Will Morro Bay get a new sewer plant? Coastal Commission to decide this week

A decade-long debate over how and where to build the new Morro Bay sewage treatment plant will come to head at a California Coastal Commission meeting in San Luis Obispo on Thursday.

After years of controversy, multiple site planning changes, and Morro Bay City Council and staff turnover, the Coastal Commission holds the final decision on the proposed wastewater treatment and water reclamation facility.

The preferred site is located on about 15 acres of a 396-acre property at the corner of Highway 1 and South Bay Boulevard, which is slated to be annexed into the city.

The Coastal Commission discussion is set to take place Thursday afternoon or early evening at Embassy Suites Hotel after the discussion on off-highway vehicle use at the Oceano Dunes, said Scott Collins, Morro Bay’s city manager.

The Coastal Commission’s staff is recommending approval of the estimated $124 million project, which includes a water reclamation component that would provide “groundwater replenishment and improved aquifer health, with some 825 acre-feet of water per year, or roughly 80 percent of (Morro Bay’s) yearly water needs,” wrote Kevin Kahn, a Coastal Commission Central Coast district supervisor in charge of planning and development work.

“This proposed project is an important project that meets Coastal Act consistency on many fronts — for the protection and enhancement of coastal resources, for providing essential public services to Morro Bay residents and visitors, and for providing adaptation and resiliency in an era of increased hazards exacerbated by climate change,” Kahn wrote.

The Morro Bay project is supported by the City Council majority, which is working to replace an aging oceanside sewage treatment plant built in 1953 near the high school that’s failing to meet Clean Water Act standards, according to the Coastal Commission’s staff report.

The proposal also has a side benefit: opening up a valuable piece of coastal real estate.

“The city’s proposal to decommission, demolish, and restore the existing (wastewater treatment) site” will remove the facility from a prime oceanfront area near beaches and the city’s Embarcadero tourist area, the staff report noted.

Morro Bay plans to replace its aging wastewater treatment plant, which was built in 1953. Joe Johnston jjohnston@thetribunenews.com

Opponents speak out against project approval

But opponents of the proposal have lobbied loudly against the project’s cost, location and handling, including Board of Supervisors’ approval of a consolidated planning process that sped up the county’s consideration.

“People have been denied their right to fully participate in the permitting decisions related to Morro Bay’s proposed sewage treatment facility that is so unnecessarily expensive that people will be forced to leave this coastal town because they cannot afford water and sewer rates,” wrote Cynthia Hawley, an attorney representing the groups Citizens for Affordable Living, Home Front Environmental Justice Morro Bay, and LandWatch San Luis Obispo County.

The city of Morro Bay, the Coastal Commission and the county each have some jurisdiction over the planning of the project.

The county could have conducted further review of the proposal, but in a 4-1 supervisors’ vote in April, the item was sent to the Coastal Commission for the July hearing for consolidated vetting, saving an estimated year of additional county analysis.

Hawley threatened legal action and wrongdoing in a June 21 letter to the commission, saying public participation in the process was impaired.

“Given the facts in this report and those that have been previously reported to the commission related to this project and to the harms and losses that will be suffered by the public, the commission could be exposing itself to litigation, and commissioners and involved staff could be exposing themselves to allegations of, among other things, official malfeasance,” Hawley wrote.

This property off Highway 1 near South Bay Boulevard has been chosen as the location of the new Morro Bay sewer plant/water reclamation facility. David Middlecamp dmiddlecamp@thetribunenews.com

Project planners say the process was followed properly

But Collins said while the city could possibly face litigation, he believes Morro Bay is on solid legal ground for a favorable court ruling to move forward with the project.

And Kahn noted in his letter that the consolidated planning is a “tool that the Coastal Act expressly provided to help avoid multiple overlapping (Coastal Development Plan or CDP) processes, including potential appeals to the commission of local government CDP actions where the commission also retails some CDP jurisdictions.”

The city of Morro Bay, additionally, has held more than 50 public meetings on the project in the past two years alone, Kahn wrote.

Delays in project planning could have added significant cost by putting loan funding at risk and adding higher construction fees, according to Morro Bay City Council members.

“This is a path to consolidate for efficiency,” county Supervisor Bruce Gibson said in April. “I am in support of consolidation.”

Morro Bay sewer
Morro Bay’s wastewater treatment plant supervisor Les Girvin walks the facility in 2006. The city is planning to build a modernized sewage treatment plant and water reclamation facility. Jayson Mellom

What a new sewer could cost ratepayers

Collins told The Tribune on Monday that the estimated rate increase for city households would be $41 per month, bringing the average city household utility bill to $191 per month from $150 per month.

But Collins added that low-interest state and federal loan financing could lower the price tag by $5 to $10 per month.

The State Water Resources Control Board has recommended the city receive up to $105 million in low-interest loans and grants, the commission report said.

And the city also has received a favorable rating to receive money from the U.S. Environmental Protection Agency’s water infrastructure loan program, an amount that could reach up to $60 million, Collins said.

“We don’t know the breakdown yet of how the financing would work exactly, but by spring of next year, we expect to have the finalized financing in place,” Collins said.

The staff report noted that the city currently pays $2,100 per acre-foot of State Water Project water, which has “proven to be a volatile supply and most likely will increase in cost due to needed upgrades.”

“Meanwhile, use of the city’s existing groundwater supply only costs $1,000 per acre-foot,” the report stated.

sewer site map
Morro Bay’s new wastewater treatment and water recycling facility will cost an estimated $126 million at its new site at the intersection of South Bay Boulevard and Highway 1. Source: City of Morro Bay

Community voices weigh in

Community members who support the project say they’re willing to pay for the new infrastructure as a needed community benefit.

“We and other people and families like us will be the ones who pay the entire cost of the project and are here to reap the rewards,” wrote Morro Bay resident Maeve Holden in a June 30 letter to the commission. “The current facility is badly in need of an upgrade, and the placement is really not feasible for the town anymore. We are all anxious to secure a plan to clean water that is modernized, able to reclaim and recycle more, and move our infrastructure into the 21st century.”

But opponents are angered by the price tag and contend a new sewage treatment system is unnecessary.

“Costs for the proposed new water/sewer facility continue to rise,” the group Citizens for Affordable Living wrote on its website. “Not only the proposed project is not affordable for most residents, the project has grown unreasonably large and complex for Morro Bay’s expected population by the year 2040 of 12,000 residents. In fact, we have fewer violations per year than the majority of other plants in the state...”

But Kahn noted in his staff report the current plant “does not meet federal Clean Water Act standards” and has been operating under a CWA waiver since 1984.

The city received a deadline from the Central Coast Regional Water Quality Control Board to meet full compliance by Feb. 28, 2023, Kahn said.

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Nick Wilson covers the city of San Luis Obispo and has been a reporter at The Tribune in San Luis Obispo since 2004. He also writes regularly about K-12 education, Cal Poly, Morro Bay and Los Osos. He is a graduate of UC Santa Barbara and UC Berkeley and is originally from Ojai.