DATE: JUNE 18, 2024
DEPARTMENT: ADMINISTRATION
PUBLIC WORKS
CITY CLERK’S OFFICE
CITY ATTORNEY’S OFFICE
FROM: DAVID JACOBS, PUBLIC WORKS DIRECTOR
RENE MENDEZ, CITY MANAGER
BY: CHRISTOPHER A. CALLIHAN, CITY ATTORNEY PATRICIA M. BARAJAS, CITY CLERK
JIM PIA, ASSISTANT CITY MANAGER
TITLE: WASTEWATER COLLECTION PUBLIC HEARING
RECOMMENDED MOTION:
Conduct a public hearing and determine the official number of written protests received on the proposed collection of wastewater collection fees and charges on the property tax roll by Monterey County and, if the number of valid protest votes is below 50% of the number of property owners or customers authorized to vote, approve a Resolution approving the City’s 2024-2025 Annual Rate Report for Wastewater Collection and directing collection of the fees and charges detailed in the report on the Monterey County Tax Roll.
EXECUTIVE SUMMARY:
Effective July 1, 2024, Monterey One Water (M1W), will no longer directly bill its customers for wastewater collection service. As proposed and as approved by M1W, customer bills will be replaced by an annual fee which will be included on each affected parcel’s property tax bill issued by the County of Monterey. This change was initiated by M1W and approved by their Board of Directors and, consequently, each of the cities within M1W’s service area are now required to take action with respect to the future billing of M1W’s service fees and charges. This action does not create a new fee, charge, or tax imposed by the City of Salinas; rather, this action represents a change in the process for collecting an existing charge imposed by M1W for services M1W provides to its customers.
At the City Council meeting of June 11, 2024, the Council approved a Resolution approving both an agreement with the County of Monterey and a Memorandum of Understanding with Monterey One water (M1W) and authorizing the City Manager to enter into these agreements on behalf of the City of Salinas. These agreements are required to establish the new billing process. Before these documents can be executed, however, today’s Public Hearing must be held as to whether there is a majority protest to the proposed billing change and, if not, to take action to approve collection of the annual wastewater collection service fees and charges on the property tax roll by the County of Monterey. In order to utilize this billing method, the following steps are required and have been completed by the City Clerk’s Office:
The City of Salinas Annual Rate Report for Fiscal Year 2024-2025 must be prepared and filed with the City Clerk; Salinas must publish notice in the newspaper prior to holding a public hearing; Because this is the first year in which the fees are proposed to be collected by the County on the tax roll, notice must also be mailed to each property owner; At the time noticed, the City Council must hold a public hearing and majority protest proceeding; At the end of (today’s) hearing, and so long as protests have not been filed by a majority of property owners, the City Council can approve the attached Resolution approving the City’s 2024-2025 Annual Rate Report for Wastewater Collection and directing collection of the charges detailed in the report on the Monterey County Tax Roll.
BACKGROUND:
During the current Fiscal Year, the M1W Board of Directors took action to change its billing platform from direct billing of its customers to utilizing the Monterey County Tax Roll for annual billings of wastewater sewer charges. M1W made this change due to issues with its current billing system and estimated savings. With this change, direct billing will stop on July 1, 2024, and depending on additional action by the City an annual sewer charge would appear on property tax bills in October 2024 for all residents in the M1W service area. Property tax bills may be paid in one or two installments, which is a change from the current six direct billings each year. For those customers who prefer monthly payments, however, the County of Monterey has authorized Easy Smart Pay to provide a monthly payment option for the payment of property taxes, inclusive of the M1W service fees and charges. M1W will also continue to offer a low-income assistance program to help qualifying residential customers with their wastewater fees. A copy of M1W’s “Change to Billing Practice” fact sheet is attached to this Report for reference.
With M1W’s change to its billing practice, M1W will no longer provide wastewater billing and collection services to Salinas residents; consequently, the City needs to allow for the collection of wastewater service charges through the Property Tax Roll of the County of Monterey pursuant to California Health and Safety Code section 5470 et seq. in order to collect service charges to cover the costs of providing wastewater collection services to Salinas residents. If the City does not enter into this service, the City will need to bill customers directly which will require the City to create a new division within the City to manage the billing.
So that the collection may occur through the Property Tax Roll of the County of Monterey, the City must enter into an agreement with the County of Monterey in the form attached to this Report pursuant to which the County will collect the wastewater fees on the County tax rolls and remit those fees to the City. In addition, the City must enter into an agreement with M1W in the form attached to this Report pursuant to which M1W will assist the City in placing the wastewater fees on the County tax rolls by assisting the City with the preparation of reports and the collection of data and information related to customers within Salinas. The agreements noted here were approved by the City Council on June 11, but will only be executed by the City Manager after today’s public hearing and majority protest proceeding. During its June 11, 2024, consideration of the related agreement with the County of Monterey and the related Memorandum of Understanding with M1W, the City Council requested that City staff monitor the effect of this change on M1W’s Salinas customers over the next year and provide a report to the City Council.
At today’s meeting, the City of Salinas will conduct the public hearing and majority protest proceeding relating to the approval of the written report, and direction to collect the sewer fees on the property tax roll. The City of Salinas has complied with the other requirements noted above.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378). In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.
STRATEGIC PLAN INITIATIVE:
This action is consistent with the City Council’s goals of supporting infrastructure and environmental sustainability and supporting effective and culturally responsive government. (City of Salinas Strategic Plan 2022-2025).
DEPARTMENTAL COORDINATION:
The City Manager’s Office, City Clerk’s Office, Public Works Department and City Attorney’s Office coordinated internally on the preparation of this Report and with M1W regarding the change to the billing process.
FISCAL AND SUSTAINABILITY IMPACT:
There is no impact to the City’s General Fund other than the continued compensation paid by the City to M1W for services provided and future increases to that amount and to charges imposed by Monterey County related to the property tax billings. The City will continue to receive the same amount of service charges to cover the costs of providing wastewater collection services to Salinas residents.
ATTACHMENTS:
Resolution
M1W Customer FAQs
City of Salinas Annual Rate Report for Fiscal Year 2024-2025 available at: www.cityofsalinas.org/Newsroom/Public-Notices
County of Monterey Agreement
Memorandum of Understanding with M1W
RESOLUTION NO. _________ (N.C.S.)
A RESOLUTION ADOPTING THE REPORT PROPOSING TO HAVE SEWER FEES AND CHARGES COLLECTED ON THE TAX ROLL FOR FISCAL YEAR 2024-25 AND DIRECTING THE CITY CLERK TO FILE A COPY OF SAID REPORT WITH THE MONTEREY COUNTY AUDITOR TO PLACE SAID FEES ON THE TAX ROLL WHEREAS, pursuant to Section 5473 of the California Health and Safety Code, Monterey One Water (M1W) and the City of Salinas are each authorized to place sewer fees and charges on the property tax roll that have been adopted by Resolution and approved by the City Council; and WHEREAS, Staff has prepared and filed a written report (Report) with the City Clerk containing a description of each parcel of real property receiving the services from M1W and the amount of the charge for each parcel; and WHEREAS, the Clerk filed the Report and caused a notice of the time and place of the public hearing to be published all in accordance with California Health and Safety Code, section 5473.1; and WHEREAS, the Clerk also caused a written notice of the filing of the Report and the date, time, and location of the public hearing, to be mailed to each person to whom any parcel or parcels of real property described in the Report to the address shown on the last equalized assessment roll available on the date the report is prepared, or as known to the Clerk; and WHEREAS, on June 18, 2024, at 4:00 p.m., the Salinas City Council conducted the public hearing on the Report and heard and considered all objections or protests thereto; and WHEREAS, the Salinas City Council determined that protests were not made by a majority of the owners of property described in the Report; and WHEREAS, the Salinas City Council has determined to adopt the Report and to collect the fees on the tax roll of Monterey County, which such fees shall constitute a lien against the parcel or parcels of land described in the Report in accordance with California Health and Safety Code sections 5473 et seq.
NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF SALINAS that:
The Council hereby finds and determines that the above recitals are true and correct and are incorporated herein by this reference.
The Report filed with the City Clerk contains a description of the real property parcels subject to the fees and the amount of said fees for Fiscal Year 2024-25 to be imposed thereon, and the Report is therefore approved and adopted.
The Report for the Fiscal Year 2024-25 shall be forwarded to the Monterey County Auditor/Controller and the Fees contained therein shall be collected on the tax roll in the same manner, by the same person, at the same time, together with and not separate from the general taxes.
On or before August 10, 2024, the Clerk is hereby directed to file a copy of the Report with the Monterey County Auditor/Controller, with a statement endorsed thereon over her signature that this has been fully adopted by the Salinas City Council, together with a certified copy of this Resolution, and shall request that the fees be collected on the tax bills for the taxable parcels identified in the Report along with the ordinary ad valorem taxes to be levied on and collected from owners of said parcels.
If any section, subsection, subdivision, sentence, clause, or phrase in this Resolution or any part thereof is for any reason held to be unconstitutional or invalid, ineffective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Resolution or any part thereof. The Salinas City Council declares that it would have adopted each section irrespective of the fact that any one or more subsections, subdivisions, sentences, clauses, or phrases be declared unconstitutional, invalid, or ineffective.
This Resolution shall take effect immediately upon adoption; The City Manager or his designee is hereby authorized to take all actions necessary to implement this Resolution.
PASSED AND APPROVED this 18th day of June 2024, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
APPROVED:
____________________________________
Kimbley Criag, Mayor
ATTEST:
_________________________________
Patricia M. Barajas, City Clerk
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