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Monterey One Water’s Regional Treatment Plant celebrated its 30th birthday in 2020. Throughout the decades, steady user fees allowed the Agency to operate and maintain this infrastructure. Now, we are at a critical juncture where maintenance alone is not enough to guarantee the reliable service you have come to expect from us. Many upgrade and replacement projects are needed to ensure the safe and uninterrupted treatment of your wastewater.
On July 6, 2021, the Board of Directors voted to approve a 5-year rate schedule of maximum monthly rates for wastewater treatment. These maximum rates are effective August 6, 2021 through June 30, 2026. Explore the resources below to learn why the series of rate increases is needed and what your dollars will fund. To listen to the Board's public hearing on this topic, visit the Audio Recordings page.
Why is M1W implementing a series of rate increases?
Additional revenue will support increases to critical expenses like chemicals and utilities, while assisting with necessary capital reinvestment, responding to personnel obligations, and improving the Agency’s financial strength.
Capital Reinvestment: Much of the Agency’s infrastructure is reaching its useful lifespan. Replacing or upgrading these assets will take significant resources. Learn how we will apply your fees to ensure we are Progressing Forward (PDF).
Responding to Personnel Obligations: Like many service-based entities, M1W relies on the expertise of its specialized personnel. The Agency must respond to staffing needs to ensure reliable operations. Contributions to a pension trust and increased contributions from employees are also planned to reduce the Agency’s pension obligation.
Improving the Agency’s Financial Strength: The M1W Board adopted a Financial Reserve Policy to ensure the fiscal strength of the Agency. The policy has two major components: (1) maintain enough reserves to meet 50% of the annual operating expenses and (2) have on hand at least one year of Capital Project expenses.
Planning for the Future
M1W’s 10-Year Capital Program prioritizes what and when infrastructure improvements are needed to provide consistent service. The program focuses on replacing aging infrastructure, meeting regulatory requirements, preparing for the future, and ensuring sustainability in all we do. Projects focus on M1W’s comprehensive sewer system, including:
What do my fees fund? Sewer system management is a joint responsibility in our area. Your local city or district is responsible for collecting the wastewater exiting your home or business. Monterey One Water is responsible for helping pump it to the Regional Treatment Plant, the treatment of the wastewater, and the safe disposal or resuse of the treated water. The rates represent the monthly fee for Monterey One Water’s sewer services.
Your fees do not fund any expenses associated with our water projects: (1) the Castroville Seawater Intrusion Project and (2) the Pure Water Monterey Groundwater Replenishment Project. Costs of these projects are funded through the sale of recycled and advanced purified water.
How do you plan to spend revenues over the next five years? The 5-year rate increase will generate an additional $122 million in wastewater revenue. 60% of this revenue will go to our infrastructure. M1W’s Capital Improvement Plan identifies needed upgrade and replacement projects for our pump stations, sewer pipes, and wastewater treatment plant to ensure they continue to function properly now and into the future. For more details on the projects the proposed rate increase will fund, view our “Progressing Forward” document which discusses efforts in pump station upgrades, interceptor rehabilitation, plant and laboratory improvements, outfall stabilization, and energy management.
How are monthly rates set? To determine monthly rates, the Agency updated its Wastewater Rate and Comprehensive Fee Study (PDF) to include revised long-term estimates of operating and capital costs. In addition, comparisons were made to rates, capital investment, and reserve levels of comparable entities. The monthly rate structure selected is designed to immediately support M1W’s capital investment and improve its financial strength, with more modest increases in later years reflecting anticipated increases in annual operational expenses like chemicals and utilities. While the rates represent significant change, the rate study confirmed they remain in line or lower than nearby sewer service providers and will help ensure the Agency continues to provide reliable, uninterrupted wastewater service. View the Public Meeting Presentation (PDF) for full details and see a snapshot below.
Infrastructure, technology, and major equipment are the foundation for providing service to our customers. Monterey One Water’s Capital Improvement Plan identifies upgrade and replacement projects to ensure our system functions now and into the future. The upcoming rate increases will provide needed funding to complete the critical projects currently scheduled for the next five years.
1) Pump Station Upgrades: We will upgrade or rehabilitate nine critical pump stations which are essential for continuous delivery of wastewater to our Regional Treatment Plant. Improvements include replacing pumps, electrical equipment, water and odor control systems, and more.
2) Interceptor Rehab: An interceptor is a major sewer line that directly transports wastewater to a treatment facility. We will replace manholes and several air release valves along the Pacific Grove Interceptor due to corrosion.
3) Plant Improvements: All wastewater, regardless of origin, enters the Regional Treatment Plant through the Headworks system. We will replace a 25-year-old by-pass system at the Headworks to prevent untreated overflows to the outfall and to allow safe access when performing maintenance. Throughout the Plant, we will also upgrade several 35-year-old motor control centers. Motor control centers are units to control electric motors from a central location. They operate our pumps and other process equipment to meet regulatory requirements. Additional modernizations at the Plant will include replacing components of our fire suppression system, upgrading the Class C water pump station, and establishing a new potable water source for the Plant.
4) Lab Improvements: We will initiate and complete the design of a new laboratory space. This is required for all instrumentation to analyze samples, optimize operational processes, verify the integrity of the treatment processes and water quality, and ensure regulatory requirements are met.
5) Outfall Stabilization: Our ocean outfall pipeline travels from the Regional Treatment Plant to the coast where it extends about two miles into the Monterey Bay. It was installed in the early 1980s and the junction structure where the land and ocean pipes meet needs to be replaced. Due to beach erosion and other potential climate change impacts, it will be moved inland, approximately 500 linear feet, farther away from the mean high tide line, to prevent a collapse of the line.
6) Energy Management: We will replace a failed, 30-year-old cogeneration transformer that helps deliver and manage power to the Plant. This will provide better energy reliability and redundancy. To further these efforts, we will also replace a 21kV electrical switchgear that reached the end of its useful life in 2019.