BY ELAINE GOODMAN
Daily Post Correspondent
The city of East Palo Alto is moving forward with its takeover of the East Palo Alto Sanitary District, even as the district is battling in court to try to block the takeover.
City Council will discuss its next steps in the takeover process Tuesday (July 16). And a San Mateo County body called the Local Agency Formation Commission, or LAFCo, is slated to give final approval to the takeover on Wednesday (July 17), which would take effect on Aug. 1.
The city proposed a takeover of the sanitary district in late 2022, complaining that the district was blocking new development in East Palo Alto. Approved projects haven’t been able to proceed because the district hasn’t agreed to provide sewer service to the new development, the city said in its application to LAFCo.
LAFCo gave initial approval to the city’s takeover request in November. The sanitary district asked LAFCo to reconsider, but that request was denied in February.
In a lawsuit filed in March, the sanitary district says LAFCo and the city didn’t treat it fairly. The district is asking the court to overturn LAFCo’s decision.
The district said it serves a working class community of mainly black and Hispanic residents in East Palo Alto and parts of Menlo Park. The area’s major tech hubs are making East Palo Alto attractive to developers, the lawsuit said, but the sewer system wasn’t designed to accommodate large-scale development.
“At the heart of this matter is one key question: Should disadvantaged ratepayers be forced to bear the cost of new development?” the district said in its lawsuit, predicting large rate hikes that would hurt customers.
In the lawsuit, the district says major development proposals have been delayed due to other factors, including “the city’s long-standing water allocation problem.”
In separate responses filed with the court, the city and LAFCo denied the district’s allegations.
A hearing in the case is scheduled for Aug. 16.
The parties agreed that a judge from outside of San Mateo County should oversee the case. It was assigned to Roger Picquet, a retired San Luis Obispo County Superior Court judge.
The sanitary district asked Picquet for an injunction to halt the takeover until he reaches a decision on the lawsuit. The judge declined to do so. The district is now appealing that decision.
How it will work
The East Palo Alto Sanitary District is currently an independent special district. Voters directly elect the sanitary district’s five board members for the specific purpose of running the district.
If the city takes over the sanitary district, it will become a subsidiary of the city government and will be overseen by the East Palo Alto City Council.
The district’s boundaries and services won’t change. Sanitary district money will be kept separate from other city funds.
The city plans to hire the West Bay Sanitary District to run the East Palo Alto Sanitary District. West Bay Sanitary already provides sewer service to parts of East Palo Alto, as well as to Menlo Park, Atherton, Portola Valley, Woodside and some unincorporated areas.
Council will vote Tuesday (July 16) on giving the city manager permission to negotiate a contract with West Bay Sanitary for up to $1.7 million a year.
In its lawsuit, the sanitary district noted that if it becomes a city subsidiary, customers in Menlo Park won’t be able to vote for district board members, who will be members of the East Palo Alto City Council.
But the city plans to form a new advisory committee on sanitary district matters that will include at least one member from the district’s Menlo Park territory. As it’s now proposed, that member would be appointed by the Menlo Park City Council. The East Palo Alto council would appoint the other four members and an alternate.
Protests received
Sanitary district customers had a chance to protest the takeover by submitting a protest form during a 100-day period that started Feb. 12.
The takeover would have been stopped if more than half of registered voters protested. If more than 25% but less than half protested, the takeover would have been decided at the ballot box. But only 10% of registered voters in the district submitted protests.
The protest percentage was also calculated based on land ownership. Fourteen percent of landowners submitted protests, still not enough to send the issue to the ballot. The protests were associated with 8% of assessed land value in the district.
The LAFCo board is scheduled to vote Wednesday on certifying the protest results and officially establishing the East Palo Alto Sanitary District as a city subsidiary.