Posted: Sunday, June 5, 2011 1:00 am
The San Luis Obispo County grand jury believes a conflict of interest exists at the wastewater treatment plant in Oceano and that the board overseeing the Sanitation District has failed to recognize the issue.
In a 28-page report released Thursday, the grand jury claims South San Luis Obispo County Sanitation District Administrator John Wallace “has a conflict of interest in his dual, simultaneous roles as administrator of the district’s facilities and operations, and as the majority owner of a company, Wallace Group.”
The San Luis Obispo-based Wallace Group, owned by Wallace, has provided engineering services to the Sanitation District for the past 25 years.
Three major issues were reported by the grand jurors after their investigation, which was prompted by several citizen complaints alleging mismanagement at the plant and other problems, according to the report.
Along with its claim about Wallace’s conflict of interest, the grand jury is charging that the district’s three-person board has failed to recognize the conflict of interest and not taken corrective action. Members also determined that Wallace’s 25-year-old contract has never been evaluated, modified or re-bid in any way.
Sanitation District officials don’t concur with the report and believe it is “erroneous in a number of respects,” said Mike Seitz, district legal counsel.
“The district disagrees with the grand jury conclusion that the board hasn’t recognized the potential conflict of interest,” Seitz said.
According to Seitz, the board also is kept apprised of contracted work at the treatment plant, and Wallace has no authority to funnel work to his company. Authorization for all work has to come directly from the board.
“That has been the practice for five or six years now,” Seitz said.
Additionally, the board directed Seitz and Tony Ferrara, who sits on the board, earlier this year to split Wallace’s contract into two separate documents — a single contract for administrative services and another for engineering work, Seitz said.
The attorney said bifurcating Wallace’s contract didn’t come as a result of the grand jury investigation but was a board decision resulting from former board member Jim Hill’s suggestion to split the contract. The new contract will be presented for final approval at the board’s June 15 meeting, as will a full report of the grand jury report.
Among its numerous conclusions, the grand jurors suggest the district consider independent management and an audit of its financial records by the county Auditor-Controller.
“Generally, the district’s books are open to the public,” Seitz said. “Nothing is hidden.”
The entire report can be viewed at www.slocourts.net/grand_jury.
http://www.santamariatimes.com/news/local/govt-and-politics/article_6fe9dede-8f40-11e0-842e-001cc4c03286.html
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