Canyon Crest residents ask Arroyo Grande to allow sewer hookup, citing nitrate violations and lower long-term costs

Canyon Crest homeowners told the Arroyo Grande City Council on June 23 that they want the city’s help connecting their 54-home subdivision to the city sanitation system after a 2022 Regional Water Board notice of violation flagged elevated nitrate concentrations linked to aging septic infrastructure.

The council heard a staff pre-application presentation from the acting community development director, who said the HOA’s preferred option — connecting effluent into city sewer treatment at the sanitation district plant in Oceano — has an estimated startup cost of $700,000 to $1 million, versus $1.5 million to $2 million to build an on-site treatment facility. Staff said annual operating costs would likely be $50,000–$60,000 for the consolidation option compared with $83,000–$180,000 to run a new on-site plant.

David Crater, a Canyon Crest resident, told the council septic systems are increasingly ill-suited to the neighborhood’s conditions and urged the city to allow connection to the broader system so communities can “be served by a larger communal base which has more of an infrastructure resource.”

Na Shajian, a member of the project team, said the estimated added flow is small relative to the sanitation district: “less than 1% of the city's average daily flow to the sanitation district,” she said, and argued that moving liquid effluent off leach fields would help protect groundwater. Civil engineer Rob Miller estimated the technical studies the council would require would likely cost the applicant between about $20,000 and $50,000.

Staff said the consolidation would require the HOA to install roughly 1,000 linear feet of sewer pipe from the neighborhood to a city manhole near the intersection of Wasna Road and Perwood Avenue, annexation of the track into the sanitation district service area (not annexation into the city), and an agreement on connection and capacity fees. The sanitation district has confirmed capacity to treat the projected volume, staff said, but council members asked for further analysis of how the added load would affect long-term planning under the city’s general plan and whether outside users should pay a buy-in to reflect equity already paid by current ratepayers.

Council members expressed sympathy for the homeowners and support for further study while stressing protections for city ratepayers. Council member Guthrie said any outside hookup must “ensure that our ratepayers are made whole” and suggested the city consider a buy-in fee that reflects existing system equity. Mayor Prom Marvelia and others asked staff to negotiate indemnities and ensure that all legal and fiscal costs be borne by the applicant if the council gives further support.

Next steps: staff said the applicant will undertake additional technical studies if the council gives conceptual support; staff would then negotiate the annexation terms with the sanitation district and return with proposed agreement terms before the HOA applies to the Local Agency Formation Commission (LAFCO).