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Draft county State Water Project transfer policy keeps Morro Bay as top-priority subcontractor, offers surplus‑sales clarifications
Summary
San Luis Obispo County's draft update to the State Water Project transfer policy reserves a 5,000‑acre‑foot resiliency pool, clarifies priorities and cost‑recovery rules for surplus sales, and keeps Morro Bay a top‑priority subcontractor. Staff said the policy could help the city recover costs from surplus sales while maintaining local resiliency.
Morro Bay — City staff briefed the Public Works Advisory Board on May 21 about a draft county policy updating how the San Luis Obispo County Flood Control & Water Conservation District will handle State Water Project (SWP) transfers and surplus sales.
The draft policy sets priorities to protect subcontractors’ local water needs first, reserves a 5,000‑acre‑foot table‑A allocation for county resiliency, and clarifies criteria for internal/external transfers, emergency use and short‑term sales. Utilities Division Manager Demaris Hansen told the board that Morro Bay remains a top priority under the draft and noted some financial upside: in 2024 the district sold 13,500 acre‑feet of surplus water and Morro Bay’s share produced roughly $160,000 in credit to the city’s SWP account.
Hansen said the policy also creates clearer rules for cost recovery and short‑term uses that could help the city manage reduced allocations in dry years. Under current regional arrangements Morro Bay received about 82% of its 2024 supply from the SWP and about 18% from the Morro Valley groundwater basin; the city is also building the WARF IPR project to add roughly 412.5 acre‑feet per year in Phase 1.
County staff emphasized that final transfer or sale approvals would still require district board action and public input, and that long‑term contract changes cannot be implemented until subcontractor agreements are renegotiated. Board members raised infrastructure questions — including turnout capacity and whether tapping additional users into the coastal branch would require pipe reinforcement and upstream valve upgrades — and asked county staff to return answers to assembly and turnout‑capacity questions.
Staff said the policy will go to the County Board of Supervisors for consideration following City Council input and that the city will use council meetings in June to provide formal comments to the county.
