In a stunning vote, two cities nix Monterey One Water's billing process one week before it begins.

A cost-saving plan to shift all of Monterey One Water's billing to collection through county property tax bills was killed just seven days before it was to go into effect, thanks to opposition from just two of the board's 10 members in a weighted vote.

Anthony Rocha, a city councilmember from Salinas who serves as the city's representative to the sanitation agency board, and Alexis Garcia-Arrazola, representing Seaside, were the deciding votes. (Salinas gets six votes because it has the largest population in the district's service area. Seaside gets three votes.)

Eight board members voted to move ahead with contracting with the Monterey County Tax Collector to collect fees from M1W ratepayers beginning July 1. But with the weighted vote means instead of an 8-2 vote to proceed, the total was 13-9 to proceed—although it's a majority, the vote failed because it required at least two-thirds of the total possible votes, or 14 of 22.

"Yes, I was surprised," says M1W General Manager Paul Sciuto. He and his staff had been working on the changeover for well over a year.

The switch from a third-party billing company to the tax collector was estimated to save the agency approximately $400,000 a year once fully implemented, since M1W would no longer have to pay for printing and mailing of bills six times a year, among other cost savings.

The district representing approximately 58,600 ratepayers to fund sewer treatment had spent over $100,000 in public outreach to explain the change in billing practices and make preparations for the switch, according to Sciuto. They now have to spend more going back to tell ratepayers that there is no switch and they will continue to receive bills every other month.

After the board decided in a preliminary vote in February to continue working toward making the switch on July 1, members subsequently approved a budget for for the 2024-25 fiscal year that did not include the usual expenses for bimonthly. The district will have to come up with that money from somewhere, possibly its contingency fund.

Rocha was adamant the district not proceed with the plan, due to his belief that placing the fees on property tax bills would be an unfair burden on senior citizens and residents from underserved populations.

Had the plan passed, customers would go from paying $101.90 per two-month billing cycle ($50.95 per month) to $305.70 twice a year with their tax bills in December and April (also $50.95 per month).

Board members representing other cities within the district—Sand City, Del Rey Oaks, Pacific Grove and Monterey—the County of Monterey and other agencies—Marina Coast Water District, Castroville Community Services District, Boronda County Sanitation District—argued that there would be no detrimental impact to ratepayers, who would go from paying the same rates they would have paid six times a year to twice a year. 

Board member Nick Smith, representing Pacific Grove, said customers would not see an increase in their costs but that the district would save money, "which is good for the public." That savings would be invested back into the district's equipment and infrastructure, which in turn would benefit customers.

Smith and others pointed out that if any property taxpayer had problems paying a large bill twice a year, the county's tax collector recently implemented an "easy pay" option, allowing them to pay those bills over 12 months. (Easy pay allows people to pay their full property tax bill monthly over 12 months, but not to split off line items like the M1W portion to pay monthly.)

A long line of angry customers showed up to the meeting to argue against making the switch, voicing fears that the changeover would lead to drastic outcomes, including homeowners losing their homes if they couldn't pay their bills. 

Vice Chair Tyller Williamson, mayor of Monterey, said that after listening to public comments and seeing negative comments posted on the social media site Nextdoor, he sensed a general dislike of government and a misunderstanding of how the sanitation agency works. "Change is hard," he said, adding that the fear of the unknown was also at play. 

At one point Williamson told Rocha he struggled to understand Rocha's logic of the change burdening ratepayers, since it was simply a difference in how billing was done and there was an option through the county to pay over 12 months.

(Part of Rocha's concern was that lenders could require homeowners to add funds to escrow accounts due to an increase in property tax bills, costing them a one-time sum, usually two months' worth of payments—in this case, $100. According to M1W, 28 percent of ratepayers have such an account.)

Asked why the district waited until June 24 to ask for a formal vote on the change, Sciuto says that after the preliminary approval in February the staff was gathering the most up-to-date and accurate data for the board before a final vote. 

"Would I do it that way in the future? Probably not, because we invested quite a bit," he says.

The M1W staff now needs to unwind all of the preparations for the expected change on July 1. They had already made arrangements to switch over to the county for invoicing. They now have to go back to their third-party biller and hope they will take the district back. 

Would the district attempt another vote of the board in the future? Sciuto says it would take a board member to initiate a restart of the process. "It certainly wouldn't happen this year," he says.