About five months before receiving a $1.1 million fine in October 2012 for a sewage spill, leaders of a South County wastewater treatment plant met in closed session and rejected a lower offer from state regulators.
A closed-session document obtained by The Tribune shows that staff from the State Water Resources Control Board proposed settling the matter in April 2012 for $775,000 — $400,000 in cash and $375,000 in projects at the plant.
The three-member board of the South San Luis Obispo County Sanitation District met in closed session on May 16, 2012, and rejected the state offer, according to a timeline attached to a June 6, 2012, closed-session memorandum.
A few months later, the Central Coast Regional Water Quality Control Board levied the $1.1 million fine, which the sanitation district board quickly voted to appeal. The district board is still grappling with the hefty fine and has reopened negotiations with the water board.
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The closed-session document does not show whether any additional negotiations between the state and the sanitation district took place between June and October 2012.
Sanitation district legal counsel Mike Seitz said Friday that he could not comment on the document because it was a closed-session item and remains a closed-session matter.
The wastewater treatment facility, built in 1965, serves about 37,000 residents in Arroyo Grande, Grover Beach and Oceano. It is overseen by a three-member board with one representative from each community.
In 2012, those board members included former Arroyo Grande Mayor Tony Ferrara, former Grover Beach Councilman Bill Nicolls and Oceano Community Services District Director Matt Guerrero.
Of the three, only Guerrero still sits on the board. Its other members are Arroyo Grande Mayor Jim Hill and Grover Beach Mayor John Shoals.
The $1.1 million penalty was levied after the Central Coast water board found that the treatment plant was not adequately protected from a storm that pounded the area in December 2010 and led to a sewage spill.
On Dec. 19, 2010, floodwater flowed into the treatment plant and caused an electrical short that shut down four influent pumps.
Estimates of the spill volume later ranged from about 400,000 gallons to 3 million gallons. The regional water board estimated that 674,400 gallons of sewage was spilled.
The confidential closed session timeline estimated the spill at approximately 418,000 gallons.
The timeline showed that negotiations over the fine included a March 1, 2012, meeting between district staff and state water board staff to rebut the state’s estimated spill volume and other issues.
Later that month, the district presented a confidential settlement offer to the state of $50,000 cash and a $100,000 “suspended” penalty in exchange for two projects at the plant, according to the confidential memo.
The state water board’s office of enforcement did not accept that offer.
A letter dated April 20, 2012, from senior staff counsel Julie Macedo said that based on the state’s spill estimates, the penalty amount could range from $951,478 to $1.8 million.
Her letter proposed, instead, a $400,000 cash payment and $375,000 worth of projects, including drafting a wastewater treatment plant master plan to include existing needs at the plant and a schedule to address those needs.
Seitz said Friday that the sanitation district board has directed staff to seek a mediated settlement with the water board as quickly as possible. That process is ongoing, and the issue is set for discussion at the board’s meeting next week in closed session.
At a sanitation district board meeting in December, Seitz addressed a public comment that mentioned a $300,000 settlement offer. Seitz said the district was never offered a $300,000 settlement and that it has offered to settle for substantially higher than that.