In the next month, the city of Ceres and Stanislaus County could reach a tentative agreement to provide clean drinking water to a small, isolated settlement nine miles south of Modesto.
The Monterey Park Tract Community Services District has been in negotiations with Ceres for years to connect to its water supply. During that time, the roughly 200 residents of this neighborhood of 47 homes have had to buy bottled water because its two wells are tainted with nitrates, arsenic and manganese, which can cause significant health problems if ingested.
In April 2012, the district received a $2.2 million grant from the state that will cover the cost of constructing a water-pipe extension from Ceres after completing an environmental study and drafting a water service agreement with the county and city.
Ceres city engineer Toby Wells said the district must establish a reserve fund of at least $75,000 that the city can draw from if the district fails to pay its bills, estimated to total $31,000 a year.
If that account reaches zero, the county will assume responsibility of the district per a memorandum of understanding among the three parties, which the Board of Supervisors will consider today. If the board approves it, the Ceres City Council likely will vote on it in late July and will set the foundation for the more legally binding water service agreement in the future.
How to pay the bills?
Wells said the city's concern in helping the district has been doubts over its ability to pay now, as well as in the future.
The district's finances have not been audited since 1995, and its cash balance is slightly more than $25,000.
Because the district is outside the city limits, its residents would not get to vote on future rate increases under Proposition 218 but they conversely would not be obligated to pay the future rate increases. The district, Ceres' customer, would have to pay the increased rate, and would bill residents accordingly, but the residents could balk.
Rates set in the current memorandum of understanding will reflect an increase that started this year and will continue increasing 5 percent to 7 percent per year until 2018.
A state-funded study looked at treating the well water, refurbishing a well or drilling new ones; it determined that buying from Ceres would be best.
Because the project is in its preliminary stages, no time line has been set, Wells said.
In the interim, another grant to the district provides emergency funds to supply residents with 20 gallons of bottled drinking water a month, said district President Francisco Diaz. He said deliveries of the water are expected to begin the second week of July.
Bee staff writer Erin Tracy can be reached at firstname.lastname@example.org or (209) 578-2366. Follow her on Twitter, @ModestoBeeCrime.