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Save Morro Bay Statement on the Commencement of Prop. 218 Hearing

This is a critical moment for Morro Bay ratepayers.

You have approximately 45 days to respond to water and sewer rate hikes for the proposed Morro Bay Water Reclamation Facility. More than ever, it’s important to make an informed decision when it comes to protesting these proposed hikes pursuant to California’s Proposition 218.

We’ve heard the fear. Now read the facts on why protesting these rates matter.

In 2015, the City conducted a Prop. 218 protest period for water and sewer rate hikes for a $75 million wastewater treatment plant. The City explicitly told ratepayers the cost would finance a project without Cayucos’ participation. This year, the City tells us the previous 218 rate hikes are unable to finance the project because the calculations — to determine the actual cost — were based on estimates and approximations. Though we’ve made progress since then, with regard to the design-build procurement process, the rates they want ratepayers to approve now are based on the same uncertainty.

This is a breach of public trust.

The City wants residents to vote on a “reasonable” $41 surcharge. But here’s what they don’t tell you: including the surcharge, rates will increase to $191/month. And there will be more Prop. 218 rate hikes in the near future, which will include the demolition of our current oceanside plant. In the best case scenario, $191/mo. is just the beginning. The City cannot guarantee a sustained flat rate, especially when they base their rate analysis on mere estimates and approximations — and that’s against the law. Supporters of this project have urged residents not to protest because the city might receive fines by the Regional Water Quality Control Board for $50,000 a month. You support infrastructure because of its cost-effectiveness and environmental sustainability, not fear. Fear is not a specific benefit for this project. Supporters also underestimate the determination of our informed citizenry to work with our regulatory and permitting partners, including the Coastal Commission and Water Board, to achieve compliance in a timely manner. Save Morro Bay and Citizens for Affordable Living have reached out to these agencies, and have engaged in proactive and productive communication.

The consensus is clear: doing nothing is not an option. No one is “going rogue.”

We’ve also heard the City talk about the efforts they made to reduce the overall project cost from $150 million to $128.5 million, and how the rate hikes affect that change. Part of that cost decrease is attributed to awarding the design-build contract to multinational engineering firm Black & Veatch. They submitted a maximum bid of $69.5 million to the city, claiming they will not charge any more than that amount. But in 2009, Black & Veatch lost a $36 million breach-of-contract lawsuit in Pinellas County, Florida. In that lawsuit, Black & Veatch signed a contract for a “not to exceed price” that they refused to later commit to. The City never vetted this lawsuit or the press coverage, despite that coverage being readily available with a simple Google search. You can read more about the case here:

This isn’t an isolated incident. Black & Veatch was also sued by the City of Antioch in 2013 for performance problems and defects because of misrepresentations and omission of information (SOURCE:

The more we learn about Black & Veatch, the more we distrust the City of Morro Bay’s process. The City has not vetted these developments, despite residents repeatedly mentioning this specific coverage at city meetings. Yet we’re told the City listens to us. Let’s be absolutely clear: Residents want a compliant project, but not at any cost. We also want the process to be legal and thorough, but by taking unnecessary and potentially illegal shortcuts because of fear and risky guesswork, our residents will suffer.

Trust your insights. Protest.

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