John Wallace responds to investigator’s charges

For several years, my Wallace Group colleagues and I have been under intense criticism for our work with the South San Luis Obispo County Sanitation District. We have remained silent, believing our work has been of high quality and spoke for itself.

Though somewhat accustomed to incessant, unfair criticism, it was still a shock to wake up and see my name plastered atop Page 1, accused of professional mismanagement (Tribune, Jan. 21, “Former South County sanitation administrator could face charges”).

Additional salt in the wound was The Tribune’s secondary headline: “New report claims Wallace mismanaged the district over his 27-year career.”

We can take criticism. Character assassination by innuendo is another matter.

This new report — prepared by an out-of-town investigator at the direction of the South County Sanitation Board — recklessly disregards the truth and impugns the integrity of all my Wallace Group colleagues, an extraordinary group of dedicated professionals who deserve respect, not condemnation.

Bluntly, the report omitted readily available facts that would have made it abundantly clear there was no misconduct, as the report claims.

This report was published and adopted by the district board without any meaningful opportunity for the Wallace Group to address its many exaggerated, unfounded and misleading claims.

Consider the following:

• Of the 530 hours the investigator billed the district for his investigation, he spent only four hours interviewing me. That’s less than 1 percent of his total hours.
• More than 125 pages long, this report was months in the making, but was kept out of sight and could not be reviewed until it was first published on Sunday evening, Jan. 17, before a Monday holiday, and scheduled for approval on Wednesday, Jan. 20.
• The board voted on the report even though 48 lengthy and detailed exhibits — comprising several hundred pages and said to be the guts of the criticism — were not provided to the board or the Wallace Group. Despite the lack of evidence and lack of time to respond to the investigator’s findings, the board, puzzlingly, refused a request for a postponement.

Worse yet, the investigator admitted that he intentionally withheld questioning me on his key conclusions and that he intentionally declined to interview other Wallace Group employees even though they were offered. Had he asked us about what others alleged, he would have reached very different conclusions.

Fundamentally, the investigator ignored the board’s central directing role. The board reviewed all proposals in advance, approved all expenses in advance and approved all bills after receiving scrupulously detailed invoices. The district’s finances were audited every year, and every year auditors issued a clean bill of approval.

The investigator also ignored easily understandable reasons that were the root cause of escalating expenses, primarily expensive capital projects triggered by the following circumstances:

• Updated and more stringent regulations, which required new and different — and costly — equipment.
• Population growth, which increased the need for more capacity.
• Natural disasters, such as the San Simeon Earthquake and the 2010 flood that required major repairs.

The board knew of all the expenses and approved them in advance.

The report contains numerous other exaggerations and misleading claims, too numerous to rebut here. But as just one example, the report claims the current plant superintendent and his staff of eight do the work formerly done by 28 Wallace Group employees.

This is entirely misleading. To accomplish the work previously managed by the Wallace Group, the district staff currently uses at least a dozen consulting firms, most of which are billing the district at rates 30 percent to 40 percent higher than what the Wallace Group charged.

Here is the truth: For more than a quarter century, the Wallace Group — working closely with the district’s full-time employees and with the board’s approval and oversight — helped build and maintain a wastewater treatment plant that has one of California’s best performance records.

The system has operated so efficiently that residents of Arroyo Grande, Grover Beach and Oceano have some of the lowest sewer rates anywhere in California.

Rather than being burdened by the Wallace Group, the community greatly benefited from our services. Of that, we have no doubt. Of that, we are immensely proud.

John Wallace is founder of the Wallace Group, a San Luis Obispo-based engineering consulting firm.

This story was originally published February 5, 2016 at 9:25 AM with the headline "John Wallace responds to investigator’s charges."