MPWMD adopts $39.4m budget featuring reduced recycled water costs and $1.8m for Cal-Am buyout

MPWMD adopts $39.4m budget featuring reduced recycled water costs and $1.8m for Cal-Am buyoutThe Monterey Peninsula Water Management District has approved its FY 2026-2027 financial plan, highlighting a 12% reduction in purchased water rates from the Pure Water Monterey expansion and advancing efforts to acquire the local private water system.

The $39.4 million budget represents a 6.6% decrease from the previous year, primarily due to the completion of grants related to the Pure Water Monterey expansion.

The district plans to purchase 5,286 acre-feet of water, plus 300 acre-feet for a drought reserve, at a reduced rate of $3,800 per acre-foot.

Capital expenditures include $1.8 million for the ongoing eminent domain acquisition of the Monterey Water System and $800,000 for redrilling Seaside Basin monitoring wells.

Despite healthy water reserves, the district faces ongoing regulatory hurdles as the State Water Resources Control Board delays hearings on modifying a Cease and Desist Order that halts new water connections.

The Monterey Peninsula Water Management District (MPWMD) Board of Directors unanimously adopted a $39.4 million budget for fiscal year 2026-2027 on June 15, 2026, marking a 6.6% decrease from the current year's revised budget. The reduction in overall spending is largely driven by a 10% drop in project expenditures as major grants tied to the Pure Water Monterey (PWM) expansion project come to a close. However, the purchase and sale of water remains the district's largest budget category. For the upcoming fiscal year, the district plans to purchase 5,286 acre-feet (AF) of water, along with an additional 300 AF for a drought reserve. According to the district's Chief Financial Officer, the rate for this water will drop 12% to $3,800 per AF, a reduction framed as a major win for local ratepayers. The budget also allocates $4.6 million for unreimbursed project expenditures. This includes $1.8 million specifically earmarked to advance "Measure J" efforts—the district's ongoing eminent domain acquisition of the Monterey Water System from private operator California American Water (Cal-Am). An additional $800,000 is allocated for the redrilling of three monitoring wells in the Seaside Groundwater Basin. Operationally, the district is entering the summer months in a strong supply position. The General Manager reported that the district's overall reserves stand at 9,168 AF, representing roughly a full year of supply based on customer demand. Furthermore, the PWM operating reserve requirement of 2,875 AF has been successfully met. Despite the robust water supply and healthy financial reserves, the district remains constrained by a State Water Resources Control Board Cease and Desist Order (CDO) that enforces a moratorium on new water meters. During the meeting, district officials expressed deep frustration over the state's delay in scheduling a hearing to modify the CDO. Because of the state-level moratorium, local jurisdictions like the City of Monterey are refusing to release water for new projects—including affordable housing and commercial expansions—until the order is officially amended. Board members noted that the district recently received a letter of support from State Senator John Laird, urging the State Water Board to expedite the hearing process and provide regulatory relief to the region.