Finance
ANNUAL WATER SUPPLY CHARGE
September 2024 Update
The Monterey Peninsula Tax Payers Association (MPTA) brought a series of six separate cases, collectively challenging various aspects of the District’s collection of the Water Supply Charge. Information regarding these cases is available in the latest report provided by the District Counsel at the September 2024 Board meeting. The link to the Public Report from District Counsel is available here. The California Sixth District Court of Appeals sided with the MPTA o to sunset the collection of the Water Supply Charge. More information will be provided as it is made available.
History of the Water Supply Charge
The Monterey Peninsula community had expressed a strong desire for construction and operation of new water supply in order to comply with state-ordered cutbacks. The proposed regional water supply solution included a portfolio of three projects: a scalable desalination facility, Pure Water Monterey (a groundwater replenishment project), and completion of aquifer storage and recovery (ASR). The District is involved in the latter two projects – Pure Water Monterey and ASR. To cover the cost of these projects and water supply development, the District proposed and passed an annual water supply charge using the Proposition 218 process.
Under Proposition 218 law, affected property owners were notified of the proposed fee and given 45 days to submit one protest for each property owned. A public hearing on the matter was held June 12, 2012, where the District Board heard from the public and closed the period for submitting protests against the fee. The meeting was continued to June 19, 2012, to allow counting of the large number of protests delivered during the hearing. The District received 10,343 eligible protests from a potential of 30,509 eligible properties. In total, 15,709 letters were received; however, that number included 3,252 ineligible protest letters and 2,114 duplicate protests. A majority protest to defeat the fee would have required 15,255 eligible protest letters.
Before enacting the water supply charge, the Board of Directors met with various community groups to address concerns over the annual charge. As a result of those discussions, Board members agreed to add the following provisions to the ordinance:
- Sunset clause which states that the water supply charge will go away if an identified District project is not underway within five years, or to the extent funding for a project has become a charge on the Cal Am bill, or if bonds are repaid.
- Strengthen the existing ordinance language, which limited the funds to water supply projects, by being more specific:
- Limit the use of fee revenue to water supply projects such as ASR and groundwater replenishment,
- No more than 15 percent of funding would be applied to general overhead costs.
- Creation of a Citizen’s Oversight Panel to review expenditure of funds received from the water supply charge.
- Prohibition of future modification of the ordinance without holding a Proposition 218 protest hearing.
The annual water supply charge was added to the property tax bill of those property owners subject to the charge, and was collected by the Monterey County Assessor in two installments each fiscal year.
The full rate ordinance and additional information on the annual water supply charge can be found below.