"There's no doubt in my mind that human sewage is the main source of their problem," said Stanford University environmental engineering professor Alexandria Boehm, who has researched Avalon's water quality for nearly a decade. "And it's really rare to have a scientist say that."
The city in recent years has spent millions trying to fix the problem, but those efforts too have drawn scrutiny.
The State Water Board last year questioned Avalon's work on a grant it received to conduct studies and make sewer repairs to clean up its beach water. The state agency was about to terminate the $1.3-million agreement last year when the city hired a firm to certify that the work had been completed.
In February, water regulators cited the city for letting tens of thousands of gallons of sewage reach the ocean in six spills since 2005. They also pointed out poor record-keeping and management lapses at its sewer plant.
Those practices have since been corrected, city officials said, and United Water, the firm that had managed the city's sewer system for two decades, has been replaced.
On a summer afternoon, it's hard to find a patch of sand on Avalon's main beach not packed with visitors, who splash in the calm, clear surf around the Green Pleasure Pier and sunbathe in view of the picturesque Casino building.
The often-present health warning signs don't deter Travis Peterson, 35, who swims at the beach on family vacations from Santa Ana and lets his 6-year-old daughter go underwater as long as she showers off afterward.
As a boy, Peterson used to get ear infections after swimming in Avalon, but these days, he said, "I just don't put my head underwater — I try, at least."
The Santa Catalina Island Co., which owns 10% of the island, has spent $12 million in the last few years revamping hotels and adding attractions, including a zipline tour and the mayor's underwater tour, in an attempt to bring back tourists.
But business leaders know the polluted water remains a strike against Avalon.
"Would we like to see the bay cleaned up? Absolutely," said Griffin, the Chamber head. "It's at the top of our list."
Critics are encouraged to see Avalon making its water pollution a higher priority. But they say the problem continues to be played down and gets little scrutiny by health officials because it's far from the mainland.
"It's a small city with a big problem," said Mark Gold, president of the environmental group Heal the Bay. "They're worried that if the word gets out on pollution in a big way, it might impact their tourism economy."
That was the experience of Angie Bera, a former Santa Monica Baykeeper biologist who moved to Avalon in 2006 to start a sailboat charter business and store. She started working for the city on its water quality problem, drafting talking points for the press and writing grants for funds to fix the city's sewer system.
At first she was optimistic, but after a few years, she began to feel the city was not acting urgently enough.
"You can't put off fixing something that is the whole reason you're a tourist destination," she said. "I moved to the island because of the water."
Last summer Bera, who has since moved off the island, wrote an article in the Catalina Islander saying that Heal the Bay's ranking of Avalon Harbor as the dirtiest beach in the state a "reality check." The reaction was swift.
Some on the island said they would boycott Bera's business. The Chamber president canceled his subscription and denounced the negative publicity in a newsletter to island businesses.
"I'm not suggesting that we attempt to cover things up or ignore problems," Griffin wrote. "But we don't have to go out of our way to publicize them."
Civic and business leaders are putting their hopes in the new $5.1-million sewer project. But some, including the mayor and Chamber president, still question the accuracy of the standardized health tests and continue to blame the birds.
And city officials admit the sewer project isn't likely to be a silver bullet.
"I can't tell you 100% that when we do all this, that there's never going to be a failing grade again," Wagner said. "But we have to do that before I can say we've done all we can."
Even if the entire system were replaced, sewage has accumulated below the town for so long that researchers don't believe the beach would show improvement for several years.