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Arroyo Grande faces a water crisis, Paulding faces a conflict

May 12, 2026

SLO County Supervisor Jimmy Paulding

OPINION by CISSIE PACE

San Luis Obispo County Supervisor Jimmy Paulding says he opposes the lawsuits. So why has he said so little about them publicly?

South County faces two major legal threats that could reshape its future. One targets Lopez Dam operations and the region’s drinking water supply. The other continues the long-running legal assault on Oceano Dunes and the economy surrounding it.

Together, the stakes are enormous.

Visit SLO CAL’s Oceano Dunes stewardship study found that visitors from outside SLO County generate $511.2 million annually in economic impact tied to the dunes. Oceano Dunes State Vehicle Recreation Area attracts more than 3 million visits each year and supports hotels, restaurants, gas stations, RV businesses, rental companies, and small employers throughout South County.

At the same time, the Lopez Lake litigation threatens the water supply relied upon by communities across the Five Cities area. Yet most residents know almost nothing about either case.

That silence matters because Jimmy Paulding is not just San Luis Obispo County’s District 4 supervisor. His wife and campaign manager, Kendra Paulding, runs EcoSLO, a local environmental organization publicly aligned with Los Padres ForestWatch, the lead plaintiff in the Lopez Lake lawsuit.

ForestWatch identifies EcoSLO as a trusted partner, and EcoSLO promotes ForestWatch through its coalition platform, “The Hub.”

Many of Paulding’s political supporters also openly support the lawsuits.

In Oct. 2025, Charles Varni, one of Paulding’s longest and most vocal political allies, publicly described himself as “a long-term member” of ForestWatch and stated that he was “currently working with” the organization on the Lopez Lake issue.

None of this proves corruption. But it does create an obvious political conflict.

Sounding the alarm on these lawsuits would mean confronting organizations and activists closely tied to his own political coalition, including is own wife and close friend.

And so far, Paulding has largely chosen silence.

To be fair, Paulding has publicly opposed the Lopez Lake lawsuit. He voted to authorize the county’s appeal and has described the litigation as “environmentalism going too far.” But occasional comments in news stories are not the same thing as leading a public response.

Leadership means informing people before the consequences arrive. Right now, that is not happening.

In Aug. 2024, four environmental groups sued San Luis Obispo County in federal court, alleging that Lopez Dam operations violate the Endangered Species Act by harming steelhead trout in Arroyo Grande Creek. Arroyo Grande alone has already absorbed more than $1.43 million in unbudgeted fiscal year 2024-2025 costs tied to the litigation, requiring an emergency interfund loan from its sales tax fund.

The legal fees are only part of the story.

The plaintiffs are seeking release requirements totaling roughly 5,800 acre-feet of additional water annually from Lopez Reservoir. County modeling reportedly shows that if the proposed release schedule had been in place during the 2020 to 2023 drought, Lopez Lake would have reached “dead pool,” meaning no water deliveries for more than a year to communities dependent on the reservoir.

Arroyo Grande receives approximately 61% of its drinking water from Lopez Lake. There is no replacement supply available at anything close to the current cost structure. A water rate study is now underway, and significant increases appear increasingly likely.

Meanwhile, ongoing federal rulings and endangered species litigation continue to place the future of Oceano Dunes under pressure. The uncertainty surrounding long-term OHV access threatens one of South County’s largest economic engines.

Taken together, these lawsuits represent one of the most serious simultaneous threats to South County’s water security and economic stability in decades. And yet there has been no sustained public warning campaign from the supervisor whose district stands to absorb the impact.

No town halls focused on the Lopez litigation.

No major public education effort explaining possible water rate consequences.

No sustained attempt to prepare residents or small businesses for what may be coming.

That is the issue.

This is not fundamentally a debate about environmental policy. Reasonable people can disagree about endangered species law, water releases, or off-highway vehicle management. The issue is whether residents deserve to know when litigation may materially affect their water bills, local economy, and financial future.

A family in Arroyo Grande paying its water bill every month likely has no idea that ongoing federal litigation could dramatically alter the cost and reliability of its water supply. A small business owner in Oceano likely has no idea that continuing legal pressure on Oceano Dunes threatens an economic ecosystem generating more than half a billion dollars annually in regional activity.

Those consequences are real whether people support the lawsuits or oppose them.

Jimmy Paulding says he opposes these lawsuits. Fair enough. But saying you oppose them is not the same thing as sounding the alarm for the people he represents.

District 4 residents deserve more than acknowledgment after the fact. They deserves transparency, accountability, and a supervisor willing to fully inform the public even when the politics are uncomfortable for the people closest to him.

 


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I miss the days of sub $100 water bills. Now I pay $220 before I use a single drop of water because of a terrible carrot farmer suing every single person in the area to take their water rights away so they can grow more carrots in the desert.


2

If you want another HUGE issue the public is not aware of read this statement I made to Grover Beach City Council last night:


May 11, 2026


Dear AG and GB City Council and Oceano Services District electeds,


In 2017 when the Coastal Commission (CCC) granted the South County Sanitation District (SSLOCSD) a development permit for the redundancy project they required a number of Special Conditions focused on planning for potential relocation of the SSLOCSD to a new operational site safe from flooding and sea level rise by 2047. The first required ten year planning progress report by the SSLOCSD to the CCC is due one year from today.


At last month’s Ramona Park presentation by the County Water Agency on future possible desalination two important facts were shared. First, State water policy requires that wastewater be recycled before desalination would be approved. Second, County representatives clearly stated that the possible relocation of the SSLOCSD was the sole responsibility of AG, GB, and Oceano, the three member agencies of the SSLOCSD


The re-location of the SSLOCSD will be the largest public works project in the history of SLO County with an estimated cost of at least $300,000,000. At current discharge rates of an average 2.9 million gallons per day, full tertiary treatment would provide an approximate annual yield of 2,200 acre feet of “new” water for municipal distribution, agricultural use, or recharge to the groundwater basin. 


I strongly support this project as the right thing at the right time. It will provide cost effective and sustainable longterm water resiliency for the 5 Cities and the groundwater basin. Most citizens of AG, GB, and Oceano are ignorant of this project and it is imperative that public engagement and education be robust and transparent, especially if their enthusiastic support is valued.


The decision to move forward with the relocation, or not, is time sensitive. A project of this magnitude and complexity would, at best, take 15 years from start to finish. Very important, the State currently has billions of unallocated grant dollars for coastal resiliency projects. We should be first in line to apply for that funding. We need the CCC to make its decision in a timely manner so that the issues of future water availability, sustainability, and wastewater recycling can be addressed and solved.


Sincerely,


Charles Varni

Oceano


-15

Sounds like a scam, just like Morro Bay’s sewage treatment plant relocated to the uphill side of town.


5

The information on economic impact of SVRA tourists is invalid.


The 2007 Economic Impact of Oceano Dunes SVRA and the 2017 Economic Impact Analysis Report for the Oceano Dunes District were paid for by State Parks. The 2007 study concluded the SVRA generated a total of $70 million from spending by users. The 2017 study raised that to $158 million. The 2019 study by Visit SLOCAL estimated $500 million.


In fact, all of these totals are hugely exaggerated, essentially invalid, and simply serve a propaganda function for the public and private SVRA lobby. Unfortunately, these fake numbers have been widely promoted by Chambers of Commerce, elected officials, the motor sports vehicle industry, and a great many people believe them to be true. Detailed critical analyses of these studies by professional experts have rendered them largely irrelevant from a factual basis.


The following are the most significant errors:


1. Exaggerated number of motor sports touristsFirst of all, each of these studies relies on the number of tourists to local State Parks calculated by State Parks as well as study questionnaires. In addition to data from paying tourists (paid for camp site; paid for day use), there are estimated thousands of “free entry” tourists (beach walkers, surfers, families, bike riders, etc). These various numbers are then doubled by State Parks to account for multiple persons in cars or estimated “uncounted” free tourists. Additionally, and inexplicably, all of these tourists are then attributed to the SVRA, and it is then claimed that literally millions of tourists visit the SVRA. Simply not true.


2. Biased questionnaires and research methodsRespondents to questionnaires are typically biased with an over-representation of motor sports tourists. For example, the 2007 research questionnaires were distributed within the SVRA, and respondents were told that the results of the research would be used to determine future operations. They are also asked to estimate the amount of money that they spent during their stay. Motor sports tourists are well aware of the threats to shrink or close the SVRA and thus are likely to exaggerate the amount of money they spend in order to boost the economic impact and importance of their recreation. In both the 2007 and 2017 studies, respondents were asked this question: “If Oceano Dunes were not in existence (no OHV riding, no camping, no trails, etc.) when you were considering a visit to the area, would you still have visited San Luis Obispo County?” The “correct” answer for an off-roader would, of course, be “no.”


3. Exaggerated income from SVRA tourists It is reasonable to conclude that the amount of money spent by actual SVRA tourists is greatly exaggerated. In fact, the 2021 Visit SOCAL Oceano Dunes Stewardship Study opens the report’s Executive Summary with the line “ The Oceano Dunes SVRA is the second most visited destination in San Luis Obispo County with 3.4 million annual visitors in 2019.” That would be an average of 9,315 persons per day—all in the SVRA. This is simply not true and challenges the integrity of the entire economic aspect of the report. It is another example of manipulating data to create an exaggerated impression of the SVRA’s “positive impact.” The fact that this 3.4 million number is a hugely exaggerated estimate of EVERY visitor to every State Park or beach in South County. 


Finally, and somewhat shocking, the researchers also provided a stunning fact. They actually separated the actual motor sports tourists who ONLY visited the SVRA, and calculated that they contributed $50 million of the total $511 million. So, while the opening line of the report states the SVRA generated $511 million, a 10% fraction of that ($50 million) is provided by visitors who only visit the Oceano SVRA. Of course, motor sports businesses, supporters, and politicians always use the $500 million number. In fact, a recent candidate for County Supervisor bumped it up to $500 billion–about $23,000 spent by every tourist!


4. Opportunity costsA question that has never been asked in any surveys is, “If there were no longer vehicles on the beach or dunes in Oceano, would that increase or decrease your likelihood of visiting?” Since the great majority of individuals and families prefer going to beaches without vehicles, motorcycles, quads, and dune buggies zipping around, we would expect a very large proportion to respond that it would increase their likelihood of visiting—as happened to Pismo Beach when they banned vehicles.

This is a clear example of what economists call opportunity costs. How much money are we losing by doing this instead of that? How much money is a farmer losing, if any, by growing broccoli instead of cabbage? How much tourism money is a community losing by having motor vehicles on its beach compared to having none? Ask Pismo Beach.


-15

Go to the History section of the SLO Surfirder’s Oceano Vehicle Free Beach Campaign to see links to the original reports and the professional critical reviews of them https://slo.surfrider.org/oceano-vehicle-free-beach-history


-5

All part of the Grand Plan to keep water scarce and thus limit development and exercise control. Both things are high on the administrative state’s list.

Keeping property prices high through scarcity allows maximum tax revenue while also requiring government provide the fewest services.

So called environmental groups are now basically NGOs that help keep this status quo while enriching themselves. All part of a long term strategy to promote an elitist vision for California moving forward.


19