This map of the Los Osos CSD’s ‘Water Resiliency Intertie Pipeline Project,’ shows the proposed route for a water pipeline that would bring supplemental drinking water to Los Osos. The idea is to tie-into the Chorro Valley Pipeline next to Hwy 1 (at far left) and run the pipeline down South Bay Boulevard to the storage facility at Santa Ysabel Avenue and South Bay. Rendering by SWCA Environmental Consultants
If Estero Bay News readers don’t think what’s happening in Washington D.C., with the new administration’s efforts to cut government waste and fraud, as well as the size of government overall, doesn’t affect them, the cuts could greatly affect a proposed water project in Los Osos.
Last summer, Congressman Salud Carbajal (D — Santa Barbara), announced that he’d been able to insert funding for the Los Osos Community Services District’s so-called, “Water Resiliency Intertie Pipeline Project.”
That $8 million was part of the Water Resources Development Act passed by Congress last fall and signed by then-President Joe Biden in the waning days of his Presidency.
The project would snake a pipeline down South Bay Boulevard and connect with the Chorro Valley Pipeline running parallel to Hwy 1. That pipeline brings fully treated State Water Project drinking water to Morro Bay.
The CSD’s plan was to build the new pipeline, which would be a couple of miles long, and carry up to 200-acre feet a year of already-treated drinking water to Los Osos.
The idea was to have this water available to offset some of the pumping of the town’s groundwater basin when rainfall is low. The goal is to give the aquifer, the town’s sole source of water, some respite from pumping.
Not for Development
This added water is not intended to increase the water supply to accommodate renewed housing development, which is a real concern for many residents after the State Coastal Commission and County were able to certify a general plan last year and begin taking steps to lifting the building moratorium that has bottled up growth since 1988.
When the Los Osos plan went to the Coastal Commission, numerous Los Osos residents spoke against adopting it, arguing that the County hadn’t solved the water supply problems and the town’s water supply are not adequate for the people who live here now, let alone future residents. Nevertheless, the Commission approved the plan.
More recently, the County was able to finally certify a “Habitat Conservation Plan” (HCP), a document that lays out the steps to be taken to protect critical habitat for various protected species of animals and plants, especially the Morro Shoulder Banded Dune Snail and kangaroo rat, among others.
That HCP plan continues to be fleshed out, most recently with County Supervisors agreeing on a fee schedule to pay for the goals in the HCP.
In essence, it sets the price people must pay in mitigation in order to build on their property. That money is to be used for buying open space in a protected “greenbelt” that’s being established around the community and preserved for the plants and animals.
But Rep. Carbajal’s victory dance stumbled when the new president took over. One of President Donald Trump’s first executive orders froze funding for all federal grant programs, pending review. That apparently includes Los Osos’ $8 million.
Funding Announced
According to LOCSD General Manager Ron Munds’ December report to the board: “Over the past year, general updates have been provided to the Board regarding a grant application submitted by the District to Congressman Carbajal requesting $8 million to support the design and construction of the Water Resiliency Intertie Pipeline Project.
“Congressman Carbajal recently announced via his Dec. 10 newsletter that the intertie project was authorized for funding as part of the 2024 Water Resources Development Act.”
But that good news came with a caveat. “The project still needs the funds to be appropriated by Congress based on the recommendation by the Army Corp of Engineers.”
Turns out the Army Corps, which is a notoriously slow-acting agency, wasn’t even the biggest hurdle. Munds said the new president is holding things up.
“Well,” he told EBN, “the funding for the annual Water Resources Development Act (WRDA) was approved by the House, Senate and signed by Biden on his way out. The catch is that the appropriation of the funding is pending and typically approved in the March/April time frame.
“As you are aware, the new administration is holding up all appropriations, so the actual funding is on hold and in jeopardy. I’ll definitely let you know if things change.”
The pipeline at this point can’t even be truly called a “project,” as it has yet to be permitted, a process that could take a while, as the Coastal Commission will definitely have to play a part.
In September 2023, the CSD produced a mitigated negative declaration environmental review, essentially a checklist of potential impacts. The Neg-Dec basically says there are no environmental impacts from the project that cannot be mitigated.
Congress Reacts
The actions by the president and his small army of cost cutters have Democrats in Congress — including those from the Central Coast — rattled.
“On Donald Trump’s first day in office,” Rep. Carbajal said in a recently emailed letter to his constituents, “he issued an executive order that claimed to freeze all funding derived from the Inflation Reduction Act and Bipartisan Infrastructure Law, two key laws that I helped write, which have delivered more than a billion dollars to our region so far.”
On Jan. 28 he stated, “The Central Coast received more than $1.4 billion in grants and other federal aid last year alone. Halting federal assistance — even temporarily — has the potential to harm every single Central Coast community.”
He claimed the actions of the president violate the law. “This action is not only cruel, it is also illegal,” Rep. Carbajal accused. “Congress, on a bipartisan basis, approves these funds to help raise the quality of life and keep our communities safe. The president does not have the authority in law or the Constitution to unilaterally halt these federal assistance programs. I will fight with everything I have to ensure this illegal theft of taxpayer dollars is overturned.”
On the Bandwagon
Numerous California Congress people, Carbajal included, signed a letter addressed to Matthew J. Vaeth, the acting director of the Office of Management and Budget; and Kevin Hassett, the assistant to the president for as the director of National Economic Council. In the letter, Congress decries the pausing of the payouts.
“We write to request an itemized list of programs, projects, and activities,” the letter reads, “that have been put on hold because of President Trump’s January 20, 2025, executive order pausing the disbursement of funds included in the Inflation Reduction Act of 2022 (IRA) and the Infrastructure Investment and Jobs Act (IIJA).”
Under Trump’s executive order, these grant programs and the awards themselves will be scrutinized and must go to the OMB before being either approved for funding or rejected.
Whether or not this is illegal, remains to be proven.
What seems certain is that if this award is ultimately canceled, either Rep. Carbajal will have to hunt up another funding source, or the CSD may be forced to ask voters to approve a bond measure — debt financing — to pay for it. And that would likely mean a water rate hike to pay off the bonds.
Not A First
This isn’t the first time something like this has happened in the South Bay. This 3-card Monty game was played with some $45 million that then-Rep. Lois Capps had secured through this same annual water bill for the Los Osos Community Sewer project.
Back in the early 2000s, when the CSD was starting work on the failed mid-town treatment plant, the CSD broke ground and even started laying pipes. The whole project ground to a screeching halt when the voters forced a recall election and ousted the majority of the CSD board.
The new board cancelled the project and incurred the wrath of the Regional Water Quality Control Board, which had ordered a sewer system be built way back in 1983; and the State Revolving Loan Fund that had loaned the project millions. The LOCSD became the first agency in State history to default on one of these loans, and the water board started going after “selected at random” homeowners.
Fortunately, that all stopped when the CSD filed bankruptcy. The County was eventually given back control of the project by the State Legislature, and it was pushed through and completed in 2016.
Rep. Carbajal has pledged to track the progress of this $1.4 billion worth of funding he said he’s been able to bring home to the Central Coast.
“As more details become available on the individual programs affected,” he said, “[My] office will coordinate with Central Coast entities impacted by the halt in federal funding.”
Central Coast residents with concerns can email to: carbajal.house.gov/contact.
