City Council approves business deferral program for wastewater charges
By Mike Chaldu · Thu Oct 15 2026
Authorization of wastewater plant projects second phase also granted at Tuesday's meeting
ATASCADERO — Wastewater treatment and payment of such was the main focus of the Atascadero City Council's meeting on Tuesday, Oct. 13. In the meeting, the council approved a new Wastewater Capacity Charge Deferral Program for new businesses, and then authorized moving forward with the Phase 2 Preliminary Design for the city's upcoming wastewater plant project.
The item involving the Wastewater Capacity Charge Deferral Program, the first of two management reports on the evening. City Manager Jim Lewis said the proposed program continued the city's effort to encourage business in Atascadero.
"The item before you, as you'll hear, is our continued efforts to keep the energy and business attraction downtown," he said. "Many restaurants and venues downtown require sewer connections and the council has been very concerned about making sure we're prudent in pre-funding the wastewater plant, and make sure the fee, while they are where they need to be, aren't so cost-prohibitive as to stifle restaurants and entertainment."
With that, he turned it over to Atascadero Economic Development Director Lorelei Capell to present the item.
Capell described the program as "a targeted financial tool" to support commercial investment
The program is meant to help new businesses having to pay a wastewater capacity fee (also referred to by council as a "connection fee" for sewer service) defer up to 75% of the fee to pay back over the next three years, with interest.
As described in the city report, wastewater capacity charges are one-time charges paid by new or expanding development to provide capacity in the city's wastewater collection and treatment system. The city is undertaking substantial wastewater infrastructure improvements, including modernization of the wastewater treatment plant to meet state permit requirements and accommodate future growth. Improvements to the treatment plant alone are anticipated to exceed $100 million and represent the largest capital investment in the city's history.
Capell said the programs would be capped at $300,000 in deferred payments for the first year, with the program to be reviewed after one year.
The councilmembers, in general, expressed support for the program, although some had questions.
Mayor Pro Tem Mark Dariz asked if there might be a singular cap on how much one business could defer, and whether the overall $300,000 cap could be increased in later years.
"The $300,000 was our first take and we can revisit it after the year is up," Capel answered. "But with loans stretching out to three years want to make sure we don’t deplete the fund."
Councilmember Heather Newsom asked if the council might be able to put terminology in the program that limits it to granting one loan per property owner, however that met with opposition with a couple of her colleagues.
"I don’t mind if one person gets two or three loans if they’re building something the city wants," Councilmember Seth Peek said. "Limiting it to one per owner seems sticky."
Mayor Charles Bourbeau agreed with Peek, saying, "If an owner has three restaurants he wants to get running right away, we should let him."
Another factor was something that was brought up after Atascadero resident Geoff Auslin mentioned Chick-fil-A as an example of a business outside downtown who could possibly join the program (though did not advocate for it). That had the council emphasizing they wanted to limit the program to local businesses.
"I think we shouldn’t do it with large corporate entities," Councilmember Susan Funk said. "If that can be handled on informal basis, so as to not delay, we should do that. It's important to get this moving."
Lewis assured council they could monitor the types of businesses they let into the program without writing it into policy.
Bourbeau moved to approve the program, with Funk seconding, and the item passes 5-0.
The following item had council being asked to move forward with Phase 2 of the Wastewater Treatment Plant Project Updates and Phase 2 Preliminary Design Authorization.
The item consisted of the following:
1. Review Phase 1 (Process Selection) Alternatives Analysis and direct staff to proceed with Moving Bed Biofilm Reactor (MBBR) as the selected secondary treatment process for the Atascadero Water Reclamation Facility Replacement Project (City Proj. No. C2020W03).
2. Authorize Black & Veatch to proceed with Phase 2, Preliminary Design Report and Construction Cost Estimate, in the amount not to exceed $759,696 for the Atascadero Water Reclamation Facility Replacement Project .
3. Authorize the City Manager to execute a contract amendment with Water Systems Consulting (WSC) in the amount of$322,310 to design and prepare plans, specifications, and cost estimates for Interim Improvements for the Wastewater Reclamation Facility.
Deputy Director of Public Works Ryan Hayes presented the item laying out the details of the upcoming process and telling of taking trips to treatment plants in Denver, Colorado, and Cheyenne, Wyoming, to see how their plants were run. He was joined at the meeting (by remote) by Kaitie Zusy of Black & Veatch, the contractors for the plant project.
The council voted 5-0 to approve the item.
The City Council will next meet on Tuesday, Oct. 27, at 6 p.m.