A misinterpretation of state law regarding cost-of-living adjustments led to Seaside City Council members in Monterey County receiving a 500% pay raise, resulting in an overpayment of approximately $26,000 per member. The council's monthly pay was inadvertently increased from $400 to $2,400 in June 2025.
The significant pay bump went unnoticed for over a year until a citizen alerted city staff via an email. Councilmember Alex Miller expressed anger over the situation, stating that the council is "extremely furious" about the prospect of repaying the funds. Miller attributed the error to the city attorney, claiming the attorney "assured us it was legal" and had not properly researched the applicable law.
The error reportedly stemmed from a misunderstanding of compound interest within a state statute designed to adjust council compensation for inflation. The law permits an annual increase of "an amount equal to 5 percent for each calendar year from the operative date of the last" pay adjustment. However, instead of applying a simple 5% annual increase, the salary was recalculated with compounding 5% gains each year since the council's last raise in 1986. This compounding calculation resulted in a salary increase that was 310% higher than intended, leading to the monthly pay reaching $2,400 instead of the expected $1,100.
Councilmember Alexis Garcia-Arrazoa acknowledged the overpayment and pledged to repay his portion. "I think it's the right thing to do, the moral thing to do and to be the example to the community that, you know, even though these things happen, there is accountability and transparency," Garcia-Arrazoa said. He also indicated that the council felt misled during the process, stating, "What I want to highlight is that we were guided through a process that led us to believe the amount (of the raise) was appropriate."