Salinas pauses sewer rate rollout after staff find errors; council told public hearing will repeat

City staff told the Salinas City Council on June 17 that the city would restart the sanitary sewer rate process after identifying inaccuracies in the rate study, rate schedule and the public notices that had already been mailed. The revised study and updated notices are scheduled to return to the council for action on July 1.

The council had initiated a sewer rate-increase process on April 22. At the June 17 meeting Chris (staff member) said staff discovered differences between the categories and calculations the city used and the way Monterey One Water bills some customers based on measured flows. "We identified some inaccuracies or inconsistencies between the categories that M1W had established and the categories that we had on our rate schedule," Chris said. He told council that correcting those mismatches requires updating the rate study, reissuing notices and starting the protest period again.

City staff emphasized there was no immediate action required at the June 17 hearing because public notices already sent set an expectation that the hearing would occur. The council and staff allowed the hearing to proceed as an informational session so residents could comment.

Residents who spoke called for more targeted outreach and for protections for low-income and senior households. Several commenters said Monterey One Water bills at a flat rate that some residents consider inequitable; others pressed the city to pursue a tiered or usage-based structure so small households would not face the same increases as larger households. Council members asked staff to design outreach and to consider rate-assistance programs; city staff noted the proposed budget includes $500,000 as seed funding for a rate-assistance or tenant-assistance program.

Staff told the council the corrected rate study and an updated protestable rate schedule would be presented July 1, and that any new rates adopted would follow the public-protest rules that apply to utility increases. No rate change was adopted on June 17.

The city also noted bond-holder concerns: a council member asked whether bond covenants or bondholders might expect different treatment if the schedule is delayed. Staff answered they have not heard any contrary direction from bond holders and that setting a clear timeline and re-starting the process should provide assurance to creditors.

The council did not vote on a rate increase on June 17. Staff will return on July 1 with a corrected rate study and new notices for the public-protest period.