San Luis Obispo County has determined there was some hanky between its Public Works director and a former Community Services District director, but no panky.

On Oct. 4, County Administrator Jim Grant announced his conclusion after more than three months of investigating a relationship between Public Works Director Paavo Ogren and Maria Kelly, a former member of the Los Osos Community Services District Board of Directors. According to that investigation, Ogren and Kelly have been dating since January—after several years as friends—but their relationship didn’t pose a conflict of interest, at least not pertaining to the Los Osos sewer project.

The announcement infuriated Los Osos residents in the Board of Supervisors Chambers, at least three of whom left the room muttering things like “surprise, surprise,” and “I can’t stand this shit.”

According to Grant’s report, the CSD had no authority over the sewer project after Assembly Bill 2701 gave that power to the county. Additionally, the county has no authority over the CSD.

“Neither the materials reviewed nor the interviews of county staff revealed evidence that the relationship between Mr. Ogren and Ms. Kelly resulted in a conflict of interest regarding accusations that they conspired to push through a $200 million sewer project in Los Osos,” Grant wrote in the report, which he read aloud following public comments at the Oct. 4 meeting. “Additionally, there is also no evidence that Mr. Ogren attempted to exercise control regarding the bankruptcy or water litigation proceedings.”

The county investigation began June 21 and stemmed from a June 17 story on calcoastnews.com. Grant said he reached his determination based on interviews with Ogren, County Human Resources, and review of “a variety of other information and documents.”

New Times obtained copies of e-mail exchanges between Ogren and Kelly from 2007 to 2010. Though many of the exchanges were about the sewer project, none indicated any collusion or conspiracy. Most of the conversations centered on upcoming community meetings and public perception about the project, or in many cases, about Ogren’s and Kelly’s kids.

“All is well. Great thing about feeling tired is that we get to sleep!” Kelly wrote to Ogren in mid-2009. “I am ready again for whatever the kids dish today.”

Kelly resigned from the CSD on June 16.

See a copy of the county’s report here.