San Simeon CSD blames whistleblowers for lost grant monies


The San Simeon Community Service District is saying that whistleblowers are responsible for losses suffered when grants totaling $250,000 were rescinded because the district was not eligible.

San Luis Obispo County Deputy District Attorney Kenneth Jorgensen says that unless the district can put up evidence that the whistleblowers made false claims regarding the district’s grant applications, it should retract that allegation.

The district’s latest newsletter, sent to every residence in the district, said that the people who raised the issues of conflicts of interest and fraud in getting the grants were liars.

” ‘Concerned’ citizens contacted the National Fish and Wildlife Foundation with false allegations of conflicts of interest and fraud, convincing the NFWF general counsel that the district applied for the grant knowing the district did not qualify,” the newsletter says. “The actions by the community members, who continue to spread false information about the district, have resulted in a substantial loss for the district, which will now have to pay directly for the cost of the Coastal Hazard Response Plan.”

The district said it was, in fact, eligible for the grant.

In the summer of 2019, San Simeon applied for and received confirmation the district would receive $125,000 from the National Fish and Wildlife Foundation (NFWF) and a matching $125,000 grant from the Ocean Protection Council. But in October 2020, both agencies rescinded the grants after looking into allegations from concerned citizens of wrongdoing.

In his correspondence with the district, Daniel Strodel, general counsel for the NFWF, voiced concerns over conflicts of interests with CSD Board Chair Gwen Kellas and General Manager Charles Grace and the awarding of contracts without going through a required bidding process.

“Moreover, we have additional information that indicates that your organization was aware of the ineligibility of the project and continued forward in seeking the NFWF award,” Daniel Strodel, general counsel for the NFWF, wrote in an Oct. 23 email to the district. “Accordingly, for all of the above reasons, I am notifying you herewith that the award has been rescinded.”

In addition to accusing local activist Julie Tacker of making false statements to the NFWF, Kellas wrote that public records requests from Tacker and San Simeon resident Hank Krzcuik were harming the district.

Kellas is under a Fair Political Practices Commission investigation for alleged conflicts of interest related to voting on projects that could impact the value of her home.

On Jan. 26, Kellas sent deputy District Attorney Kenneth Jorgensen an email praising district staff while disparaging Tacker and Krzcuik for requesting records and scrutinizing the district’s management.

“I have no tolerance for grudges held and unfounded, personal vendettas as I told Krzcuik many times to his face when I worked face to face with him,” Kellas wrote. “I am proud to be on the district board and if I had even an inkling that any aspect of the district was in the wrong, I personally would have initiated an investigation.”

In response to the email and the newsletter, Jorgensen informed Kellas that it appears the district applied for a grant it was not eligible for. He also said that the district is required to follow Public Records Act.

“I have heard these citizens called gadflies, out-of-towners, and political pundits to name a few,” Jorgensen wrote in his Feb. 5 letter to Kellas. “The district’s most recent newsletter also seems to have joined the ranks, with a tongue-in-cheek description of them within quotation marks, calling them ‘concerned’ citizens.

“The law is clear, all citizens have a fundamental right to scrutinize the district’s business. Name calling only serves as adhominin attacks, detracting from addressing the concerns raised by regulatory agencies.

“Moreover the attacks only chill public discourse of the business of the people. The district should avoid the trappings of blaming the critics and concentrate on efforts to address the areas of concern raised by the critics and regulatory agencies.”

Near the end of his six-page letter, Jorgensen asks Kellas, that “unless there is
some finding of a false accusation at the root of the grant rescission, an immediate
retraction of the statements contained in the district’s January-February 2021
newsletter in the article titled National Fish and Wildlife Foundation Grant is warranted.”