Pismo Beach to charge developers a one-time water impact fee

An aerial view of Pismo Beach.
An aerial view of Pismo Beach. Tribune

Pismo Beach developers will be partially on the hook for a $29.7 million sewage treatment and recycling facility the city is developing, after a decision by the City Council to charge a water impact fee for new developments.

The Pismo Beach City Council approved a recycled water development impact fee last week that will levy a one-time charge on developers, based on the type of project being built and its expected water demand.

“I think it’s very telling that we don’t have a packed room from the development community,” Councilman Erik Howell said during the council discussion last week. “And from my conversations with people involved with construction, they are in support of a fee.”

The fees are applicable to all new development, redevelopment and additions to existing buildings that increase dwelling units or nonresidential floor areas. It will be charged in the building permitting phase and would increase the impact fees the city charges by up to 53 percent per project, according to a city report.

The city could potentially collect $16.3 million that would be used to pay for its 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 that the best option would be to update the city’s sewage treatment plant to include “full advanced treatment with direct groundwater injection.” The plant currently 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 disinfection, so the effluent could be injected into the Santa Maria groundwater basin. 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 partner with Pismo Beach to pay for, manage and benefit from 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 Pismo Beach officials. 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, Pismo Beach would increase the impact fee to accommodate its increased share of the project’s cost.

During discussion Tuesday, much of the debate centered not on whether a fee should be implemented, which the council almost unanimously agreed was necessary, but on how much should be charged.

Howell and Councilwoman Sheila Blake said they were in favor of a maximum fee amount — between $2,779 for an RV park and $11,715 for a new detached house. Howell also noted that if neighboring agencies commit to the project, the council could revisit the fee and lower it appropriately.

Mayor Shelly Higginbotham and Councilman Ed Waage preferred a lesser fee — about 50 percent of the maximum, which would charge between $1,390 and $5,858.

“When you look at the cost of trying to just build a house here, for Pete’s sake, come on,” Higginbotham said during discussion. “To raise somebody’s fees 53 percent to just build a house?”

However, to avoid a divided council because Councilwoman Mary Ann Reiss was absent, Higginbotham eventually voted in favor of the maximum fee, making the final vote 3-1, with Waage dissenting.

The fee will go into effect Feb. 13, 2016.

Kaytlyn Leslie: 805-781-7928, @kaytyleslie