Grover Beach attorney warns council to keep quiet

August 31, 2012

Grover Beach’s city attorney has warned the council and staff not to provide information to state investigators related to a 2010 sewage spill.

Attorney Martin Koczanowicz said that if the South San Luis Obispo County Sanitation District administration is found responsible for a 2010 sewage spill, the rate payers would likely end up paying more than a million dollars in fines.

However, Regional Water Resources Control Board prosecutors said that if the court determines district administrator John Wallace’s failure to properly maintain or operate the plant led to the 2010 sewage spill, he could be held financially responsible for the proposed $1.4 million fine and also the damages to 40 Oceano homes inundated with sewage during the spill.

Wallace is the owner and president of the Wallace Group, a private engineering consulting firm located in San Luis Obispo that receives from $50,000 to $80,000 a month for plant administration and engineering services.

Grover Beach city attorney Martin Koczanowicz said in his email that he had been “informed that investigators from the State Water Quality Control Board are trying to interview individuals regarding the South County Sanitation District in an attempt to gather information to be used against the District in the upcoming hearing regarding the potential fines. The proposed fines that the District is attempting to appeal are on the order of a million dollars and, if actually assessed against the District, would end up likely being funded from rate increases.

“I wanted to provide some words of advice and caution on this issue to City Council, Planning Commissioners, and staff. First of all, please be advised that absent a subpoena to testify, there is no mandate or obligation to speak to these investigators. Secondly, as we have discussed during Council meetings when these issues are continually raised by the public, care needs to be taken to first of all observe confidentiality of information dealing with personnel issues and rights of privacy of individual employees and information obtained during closed sessions of the Council or the District Board.

“Secondly, the District Board is a separate sovereign body and should be afforded due respect and ability to deal with and address issues that pertain to its authority and responsibility. Also, unless any of you have first-hand knowledge of facts, not information that was transmitted by public speakers at Council meetings or by the newspapers, repetition of such unverified information to others may expose you or the City to potential liability.

“To be clear, you are not precluded from speaking to these individuals, but if you choose to do so, please keep the issues raised above in mind. As always, feel free to contact me with any questions.”

Koczanowicz’ email was sent shortly after Phyllis Molnar, a Grover Beach council woman and mayoral candidate, sent an email on Aug. 16 to a member of the South County Oversight Group noting her concern over the safety of those opposed to Wallace’s management of the district.

“Hi sorry I have not been in touch with you, I wanted to think about things and I am concerned for you and your husband,” Molnar said in the email. “I have been independently told some very scary things and I do not want to be the cause of any harm for innocent people. On the other hand, things are out of control at the San District and I am going to try to bring about change. As you know our council is not going to make any changes at this time and I have been given a warning not to get involved. It is getting a bit dicey here too.”

“I am going to take a chance and forward something to you,” Molnar added. “Do you want to meet? Is it safe for you? When the hearing takes place most of our council is at a conference in San Diego, I know Mayor Pro Tem Bill Nichols is our voting delegate. Unless something happens he will be there, a good place to hide when it all comes out.”

Regulators have set a public hearing on the complaint for Sept. 7 at the water board office in San Luis Obispo. At the hearing, Wallace will have an opportunity to argue against the complaint.



The headline should read…


In other words he is doing his job!


Or the headline could read “City Council ignores years of problems with the Wallace Group and the operation of the treatment palnt and puts citizen at risk to huge fines”


Sounds to me like the attorney is trying to bully, harass, intimidate staff into not cooperating with a federal and state investigation, just unbelievable. Keep this in mind, if you fail to cooperate on a federal investigation then you could be charged with obstruction of justice. However, if you are complicit (had knowledge of and had a duty to report under your certifications) or maybe you just kept silent because you were making money (i.e. profited from the misconduct) in the misconduct that has been apparently been going on, then maybe you should just take the 5th.

Great reporting, too bad it takes years before anything happens all the while the same people keep profiting off of the little people.

Bored Watcher

Sadly AG, GB City Council and OCSD Board members know little about the SSLOCSD. SSLOCSD Board members are a click of their own and don’t appear to share much with their home bodies or voters who put them there.

SSLOCSD recently passed a HUGE budget for legal without disclosing that that budget is to arm themselves for the fight. They never reported out of Closed Session to say they’d decided not to settle (or what those figures would be) and to proceed with the legal wranglings that only end up costing the rate payers so much more.

It also doesn’t appear that the Board members 3 took the question “to settle or not to settle” back to their home bodies where they would get consensus of their Board/Council’s on whether or not to go the distance. This decision was made by the figureheads of each body. IMO, a decision that was too big for just these 3.

The cost to do battle is not just born in the legal line item, Wallace Group staff is being paid to do paralegal type stuff, compiling the record at a cost to the SSLOCSD (and a win for his firm) under the line item of “operations.” See last months warrants Wallace Group pulls down over $50K for one month’s work. Sweet work if you can get it.

To the citizens of AG, GB and Oceano, some of this is your fault, get off your butts and go to those SSLOCSD meetings…literally no one shows month after month, giving the Board members cart blanche. The citizens are not there to scrutinize the bills or make comment on their next moves. And for no one to challenge Ferrara, come on! Giving the Board 3 the feeling of security in what they are doing. They are untouchable. Must be why they are going to play in San Diego rather than face the music at the Water Board meeting.

I remember Jim Hill and the Grand Jury calling for the separation of the contracts, they did that, but still gave both the Wallace Group.

Citizens from all three communities should be at the meeting of the Water Board on Sept. 7th. Get informed, get outraged, Wallace is culpable and you don’t want to pay for it.


I am with the attorney. Don’t fine the tax payers. Fine the corp. behind the mess, or in this case, seems like the engineering group/


Hey, it’d be great if the lawyer could find a way to better protect his city and the taxpayers he represents.

OH WAIT! He probably can. Not by telling them, in essence, to shut the hell up, but in cooperating fully with the investigators, and looking through the Wallace contract, doing some legal homework and finding a way to make sure that if the District is put on the hook for the fine, the cities that make up the SSLOCSD hold Wallace financially responsible.

As nonsensical as it is going to sound to some of you out there you/we need to make it clear in your/our minds which side of this mess we’re on and then do what we can to help the right side. It’s called responsibility. Are you/we on the side of the State Water Board who is trying to uphold the environmental laws that are in place -or- are you/we on the side that wants to let the SSLO management and John Wallace off the hook for–let’s be honest–screwing the ratepayers/citizens over and squandering our money. If you’re on the side of the Water Board, as much as it stinks, you’ve got to be on the side of finding out the truth from everyone (city counsel members included,) and letting the fine “cards” fall where they may. If you’re on the side of Wallace Group, then yeah, shut the hell up board.

I am by no means saying that I think the email discussed above was “wrong.” Shady, yes. Hinting at the wrong things, yes. the kind of attorney we want in the public sphere, no. But it IS, technically, sound legal advice. I think you and the readers of this site need to keep in mind the difference between attacking the man for giving sound legal advice, and attacking the man for the underlying message it is ending.


Grover Beach City Attorney Martin Koczanowicz looks to have provided accurate information to the City Council and City Employees; but is it the independent advice that he should be giving?

Loyalty and Duty are disconnected when a City Attorney is hired by the City Council. His natural loyalty is to the Council Members who hire and fire him. But the Grover Beach City Attorney’s actual duty is to zealously represent and advise the Grover Beach Citizens … and to provide those Citizens with all the information that they need to make decisions.

The only way to restore the bonds between Loyalty and Duty is to make the City Attorney elected by the voters of Grover City: independent of the City Council. In that setting wouldn’t the City Attorney actually be seeking more information to protect City residents? Wouldn’t the City Attorney have had more incentive to prevent the kinds of costs Grover Beach is now facing?


Has Grover Beach become so poor the had to drop the “r” from their name?


So, the City Attorney for Grover Beach is obligated to remind City Council members to watch what they say to regulators. These regulators, after all, have performed investigations of the SSLOCSD and found illegal activities. These proven illegal activities were discussed during public council meeting. But, since other potentially illegal activities might end up costing rate-payers more money, as a public servant you should just sit down, shut up, and go down with the ship. Hey AG, GB, and Oceano citizens, would you like a fork or a spoon for your *hit pie? Because, your council members can’t speak to you about these issues, because… well… they just can’t, and let’s leave it at that!

Nice statement from the leadership of Grover Beach, and welcome to the outcome of covering for government-enabled conflicts of interest. I understand why that part of the article is important for people to know, and it should be posted publicly by the city to let everyone know that THAT IS THEIR POLICY ON THIS ISSUE.

However, why are the personal discussions and message traffic of Phyllis Molnar important to this article? It’s like this is Jerry Springer, and someone just threw the first chair!!! Is CCN the Jerry Springer of print media in this county?


I think the Molnar email is the exact reason the Council has been cautioned. Officials must be very careful when they make statements based on hearsay or bias. “I am going to take a chance and forward something to you.” begs the question of what did she forward. Did it involve privacy issues, hearsay, libel? I hope this hearing results in the correct party being held accountable, that the citizenry which is innocent other than voting preferences is released from any liability and that the plant will be run correctly.

The Gimlet Eye

More proof that nothing good comes from government. I don’t have to make this stuff up. The news gives me all the evidence I need.


When it comes to not pleading the 5th dont forget to include the Highly praised by Wallace new shift supervisor. He also refused to cooperate with state officials during the investigations. At least a few of the operators had some backbone and weren’t whores to Wallace’s chicken shite promises knowing it would mean their jobs eventually.


My advice to the Grover City Council. Do the right thing. Tell the truth. Cooperate with the State investigators.

In this way, you will have a clear conscience, justice is done, and the State Board is less likely to impose maximum fines because they received the respect and consideration that is due to a state board during a legitimate investigation.

I think that you received some bad advice from your attorney. Unless you are being investigated for wrong doing, it would serve Grover Beach and the other cities in the sanitation district well to cooperate. Of course, if you have committed a crime , then your attorney’s advice is well founded. If not, then he is out of line telling people not to cooperate unless a subpoena is issued.

As to Molner’s e-mail, one has to wonder if the Wallace Group is some kind of Mafia organization. I don’t have a clue as to what she is referencing. Perhaps she knows of some conspiracy to lie by Wallace Group supporters. That, my friend, is a cover-up. If so, she needs to inform the State Board.


“As to Molner’s e-mail, one has to wonder if the Wallace Group is some kind of Mafia organization. I don’t have a clue as to what she is referencing. Perhaps she knows of some conspiracy to lie by Wallace Group supporters”. The reason you are forced to speculate on this is because the story is incomplete! What could Mplnar mean by that??? We don’t know, we can only speculate, so that part of the story should not have been published without following up on the context of the 3rd hand information received by CCN.

Furniture throwing, I say!

Jerry! Jerry! Jerry!


I neither reside in Grover Beach, nor am I an attorney, but I think this sounds like prudent advice to all concerned and I hope Molnar especially takes note. To not follow the city attorney’s advice is to subject the citizenry of G.B., A.G. and Oceano to costly fines.


Too me it seems the poor job of the council to address the Wallace Group for years has put the citizens of Grover Beach, Arroyo Grande, and Oceano in a position to be subject to costly fines, and to speak up and correct this by first getting rid of the Wallace Group would be the best thing for those same citizens


It seems to me your opinion is uninformed and misguided.

If we do not get the situation at the SSLOCSD straightened out now, there will certainly be more problems, which may include fines, in the future.

If you have already used a casserole recipe that turned out to be *hit pie, the chances are if you continue to use the same recipe you will continue to end up with *hit-pie dinners.

Or, as Albert Einstein said, “Insanity is doing the same thing over and over again and expecting different results.”


My opinion is that Council members etal need to be very careful about what they say and insinuate. There are privacy and libel laws of which to beware. My concern is that ignorantly made statements will further harm this case in which I hope the ratepayers prevail. They should save it for the public hearing and make sure it’s accurate. I want justice and I value the advice of attornies hired to protect the cities and its citizens.