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Monterey OneWater outlines multi-year rate increases to fund aging wastewater system; public protest process set
Summary
Monterey OneWater presented a rate study proposing to raise residential wastewater rates from about $54 to roughly $79 per month by 2031 to finance $568 million of capital needs; the board mailed Proposition 218 notices to 65,000 accounts with a June 29 public hearing and an appeal/protest process. (Proposition 218 notice mailed May 8.)
Monterey OneWater executive officer Paul Shudo told the City Council on April 21 that the local wastewater and recycled water agency faces a backlog of capital projects and aging facilities and is proposing multi-year rate increases to maintain system reliability.
"The identified needs that our engineers, operators, and maintenance folk came back with was about $568 million worth of projects over the next 10 years," Shudo said during the presentation. He said the agency presently serves roughly 65,000 accounts and produces about 60% of the peninsula’s potable demand through recycled water programs.
Shudo said the board accepted a comprehensive rate study and approved mailing Proposition 218 notices to customers. "A notice will go out to all 65,000 accounts… mailed by May 8th," he said, and the board will hold a public hearing on June 29 to receive protests that will be counted toward the official protest threshold under Proposition 218.
The rate study, prepared by Willdan Consulting, uses the utility’s capital-improvement plan and budget model to determine a cost-of-service revenue requirement and then translates that into proposed monthly charges. Shudo presented a trajectory that would raise the current residential wastewater charge (about $54 per month) to roughly $79 per month by 2031, excluding additional municipal add-ons from member cities.
Council members and residents pressed staff on customer-assistance and outreach. Shudo said Monterey OneWater operates a customer-assistance program funded with non-rate revenues and will ask the board on June 29 to expand that pool. "We are going to actually go to our board on the 29th with a request to increase that pool of funds to try to help out more people," he said.
During public comment, several residents described the proposed increases as burdensome for renters and low-income households. One commenter, Esther, said the outreach does not reach many working people: "The majority of the renters in this city… are not getting increases in their income to cover all of these infrastructure issues." Another commenter asked what would happen if voters rejected increases; Shudo replied there is no plan B beyond deferring projects and relying on emergency repairs, which can raise costs over time.
The board’s Proposition 218 mailing begins May 8 and will include instructions for filing formal protests; the agency will host three public information sessions during the protest window, and mailed protests are required to be counted under Proposition 218 procedures. The Monterey OneWater board will tally protests at its June 29 hearing before considering adoption.
What’s next: Monterey OneWater’s Proposition 218 notice mailing (beginning May 8), three public information sessions during the comment period, and a June 29 public hearing where protests will be counted. The board may adopt a new rate schedule after resolving protests and adopting a budget prior to July 1 if approved.
Attribution: Quotes and figures above come from Paul Shudo, Monterey OneWater executive officer, during his presentation to the Monterey City Council on April 21, 2026.
