Palo Alto Daily Post Apr 21, 2022

EMILY MIBACH  Palo Alto Daily Post

The East Palo Alto Sanitary District faced sharp criticism yesterday during a county agency’s review of a report that analyzed whether the district ought to be absorbed by the city or a neighboring sewer district.

One commissioner even likened the district to a condo complex in south Florida that collapsed in June, leading to the deaths of 98 people.

For the past few years, developers and city officials have complained that despite projects being approved by East Palo Alto after its building moratorium expired in 2018, issues with the sewer district have halted developments. So, in 2020 developers and residents asked the San Mateo County Local Agency Formation Commission, or LAFCO, to commission a review on the sewer district and look at whether it ought to be dissolved.

The review says the sanitary district has created a “de facto” ban on development, despite not being the board in charge of land-use decisions.

Fails to follow common practices

Yesterday, LAFCO Commissioner Ann Draper said she is concerned that the consultants’ report says the sanitary district doesn’t appear to do what are common practices among other sewer districts, such as prioritizing projects through its Capital Improvement Plan, which also sets forth the budget. Instead, the district spends $500,000 to $1 million a year in repairs to its aging pipes.

The district’s representatives have long said they aim to keep the district’s sewer rates as low as possible for residents and that it is illegal to have current residents pay for the rate increases for new development. But Draper said there appears to be $23 million in deferred maintenance to current district residents.

The district has estimated it needs some $40 million in upgrades to serve any of the new planned development.

“I don’t see this as a well-run district. I have been thinking of that apartment complex in south Florida where the managing partners were so concerned about rates, they didn’t do anything, and then the complex collapsed,” Draper said.

‘Artificially low rates’

San Mateo County Supervisor and LAFCO Commissioner Don Horsley said the district is keeping rates “artificially low.” Commissioner Harvey Rarback said it appears the sewer district “has been an impediment to the city … progressing.”

City officials pointed out that the district not approving sewer hookups to new development is stopping new tax revenue from flowing into the city’s coffers.

“East Palo Alto is on the verge of being able to finally start taking care of itself in a financial stance,” Assistant City Manager Patrick Heisinger said, adding that the city’s current budget deficit could have been avoided if the new projects had been allowed to be built.

Sewer district board member Dennis Scherzer advocated for LAFCO to keep the status quo, pointing out that the district has been around longer than the city and works well currently. The commission voted 6-1 to send the report to its next stage and have a hearing on June 15 regarding the final report.