City Council - Regular Meeting

Recess, for closed session. But before we do that, we're gonna call to order the board of supervisors of the Monterey County Water Resources Agency, letting the record show that all supervisors with the exception of, supervisor, sorry, supervisor Lopez our president. We expect supervisor Lopez to be arriving shortly. Are there any additions or corrections to the closed session for the water resources agency agenda?

No, chair.

All right. We have closed session items one a on the water resources agency agenda. Is there any public comment on our closed session item? Seeing no one in chambers and no one online, we're gonna close public comment and recess recess to closed session. We'll be back here at ten. Board of Supervisors

of the Monterey County Water Resources Agency, the record show that all supervisors are present. Are there any additions or corrections to this agenda today?

There are none.

Okay. We're going to open it up for general public comment. This is general public comment on the Water Resource Agency agenda. So specific to Water Resources Agency public comment. Seeing no one in chambers and no one online, I'm going to close general public comment from the Water Resources Agency agenda, move on to the consent calendar. We have item two on the consent agenda, for Water Resources Agency. Is there any public comment on the consent calendar for Water Resource Agency? Seeing none, we'll bring it back to the board. I have a motion from Alejo.

Second.

A second from Lopez. All in favor?

Aye.

Aye. Thank you. Passes unanimously. We'll move on. We do have a number of scheduled items for the Water Resource Agency agenda this morning. And for those of you who are here for general public comment, hang tight, we'll work through these items. It might be about, as I'm looking at the times here, thirty to forty thirty minutes to an hour till we get to the general public comment portion. So hang tight, but maybe it could go faster. So we'll work our way through this. Okay. We're going to go to item number three, and I'll pass the floor to Ara.

Good morning, supervisors. Araj Darian, general manager, Monterey County Water Resources Agency. I have a quick presentation for you here today while we talk about come on microphone, you can do it. While we, to talk about the, groundwater monitoring program and the fees that we are requesting to be adopted today. So a little bit of background.

So a quick overview of today's presentation. The Salinas Valley Groundwater Basin, the agency's groundwater monitoring history, Sigma, and the new regulatory paradigm. Sorry, it keeps falling down. Is this better? Yes, all right, thank you.

So presentation of proposed GMP regulatory fees and then the recommendation. So the Salinas Valley Groundwater basin extends from the County Of San Luis Obispo border in the South to the Pacific Ocean in the North. It is comprised of over zero five million acres. It helps support nearly $5,000,000,000 agricultural industry, and there are approximately 200,000 residents that are dependent on groundwater for their daily use. The agency has a long history of groundwater monitoring beginning in the 1940s when we began monitoring groundwater elevation.

1960s, we began monitoring water quality in the context of seawater intrusion in the northern end of the valley. In the 1990s, we began extraction reporting. And in the 2010s, with the passage of the Sustainable Groundwater Management Act, we began collaboration with the Valley GSA. So SIGMA, so the Sustainable Groundwater Management Act is in fact three laws that were enacted in 2014. And to summarize, the laws mandate that groundwater sustainability be achieved by 2040 or 2042 depending on the sub basin.

It assigns a number of responsibilities to the Department of Water Resources. It allows local jurisdictions to establish groundwater agencies in lieu of state control. And those agencies then become responsible for developing the local plans. And it requires that monitoring of groundwater of level, quality and usage be performed. So in 2017, the decision was made to develop the Salinas Valley Groundwater Sustainability Agency.

They are a separate entity from the Water Resources Agency, but we work closely with them. So the SVB GSA is the entity that has responsibility to the California Department of Water Resources to develop, the groundwater sustainability plans. The California Department of Water Resources requires that those plans be evaluated every five years. The Department of Water Resources also, can, express, what they would call, recommended corrective actions. These are things that they feel need to be addressed in the local plans.

And so in trying to and in this case, focusing very much on filling data gaps and more rigorous and more timely reporting of groundwater monitoring information. So in 2023, the Water Resources Agency in the Salinas Valley Basin GSA began meeting to discuss how we were going to meet these DWR mandates. There were basically three options. One was for, the SVB to take over, the entire program. One was for them to expand into the areas that the water resources agency wasn't monitoring and ultimately what was selected was for the agency simply to expand its historical efforts into those new areas that were being required by Department of Water Resources.

So that decision was memorialized in October 2024 by ordinance 5,426 that formalized the groundwater monitoring program that we have before us today and established the ability to recover costs through fees. So why is groundwater monitoring important? Monterey County, of course, is a groundwater dependent community. Our economy, our culture all depend on it. It's ag, it's tourism.

Approximately 40% of the county's workforce is associated with agriculture, and so it really touches most every life. So as we move into the GMP specific services, again, they focus on the monitoring aspects of this. You may recall last year when we were talking about the twenty five, twenty twenty six program, there was the inclusion of initial well registration, a onetime cost. We are now able to set that aside. Last year, we were able to implement the program with grant funding from the State of California, and we were able to implement a comprehensive outreach program that resulted in a number of individuals who hadn't been registered before registering now.

And in the future, we'll be looking to the Department of Health, as people, walk, through their process to permit well, construction, repair, or destruction to to collect those well registration fees. So what we have before us this year are just, the four, services. There's the annual registration renewal. There's a groundwater extraction reporting, the groundwater level monitoring and the groundwater quality monitoring. And so these, fees are for the specific services that the agency is providing, and to meet the needs of the GSA per the mandates of the Sustainable Groundwater Management Act.

So the annual renewal fee, what we are proposing here is a fee of $21.9 per well. And it would cover all of the wells that are within the Salinas Valley groundwater basin. We estimate that number to be approximately 3,500. The groundwater extraction reporting also applies throughout the groundwater basin. However, it only applies to wells that extract greater than two acre feet per year.

So we estimate that to be approximately 2,100 wells at a cost of about, almost $65 per well. Groundwater level monitoring also occurs throughout the entirety of the basin. So again, we estimate about 3,500 wells here at a cost of almost $118 per well. And finally, well, this is just to demonstrate, while all of the wells are in the program in terms of the effect of the monitoring data, we don't actually go to each and every well for to cut the costs of the program. We sample approximately five forty representative wells to develop the data we need to appropriately manage the groundwater basin.

Lastly, water quality monitoring, that's performed largely in the North. And so there's approximately 2,300 wells that we estimate to be a part of this program at almost $74 So what's the difference in water quality monitoring? We often are asked. The Environmental Health Bureau, of course, monitors wells for water quality. They're predominantly looking at human health issues.

So they're looking for arsenic and things like that. The Central Coast Water Quality Preservation Incorporated was established to help comply with state water quality requirements, specifically discharges to groundwater. And so that is looking more like at nitrates and those sorts of constituents. Our water quality program focuses on chlorides and constituents that are indicative of seawater intrusion. So summarizing, the four services that we are requesting fee approval for in the twenty five-twenty six year, is here.

And then putting them together so folks can understand depending upon what, sub base and what area of the county they are in, this table is meant to summarize that. And so if you are in what's called the Upper Valley or the 4 Bay and you have a de minimis well, therefore you don't have a reporting requirement, You have the annual renewal and then you have the water level monitoring. And so the total proposed for the twenty twenty six, twenty twenty seven year would be $139.53 all the way to if you are in one of the four sub basins in the northern end of the valley that and you are extracting greater than two acre feet per year, then you would have registration renewal, you'd have the level monitoring, the extraction reporting and the water quality monitoring. And so the other end of the spectrum would be $278.25 So the benefits of the GMP, of course, it's about the quality of life and protecting future access to groundwater for all well owners, especially de minimis well owners. It alleviates the burden of individuals monitoring and compliance with the law.

It provides for economy of scale. It helps avoid costs and preserve property values so quality monitoring promotes effective management which reduces the risk of well repairs, replacement, water treatment to maintain viable use of groundwater and so that of course helps protect the property value and it complies with the law. So cost allocation and recovery. So it's the ownership of a well that subjects the owner to Sigma. Not all land owners are well owners.

And so it's that's the nexus between this program and an individual. Sigma requires management of groundwater and effective management requires well specific information, which is why we encourage the registration and of course the monitoring. Prop 26, Proposition 26, which was a voter approved initiative many years ago, ties specific services, in this case monitoring, specific benefit, in this case, which is well ownership. And so the GMP equates the cost to the number of wells, not the number of acres or the amount of extraction. So last year when we were before you, the Board did approve the rates understanding that the costs of the program were going to be offset by grant funds.

And so we were able to perform the entire program for all well owners in this current fiscal year at no cost to well owners. That grant funding from the state has been exhausted and there is not currently a grant funding opportunity before us. So we're relying on the rates that were established in the NEXUS study that we performed and presented in 2025. We were asked to undertake a number of activities that would look for alternative funding sources, particularly for de minimis well owners. And so there three activities that we've been involved in during the course of this current fiscal year to try to address the requests of the board.

So one was could we recover the costs through the Salinas Valley Basin GSA's cost recovery method, and approach this differently. They have run that calculation and through their rate structure, In some cases, it results in de minimis well costs lowering in those sub basins where the de minimis wells are few. But in other areas, it results in de minimis well costs rising in those areas where there are the preponderance of wells. And because of that result, we have set that option aside. We have worked with the rural county representatives of California to explore the potential of draft legislation, that could help us to avoid applying cost to the Venezuelan owners.

There have been some recent court rulings that could allow us a permanent solution here. And so we have been working with RCRC to develop that draft legislation. And we are hopeful that it gets picked up and passed ultimately, but that's not a solution for the fiscal year that is in front of us. It would provide for a long term solution. And so in the short term for the twenty six-twenty seven fiscal year, the agency is requesting $200,000 from AA funds to establish a low income program.

This wouldn't cover all de minimis well owners. The idea here is it would cover a portion of them. And rather than the agency standing up its own independent program, what we would propose is that if you qualify because most wells operate on electricity, if you qualify for the PG and E program, you would qualify for this program. However, a final decision on the allocation of Measure AA funds has not occurred. And so what we are presenting you today as the baseline, because we need to establish the rates as part of the fiscal year budgeting process, What we're establishing as the baseline is the rates as I've just explained them which would include costs for all de minimis well owners irrespective of income.

But we would modify that of course if the measure AA funding is approved and we are hopeful that it will be. And so to recap, these are the rates that we are requesting today and that concludes my presentation, trying to keep it short and sweet.

So, Ara, can you recap to me what the full cost is to de minimis well owners here?

Yes. So it depends on which sub basin you are in. But for the sub basins in the southern portion of the valley that don't require the water quality monitoring, it would be just under $140 per well for the year. And for the de minimis well owners in the northern end of the valley that are subject to the water quality monitoring, it would be, just under $214 per well.

This is the de minimis charge here?

Yes.

Okay. Because it's sort of summary of different fees here. And there's about 1,400 well owners are de minimis. If I said 3,500, I think we're all together and is like 21 or 22 that are not de minimis?

Those estimates are all of the wells and in different sub basins, the percentage of de minimis versus production wells changes. But in general, as a rule of thumb, figure about fiftyfifty.

Okay, about fiftyfifty. So what's the total cost for the de minimis well owners repaying, not as individuals, but in congregate?

I see approximately $400,000 we estimate.

400,000. Okay. And that's about half of the budget, isn't it?

Correct.

Okay. So I'm just going back to my same position I had before. Mean, I the de minimis well owners were talking about folks are using a very minimal amount of water, 3% to 5% of the total basin, and they're paying for half of this cost. I oppose the speed being put on them. I know there's some efforts to change this legislatively. Not quite there yet. So I'm you know, I'm appreciate the low income presentation out of here and suggestion, but I I I'm just not gonna I just can't support any de minimis well owners be having to pay on this at this point because I think they're carrying unnecessary burden individually.

Thank you. Ara, if you could actually just one more time, even though you just went through this whole thing. We've got the annual well registration, groundwater extraction reporting, groundwater level monitoring, and groundwater quality. Which are the ones that the de minimis user is not subjected to?

And so in the southern portion of the valley where there isn't a groundwater quality monitoring requirement, they are just subject to the annual registration renewal and the groundwater level monitoring. And then in the northern end of the valley where the groundwater sustainability plans include water quality monitoring, then they have that component as well.

Okay. And then just an aside, in terms of the initial well registration, the one time, how successful was the program?

It's hard to say because we're estimating how many wells we think were out there. We hadn't kept records of de minimis wells in the past, but we have had several 100 well owners step forward and take advantage of the well registration for free program and so it was as successful as it could be.

And can you articulate for us the I 100% understand my colleagues' concerns, but what we are measuring and why it is per well rather than the amount of water that's being pumped per well, and what drives the program workload and why it's set up this way?

Yeah. And so, you know, the California constitution puts limitations around the way the agency can allocate costs. And the issue with having a land based approach is the fact that we know that there are parcels most in fact that don't have wells on them. And so that was an issue. With extraction, the volume of water one extracts doesn't affect the cost, the scope, the scale or the cost of the groundwater monitoring program.

It's the fact that the wells exist. If there were zero wells, there would be zero program. And so the extraction volume doesn't change this. Now when the monitoring program helps inform management actions and a cost allocation and recovery method for management actions considered, I think it's most appropriate to consider extraction rates at that point. But for this, because of the proposition 26 limitations where we have to drive the tie, the specific benefit to the specific service.

We just can't bill some folks for the cost of others. Now that takes us back to the RCRC effort and drafting legislation because some recent court cases are beginning to affect that ability some. And so we're we're optimistic, cautiously optimistic that we might be able to rely on those recent court decisions.

And would that legislation be at at the earliest next year Or is there something underway at the moment?

Something underway at the moment.

Thank you. Okay. Great.

Thank you for the discussion. Let's open this up to public comment. This is public comment on this item. This item number three, our groundwater monitoring program regulatory fees.

Hi. Good afternoon. Seguera, I'm on behalf of community. I don't understand how we cannot just monitor everything. I mean, you you don't have the surplus of either finance or is it surplus of employees or what's the problem with that? And then how are you monitoring it and who's checking your guys' work on monitoring the water? Because, you know, we need air monitors out here, but we're doing water, but we don't have a lot of information on that. I've never heard of this. No one's ever brought this up. And you have a presentation, but you don't have a lot of data, you don't have enough information, and you don't know how many wells are out there.

That's kinda scary to know that maybe there's some contaminated wells out there that have been leaking into the regular water system. We don't know. You don't know that. And into the environment, into into just nature. I mean, when when are you gonna come up with a better solution for that? What are we gonna do? What what do we need to go a step further and do the proper proper diagnosis, the proper way of looking at how we will monitor everything. It's easy to say I can put a water monitor on my house and say, oh, it's good. Well, how do we know that? Are we trusting the people who are running this?

I mean, are they engineers? Are they regular people? Are they people that that know anything about water? Because I can give you a position and say, hey, you're the new water monitor. Doesn't mean you know anything. No disrespect. That's the way it is. That's the way I look at life. I could put you guys up there and say, hey, you're the best supervisors, and we know a lot of you guys are not. You know what I mean?

Just like that. Thank you. I appreciate it. God bless you guys. Have a good day.

Thank you. Is there any other public comment? This is on the groundwater monitoring program regulatory fees.

Hi. My name is Doctor. Laura Salodio. And I've always had this question. Before we had Measure Z, I went to the health department and talked to the water people and asked if they checked for any byproducts of oil production in areas where there is oil production, like in South County.

So, some of the key contaminants to test for and I just Googled this are volatile organic compounds known to be carcinogens like benzene, toluene, ethyl benzene, xylene total petroleum hydrocarbons dissolved gases, which include methane, ethane, and other gases that can seep into the groundwater and general metals and minerals like barium, arsenic chlorides, bromides, etcetera, often found in drilling brines and released when aquifers are disturbed. So, just had a question if those were ever checked in South County where there are oil fields.

Thank you. Is there any other public comment in the chambers? Alright. We're gonna go online. There's a couple of hands raised, and let me just be because this is again for our groundwater monitoring program regulatory fees item. We'll start with the phone number ending in 837 and then to iPhone 2024. Phone number ending in 837, we have you up for public comment. Okay. Let's go to iPhone twenty twenty four.

Good morning, supervisors. You, chairman. Thank you, supervisors. My as I understand it from reading through the ordinance, and this is on fees and who might be exempt, that there was a a minimal baseline of two acre feet may be exempt from monitoring. So in terms of the wells and monitoring, obviously, if you have two acre feet, of these wells assumes they are all metered, so they would know how much water each of them are using.

So let's assume 50% are not metered. So that says you would have to have a meter so you could tell how much water was being used. If they were to retrofit wells with a meter, you can assume that's certainly gonna be over a thousand dollars to install metering metering. So I think that's rather problematic. Way of also looking at it is the minimum threshold.

Two acre feet is very, you know, light usage. I think you might want to consider raising the base threshold to five acre feet or get a baseline that would cover a great deal of single family home users. And other than that, of course, I appreciate this is on rates, but as we know, there's always rate creep. And we have a continual long list of fees that we have to pay on any number of things from property taxes. Now, of course, water monitoring.

So I'd be sensitive to the rates and any de minimis program. You're looking for grant money. So going to the well, sort of speak, and those wells are drying up. So I'm very opposed to more fees. Thank you. Thank you.

Thank you. We'll try again for 837 followed by 705. Alright. Let's try 705. Again, public comment on the groundwater monitoring program regulatory fees. Okay. I'm not seeing either one on mute. So we're going to, bring it back to the board. But to be yep.

Yes. Can you hear me?

Oh, okay. We've got 705. We've got public comment for 7 phone number ending in 705.

Yes. You can hear me?

We can hear you. Thank you for joining us.

Thank you. I would like to suggest that you somehow educate people about what they're putting in the drains. A lot of people aren't aware they're using very harsh laundry detergents with forever chemicals, and they have no idea. And I think that's gonna clear up some of the pollution problems that dwell on these wells. Thank you.

Thank you. We'll try one more time for the phone number ending in 837. Alright. I'm going to bring it back to the board. Just one comment.

Okay. Yep. Thanks. So, just in future presentations, I think it could be helpful to just bring some examples of, how much an acre foot of water is. I know as a single family home, I use about a quarter acre foot, maybe.

I don't really know the exact number, but there were some things I heard about a single family home using two acre feet of water and not a residential home, that's for sure. And then I think it would be helpful, if you don't mind, Ara, as we had some questions about water quality and I think it would be beneficial to reiterate what you said in your presentation about what the Water Resources Agency program is focusing on as compared to the Central Coast Water Quality Preservation Program and the Environmental Health Bureau. Just one sentence because I think it's it's it's good to reiterate what this program is looking for and monitoring.

I do appreciate it's a bit confusing with three different entities involved in water quality monitoring. We're all looking for different things. For the Water Resources Agency, what we're looking at is chlorides and other constituents that are associated with the intrusion of seawater, and this is promin predominantly monitored in the Northern End of the Salinas Valley.

Thank you so much. I appreciate that.

And Lopez?

Yeah. So my position is largely aligned with supervisor Church as it was in the past. I know that was a very tough battle up here for many months to try to figure out a path forward. Took the charge seriously, done a ton of work to try to find some legislation that could put us in a position to mend the issue that we're up against, is an equity issue where the smallest users are paying, in my opinion, the largest load of this particular fee across the entire basin. So I'm still struggling with moving forward with new fees, right, saying that last year was covered by a grant.

So then this year, now we're going to go back out and charge those folks. My question would come back to if that legislation is successful, which I hope it will be this year, are we stuck in a position where we took the line that everybody has to pay that this year, right? Or are we going to amend at some point in the year? I think that's my issue, given that we've done the work to try to get to a point where we can solve this. Are we saying they're gonna pay one year, and next year, we'll remediate and fix it so that they don't move in forward?

That's where I'm stuck with being able to support this today, but I get again that Supervisor Church and I may be on a 3.2 loss on this as we have in the past, but I would ask for some sort of grace, should we be able to get that legislation passed and enacted to revisit and right size this given the overarching impact on small users?

Yes. And it's a great point, Supervisor. So the monitoring year coincides with the water year, which is October through September. And so our cadence in terms of communicating with well owners would be in that September timeframe reminding folks that the new water year is coming, reminding folks about the reporting requirements and so forth. We probably don't do invoicing until the end of the calendar year. So if the legislation is adopted prior to then, we could we could amend and readjust. Yes.

Would there be a an interest in this board and then supporting the staff recommendation and with that in mind that upon the legislation adoption that we could adjust?

I'm not going to support. Feeling is we need to look for some funds elsewhere. I know we have some time. This is a little different than most other budget issues that's not oriented toward July. But I would I don't want to commit to for a de minimis user's pain. I just don't think it's fair. I think supervisor Lopez and I both raised issues on that. There's a lot of fees coming down in the next few years on water from state imposed regulations. This is one of those. We don't have a lot of flexibility on it, but we can find other ways so that those who use the least amount of water are not having to pay for half of a program.

And that's my concern. It's just unfair. So that's what I'm saying.

Another option here is we were trying to minimize the request for the Measure AA funds. If we took that request to 400,000, it would likely cover all of the de minimis wells. We were focused more on the low income and the notion of establishing a program around that. So that is one way. The

one

thing I do want to say notwithstanding sort of when we're communicating with well owners, the July timeframe is still important to us and it's critical because the bulk of the monitoring activity occurs during the summer and July and August are extraordinarily busy months for us.

Thank you for the discussion. Wouldn't you know, we've we did have extensive discussion about this prior to coming here today, and the my understanding and part of the reason we're moving forward on this we've moved forward last year is because there are state requirements. And if we fail to act and put this program into place, it does put us at risk of having the state remove our local control and authority on this on this issue. So can you speak to any updates on that point so that our action or inaction would impact state control of our of our local water systems.

As as the conversations focus mostly on the de minimis well owners, the that two acre foot per year threshold is established by the state. And so that was established by the Sustainable Groundwater Management Act as was the requirement that all beneficial uses and users of groundwater be monitored. And so there isn't an ability with current state law to exclude some category from the monitoring program. Through this legislative effort, we are trying to create an opportunity to shift the cost burden based on these recent judicial rulings. But but under state law, you know, these are the kind fines that we're working in.

And so you have the sigma and the California constitution kinda competing against each other.

Okay. So thank you. But so bottom line is like we are this is state law that we're under, like, under pressure to implement. If we choose not to move forward?

Then the Salinas Valley Basin GSA would stand up its own program to fill in the gaps that the water resources agency is not filling.

Okay. With the same pressures and challenges and being a year behind now on implementation.

Right.

Okay. So we made the decision that the water resource agency would be the one to stand it up, that we would move forward. That all went into effect last year. Now that we're a year in, we have to continue to do the work. And if we don't, that is state required that we move forward. Thank you. Okay. I'm happy to entertain a a motion from the board.

I'll make a motion that, you know, I'll approve the program. We need the program, but that the de minimis that come back with some alternatives for funding for de minimis users and that's been the motion.

I'll second that.

So motion to support the staff recommendation to move forward with the program and with an additional request to bring back options for funding for the de minimis users that potentially could be part of our budget discussions. Okay. Great. Thank you. Thank you. All in favor? Aye. To make all opposed? No.

We we've postponed this hard decision several times. Right? And I'm I'm I understand where my colleagues from North And South Monterey County are coming from. But when if if we're we've asked for that kind of direction. Where can we get funding to address this concern about about de minimis users over a year ago? We were talking about this, and we postponed it. And then we went into July, and then here we are a year later. So at some point, we've gotta make the tough call on this. Right? If if we're gonna implement this, what are gonna be the funding mechanisms to accomplish it?

And if there is funding, 400,000 or whatever it takes, that should've been brought back, I would assume, today to make a decision on. So if we're not ready and if there is some funding available, could you speak to that? Where is the $400,000 in your budget to cover the de minimis, users, to not have to pay this?

Right. So it's not in the water resources budget. We do have a request in the county budget for measure double a funding. That currently has been going through the committee process. I think a final decision on that's in June. And that has again, we were targeting 200,000 there to minimize the request in light of of of all of the, the circumstances. We could increase that request and assuming, then if that were approved, that would cover the de minimis well owners for this year and it would allow us time to see if the state legislation

However, this is an annual cost, so we go to measure a funding, then it's a one time waiver or one time, but then it would require that every single year, not to mention as cost of the COLAs go up, to run the program, it would increase down the road as well.

Yes. The program being a Prop 26 program reflects the cost of service. So those rates could go up or down depending. New technologies make it less expensive, rates could reduce as an example. I understand what you're saying supervisor in terms of it is a one time fix. I agree it's a one time fix. And and it hasn't yet been decided, but it does buy us some time if in fact we could utilize that source of funding to meet the needs for this year and then the question would be before us again next year.

So just we are in the middle of a vote.

I'm I'm willing to have that portion come back, approve it, and then looking at the de minimis fees coming back to have further discussion just on that aspect of it.

So that's a yes?

Two yes. Yes.

Okay. Thank you for clarifying on that. So just to be clear, so we have motion to take the staff report and with an additional request to bring back funding options as part of the to help offset the cost for de minimis users as part of the budget cycle. We called for a vote. I'm hearing yes. Actually, could you do a roll call vote for clarity? Thank you.

Supervisor Alejo? Aye. Supervisor Church?

Aye.

Supervisor Lopez? Aye. Supervisor Daniels? No. And Chair Supervisor Root Askew?

I'm also gonna say no, although I am open to the state legislation changing and making updates as soon as we have that information. So thank you. Okay. That is approved to move forward, and we will go on to I am sensitive to the fact we've got an audience full of folks who are waiting to do public comment, and maybe we should have organized our schedule a little bit differently moving into this. The additional couple items, are those gonna be longer items, or do you think we can move our way through those? Otherwise, I could we'll switch back and forth, I think.

Yeah. We'll bring the a team up, and they'll move right along.

Okay. Perfect. So those of you with us for public comment, bear with us. We will we'll get through to you. And we are working on cooling it down in here as well. So pardon the the the AC taking a minute to kick in. Alright. We're moving on to we're gonna skip item number four to the end. We're gonna move on to item number five, which is a public hearing to consider the cost of living adjustment rates, for zones two b, two y, and two z assessments.

Yes. Good morning, chair Eskew and members of the board. Shana Murray, deputy general manager, and I have with me Nora Cervantes, accountant three. And we are here for a public hearing for the cost of living increase of 2.5 for zones 2B, 2Y, 2Z, the water delivery charge, and water service charge for FY27. And I do have slides.

Thank you. So we have had previous actions related to this. The agency did hold a CSIP landowner workshop to go over the needs and the fees back in March. We've also gone through our board of directors, budget workshop, finance committee, was to move forward back in April. We have ordinance that dictate how we can move or change rates.

The assessments are done through their supporting USBR loans that funded these projects. The water service charge is for the Salinas River diversion facility. It's our fund to operate that and maintain. And there are rules about an annual cost of living based on the San Francisco Bay Area March 1 to March 1. The resolution for the water service charge did state that it was subject to a COLAG for the first five years.

Thereafter, it was based on an evaluation by the agency. So the agency has evaluated that need. And this is the first year we're proposing a rate that's higher than the CPI. And again, that's since 2008. So 2y, 2z are supporting the capital and O and M for our recycled water plant and our distribution system. Those are valley wide. That's the boundary. And here's the parcel count and factors. We have both the current rates per acre, and then we also have the proposed rates. And this reflects the 2.5% CPI.

And the same for SVRP. And here is our zone 2B boundary. And this is the boundary for the actual users of recycled water and the distribution system. And again, they're all in irrigated ag, and so they're all factor A. And you can see, again, the 2.5% reflected here over current.

Now, the water delivery and service charges, we are proposing a $15 increase for the water delivery charge that supports CSIP and SVRP and a $25 increase for the water service charge for the SRDF. And this is based on our current needs for both of all three of those systems. You can see here the different funds that support these projects are 15.09, 15.1, 15.11. And all three are in a budget deficit. So the gray column all the way to the right shows you that we're using more.

Even with these increases, we're still not breaking even on those three funds. And that concludes my presentation.

Thank you. We'll open it up to public comment on this item. This is item number five, the cost of living adjustment. We have one hand raised for phone number ending in 837. Phone number ending in 837. This is public comment on water resource agency agenda number five. Okay. We'll go to the chambers here for public comment. Oh.

I never raised my hand on the water issue. I don't know why this happened. Okay?

Oh, okay. Thank you. We'll go to the chambers for

Thank you.

Comment. Thank you.

Good afternoon. Segura, Montevia community. I think this is a very, a vague report, and you're increasing the rates quite a bit. And I mean, what 2008, 2009, that's a long time ago. Why are we doing rate changes so late? Are we not studying doing the studies correctly? Are we not doing our homework on on how we're supposed to do rates? I mean, are they every ten years? Are we five years? What's going on with that? I don't understand why why we have a significant rate increase. And this this is part of water one. Correct? Or is it a little bit different? It's different?

Okay. Because we got just got a rate increase there too. So I I don't understand where where you get your surveys. How how do you do your increases? Increases on on water and stuff? We need more information. There's not enough information here. You did a ten minute presentation, maybe top 15. It's not enough information for the public.

Thank you. Have a great day. God bless you.

Thank you. Seeing no additional public comment, let's close public comment on this. We'll bring it back to the board.

Move approval. Second.

Move a motion from Lopez, a second from Alejo. All in favor?

Aye.

Aye. Great. Thank you. All approved. And I'll just say if we could make sure we get a staff report copy to the member of the public. All of our items have additional staff reports posted. So even when our presentations are limited, there's usually a bit of additional background that's posted on the, legislator agenda. Alright. We're gonna move on to item number six, which is to hold a public hearing to consider approving and adopting the fiscal year 2627 assessment charges with cost of living increases.

Yes. And so this is specifically the 2.5% CPI that I previously discussed for our zone two c administration and operations and maintenance of Nacipino and San Antonio Dams. Again, this is driven through ordinance 4,203, and so these assessment rates can be increased annually by the CPI. That was calculated March after the March 1 date, And it was calculated to be the 2.5%. Now this only applies to operations and maintenance and administration components.

This is the boundary of Zone 2C. There are various sub areas within this zone. And so you can see those displayed on this map. And so based on the sub areas are across the top in this chart, and the factors are over to the left, again we have irrigated agriculture, residential, dry farming, river channels, and lands receiving no charge. The parcel counts are not located here.

It would be too complex. So these are the charges per acre proposed for fiscal year 'twenty seven. And this is the administration component. The factors, again, are the same. The previous slide was the operations and maintenance. So both factors are applied. This is for the spillway modification. This does not receive a COLA. So these rates are the same. This is for our capital.

And so these rates, again, do not receive the COLA. And the diversion facility construction also does not receive the COLA, and it is only charged in the pressure and East Side areas. This is an overview of our fiscal year 'twenty seven proposed budget. All of the key projects are listed over on the right that we're performing. The revenue, you can see, are primarily assessments and grants, and the rest of other reimbursements and programs totaling $13,900,000 Our total expected expenditures 14,600,000 So again, we're going into a deficit of 660,000 even with our COLA increase.

And that concludes my presentation.

Thank you. I'll open it up to public comment on this item. This is item number six. I'm not seeing anyone in chambers or online, so we'll close public comment, bring it back to the board.

Move approval.

A motion from Lopez. A second from Alejo. All in favor? Aye. Aye. Any opposed? Quiet. Alright. Passes unanimously. Thank you. We'll move on to item number seven.

Yes. So item number seven is to hold a public hearing for our cost of living increase for our flood zones, one, one, a, eight, nine, twelve, and seventeen. Again, these have been previewed by our board of directors and finance committee and recommended for approval here today. It, again, is ordinance driven. There are four ordinances that drive kind of these different zones and to do an annual CPI.

That was established March 11 at 2.5%. Zone one is our boundary for the Pajaro area. 1a is also for Pajaro area. And here are the 2026 and 2027 proposed charges by acre with that 2.5% CPI, again, by factor. Here are the 1A benefit assessment proposals.

Now, Zone eight is an area down in the Soledad area for our Soledad storm drain. It's shown here on the map. And here, again, are the factors and the proposed rates by acre for 2027. Zone nine is our reclamation ditch running through the Salinas area and out to the ocean. Again, our factors and our per acre charges for 2027.

Zone 12 is the San Lorenzo Creek area in King City. And again, the factors and the per acre charges. Zone 17 is a coastal area by the Morrocoho Slough, and again, the factors and the per acre charges. Again, the recommended budget does show a deficit in the funds that we're talking about. Reclamation ditch is $15.00 5, with a deficit of $533,000 San Lorenzo, 15 oh six, is breaking even roughly at $2,000 in the positive Moroccoho, negative $194,000 and Pajaro, a negative of $114,000 with these cost of living.

And that concludes my presentation.

Thank you. I'll open it up to public comment on this item and then bring it back to the board. Happy to entertain a motion? Move motion from Lopez. Second. Second from Alejo. All in favor? Aye. Aye. Alright. We have one final item here, item number four, public hearing on the water resource agency fiscal year 2526 recommended budget.

Yes. Thank you. So this will be a public hearing today, and then moving to adoption in June. So today, we'll just be providing getting that feedback, and it's based on the rates that we just heard are all included in this budget. And so we are shifting, as you know, the county is shifting from CGI to Oracle.

And so all of our codes are changing. And so you may see this is a little crosswalk to help clarify that. We have been working on our budget since January. That's our internal kind of beginning of looking at projects and programs that need funding for the agency. It's moved through quite a few public workshops that we've held over the last few months, and it was ultimately approved by the Board of Directors for recommendation here today.

Our total appropriation, our expenses are 48,600,000. This is an increase of 12% over the current fiscal year of $43,600,000 Our total revenue has also increased about 10%, and that's $43,300,000 revenue. This shows us that we're still in a $5,300,000 deficit. We'll be proposing to use fund balance to cover that funding gap. As far as our expenses, the salaries and benefits, we do have 45 funding position funded positions for next fiscal year.

It's an increase of one over this fiscal year for a program manager to help support the recycled water program, the CSIP, the recycled plant, and SRDF. We have currently seven vacant positions and 12 unfunded positions. Other charges our insurance charges have gone down by 1,600,000 over the current fiscal, but our cost plan has increased by about $687,000 Our consultant numbers the majority, the 23,000,000, we have a large majority of grants, dollars 8,000,000 of reimbursement by grants. And our other large expenditure is Monterey One Water, 8,500,000. That decrease over last year as the agency continues Monterey to take on some more of those operations and maintenance projects.

We're proposing three fund transfers. The first from the administration fund, Fund fifteen oh one. And that's to support the Moroccoho Slough Tidegate project of $150,000 to supplement that project. We also have fund transfer proposed from the hydroelectric plant, Fund fifteen oh eight, to support the increased regulatory requirements at the dams. So the dam operations fund will increase by $700,000 And finally, the hydroelectric plant will also have a fund transfer to CSIP operations.

And this is anticipated to support a well replacement project that is underfunded. Our revenues, as we discussed, our assessments in both flood and special assessments will be increased by the CPI. Our program revenue we've heard about the groundwater monitoring program. That will be the status quo from this current fiscal year as far as revenue, and the boat docks will also remain steady. We have anticipated some reimbursements from partner agencies.

SLO County has an agreement to pay for a portion of San Antonio Dam operations and maintenance activities. We estimate that to be about $680,000 And the Public Works Department, through an MOU, is cost sharing on the Morocco Tidegate construction, and that's estimated at $275,000 As I mentioned, we have a large portion of grant revenue as well. Other revenue that we've discussed are the hydro revenue, the water delivery charge, and water service charge. Here's a distribution of where the expenses are coming from. And you can see the larger pie charts are the salaries, the grants, and the Monterey One Water contract, as well as our other contractors and consultants.

Debt payment is coming in as kind of that next portion at 9%. And then our revenue, the majority, 41%, comes through special assessments. And then we see a large portion, 20%, coming from one time grants. Here are our overall fund balances. And you can see through the expenses on the kind of reddish color, we've gone from $34,000,000 in 2023 to $48,000,000 requested budget for 2027.

So we have made some incremental increases. The revenue has increased due to the grants. But otherwise, you can see in the green where our revenue is at. Our beginning fund balance, we're starting at about $23,000,000 in our fund balance this current fiscal year. And with the draw, it will be down to 20,000,000 So the use of fund balance is shown in blue.

And I'm sorry, I misstated that. We're going into the year with 20,000,000 and we would be coming out with 14,700,000. The estimated funding balance is the final line of where we would end based on this budget request. We do have a summary of the various funds. The budget book is also included in your packet that kind of details the highlights.

I'll go over a few of the larger funds. So our fund fifteen oh one is administration and agency wide services. This is where the groundwater monitoring program lives. Our financial planning and strategies is one of our big initiatives that we've begun over the last few years and will continue into next year. And we've been dedicating more significant funding towards that, as well as that Moroccoho Tidegate project.

For dam operations, this is our fund fifteen oh three. We have quite a few grants for reservoir operations, flood mapping, and other partner agency projects. We're also looking at significant maintenance of both dams through state funding, both the NAASI maintenance grant and then the SB 104. And so you can see that these projects have been undergoing design, and we'll start getting into some construction. We're also seeing that $700,000 transfer from the hydro plant to support these funds.

So you can see we still have that $660,000 impact of fund balance. And finally, our hydroelectric plant operations. We're projecting our revenue to be around $1,300,000 gross. We have some work to do with calibrations and maintenance of the hydroelectric plant. And then after transferring the 700,000 to dam operations and 200,000 to CSIP.

And that draw will be about 567,000. CSIP, the majority of this goes to Monterey One Water O and M. We'll also be performing condition assessments. We have a recycled water permit that needs to be reissued, so we're working on that. And that's also the Title twenty two two engineers report to support that new permit migration.

We are also hoping to complete a well replacement project through federal funding, federal EPA funding. And so that's another big ticket item in this fund. So here is the overall recommended budget by fund. And you can see the estimated revenue and the expenses, as well as the fund balance usage is in that grayish color and then the ending fund balance. That concludes my presentation. Thank you.

Thank you. Checking with the board for questions. Nope. Okay. We'll open it up to public comment on this public hearing and again this will come back for final adoption as part of the county budget hearings. Seeing no one in chambers, seeing no hands online, I'll bring it back to this board. For discussion. Saying no Are we

moving to accept the report? Is that what Happy to entertain

a motion. I just had a brief comment as well, so feel free to make a motion.

I just have one brief comment then. I had I feel like I had read something, and I'm and I didn't hear it regarding an investment that the agency was making in planning and restructuring to prevent deeper deficits in the future. I think it was, like, 350,000. What was that? And did I read that correctly?

Yeah. That's in our administration fund, our fund fifteen oh one. And that is to perform multiple studies as far as how are we bringing in revenue, who's being assessed, and to kind of look at that. Because as you can see with the fund transfers, some of our funds, specifically the dam operations, are underfunded and are not sustainable. And so without that 8,800,000 in grants and $700,000 in fund transfer from the hydroelectric plant, we really wouldn't be afloat. And so these studies that we're investing in next year to try and get that back to a manageable, sustainable rate.

I just wanted to express my appreciation for that, and it'd be interesting to hear back, you know, as as that study is completed, how that went. Thank you.

Great.

Thank you. I just wanna comment and thank the team at the Water Resource Agency for the work that you do. The water infrastructure that we have here in Monterey County, it's not an optional an optional item for us to be working on. It's fundamentally connected to our drinking water, our agricultural base, flood protection, groundwater sustainability, environmental health. It's it's it really is the the thread that touches everything, and the budget of the water resource agency funds that work.

But to supervisor Daniel's point, I think there's some some clear messages in both the presentations we received earlier as well as this budget draft that our long term financial model needs some attention. And so I'm really, again, grateful to see that being acknowledged and spoken of publicly. We need to protect this infrastructure, and we also need to be honest about what it takes to pay for that work over time. It's not something that happens freely, and we've been talking for years about those realities, the aging systems, the groundwater sustainability, climate pressures and changes, deferred maintenance, and the growing importance of recycled water as part of our long term strategy. But through this hearing and this budget, I think the conversation that we need to be having now is increasingly transparent about the financial costs of maintaining those systems.

And so I just wanna say thank you again, and let's continue being really honest about what it costs to maintain this critical infrastructure. Because if we're not intentional about our budget planning, we're gonna find ourselves in crisis response in the future, and that's not something that I wanna leave leave unaddressed. So thank you. I'm happy to entertain a motion.

Move. Second.

Sorry. So I had a motion from Alejo, a second from Church, and a Formally comment from

adopted when it comes back in June. So this is just a motion to move forward.

Yes. Thank you. Alright. All in favor? I had a comment.

I had a comment.

Sorry. We opened in

Public comment.

On that item. So we're, moving now on to recess the Monterey County Board of Supervisors for the water resource agency. We're