MODESTO -- The Modesto City Council decided Wednesday to spend $30,000 to study the costs of annexing Salida and providing municipal services to the community of 13,700.
Some city leaders see major potential for developing approved business parks in the Salida community plan. Stanislaus County will fund the other half of a $60,000 fiscal study; Goodwin Consulting Group of Sacramento is expected to complete the study in two months.
On another item, council members questioned the $2.4 million cost of making repairs to the fire-damaged McHenry Mansion and heard from staff that large insurance settlements in recent years have driven up the costs of the city's liability insurance.
As of July 1, Modesto has a $500,000 deductible on its annual policy for insuring city property, up from $100,000, staff said.
Regarding Salida, the council strongly supported the fiscal study on annexation, making it clear that potential economic development was the driving force.
Councilman Dave Cogdill Jr. said Modesto doesn't have large enough sites to market to major employers, so it watches Patterson and Turlock seal agreements with Amazon.com and Blue Diamond Growers, respectively. "If Salida is not going to be part of our future, then what are we going to do for economic development?" he asked.
Mayor Garrad Marsh said he wanted to see a cost analysis and tax-sharing scenarios with the county before asking the public about the annexation. He said the annexation proposal won't move forward unless those questions are answered.
The study will look at the county's service costs in Salida and the costs of Modesto providing law enforcement, recreation, park maintenance and other services to the community. Marsh also is interested in potential agreements for sharing Salida's tax base with the county, which could expand with business park development.
Stanislaus County supervisors approved Salida's growth plan in 2007, including industrial and commercial areas that, according to planners, have potential to add 30,000-plus jobs. The plan also designated land for 4,500 housing units.
Marsh said the city would need to hold a sewer-line extension vote in Modesto before the wheels start turning on annexation.
The city and county will spend $60,000 on the study even though it's unclear whether annexation is supported by a majority of Salida residents. "The people of Salida should get to vote on the annexation issue," said Katherine Borges, who serves on the Salida Municipal Advisory Council. "I think people don't understand what the annexation would entail for them. They don't know how it will impact their taxes or the impact from adopting Modesto's ordinances. I don't think businesses know they will be paying a mill tax."
Also Wednesday, Cogdill and Councilwoman Stephanie Burnside questioned the McHenry Mansion restoration cost, now estimated at $2.4 million — five times the previous figure to repair damage from a Dec. 6 fire.
Staff said milling work to replicate the front columns and moldings ran $300,000. Sealing off the mansion and other lead-based paint precautions cost $100,000, and $125,000 is being spent to replace wool carpeting.
Julie Hannon, director of parks, recreation and neighborhoods, said smoke damage occurred throughout the three-story building, requiring artwork and artifacts to be cleaned and restored by professionals.
"I am sure (the costs) are legitimate, but it's hard to wrap my mind around it," Cogdill said.
Staff said five large insurance settlements in recent years make it harder for the city to buy insurance at reasonable cost. The claims included $3.5 million for the original John Muir School building that burned on East Morris Avenue in 2007 and $1 million for water damage at the Police Department.
Travelers Insurance required a $500,000 deductible for a one-year renewal of the policy in July, staff said, adding that other companies wouldn't offer insurance.
MODESTO CITY COUNCIL WATCH
The City Council took the following action Wednesday:
• Approved a loan agreement with Habitat for Humanity for a neighborhood stabilization project in southwest Modesto. The $1 million in federal funds will cover part of the costs for Habitat to buy finished lots and help 21 families build their own homes.
• Approved annual landscape assessments for the Dry Creek Meadows, Creekwood Meadows and Shackelford areas
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