Pismo Beach is the only agency left on the Central Coast Blue water project 

The Central Coast Blue water recycling project was hit with some major roadblocks after two of the three agencies funding it pulled out. Now, Pismo Beach is the last agency standing and has to rethink the scope of its plans.

Pismo Beach City Manager Jorge Garcia told New Times that the city is actively looking for additional partners to join them.

"While we didn't anticipate that Arroyo Grande and Grover Beach would both be leaving the project, we do continue to believe that water resiliency is an important and worthwhile endeavor," he said. "So, what we're doing is we're recommending a modification to the Central Coast Blue Joint Powers Authority (JPA) to allow the Public Financing Agency of the city of Pismo Beach to join it so that we can continue to preserve the option of Central Coast Blue into the future."

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• Photo Courtesy Of Pismo Beach
• GROUNDWATER INJECTION Central Coast Blue was planned to be a drought-resistant project that will use injection wells (pictured) to push purified water back into the groundwater basin.

The project was originally expected to cost $93 million in 2022, but the price tag shot up to between $134 million and $159 million in 2024. The Arroyo Grande City Council decided that the increasing cost wasn't worth it and pulled its funding from the project during an April 9 council meeting.

Shortly after that, on April 22, the Grover Beach City Council followed suit and pulled out of the program due to growing opposition from community members to the city's decision to raise water rates by almost 20 percent to help fund the project.

Pismo Beach will need to do some financial maneuvering to ensure the future of Central Coast Blue.

First, Pismo Beach has to reimburse Arroyo Grande $499,855.34 and Grover Beach $719,791.71 for their respective shares of the purchase price of the property acquired for the project, according to a June 24 Grover Beach staff report.

The cost breakdown comes from the original agreement between the three cities. As lead agency, Pismo Beach agreed to pay 39 percent of the project, followed by Grover Beach at 36 percent, and Arroyo Grande at 25 percent.

According to Grover Beach Assistant City Manager Kristin Eriksson, starting on July 1, Pismo Beach has 30 days to reimburse both cities. Grover Beach will need the cash, since the city decided to revert its water rates to what they were before the 20 percent increase.

"The reimbursement funds will be deposited into the city's water fund to shore up reserves, which are low due to payment of preconstruction costs for the [Central Coast Blue] project," she said in an email interview. "As well as reductions in water rates made earlier this year."

In previous New Times reporting, Grover Beach City Manager Matthew Bronson said that Grover Beach currently gets its water from the Santa Maria Valley Groundwater Basin and Lopez Lake, but with drought being an almost yearly occurrence, the city needs to focus on finding a more consistent option.

"Our water only comes from essentially rainfall that falls into Lopez Lake and falls on the ground that gets seeped into the groundwater basin," he said. "Lopez Lake ran dry last year, and you can't get water from a lake that's dry."

This is why the city needs the reimbursement deposited into its water fund.

"There continues to be a need for the city to obtain additional water supply to ensure sustainability of the city's ability to meet water demand, including in periods of extended drought," she said.

Construction for Central Coast Blue was scheduled to begin within the next year at a vacant property that was purchased for the project in south Grover Beach, and Erikkson said Grover Beach is unaware of any changes made to the project design or construction timeline.

"The property will be turned over to the re-formed JPA, which currently consists of the city of Pismo Beach and the Pismo Beach Public Financing Agency, once the parties that were removed from the JPA (the cities of Grover Beach and Arroyo Grande) are reimbursed for their shares of the purchase price for the property," she said. "The members of the JPA that will continue with this effort will work with their design team to evaluate if the previously proposed well sites are still the most beneficial for the project or if a revision to the project design is needed."

Pismo Beach City Manager Garcia said that although the vacant property in South Grover is still the ideal site location for the project, a construction start time was paused and the new path forward isn't solidified yet. Garcia also said that any future work would have to go through the planning and permitting process from various agencies.

"Central Coast Blue is a vital project that not only secures a new source of water, but also protects the groundwater basin that serves much of the Five Cities area," he said. "Pismo Beach will be looking at ways to modify the project and secure additional funding to make the project viable."

However, Garcia said that postponing construction could have an impact on the grants that the project has already received, and Pismo Beach is working with the granting agencies to determine what that impact will be, if any.

According to previous New Times reporting, Central Coast Blue has received around $35 million in grants from various agencies.

The project received $8 million from the State Water Resources Control Board, $15 million from the state's Water Recycling Funding Program, $1 million from the state's Integrated Regional Water Management, and $10 million from the U.S. Bureau of Reclamation.

"The first step is to complete the scope and securing additional partners in order to determine the extent of the project and any potential impacts," he said. Δ

Reach Staff Writer Samantha Herrera at [email protected].