State argues for fine against South County sewage district over Oceano spill

UPDATE 1:20 a.m. Saturday: The Central Coast Regional Water Quality Control Board delayed a decision on whether to uphold a more than $1.3 million fine against a South County sewage treatment plant for a spill in Oceano in December 2010.

The board will meet in closed session on Oct. 3 in San Luis Obispo to deliberate.

“We have briefly discussed what to do and we all need time to talk about this,” board chair Jeffrey Young said early Saturday morning after hours of testimony. “It cannot be shoehorned in.”

State water board prosecutors had proposed the South San Luis Obispo County Sanitation District be fined more than $1.3 million in connection with the spill in Oceano on Dec. 19-20, 2010.

The regional board heard testimony starting at 8:30 a.m. Friday to determine whether the sanitation district should have to pay the proposed penalty.

The state water board prosecution team and the sanitation district each had time to present their case and examine witnesses.

In her closing argument, the sanitation district’s attorney urged the board to decrease the fine. Melissa Thorme of Sacramento-based Downey Brand said the district took steps to protect the treatment facility during the spill, took remedial measures and has not had any other spills in 25 years.

“The prosecution team failed to show that the district spill volume was unreasonable,” she said. “They just said they would do it differently.”

She also argued the proposed fine was not consistent with other penalties assessed to treatment plants elsewhere in California.

In response, Julie Macedo, senior staff counsel for the state water board’s Office of Enforcement, argued the sanitation district had years to properly budget funds for projects to address problems.

“Delayed maintenance issues are not acts of God,” Macedo said. “There were several unresolved issues that were known and should have been repaired prior to the spill.”

Original story: The cause, the volume and other circumstances surrounding a sewage spill in Oceano in December 2010 were debated Friday during a daylong hearing that pitted state water board prosecutors against attorneys for a South County sewage treatment plant.

The state water board has proposed a more than $1.3 million penalty against the South San Luis Obispo County Sanitation District in connection with the event that spilled thousands of gallons of sewage on Dec. 19-20, 2010.

The Central Coast Regional Water Quality Control Board, which will decide whether the fine stands, did not issue a decision by press time Friday night.

The testimony ranged from the root cause of the spill, to the amount of sewage that spilled from the plant, to whether the district has enough money to pay the proposed fine — all issues upon which state water board prosecutors and the district’s attorney disagreed.

The board also heard from local residents who are worried the fine would be passed on to ratepayers through increased sewer bills. Some urged the fine be lowered.

“Oceano has a lot of poor people, and I don’t care what you say, the rates will be raised,” said Oceano resident Larry Bross.

Some residents believe that flooding, which preceded the spill, was caused by improper maintenance of the nearby creek channel and lagoon and that the water board should have involved the county in its investigation.

“The flood wasn’t caused by the sewer plant,” said Karen White, a Halcyon resident. “The flood was caused by the Oceano Lagoon and Meadow Creek.”

The wastewater treatment facility, constructed in 1965, serves about 38,000 residents in Arroyo Grande, Grover Beach and Oceano.

During her opening statement, state water board prosecutor Julie Macedo argued the penalty is “fair, appropriate and necessary.”

Macedo said she hoped the regional board would send a message that it’s better to deal with problems as they arise rather than let them pile up and lead to a spill.

The state prosecution team alleges the spill was caused by human error, including a lack of preventative maintenance at the plant. They say the district could have prevented it if a project to install waterproof electrical wiring had been completed when originally proposed in 2004.

District officials have said the maintenance project, which has now been largely completed, would not have prevented the spill.

Heavy rain preceded the Dec. 19, 2010, spill, when floodwater flowed into the treatment plant and caused an electrical short that shut down four influent pumps about 10:30 a.m.

The district argues three factors — the storm, the electrical failure and an inadvertently closed valve — were unintentional and beyond the district’s control.

“It was really what you could call the perfect storm of events; ones that you could not have foreseen in advance,” said Aaron Yonker of Wallace Group, who testified for the sanitation district.

However, Jeff Appleton, who was the plant superintendent at the time of the spill, testified he told sanitation district officials about wiring problems and other issues at the plant, which were discussed but not fixed.

Appleton, who testified as a witness for the state prosecution team, is on administrative leave from the district.

Appleton also said he stands by his initial spill estimate of 2.25 million to 3 million gallons. He said district Administrator John Wallace and one of Wallace’s employees tried to get him to deviate from that amount.

District officials disagreed and noted they submitted Appleton’s estimates to the state along with their own.

The sanitation district modified its spill volume estimate in May to 417,298 gallons. A district consultant estimated a larger spill amount, but it was still about 400,000 gallons less than the state water board estimate.

The state water board concluded the volume of the spill was more than 1.1 million gallons.

Also discussed Friday was whether the district has the ability to pay the fine. An economist with the state water board said the district can pay because audited financial statements from previous fiscal years show it had a more than $5 million surplus.

“The ability to pay by the district is adequate to cover the proposed (fine) without any kind of impact on ratepayers,” Gerald Horner said.

The district’s attorney opposed Horner’s conclusion, arguing the statements are several years old and do not reflect the district’s current situation.

The district does not have enough money in unrestricted funds to cover the fine this fiscal year, said Melissa Thorme, a Sacramento-based attorney representing the wastewater treatment plant. Paying the fine would leave the district about $260,000 in the red as of next July 1.

“We’re now two years later and as everyone knows your financial situation can change quickly,” she said.

Reach Cynthia Lambert at 781-7929. Stay updated by following @SouthCountyBeat on Twitter.

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