SACRAMENTO – State Senator John Laird (D-Santa Cruz) announced the introduction of Senate Bill 1081 – sponsored by the City of San Juan Bautista – to give small communities more flexibility when facing state water quality fines, allowing them to invest in infrastructure solutions instead of paying penalties that strain local budgets.

“These are residents who are trying to do the right thing,” said Laird. “When very small communities are making good-faith efforts to fix outdated infrastructure and improve water quality, we should allow them to spend their limited dollars on local solutions.”

Under California law, the State Water Resources Control Board and the state’s nine regional water boards enforce water quality standards and issue fines known as Mandatory Minimum Penalties (MMPs) for certain wastewater violations. In some cases, publicly owned wastewater agencies serving small, financially struggling communities can use those penalty dollars to complete a water quality improvement project instead of paying the fine directly.

However, the current law limits how “small community” hardship is defined. SB 1081 updates that definition to make clear that communities serving 3,000 residents or fewer qualify as “a publicly owned treatment works serving a small community” under the Water Code. This change will allow more very small municipalities, including San Juan Bautista, to invest penalty funds into wastewater compliance projects that directly improve water quality and public health.

“This bill is about fairness and common sense for small cities like ours,” said San Juan Bautista Mayor Leslie Jordan. “SB 1081 essentially gives us the flexibility to use penalty funds in our small community – allowing us to invest our funds directly into a wastewater treatment compliance project that improves water quality for our residents and the environment. That’s a smarter use of limited public funds, and it helps us reach the shared goal of clean, safe water more quickly.”

SB 1081 does not eliminate penalties. Instead, it ensures that qualifying small communities can redirect equivalent funds toward local wastewater compliance projects that are often a resolution to the very violations that led to the fine:

• Improve water quality;
• Upgrade aging infrastructure;
• Bring systems into compliance faster; and/or

• Reduce long-term environmental impacts.

San Juan Bautista, which maintains a population of fewer than 3,000 residents, currently faces significant MMPs totaling $258,000 accrued between September 9, 2022, and June 30, 2025. Despite actively working to improve its system – including decommissioning its old treatment plant and building infrastructure to send wastewater to the City of Hollister for advanced treatment and recycling – San Juan Bautista continues to accrue penalties and could potentially be subject to more in the future. SB 1081 will enable these penalties to be directly applied to necessary infrastructure improvements.

“Our goal is clean water,” Laird reiterated. “This bill helps small communities achieve that goal in a practical and responsible way.”