Morro Bay Water Reclamation Facility Project:  Issues, Concerns, and Solutions



Finance Issues



Research done by Morro Bay residents shows that from 2003 through the end of 2016, approximately $5,000,000 was spent by the City of Morro Bay in an ongoing attempt to deal with its WWTP problem.  All of that money  bought taxpayers essentially nothing.


Initially, the effort was conducted as the “WWTP project”.  Since 2013, it has been called the “WRF project”.  Regardless of what the project has been called, a tremendous amount of money has been wasted.  


It has been said that the City has failed to learn from past mistakes, has placed far too much trust in claims and recommendations made by self-interested consultants, and has failed, from the very beginning to follow good project management practices.


WWTP project


As of December 31, 2011, well over $2,260,347.56 had been spent on the WWTP project.  This number was calculated by residents, using data contained in City of Morro Bay financial reports, staff reports, contracts, and invoices, and data provided by the Cayucos Sanitary District (CSD).  There was no formal, centralized tracking of project costs.


Actual costs were known to be significantly higher than the verifiable $2,260,347.56 total, but could not  be calculated due to a lack of available data.  Missing from the total are significant project expenses: costs of CSD staff labor, City of Morro Bay staff labor prior to 2006, and City of Morro Bay legal work.


Of the $2,260,347.56 in costs that could be reviewed and verified, CSD customers paid about $600,000.  The remaining amount, over $1,660,000 was paid by Morro Bay.  


Work done and overseen by consultants was the primary WWTP project expense.For example, the original Facility Master Plan (FMP), done by Carollo Engineers, cost taxpayers $218,996. The DEIR, done by Environmental Science Associates (ESA), cost $377,317.90.  Work on the second FMP amendment, plus additional design work, both done by MWH, cost $469,858.82.



WRF Project


Under the “WRF project”, as under the “WWTP project”, there has been no formal, centralized tracking and reporting of project costs by the project team.  However, it can be determined from General Ledger transactions that expenditures were roughly $3 million as of the beginning of November, 2016.


No one directly involved with the project seems to have a handle on exactly how the money has been and is being spent.  At the August 9 City Council meeting, the only consulting cost information provided to the Mayor and Council was in the "Water Reclamation Facility Advisory Committee Quarterly Budget Review Summary 4Q15/16 (Thru April 30, 2016)".  


That report was, at the time, over three months out of date, and it came from a citizens’ advisory committee, not the project manager. There was no consulting cost data for the period from May 1 through August 9.   The Mayor and Council didn’t appear to understand that was a problem.


General Ledger transactions show that over two years, the City paid more than $85,000 for project management software for the WRF project. The software has sophisticated cost tracking and reporting capabilities, but it appears that no one has been using those capabilities. Once again, residents have had to do their own research to try to determine how their tax dollars were being spent on the project.


It even appears that the City is paying far too much for the software, the price of which is based on a particular user’s needs.  The City is paying based on a cap of 10 projects and $30 million per year in construction.  Since the WRF is one project, and since nowhere near $30 million per year has been spent thus far, questions have been raised regarding possible use of this software for projects other than the WRF.  If it is being used for other purposes, the extra cost associated with that usage should not be charged to the WRF project.


So that residents could get a better idea of how their money was being spent, General Ledger accumulated transaction listings for the WRF project were obtained from the City. The first included transactions from the beginning of the project through August 5, 2016.  The second included transactions from August 6, 2016 through October 20.  


Residents compiled  an Excel spreadsheet* of consulting expenses from the beginning of the WRF project in 2013 through September, 2016, including costs for all consultants who had been paid a total of at least $10,000.  It was determined that, as of mid-October, 2016, consulting costs totaled $1,950,614.05. The highest paid consultant had received $606,929.20.


With estimates of the final project cost total skyrocketing to well over $100 million, some residents have complained that the project team has not done enough to obtain grants to help pay for the new plant.  It has been suggested that some grant opportunities have been missed entirely due to “foot dragging” and lack of an aggressive campaign to obtain grant funds to reduce the burden on Morro Bay residents.




*  For readers who do not have Microsoft Excel, a viewer can be downloaded in order to view the consulting expenses file