Sanitary District Frequently Asked Questions

What has the LAFCo (Local Agency Formation Commission) Board approved and how will it impact me?

The San Mateo LAFCo Board has granted unanimous approval for the establishment of the East Palo Alto Sanitary District (District) as a subsidiary district of the City of East Palo Alto. Once finalized, the East Palo Alto City Council will serve as the designated Board of Directors for the East Palo Alto Sanitary District. Further information on this decision can be referenced in the LAFCo Resolution. The details of this action can be found in the LAFCo Resolution (attached below): https://www.smcgov.org/media/146746/download?inline=. 

Why does the City support the LAFCo board's decision to make the East Palo Alto Sanitary District a subsidiary to the City?

The City of East Palo Alto undertook the process of incorporation to assert greater control over its future, particularly concerning land use rights. The City supports the LAFCo Board’s decision to grant the application for incorporation because it removes a barrier to the City’s land use decisions. Every new development project, including much-needed affordable housing projects, requires a will-serve letter from the District to commence construction. However, because the City has seen substantial delay and inefficiency in the issuance of these letters, the City has placed its full support behind the LAFCo Board’s decision to remove this barrier.

The City’s decision to support the application for incorporation was not taken lightly. Long before the LAFCo Board’s decision, the City worked with the District to implement the vision of its future chosen by its citizens through their elected officials. As detailed in the staff report presented to the City Council on April 6, 2021 (accessible at https://eastpaloalto.iqm2.com/Citizens/FileOpen.aspx?Type=30&ID=3180), the City engaged in extensive collaboration with the District on development applications, including the 2014 General Plan Update and zoning updates that outlined the City's development plan. Notably, during that period, the District opted not to express concerns with the City's plan when the General Plan Update was approved in 2016. The District was given an opportunity to comment on the City’s General Plan Update similar to every other interested party. However, the District choose not to speak up until 5 years later, long after the process concluded. The General Plan Update was conducted over the course of several public meetings, and the City is aware of no evidence in the administrative record that the District ever having provided any comments or expressing any concern.

Despite the City’s efforts, it has seen a lack of progress and the barrier to the City’s land use entitlement process remains. The residents of East Palo Alto have elected their Council members to advocate for their preferences regarding land use in the City. The decision to incorporate the District as a subsidiary to the City is perceived as the most effective means of achieving alignment with the community's wishes in this regard. Now, the LAFCo Board’s unanimous decision signals its support of the City’s decision to move forward with incorporation.

Will my bill increase to $1,200 when the City takes over?

No. As part of the City's submission, the City's engineering support (Freyer & Laureta, Inc.) proposed in the report that the Annual Sewer Charge be set at $690 per Equivalent Dwelling Unit (EDU) for Fiscal Year 2022/23. This new rate is exactly what the District originally recommendded to set as evidenced by the District's own Rate Study. After that, the rate would increase by 5 percent per year based on current economic conditions and additional annual capital needs. These increases will allow the City  to address financially the extensive deficiencies identified in District's Closed Circuit Television footage caused by years of deferred maintenance.

Will developers be required to pay their fair share when the City takes over?

Yes. The District and the City agree that developers must pay their fair share.  The City and the District are both required by law  (“Mitigation Fee Act”) to ensure these fees bear a reasonable relationship to the costs of providing the service. Stated another way, existing law (Mitigation Fee Act) prohibits anyone—the City or the District—from charging connection fees that exceed the cost of providing the service without going to the voters.

At the same time, if the District ultimately becomes a subsidiary of the City, the City would be charged with finding a solution to the District’s decision to defer years of maintenance. Mere maintenance repairs are likely no longer an option; real and substantial repairs would likely be required. Although much has been made of connections fees, these fees only deal with expansion of the existing system. In contrast, the current rates paid by existing ratepayers do not take into account the needed repairs to the existing system. That’s because the District has admitted it has not yet adopted a comprehensive Capital Improvement Plan (CIP) that takes into account the current condition of the system, which only recently came to light. A CIP would fix existing infrastructure deficiencies caused by years of deferred maintenance. Regardless of which local government entity has control over the current system—the City or the District—the existing system will have to be repaired and/or maintained which must be financed by some combination of public financing, existing ratepayers, and new developments.

The City will follow the Mitigation Fee Act and charge a fair fee that will recover all costs to the system caused by the new development, and adopt a CIP to address any deferred maintenance. The public, including ratepayers, will have opportunities to provide feedback throughout these processes.