Who should have covered the cost of Morro Bay’s landslides?

Writer’s Note: This is part six of a story, told in installments, about the corruption involved in Morro Bay’s water reclamation facility. Part one is about Morro Bay City Council’s bait-and-switch.


As you may know, there have been two landslides at the City of Morro Bay’s wastewater treatment plant construction site. One in May 2020 that involved an estimated 15,000 cubic yards of earth and a second slide during Jan. 2021 of 17,000 cubic yards of earth.

Both slides happened in the same place — the hillside above the city’s unpermitted excavation of  over 100,000 cubic yards of the hill. Why did this happen and why was the cost of the slides — $1.13 million so far — relegated to the city, that is, to ratepayers?

First of all, the site is formally designated as having a high landslide risk potential by San Luis Obispo County. Information about this is in reports, maps, the SLO County’s Local Coastal Program Estero Bay Area Plan and Coastal Zone Land Use Ordinance.

Everybody involved knew or should have known that  removal of over 100,000 cubic yards of a hill to make a flat place for a sewer plant would mean the risk of causing landslides. But that’s what they did. And the landslides happened — a matter of cause and effect.

Here’s how everybody knew about it.

A Geotechnical Engineering and Geologic Hazards Report written for the contractor said that land at the site is “prone to both shallow soil slips and larger rotational landslides. No known or mapped landslides are on the site. However, there are several landslides within close proximity to the site, within the same geologic formation.”

Here is a clip from a SLO County Local Coastal Program map that designates the area north east of Morro Bay, including the project site area with orange dots, as a Geologic Study Area.

The Project Environmental Impact Report (EIR) explains that designation as a Geologic Study Area in this case means the earth is subject to high landslide risk potential. Search for Geologic Study Area at page 3.10-5. Here’s what it says.

The preferred WRF site is located within the Estero Area Plan and the Geologic Study Area (GSA) combining designation. That site is located outside of the Urban Reserve Line (URL), which is coterminous with the boundary between the City and County. The GSA designation when applied to lands outside the URL signifies that the area is subject to high landslide risk potential.”

Here’s a snippet from the County’s Geologic Hazard Map that was included in the Project EIR showing the “WRF Location” to be a “Landslide Risk.” Search for landslide risk.

The Notice of Preparation of the EIR filed by the City with the State Clearinghouse says this project is:  “… construction of wastewater treatment facilities on sloped terrain that could be subject to potential seismic and geologic hazards, including ground shaking, liquefaction, soil instability, soil erosion, expansive soils, and landslides.” See page eight.

And according to the Oct. 24, 2017 Preliminary Geotechnical and Geologic Hazards Report prepared for the City of Morro Bay, “The site is located within an area designated by the County of San Luis Obispo as a Geologic Study Area (GSA) due to the potential for slope instability and landsliding.” Search for GSA.

Given that the information was there for all parties to consider in their decision-making processes, who pays for it? Well, the Morro Bay City Council members knew this information so they are accountable. They chose the site. But in terms of who pays for the costs to deal with the landslides, the design-build contract says that the contractor pays for it.

Under section 3.10.2 of the contract, the contractor pays for things like landslides where the subsurface conditions 1) were actually known, 2) were ordinarily known to exist, 3) could have been reasonably discovered, or 4) are generally recognized as inherent in the area. Click on Agenda Item C-1 scroll to page 17.

And the “high landslide risk potential” at this site was actually known in black and white, was known to exist, could have been easily discovered by any inquiring mind, and was inherent in the area according to the maps.

Then, why did the city end up paying for it? A spin was applied.

City staff, the city attorney, and the Morro Bay City Council members apparently all agree that since the “soil slip was due to an unknown ancient landslide” that was unknown to the contractor, under the contract the city is responsible for the costs because Section 3.10.2 of the contract makes the owner responsible for changed/unknown site conditions. See the City Councils Feb. 23, 2021 meeting agenda.

By reducing the question to whether the existence of an “ancient landslide” was known by the contractor rather misses the mark.

How responsibility is determined under section 3.10.2 of the contract involves a broader question — whether subsurface conditions that cause landslides were actually known, were ordinarily known to exist, could have been reasonably discovered, or are generally recognized as inherent in the area. And the facts show that the subsurface conditions were known to be at high risk of landslides. Perhaps the City Council members will reconsider agreeing to pay for the landslides in light of this violation of the contract. $1.13 million is a lot of money.

But this is just the beginning. The potential costs in terms of both money to manage unstable land and harms to the Morro Bay National Estuary could continue during the life of the project. Sediment runoff from the excavations, landslides, and slips is directed by project design into the stream that flows within about a mile into the Estuary.

It is my opinion that the City Council members who made secret deals and wasted tens of millions of dollars in unnecessary pipelines to put a sewer plant on this site in the Estuary watershed without a use permit and without a grading permit are and will forever be accountable for these costs and harms.

Morro Bay should not have paid for the landslides.