New Pismo Beach policy will help get water for developers

Over the objections of several Pismo Beach residents, the City Council this week established a process by which developers hoping to annex their projects into the city could acquire enough water to do so.

The new policy allows city staff to assist in the acquisition of water for developers and property owners.

While the policy applies to all interested developers, Tuesday night’s discussion seemed to center on one particular project: a proposal that could eventually add hundreds of homes, hotel rooms and a golf course to about 1,700 acres north of the city along Price Canyon Road.

Developers Rick Loughead and John King wrote a letter to the city in September seeking help in acquiring water from the State Water Project for the annexation.

“We were told that it would be desirous on behalf of the city that you knew exactly what was happening,” King told the council Tuesday. “We were directed to submit a statement like that.”

City Attorney David Fleishman said private developers in San Luis Obispo County can’t buy state water and own it themselves, but city staff can be involved in its acquisition.

City officials were also careful to note that the developer — not staff — would be the lead negotiator with any agency interested in selling water, and that the developers would pay in advance for any expenses associated with the negotiations and acquiring the water.

Several Pismo Beach residents raised concerns that the policy does not include enough protection for the city, should a developer not be able to pay for the supply.

“I find it reprehensible that you would be willing to put our city at risk to basically help fund these developers,” Susan Testa said.

When contacted Thursday, Fleishman said the policy simply puts in place a way for the city to recover its costs.

Before any other agreement with a developer was entered into, he said, city staff “is going to make sure it’s bulletproof and the money is all there before signing on the dotted line,” he said. “We would make sure the developer covers all the costs of bringing that water, whatever the source of that water is.”

Marilee Hyman was the sole local to speak in support of the policy on Tuesday, noting that the city is nearly built out and, in order to expand, needs to allow annexations.

“If the city is unwilling to cooperate or help any developer obtain outside water, basically the city is effectively locking itself into a no-growth policy,” she said.

The Price Canyon project would require nearly 600 acre-feet of water annually, and its draft environmental impact report proposes the water come from a combination of sources, including state water, ground water and recycled water.

State water is proposed to make up most of the water supply, with 500 acre-feet. An acre-foot is enough water to serve several single-family homes for a year.

Members of the Local Agency Formation Commission, which would have to approve the project’s annexation into Pismo Beach, reviewed the environmental report in October and later issued sharp comments about its project description.

Executive Director David Church said in a staff report that a supply of state water should be in place prior to annexation to be consistent with the commission’s policy.

“At this point in the process the water supply would not be considered an ‘adequate, reliable or sustainable’ water supply because it is in the very early planning stages,” according to comments the county Local Agency Formation Commission sent to Pismo Beach on Nov. 9. The commission rules on local government boundaries.