Editor's note: This article has been updated to correct the scope of board member Peterson's proposed review, as well as Seitz's statement that the discussion was not agendized.
Less than three months after she earned her seat on the three-member South County Sanitation District Board of Directors, newcomer Debbie Peterson said she wanted an independent audit of the books of the district and its wastewater treatment plant.
On Feb. 6, Grover Beach’s Mayor Peterson called for a substantial review of the plant’s finances.
“One of the biggest problems is that there’s a public perception of conflict of interest,” Peterson told the board, in reference to the dual role played by district administrator John Wallace, who is also president of the district's consulting firm, the Wallace Group. “And it’s been alleged that there’s a culture of secrecy, that there’s resistance to suggestions [from] regulatory bodies.”
She also stated that the district’s current expenses exceed its revenues, and noted a number of recent lawsuits and a 2011 county grand jury report that concluded that Wallace had a conflict in his roles.
“In my opinion, there is a conflict of interest, and I don’t know how to call it anything else,” Peterson said.
Mike Seitz, the district’s legal counsel, told New Times that district staff was “blindsided” by Peterson’s proposal. He pointed out that the district revised its contracts with Wallace since the grand jury report and submitted them to the county auditor for approval. Furthermore, he said, figures provided by Peterson regarding declining revenue and financial assets were taken out of context.
Board member Matt Guerrero has long held that a review is needed, though Tony Ferrara has long been steadfast in his support of the district administrator.
This isn’t the first time Peterson has called out Wallace. Since being elected mayor of Grover Beach, Peterson spoke of her hesitation to award a consulting contract to the Wallace group for a street improvement project, relaying those same concerns before reluctantly approving the award.
On Feb. 11, the board held a closed session review of Wallace’s performance, though no action was taken.