Pismo Beach considers developer fee to pay for recycled water project

Pismo Beach is considering charging a new development fee to help pay for a $29.7 million recycled water facility it has in the works.

On Tuesday, the Pismo Beach City Council is scheduled to consider a recycled water development impact fee that would charge developers a one-time fee based on the type of project being built and the project’s projected water demand.

The fees would be applicable to all new development, redevelopment and additions to existing buildings that increase dwelling units or non-residential floor area, according to a city staff report. It would be charged in the building permitting phase, City Manager Jim Lewis said.

The city could potentially earn up to $16.3 million with the fee structure to go to funding the city’s ambitious water recycling facility.

In April 2015, the Pismo Beach City Council approved its Recycled Water Facilities Planning Study, which examined how the Five Cities could preserve and increase its water supply.

The study concluded the best option would be to update the city’s sewage treatment plant to include “full advanced treatment with direct groundwater injection.” The city’s plant treats about 1.1 million gallons of sewage per day to a secondary level and discharges that treated effluent into the ocean.

The new procedure would add a higher tertiary level of filtration and disinfecting so the effluent could be injected into the Santa Maria groundwater basin, where much of the South County draws a portion of its drinking water.

Once complete, the project could recycle up to 950 acre-feet of water — or 309.6 million gallons — per year.

Since April, the city has reached out to other regional agencies to start working together on the project, now called the Pismo Beach Regional Groundwater Sustainability Program, with the ultimate goal of regional agencies partnering with Pismo Beach to pay for and manage the facility.

If Arroyo Grande, Grover Beach and Oceano all commit to sharing the cost of the project, Pismo Beach would likely pay about 18 percent of the total cost of the facility, or $5.3 million, according to a city staff report. How much each city pays would be determined by its adjudicated water rights in the Santa Maria Groundwater Basin.

Under the proposed fee structure, if all three South County agencies sign on to the project, the city could collect only up to $5.3 million — the cost of the project. If an agency or agencies choose to not participate in the program, the recycled water fee collection would increase to accommodate the increased cost to Pismo Beach.

If approved Tuesday, the fee would go into effect on Feb. 13, 2016.

This story was originally published December 13, 2015 at 12:55 PM with the headline "Pismo Beach considers developer fee to pay for recycled water project."