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Housing development seeks new water deal

POSTED March 26, 2013 10:48 p.m.

Monterey Park, a small development of rural homes located northwest of Turlock, could be receiving future water service from the City of Ceres. But members of the Ceres City Council met Monday and made it clear they want Stanislaus County to insulate the city from any financial jeopardy.
The tract, built in 1965 but served since 1984 by a Community Services District, currently receives water pumped from a ground well. The district was formed because the individual wells that served the area were shut down for problems with nitrates. One well is in service now but the CSD board is concerned that the local ground water supply is not meeting state water quality standards. Residents have to drink and cook with bottled water because of high arsenic content.
The board approached the City of Turlock for water services, which is farther away, but was turned down.
Under the proposal, Ceres would supply up to 60,000 gallons of water per day for use in the rural enclave. That quantity would allow the 44-home subdivision to add up to 11 more homes on lots already approved. The city would bill Monterey Park Tract water at a rate one and half times what Ceres residents pay, or $1,800 per month based on average use of 700,000 gallons per month. If 60,000 per day if used, the tract would pay $4,300 per month.
The construction of the water line and a water tank is only possible because of a $2.2 million grant awarded the CSD by the state under Proposition 84. Ceres City Engineer Toby Wells said the city would charge a connection fee of $7,628 for each of the 50 homes. It would also charge a connection fee on about 10 undeveloped lots, with the money kept aside as a cushion to cover problems that arise, including inability to pay for the service.
Hooking up to Ceres water will be costly to tract residents who now pay approximately $75 per month. Rates will climb to about $95 per month on Ceres city water.
Council members spent time going over what Wells called one of the “primary sticky points” — assuring the city would be able to collect the cost of supplying water. The city, said Wells, is concerned about what happens if Monterey Park Tract residents fail to approve future rate increases since they have a right under Prop. 218 to protest such increases. Ceres Mayor Chris Vierra said with 44 households he could envision future times in which over 50 percent protest increases imposed by Ceres, especially when the city goes to the more expensive co-mingled surface/ground water system.
Wells said a Memorandum of Understanding must be approved as “the first big step” to launch the environmental studies that must take place.
The mayor said he feels uncomfortable having the city be the lead agency on the project since the county approved the building of the homes. Vierra said he wants the county to serve as a “backstop” if the district has financial problems. He said doesn’t want the city to “become the evil empire” if the city has to shut off the water for non-payment of service.
Vierra said he wants Ceres residents “having zero risk or close to zero risk … of having to burden a financial shortfall.”
Roland Mendez, a representative of the county chief executive office, said the county is willing to work with the City of Ceres to limit liability. The county is willing to sign onto the agreement as a partner although is not responsible for supplying water to the homes.
“We are here at the table,” said Mendez.
Another issue that the council touched on was who will be responsible for the line if emergency problems arise along the five-mile stretch of pipeline.
Wells reported that LAFCO does not necessarily have to approve the service extension as originally thought since the move only replaces existing water service. However LAFCO will be kept current on the steps in case it must weigh in, said Wells.
The council expressed a desire to help Monterey Park with water and applauded the board for its $11,000 reserve following years of red ink, as well as finally complying with Grand Jury requirements for financial audits after years of failing to do so.
Supervisor Jim DeMartini said the extended water line will not induce growth since it will only be a four-inch diameter line and could not support more houses along the route.

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