Hearst Castle agreement with San Simeon throws wrench into dissolution

July 9, 2024


For nearly a year, Hearst Castle, one of California State Parks most profitable properties, has not paid its disadvantaged neighbor for processing its sewage. Issues and complexities with San Simeon Community Services District and State Park’s agreements have thrown a wrench into the district’s plan to dissolve.

In June 2023, San Simeon CSD Board of Directors fired its General Manager Charles Grace shortly after he admitted to conflicts of interest in a settlement agreement with prosecutors, which included a $75,000 civil penalty. Following Grace’s termination, state parks stopped paying for it sewage processing.

Plagued by years of mismanagement, the San Simeon Community Services District Board of Directors voted unanimously in March to dissolve the district. District officials want the county to take over all services.

The district then prepared and sent a formal application for dissolution to the San Luis Obispo Local Agency Formation Commission (LAFCO).

Following a 30-day review, LAFCO reported it could not finish processing the application for several reasons including issues with processing sewage for Hearst Castle. In the 70s, State Parks entered into a 50-year agreement with San Simeon, which has since expired.

San Simeon is asking the county to take over services in the district’s boundaries, which does not include Hearst Castle.

“Clarification is needed as to show State Parks would continue to obtain service, as they are an existing customer of San Simeon CSD,” according to LAFCO’s response. “If a county services area is formed, the affected State Parks area currently served by the CSD would need to be included in its boundary. Due to regulatory changes, an outside user agreement would no longer be a feasible option, so any future boundary change or formation will need to address this issue.”

In addition to issues with State Parks, LAFCO also reported that San Luis Obispo County Administrator Matthew Pontes had requested more time for county staff to review and analyze the proposal. It is now up to county administration to complete the study.


Inline Feedbacks
View all comments

The county must provide these services because this is a regional service/solution for present San Simeon’s 100-acre community, State Parks Hearst Castle operations, and potential Hearst Corp services. Why should a tiny, disadvantaged community be expected to deal with the complexities of a new wastewater treatment plant without help from State Parks or anyone else? LAFCO is stating that it will be complex to make this happen according to their new bureaucratic and more onerous rules. The lawyers are going to make big money from this. San Simeon doesn’t have a single employee or full-time contractor staff person; forget an engineer. The new County Administrative Officer needs to complete the required study for a new County Service Area to provide these North Coast regional services.

Just another indication that Supervisor Bruce Gibson, who represents the area, would rather pick fights over groundwater in Paso and not so secretly seek to shut down Oceano Dunes, than do his actual job representing his district. I’m sure there was an angry phone call from someone that made Bruce wake up from his faux-liberal stupor.

Come on man, you can do better than this, there has to be a way to include HCSP in the CSD. Annex it or create a joint venture with State Parks paying for a percentage of the plants operating costs. Don’t have the state build its own plant causing HCSP to become nonprofitable like the rest of the state.

When will Charles Grace be held accountable for his theft and sent to jail?, and yet DA Dow is silent, again.

The only time the DA talks is to kiss the butts of a minority of people, he has never done anything to pursue real local crime, ever. He’s, a good ol boy making 300k a year off us.