Morro Bay Development News
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City Council Regular Meeting
Published: Jun 23, 2026
Morro Bay Adopts Urban Water Management Plan, Confirms Water Supply Reliability Through 2050
The Morro Bay City Council reviewed and adopted the 2025 Urban Water Management Plan (UWMP) and Water Shortage Contingency Plan (WSCP). The UWMP, a state-mandated five-year update, assesses the city's water supply and demand through 2050, confirming that current and projected supplies are sufficient to meet demands, even during multi-year drought scenarios, through a diversified portfolio including recycled water and stored state water. The WSCP outlines staged response actions for water shortages, including conservation measures and potential rationing. Public commenters raised concerns about the projected recycled water supply, the use of multiple population projection sources, and the impact of aging infrastructure on water loss.
Morro Bay Council Approves Annexation and Levy for Cloisters Assessment District Amid Maintenance Concerns
The Morro Bay City Council approved the annexation of Tract 2859 into the Cloisters Landscaping and Lighting Maintenance Assessment District (LLMAD) and ordered the levy of the annual assessment. This action adds five new lots to the existing district, which was established in 1996. The assessment amount for homeowners has remained fixed since its inception, leading to eroded purchasing power. Public commenters raised concerns about the definition of 'special benefit,' the allocation of collected funds, maintenance issues within the Cloisters, and the proposed annexation. The council also discussed the potential dissolution of the assessment district and the use of surplus funds for maintenance, including playground equipment and drainage.
Morro Bay Approves Annual Assessment for North Point Natural Area
The Morro Bay City Council adopted Resolution No. 42-26, ordering the annual assessment for the North Point Natural Area Landscaping and Lighting Maintenance Assessment District. This is a procedural step following previous council actions to initiate proceedings and approve the engineer's report. The North Point Natural Area is a smaller subdivision with 11 lots.
Morro Bay Council Reviews Development Impact Fees Amidst Affordability Concerns
The Morro Bay City Council reviewed a Nexus study to justify development impact fees and considered adjustments to the fee schedule. The study found current fees are generally below maximum justifiable levels, with a slight exception for the residential police fee. Staff recommended minimal changes to comply with AB 602, including reducing the residential police fee, increasing single-family fees by 20% to account for changes in state law regarding garages, merging multifamily and single-family residential categories, and removing the parks fee for non-residential development. Annual adjustments for inflation via the California Construction Cost Index will continue. Several council members and public commenters discussed concerns about fee increases potentially hindering housing construction and affordability, while others supported the adjustments as necessary for compliance and to fund capital improvements.
Morro Bay Council Authorizes Acquisition of Jointly Owned Wastewater Treatment Plant Property
The Morro Bay City Council received a due diligence report and authorized proceeding with the acquisition of the Cayucas Sanitary District's (CSD) interest in the jointly owned wastewater treatment plant properties and related assets. The purchase price is $3,867,800. The due diligence, including a qualitative environmental assessment, found no significant hazardous material impacts likely to significantly increase redevelopment costs. The city plans to demolish the existing plant and reuse the site. The acquisition is on track for a July 1st closing, with potential minor extensions. Several council members and public commenters expressed thanks and acknowledged the long negotiation process.
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