Arroyo Grande pulls out of Central Coast Blue over cost 

The Central Coast Blue project is one agency down after Arroyo Grande City Council members voted unanimously to back out of the three-city cost-sharing agreement on April 9.

The project—which aims to inject treated wastewater into the Santa Maria Valley Groundwater Basin as a drought buffer—was supposed to provide water to the cities of Pismo Beach, Grover Beach, and Arroyo Grande.

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• File Photo By Chris McGuinness
• OPTING OUT The Arroyo Grande City Council voted unanimously to pull out of the Central Coast Blue water recycling project agreement after prices skyrocketed due to inflation.

As the 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.

In 2022, the project was expected to cost between $85 million to $112 million before staff settled on $93 million, according to an April 9 staff report. However, with inflation being factored in, the expected cost of Central Coast Blue shot up to between $134 million and $159 million.

Some of that increase came after the State Water Resources Control Board Division of Financial Assistance reduced a $15 million Water Recycling Funding Program Grant it awarded to Pismo Beach in September 2023 to $5 million due to the statewide effort to address the state's budget deficit, according to the same staff report.

Community members who spoke during public comment during the April 9 Arroyo Grande City Council meeting complained that certain numbers weren't made public.

"I have never seen $85 million to $112 [million]," Los Osos resident Julie Tacker said. "That variable was never presented to the public. They landed on $93 million and shoved it in your face, and you didn't come back to the community and say, 'Whoa, whoa, wait a minute, how far do we want to go.' But there's a big difference between $85 million and $112 million, just like there's a big difference between $134 million and $159 million."

Mayor Pro Tem Jim Guthrie agreed that the price of Central Coast Blue is getting out of hand and said the city was a good partner that stayed with the project when it reached $95 million—which wasn't a number they'd originally agreed upon.

"The total number I'm comfortable with is way less than $90 [million]. Before I was even on council, I was very uncomfortable with this project," he said. "Not exactly based on cost, but indirectly it was because if you look at that time, the cost of [desalination] was very close to the cost of this project and [desalination] is the only thing that works in a drought."

Although Arroyo Grande is the first city to officially opt out of the project, some Grover Beach residents have urged their city to do the same, claiming Central Coast Blue will cause more harm than good.

Due in part to ongoing public backlash, Central Coast Blue General Manager Geoff English told New Times, the project is currently on pause while waiting to hear if the cities want to continue with the project.

"We have suspended all work on technical work, on design, and on permitting," he said. "We have pulled the permits; we pulled the permit application from the state's Coastal Commission."

English said Central Coast Blue also withdrew its development permit from Grover Beach but is continuing to apply for grants to lessen the cities' financial burden.

"Without that funding, the project would be challenging to move forward," he said.

While Arroyo Grande City Council voted to pull out of Central Coast Blue, it decided to stay in the joint powers authority (JPA) with Grover Beach and Pismo Beach to focus their efforts on looking at alternative water suppliers or projects that are less expensive.

"I would like to see our JPA to stay together, and I would like to say, 'Hey yeah ... we have the $500,000 for the next fiscal year, let's continue to find an alternative solution to securing more water,'' Councilmember Lan George said. "Our responsibility as a council is to plan for the future. I believe we should continue to invest money into finding another water alternative." Δ