Arroyo Grande Mayor Tony Ferrara said recently that he found a report by the county’s civil grand jury criticizing the South San Luis Obispo Sanitation District “personally and professionally offensive.”
Ferrara said parts of the grand jury’s report were based on incomplete information or information not reviewed thoroughly enough to make a determination.
The report, issued June 2, determined a conflict of interest exists between John Wallace, the administrator of the South County wastewater treatment plant, and his engineering firm. It also alleged the district’s board of directors has failed to recognize or eliminate the issue, and that Wallace’s contract is 25 years old (signed in March 1986) and has never been evaluated, re-bid or modified.
“The reason it’s been there for 25 years is because it works,” Ferrara said. “It keeps our rates low.”
Ferrara is one of three members on a board governing the sanitation district, which serves Arroyo Grande, Grover Beach and Oceano. He was speaking in that capacity Wednesday at a district meeting.
At the meeting, the district’s attorney, Michael Seitz, outlined actions aimed at making the district more transparent, some of which were already in the works before the grand jurors released their report, he said.
The grand jury started investigating the sanitation district after receiving several complaints from citizens about its operational and management practices.
The agency has been in the limelight lately for other reasons, including allegations of wrongdoing by two former employees and a lengthy notice of violation from the state water board issued in response to a December sewage spill. Those issues were not covered in the report.
The grand jury recommended the board consider hiring independent management. It also suggested the board demand significant budget and cost details to alleviate a conflict of interest.
Jurors recommended the county auditor-controller consider auditing the district.
Lori Angello, one of the three board members and president of the Oceano Community Services District, suggested Wednesday that Wallace should continue providing engineering or administration services — but not both.
“It might be wise to separate the two,” she said.
No direction was made to put that on a future agenda. However, the district is in the process of splitting Wallace’s administrative and engineering contract into two separate contracts. The board was set to vote on it Wednesday but will do so after Auditor-Controller Gere Sibbach reviews the contracts.
Separating the contracts will prevent Wallace from delegating engineering work unless it had already been budgeted or is necessary in an emergency situation, Seitz said.
In addition, a “top-to-bottom” peer review of all the district’s practices, from administration to plant operations, will be conducted and is expected to be completed before Sept. 1, Seitz said.
Seitz also took exception to a part of the grand jury report questioning the cost of a roof painting job.
The grand jury alleged the board was uninformed of the total charges paid to Wallace Group; Seitz said the grand jury made its determination without reviewing information such as district agendas and minutes that showed the board was informed about the project.
Added Ferrara: “You don’t make those kinds of accusations of someone unless you have hard and fast evidence to back it up, and they didn’t have that kind of evidence.”
The sanitation district has to respond to the report by Aug. 29, but will likely do so in July.
To see the grand jury report, go to http://slocourts.net/grand_jury/reports.