SLO County neighborhood wants sewer service — but it faces a huge hurdle
A San Luis Obispo County neighborhood wants to ditch its septic tanks and add sewer service — but it faces a huge financial hurdle to get the project off the ground.
Over the past two years, a group of Los Osos residents has been searching for a solution to address the burdensome individual costs of septic system failure in the hillside Cabrillo Estates neighborhood.
Due to new state regulations, property owners are now required to adopt a more expensive, advanced septic treatment system if their tanks break or degrade, or they need to get a new one, according to SLO County’s Public Works Department.
The Los Osos group — the Cabrillo Estates Property Owners Association — requested that the SLO County Board of Supervisors approve $500,000 to start work on the project that would let more than 200 houses connect to the town’s main sewer system.
According to the staff report, 266 parcels in the neighborhood depend on septic systems for wastewater disposal since they currently exist outside the service area of the wastewater recycling facility.
Property owners in the area conducted a comprehensive professional analysis investigating the cost to connect Cabrillo Estates to Los Osos’ sewer system. Neighborhood leaders also held several town halls and surveyed every property owner in the neighborhood on whether they would support connecting to Los Osos’ wastewater recycling facility, according to a county presentation. Their poll results showed that 75% of the neighborhood was in favor of pursuing the connection.
The neighborhood group then reached out to the county’s Public Works staff, asking them to lead construction on the possible sewer project.
The proposed project would have the county construct a gravity collection system that moves sewage through pipes at a downward grade in Cabrillo Estates, the presentation said. Property owners could then go through a permit process to abandon their septic tanks and connect laterally to the new system, Public Works spokesperson Shelly Cone told The Tribune.
However, the staff report said that the project would be “a discretionary action” since property owners in the area can currently comply with the state’s waste discharge requirements by designing and constructing their own advanced systems in the event of septic system failure. The costly advanced systems are usually mound structures or recirculating sand filters that typically require electrical power and regular maintenance by a licensed professional, Cone said in an email.
The county would have to front an initial $500,000 from its general fund to get the Cabrillo Estates sewer system project off the ground, followed by another $500,000 in the future to conduct Proposition 218 funding approval, the presentation said. Prop. 218 bars local governments from levying taxes or property-related fees on voters without their approval.
Property owners are expected to reimburse the county in the long run, unless the group fails to pass a future funding mechanism.
“It’s our understanding that we’ll be paying the cost of this thing if it goes through,” which survey results show is likely, Michael Simkins, the president of the Cabrillo Estates Property Owners Association, said at the board meeting.
But if voters reject the initiative, “the county would stop work on the project and all previously dispersed funding would be lost,” the staff report said.
SLO County supervisors reject neighborhood push to fund sewer connection
Ultimately, county supervisors were wary about providing funding support for the sewer connection amid a precarious budget season.
“It’s a great idea. I think it’s really important,” Supervisor Dawn Ortiz-Legg said, adding that interconnectivity to support water resiliency is critically important to the county.
But she said she couldn’t support the funding since the budget is currently predicted to face a deficit. The project is also unlikely to receive grant money since the community is not disadvantaged, Ortiz-Legg said.
Supervisors Heather Moreno and John Peschong both agreed that it was too risky to spend $1 million on the project, though Moreno commended the community for their willingness to do the leg work and put “some skin in the game.”
“If the community is invested in this moving forward, I would like to see the community front the money for it,” she said.
Supervisor Bruce Gibson supported funding for the sewer connection and said the project could serve as a model for what needs to be done in other communities, like San Simeon.
“Given the groundwork and the overwhelming support that this community group has determined, I think that that is in the interest of the county in serving its residents,” Gibson said. “There are off-ramps here to limit our risk, but again, with the polling confirmed, the interest in the community expressed, I think that we have every reason to move forward to make this happen.”
Supervisor Jimmy Paulding added that it was unfortunate that the area was facing a water quality mandate that comes with no state funding attached. Ultimately, the funding responsibilities “shift completely to individual homeowners,” he said.
While the supervisors rejected providing any monetary support for the project, they approved a motion to explore a reimbursement agreement with the neighborhood group.
The group would effectively need to agree to spend around $1,500 per parcel to complete the initial step of the project, according to Public Works Director John Diodati.
This story was originally published May 9, 2026 at 5:00 AM.
