Former Cayucos Sanitary District General Manager Rick Koon is pictured in 2020 while giving a reporter a tour of the Cayucos Water Resource Recovery Facility during its construction. Photo by Neil Farrell
The Cayucos Sanitary District Board will have to hire a new general manager after a split board voted 3-2 not to give long-time GM Rick Koon a new employment contract.
Koon has been the CSD’s GM for many years, and was a leader for the Board in its efforts to break from Morro Bay and build its own sewer treatment plant.
Koon guided the project, called the Water Resource Recovery Facility, built out on Toro Creek Road, and has been overseeing the plant operations. Last year he moved out of state but has continued his job for the CSD.
But his contract ran out and a proposal went before the Board at its March 20 meeting that would have essentially kept him on as the GM and Capital Projects Manager, making some $98,000 a year.
He would have been required to come back to California for monthly Board meetings, but otherwise would have mostly overseen the operations remotely. The new plant is greatly computerized and has plant operators on site to monitor the operations.
But the Board faced some criticism from the public who questioned how someone who now lives in another state, could effectively manage the agency?
That led to a change in the road for the Board as a few days later they held a special meeting to discuss signing a consulting contract with Koon to have him tackle a trio of pressing issues.
The consultant contract would have been to:
• Prepare a five-year Capital Improvement Project Plan;
• Prepare an Operations and Maintenance Plan for the Water Resource Recovery Facility; and,
• Prepare a Use and Disposition Plan for District assets in Morro Bay.
Those assets include the old, now-unused and jointly owned sewer treatment plant on Atascadero Road in Morro Bay, plus the plant’s outfall pipeline that discharges treated effluent into Estero Bay about a half-mile offshore and a mile or so north of Morro Rock.
The two agencies have been partners in the treatment plant since at least the early 1980s, sharing costs on a 60:40 ratio (Morro Bay has 60% interest).
There are also some unused sewer mains still in place that used to carry Cayucos’ sewage to the Atascadero Road plant for treatment.
That ocean discharge pipe is now solely used by Morro Bay for disposal of its triple-treated wastewater, from its own new treatment plant. The only activity still going on at the treatment plant is a Saturday household hazardous waste drop off site.
Cayucos’ treatment plant now uses an undersea oil loading line from Chevron’s Estero Marine Terminal that ceased operations in 1999, to dispose of its effluent.
Both agencies’ ultimate plan is to recycle the reusable wastewater that is now being lost to the sea.
Cayucos wishes to pipe its highly-treated and disinfected wastewater to Whale Rock Reservoir, where it gets all of its drinking water from, but legislation is needed for that to happen.
Morro Bay is still working through its recycling plans, and is under orders from the State Water Resources Control Board, which loaned some $100 million for the sewer project, to reuse the wastewater or possibly face default on the loan.
When the two agencies divorced and ended their Joint Powers Agreement over disagreements on the first proposed sewer replacement project, and went their separate ways, the old plant property and discharge line were left to deal with later.
The main issue in that break-up was ownership of the treated wastewater along with costs. In the end Cayucos spent about $25 million on its plant and Morro Bay spent about $175 million, as that plan required a new conveyance system of pipes and lift stations.
That time is fast approaching now that both new plants are up and running. The agencies have already conducted a property appraisal to gauge the value of the property, which sits across the street from Morro Strand Beach.
Estero Bay News, in a previous story, attempted to get that appraisal report but our request for public documents was denied.
“Appraisals are not public until after the sale of the property,” reads the response from Morro Bay’s City Attorney, Rob Schultz. “At this time, the City is not sure if it will ultimately sell or lease the property, but you can gain access to the appraisal sometime in the future.” Schultz has been charged with helping in these negotiations.
Back in Cayucos, the CSD Board named Administrative Finance Manager, Gayle Good, its Acting General Manager.
But the Board’s association with Koon may not be finished, as the Board voted 4-0 to bring back the consulting agreement with some changes.
Dist. 1 Director John Curti made a motion to ask Koon for estimates on “time, cost, and a description of deliverables to be considered at a special meeting on April 4.”
So if the proposal from Koon is acceptable, he would presumably be contracted to prepare a five-year Capital Improvement Project Plan and prepare an Operations and Maintenance Plan for the Water Resource Recovery Facility. But he would not work on the property issues with Morro Bay.
As to how they will go about filling the GM spot, that too will be decided some time in the future.
Meanwhile, the two agencies are expected to go into negotiations on the disposition of the Atascadero Road property. That would presumably entail a plan to demolish and remove the old sewer plant and make the property ready for reuse or sale.
Given the location, the former sewer plant site is probably pretty valuable.
A three-acre lot across the street from the old plant is currently listed for sale for $3.9 million. However, that property, which sits at the west entrance to Morro Bay High School, is covered in willows and could be problematic for anyone trying to develop it. Willows are considered “wetlands” by the Coastal Commission and generally protected habitat.
The old sewer plant site is also hamstrung by the first failed plant project, as the Coastal Commission, in denying a Coastal Development Permit for that initial project, declared the site to be subject to “coastal hazards,” i.e. tsunami run-up zone, flood zone (for Morro Creek), and subject to future sea level rise.
At this point, indications are that those constraints are still in effect.
Commission staff in a letter commenting on the City’s work to master plan the Morro Bay Power Plant, restated the coastal hazards issue with regards to that 100-plus acre site, and included the old sewer plant property, too.
The Commission also noted several sticky issues with plant owner Vistra Energy’s scheme to build a 600-megawatt Battery Energy Storage System (BESS) facility on part of the old power plant property.
It seems that while Morro Bay has a handful of what should be attractive beachfront properties ripe for future redevelopment, there are nagging issues with all of them.
And whatever ultimately becomes of the treatment plant site will probably have to undergo some sort of planning effort to include potentially a change in zoning and handled through the Morro Bay Planning Department.
And given its location, the Coastal Commission would play an important part in whatever happens there.
