst Castle” Ouch.