Synopsis: Over widespread opposition, the Morro Bay City Council has approved plans for a new Morro Bay-Cayucos wastewater treatment plant, and nearly everyone is predicting the California Coastal Commission will send it back for complete revision.
A showdown over the future of the multi-million dollar proposed new Morro Bay-Cayucos wastewater treatment plant is next after numerous appeals were filed by residents and environmental groups over the Morro Bay City Council's approval of a project that has been blasted by the California Coastal Commission staff, the city Planning Commission and a parade of community members who are convinced it is dead on arrival at the Coastal Commission.
The Council's overall debate over the project on January 11 was marked by mayor Bill Yates attempting to fire the Planning Commission in the wake of its refusal to endorse the project and most of the Council members concluding that the proposed location of the new plant adjacent to the present one on the shore of Estero Bay would cost less—and be less costly to ratepayers—without any evidence comparing the costs of locating it elsewhere in either Morro Bay or Cayucos. The two communities are partners in the operation of the plant under a Joint Powers Agreement (JPA).
Council member Carla Borchard asked city staff to estimate the cost of locating the plant at a different site so it could have greater potential for using its recycled water to replenish city wells (and save on the costs of importing state water) or to sell to farmers in Chorro Valley or up the Highway 41 corridor. She received no answer: the costs of building at other sites have not been studied by the staff or the consultant that conducted the environmental impact report (EIR) on the proposed project. The absence of any study of alternative sites represents a key criticism by the Coastal Commission staff and others.
A large but untabulated number of appeals were filed with the Coastal Commission by the January 31 deadline, including one surprise that could possibly involve the county in the development of a new plant serving a wider area.
No quick decision is expected by the Coastal Commission on the proposed new wastewater treatment plant (WWTP). It has the authority to approve or reject the project under the California Coastal Act, which was enacted by the California Legislature in 1976, four years after state voters approved the California Coastal Conservation Initiative to protect the coastal environment. The Commission's jurisdiction covers impacts as well as the functions and locations of sewage plants because they typically have discharged polluted water into public waterways. The Morro Bay/Cayucos plant has discharged its partially treated effluent into Estero Bay for many years, endangering marine life.
A Commission decision could take many months, largely because the Commission has been poorly funded by the state and is understaffed, but also because the project is complex and will likely require lengthy deliberations.
Whatever the Commission decides and directs be carried out to build a replacement plant is certain to be steeped in controversy for a long time since it is the largest capital project in city history. Acontractor will have to be selected to build it and huge amounts of taxpayer money as well as charges to ratepayers are at stake.
Morro Bay submitted plans for the project to the Coastal Commission on January 14, ending months and even years of sometimes acrimonious debate over everything from its location, to its design, to the development time schedule to, of course, the cost, which is now estimated at about $34 million. That figure remains very preliminary and tentative because the project design by MWH is not finished. And now it is suspended until the Coastal Commission acts.
Every aspect of the project is up in the air and dependent on what the Commission decides must be undertaken to comply with the California Environmental Quality Act (CEQA), the Coastal Act, and the city's Local Coastal Plan. With its staff strongly recommending that Morro Bay and Cayucos go back to the drawing board to reconsider the location, design, and functions of a new plant, the Commission is certain to give that recommendation a great deal of weight, as nearly all agencies do with their staffs.
For the most part, the appeals echoed the Commission staff report (See the Commission Staff Report) rejecting the project, but there were other objections raised about the city's plan. And one surprise appeal that could be a blockbuster, which might involve the county in the project.
It points out that the county's Estero Area Plan, which covers the central coast area from Point Estero on the north to Point Buchon on the south, including Cayucos as an unincorporated community, says "the county and the city of Morro Bay should jointly develop a groundwater management program that results in cooperative planning . . . " to develop programs that "clearly suggest the intent of developing wastewater reuse facilities . . . The development of a new WWTP presents the most convenient opportunity ever to implement these programs."
But, the appeal added, "the city of Morro Bay and Cayucos have provided no discussion (of this Plan)" in the EIR about how the proposed project addresses the Estero Area Plan.
At the January 11 City Council meeting, all but one resident attacked the project and asked the Council to reject it.
Speaking to the question of whether the proposed project is an upgrade or new plant—the city calls it an upgrade, the Coastal Commission staff a new plant . . . Alex Beattie said "when you have to move the the plant to a new site and elevate its height (to try to protect against flooding), that makes it a new site."
Barry Branin said removal of the sewage plant from the area it is now in would create more room for campers and generate more revenue for the city.
Piper Reilly, vice chair of the San Luis Obispo chapter of the Surfriders Foundation, said "millions of dollars in time and money spent" have been wasted in designing a plant that fails to meet requirements.
Dorothy Cutter said, "You say you are pro-business and pro-tourism, but the project is neither pro-business nor pro-tourism. It encroaches on a prime RV park. It would put a smelly two-story sewage plant in a prime location over the beach. It will not attract business or tourists. The course you are on will probably bankrupt the city."
Barbara Doerr said the city is contemplating "a bad facility in a bad location. If you lose that RV park, it will be a shame." She told the Council that "you made it appear alternative sites have been looked at," and they haven't.
Former council member Betty Winholtz said if the Council really wants to put ratepayers at the top of the list, it would be cheaper to abandon the project, start over and develop one that meets requirements, rather than submit this one and "have it sent back to make corrections." That will only cost more time and money, she added.
Bill Weatherford said,"We are sticking with a company (MWH) that has a record of wrongdoing. We have other opportunities that actually cost less. Do we look at them and find out more about them? We are becoming the city of Bell (where council members and some staff gained wide attention by taking excessive salaries)."
Yates reacted sarcastically, "Thank you so much for those positive comments."
Lee Johnson, who said he is a new property owner in Morro Bay, stated he was "unable to see other (site) options being evaluated. I have a difficult time seeing how this could be the right plan. You are doing the community a great disservice."
Richard Margetson of Cayucos said "MWH (the project design engineer) is doing the same thing here it did to Los Osos. We are missing a chance to build at the lowest cost because of the contractors."
In discussions over the past years, the Council and Cayucos Sanitary District, which make up the JPA, had never focused on the relative cost of the project and the cost to ratepayers, but that topic dominated the discussion as the Council prepared to vote on whether to submit the project to the Coastal Commission. (The Cayucos district was virtually absent from the EIR review process, leading to submission of the project to the Coastal Commission, during recent months without explanation--even though Rob Livick, the city's public services director, had said earlier that Cayucos is required to act on the EIR once the City does. It didn't.)
Borchard started the Council discussion by asking what the potential cost would be of moving the plant elsewhere so it would have the potential of producing a lot of recycled water for community use or selling water to farmers. Would the use or sale of that water offset the cost of moving, she asked? She said the city is projected to have a $45 a month sewer rate per household and wanted to know how rates would be affected if the plant were moved to a different location.
Dylan Wade, the city utilities and capital projects manager, got up from the audience to address her questions.
"That is a great question and a very difficult one to answer. I'll give you a little bit of framework and a little bit of perspective . . . and you go, approximately, making some gross assumptions, that you go that we will continue to share the costs of moving the project at a 70-30 ratio [with the Cayucos Sanitary District], assuming we would finance that cost at 4% over 20 years, which is ballpark for the SRF loan would come in at, you go, for each million dollars of additional project cost that we incur, it's going to run right at about a buck a month for every homeowner. So you go basically a dollar a month for every million we are spending, roughly. You go, we could, I'm sure an economist or accountant could pick me apart a little bit, and say it's actually 96.2 cents or something. But it's about a buck.
"By way of comparison, in Los Osos, the process they went through, the co-equal site analysis and alternative analysis in their EIR, in the process they have basically just completed recently and gotten through, it took them two and a half years of time, and they have expended approximately $8 million in doing that. So depending on the level of effort that we chose to, I don't think we would have to do the same thing they did. So you go that's just a perspective. So that would cost about $8 a month if we copied their process. And that's just to determine which alternative site we would move it to. Then from there, you go we would have to pick up the cost of building the lift station, piping effluent to and from the current project site and those could vary widely, also depending on the strategy we use. Would we pump all of our effluent out there? Our peak flows could be about eight mgd. The Chorro Valley alternative only looked at pumping about 2.6 million, and I believe that had a five hundred and something thousand dollar lift station associated with it.
"So it just really depends if you want to move it, it's not that simple, the yes or no answer, it's exactly this much. It depends on sort of the project you would develop through that scoping process. But those costs would be significant. I would estimate, you go, you know, using the best kinds of numbers I have, you go, the most recent Los Osos, it would add about eight bucks if we copied their process just to get to ground zero, plus right of way costs, plus land acquisition costs. You would subtract any other costs that you could recover by either selling or reusing the existing site. But you would have to reserve large portions of that for the lift station that would have to be there. So significant costs."
Some members of the audience were shaking their heads, some literally.
"I was totally lost," resident Grant Crowl said. " English is the only language I speak, but this comes across as though it had been badly translated from Chinese. This is who is making decisions for the city?"
Another resident, who asked not to be named, said, "Whenever I hear Dylan go into one of these routines, I thank my lucky stars he wasn't my kid. Can you imagine what it'd be like if you asked him, who tossed the cat in the dishwasher?"
The barrier to answering Borchard's question is that the city has conducted no studies of costs if an alternative site for the plant were selected—at least any studies that have been made public—so Borchard's question would appear to be unanswerable if a professional review were required.
Yates said he had a question and "mine is about money, and I think it's just answer if we just go dollar per mill? Or do we have to go dollar per mill plus the $8 mill plus the land acquisition, so it's more than a dollar a million? It's a dollar . . . "
He stopped, and Wade returned to the podium: "I'll speak to that, too. You go, right now we're at 37 something and cents. You go, the ultimate goal is, the process was started, but the ultimate where we landed was about $45. You go, we passed our rate structure I believe at the end of 2007. You go, we put a five percent escalator on residential and a seven percent escalator every year from 2008. Well we took a big step. So from 2009 forward you go but the SRF process requires you to review your rates as you get into that and subsequent to our passing a rate structure, there's been some case law. Rob can kind of correct me if I get this wrong. You go an escalating rate structure like we implemented is only good for five years and so in 2012, we're going to have to come back and revisit that rate structure based on the actual project cost at that point in time in order to satisfy that SRF process as well as meet our legal obligation under the 218. But right now we are headed toward to about $45 a month."
"Perfect," replied Yates.
"The way I see my responsibility is to ratepayers. This is what I hear from my fellow citizens, 'Mayor, keep my sewer bill as reasonable as you can.'" It's going to be $60 a month in Los Osos, Yates said.
"Hopefully we can keep under $50 a month—this pays for the proposed project. If we add another $50 million to move it, alright so that's another $50 a month, just on his $1 a month per million basis. Plus the $8 million to start over again. Plus the land acquisition. So now your sewer bill is up to $110, $115. Yes, it is an off-the-top analysis, but the point is, it could double easy. And look at Los Osos at $160. It could happen. So our number one responsibility is to the ratepayer, that's what I feel my responsibility is to keep the sewer bill as low as we can and keep increases as reasonable as we can.
"And that's what scares me about the moving concept."
Yates said some have suggested moving the new plant to "prime ag land," such as the Hayashi property east of Main Street and south of Highway 41 or on the Chevron property at the Morro Bay-Cayucos border. But that, he said, would "cost millions of dollars to replumb and pump up there. The whole town is plumbed for that (the proposed new plant) locaton. If I had my choice, do I like it (the project) on the beach? No. Of course, we wouldn't put it there. But that's where it is, that's where we're living with (the current plant) today. And I have to support staff."
Yates continued, "As far as MWH and all this bashing away at the company, I wish every company was clean and didn't have any lawsuits and didn't have any controversy. It's the nature of business." MWH has been affected by Los Osos (where it was engaged in development of a new sewer plant there) and "this situation."
But he said PERC Water, which had been under consideration as a possible project contractor until it withdrew last October, "has got the same kind of background, but no one mentions that." Such allegations that PERC Water has been involved in charges of wrongdoing or malperformance have been refuted. Yates offered no evidence of PERC Water's "background" at the meeting.
Smukler said "it is very inaccurate for us to compare the costs in Los Osos and impress on the Council and the public listening that these are likely what we would face." For one thing, Los Osos is a much larger community, he said, plus other infrastructure costs were involved in that project. "It is very irresponsible and inaccurate" to compare the two projects, Smukler said.
He agreed that the number one consideration should be the ratepayers, but the focus should be on the "long-term costs, the lifecycle cost of this project, and really do a proper analysis. So instead of speculating with numbers and ideas, we could look at real information. We have never done a rough screening of alternative sites. I will be shocked if we get a (Coastal Commission) permit for the project. I support the Planning Commission decision."
Leage said, "God, we have come a long way, been doing this for a long time to get to this point. Now, my understanding is that even if we do not uphold the appeal, if we're still not dead in the water as far as looking at other sites. And Noah says we're sort of locked in, but that's not what I understand. We're not. So I think we have time to keep moving ahead. I made a kind of funny little remark, I say, Moses comes down and says, hey, boys, move it over here, well, then we will stop and do it immediately. But right now there really hasn't been a really solid other place to move it. And I believe we should move on with this project and keep our eyes open and ears open and maybe something else will pop up. But I don't think we should stop this project at all."
The submission to the Coastal Commission seeks a permit to build a stand-alone plant at one site, and no others are under consideration or can be, according to the Commission's process, unless the Commission requires the city to evaluate other sites.
Council member Nancy Johnson said, "I started off years ago with sewage plant 101 from Dylan Wade, who I consider a well-trained, well-educated engineer."
As far as PERC Water, it "does not have a water reclamation project as part of their proposals that they brought to us." PERC Water never presented its customized design report on its ideas for a new plant to the Council, only sketches of what it could offer.
She said "the people I heard tonight are the same people I heard at the JPA meeting, the same people who were at the draft EIR meeting, the same people who were at the hearing. You're not a new group. You haven't brought any new information to us that would say to me let's not do this plant."
"In the long term, I think the plan for the plant is set up for reclamation when it becomes feasible. I think other sites were evaluated starting back in 2003. I don't think it is speculation (about the merits of the proposed new project). I think we have some good firm (facts) to look at."
She said the recent letter from the Regional Water Quality Control Board supporting the proposed project "seals the deal for me." However, the letter said "we cannot specifically comment on the consistency of the proposed project with the Coastal Act or Local Coastal Plan (LCP)," which would seem to make it largely irrelevant to whether the project will meet the Coastal Commission's requirements that it comply with those requirements.
Borchard said the EIR shows the proposed site for the project will "likely cost much less . . . based on the cost to move it to another site where we don't have the infrastructure." She said moving it would mean a "financial hardship has gone over to ratepayers" and that rates "would more than double from where we are now or thereabouts." Borchard said she "could not in good conscience" burden ratepayers with that added cost.
Yates added that "I don't think the Coastal Commission can require us to recycle water. Eventually we are going to recycle water. It doesn't mean we can do it right now. It's an affordability issue."
Among the appeals of the project to the Coastal Commission, the Santa Lucia chapter of the Sierra Club said the Commission was not provided with sufficient information to approve it because only one site for the plant was evaluated. And by failing to evaluate alternative sites and technologies for the plant, the plan fails to consider such factors as potential for water reclamation, hazard issues, shoreline erosion associated with sea level rise, impacts on biological and archeological resources and impacts on public viewsheds, recreation areas and visitor-serving access.
Another appeal argued the project fails to comply with section 15126.6(f) of the CEQA Guidelines, which requires a range of feasible alternatives that attain these four project objectives: eliminate the need for a waiver to discharge inadequately treated sewage water, achieve state-required water quality of treated water, minimize flooding at the plant, provide for production of recycled water that can be used for irrigation of food crops, parks, playgrounds, school yards, residential landscaping, cemeteries, freeway landscaping, golf courses, ornamental nurseries, and pasture for animals.
It said Policy 4.01 of the city's Local Coastal Plan (LCP) requires that "where necessary significant archeological and historic resources shall be preserved to the greatest extent possible both on public and privately held lands." The EIR reveals that nine prehistoric archeological sites have been recorded within 0.5 miles of the proposed project area, the appeal said, and "it is clear the area located at, and around, the proposed project site contains significant archeological resources."
The most prominent of those resources are linked to the Chumash Indians, the original inhabitants of most of the region now covered by San Luis Obispo County. Fred Collins, spokesperson for the Northern Chumash Tribal Council, has said the planned new sewage plant "is in the middle of a sacred area, a prehistoric area." He had said that "the EIR lacked a serious survey into what is beneath the (proposed) plant. The EIR is not taking the Chumash into consideration."
The appeal said Policy 4.01 "requires that these resources shall be preserved to the greatest extent possible, which ideally is to not disturb the resources at all. The only way to not disturb these resources would be to construct the new WWTP facilities at a location that did not contain significant archeological resources. However, the EIR did not analyze such a site. In order to be in compliance with this LCP policy, the EIR needs to provide this level of review."
The appeal concluded that "Individually, the inconsistencies, omissions and misinterpretations of the various planning documents warrant further analysis and review. However, when taken cumulatively, these inconsistencies, omissions and misinterpretations are extremely alarming."
