PISMO BEACH CITY COUNCIL / PISMO BEACH PUBLIC
FINANCING AGENCY BOARD OF DIRECTORS /
CENTRAL COAST BLUE REGIONAL RECYCLED
WATER AUTHORITY BOARD OF DIRECTORS
STAFF REPORT
Agenda Item #3.B
Meeting Date: October 15, 2025
TITLE:
Central Coast Blue Workshop
RECOMMENDATION:
Central Coast Blue Regional Recycled Water Authority Board of Directors and Public Financing Agency Board of Directors:
1. Consent to the direction proposed to be given by the Pismo Beach City Council to the Pismo Beach City Manager and staff as outlined in staff’s report.
Pismo Beach City Council:
1. Direct staff to proceed with fixed-price design-build as the procurement delivery model for the design and construction of the Central Coast Blue project and take the necessary actions to procure an Owner’s Advisor;
2. Direct staff to complete the Communication Plan for the project and begin implementation as outlined in staff’s report; and
3. Direct the City Manager to execute Water Recycling Funding Program Grant Execution and Clean Water State Revolving Fund Loan documents.
DISCUSSION:
At the June 23, 2025, Joint Meeting of the Pismo Beach City Council, Central Coast Blue Regional Recycled Water Authority (CCBRRWA) Board of Directors, and Pismo Beach Public Financing Agency (PFA2) Board of Directors, staff received direction to evaluate various project procurement delivery models for the design and construction of Central Coast Blue, an Advanced Water Purification Facility (AWPF).
AWPFs are approved and regulated by various regional, state, and federal agencies and are proven and safe systems to refine treated wastewater effluent to drinking water standards. While traditional delivery procurement models such as design-bid-build are still utilized, their use is diminishing in the construction of water treatment facilities. There are new models that allow for a more cost-conscious project, efficient construction and plant operations, and would avoid cost surprises.
Staff and the City’s consultants evaluated various procurement models and will provide an overview and analysis during the staff presentation. Seven different criteria were utilized to evaluate the options including capital cost, reliable performance, implementation schedule, innovation, cost confidence, risk management, and lowest Joint Agenda 10-15-2025 3.B-1
operation & maintenance cost. Based on these factors, staff is recommending fixed-price design-build as the preferred delivery model.
In order to deliver the project under this model, staff recommends the City of Pismo Beach procure an Owner’s Advisor (OA) to serve as an extension of staff to ensure that the performance criteria and project objectives are met. The OA would become instrumental in the selection of the design-build team, facilitated detailed design, permitting and construction, along with the limited training and operations period.
Since the last meeting, staff also began putting together a Communications Plan. The focus of the plan is to create understanding, build awareness, engage with stakeholders, and convey the significance of existing investments. This will be accomplished by tailored outreach to the various stakeholders that includes master messaging, branding, engagement, and a roadmap for project success. In the coming weeks, staff will finalize the Plan and begin implementation, provided the City Council and Boards give direction and consent to continue to the next phase.
Staff received notification that the Fiscal Year 2026 State Water Board Intended Use Plan placed Central Coast Blue on the Fundable List, which included two key funding opportunities for the City. First, a new $15 million grant from the Water Recycling Funding Program, and second, the restoration of the project into the Clean Water State Revolving Fund (SRF) loan program. The SRF loan is a low-interest loan of up to $36.3 million.
While it is not anticipated that the City will need all of the lending capacity, it demonstrates the continued support from the state for the project. Staff anticipates grant and loan agreements being ready this fiscal year and would seek direction to execute those agreements to secure the funding to prevent it from being taken away, as has previously occurred during uncertain economic conditions. The City would not be obligated to debt issuance or repayment until the City Council/Board(s) take the necessary actions.
Conclusion and Recommendation
Staff recommends that the Central Coast Blue Regional Recycled Water Authority Board of Directors and Public Financing Agency Board of Directors consent to the direction proposed to be given by the Pismo Beach City Council to the Pismo Beach City Manager and staff as outlined in staff’s report.
Staff then recommends that the Pismo Beach City Council:
1. Direct staff to proceed with fixed-price design-build as the procurement delivery model for the design and construction of the Central Coast Blue project and take the necessary actions to procure an Owner’s Advisor;
2. Direct staff to complete the Communication Plan for the project and begin implementation as outlined in staff’s report; and
3. Direct the City Manager to execute Water Recycling Funding Program Grant Execution and Clean Water State Revolving Fund Loan documents.
Joint Agenda 10-15-2025 3.B-2
FISCAL IMPACT:
There is no immediate fiscal impact from staff’s recommended action. The total estimated cost of the Central Coast Blue project and the anticipated funding sources are summarized to provide an overall financial overview of the project in Table 1. The total estimated project construction cost is $59.1 million. Grant sources total up to $39.5 million and the SRF loan request is $36.3 million, anticipated to be finalized by the first quarter of 2026. Staff continues to pursue other grant opportunities.
Table 1: Central Coast Blue Project Cost and Anticipated Funding & Financing Sources Project Cost and Anticipated Funding & Financing Sources Amount (in $ millions)
Central Coast Blue Project Construction Cost Estimate $59.1 Grant Sources
US Bureau of Reclamation Title XVI WIIN Act (executed
agreement, up to amount) $16.5
Proposition 1 Groundwater Grant Program (executed
agreement) $8.0
Water Recycling Funding Program (in progress) $15.0
Low Interest Loan
SRF Loan Financing (in progress, estimated first quarter of 2026) $36.3
Once the project is constructed, the City’s Water and Wastewater Enterprise Funds would support the debt service and ongoing operating and maintenance costs of the project.
ATTACHMENTS:
None
Submitted by: Jorge Garcia, City Manager/General Manager/Executive Director City Manager/General Manager/Executive Director Approval:
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