MONTEREY – Wastewater officials on the Monterey Peninsula will return on July 6 to try to cement a sewer rate hike that failed earlier this week when a number of votes needed to pass the increase failed.
While the increase was approved on June 7 by the board of directors of Monterey One Water, the wastewater treatment provider for the Monterey Peninsula, the orders establishing the increase require a “second reading”, which took held Monday.
Second readings are simply a way to ensure that the earlier decision – the “first reading” – still enjoys the support of the majority of the board and leaves time for additional public comment or new information that does not. may not have been available at the time of first reading.
Again, he passed a 6-4 vote, but Monterey One’s attorney Rob Wellington said such a rate hike requires two-thirds approval due to a joint power authority whose Monterey One is one. The 6-4 vote was just short of that two-thirds requirement.
In the end, the board agreed to a compromise that there will be a more moderate increase for the first three years and then larger increases for the last two years of the five-year plan. But this compromise will trigger another round of procedure which will then have to come back for a first and a second reading.
In all respects, the price increase initially proposed was substantial. The increases would be phased out by 2025. For example, residential apartments and condos will rise from $ 24.55 per unit currently to $ 54.45 per unit in five years, an increase of 122%.
The more moderate increase, including exact numbers, will be presented to the board at a July 6 meeting scheduled for noon. If it passes then, it will be considered as the first reading and will then have to come back to the board at a subsequent meeting for the passage of the second reading. It will also need to be approved by a two-thirds vote.
The tariff increase is needed to meet a number of growing costs, the lion’s share of which is needed for the costs of maintaining and renewing an infrastructure system that is now 30 years old. Monterey One Water is also facing increased expenses due to general inflation, such as the cost of chemicals and other supplies used in wastewater treatment, as well as factors such as increased pension obligations. public employees. Health care, for example, grew 10%, about five times the current rate of inflation.
Monterey One’s board and staff have avoided blaming past boards for the need to catch up in such a dramatic way, but in 14 of the past 31 years there has been no rate increase. From fiscal year 1990-91 to 2016-17, rates increased only 29 cents per year, according to staff reports, far less than what is needed to replace aging equipment.
CEO Paul Sciuto reminded board members and the public, once again, that the increase will only go to wastewater projects and not Pure Water Monterey or any other recycling project as they are in totally different fund silos.
Director Scott Donaldson suggested a more moderate increase associated with state and federal subsidies, and opposes the current pricing structure. But there are issues with the subsidy scenario, first the subsidies are never a safe bet and if they do not go through the wastewater district will not have enough revenue to meet critical infrastructure needs. .
“My concern is that we are making decisions that are not based on facts or data but in the hope of securing state or federal funding,” said Tyller Williamson, a director representing the city. of Monterey.
Sciuto noted that in 2018 there had been a grant from the Federal Bureau of Reclamation totaling $ 19.6 million and they hadn’t seen it yet. “We’ll go after every penny we can, but there’s no guarantee.”
Director John Phillips, representing Monterey County, said the timing of increased conflict with businesses, especially the hospitality industry, has just emerged from last year’s lockdown. His idea was to raise rates to a more modest level for three years while the district waits to see if it receives viable grants.
“The 122% is not selling well,” he said.
Director Jason Campbell stressed to the rest of the board that if the rate hike is not passed, then they should start thinking about where they should start cutting the budget. He also noted that the percentage increase is significant, but that the rates were initially low.
“After the increase, we will still have relatively low rates compared to other agencies,” he said.
Director Linda Grier, representing the Boronda County Sanitation District, said there was never a good time for a raise, but “kicking the box” is what got the district in the situation it is currently in.
“If we wait for a catastrophic failure or a spill, it will be too late to find the funding,” she said.
The board, due to the lack of a two-thirds vote, kicked the box, at least until July 6.