Modesto City Council poised to approve $340 million budget

kvaline@modbee.comJune 10, 2014 

The Modesto City Council on Tuesday was poised to approve a $340 million operating budget for the fiscal year that starts July 1, which includes $4 million in cuts to public safety and will result in the closure of one of the city’s 11 fire stations. The council had not voted on the budget as of press time but was expected to approve the spending plan.

It did vote to enter into a contract with Siemens Technology to replace about 9,500 city streetlights and perform other lighting – and heating, ventilation and air-conditioning – upgrades to reduce the city’s energy costs and usage.

The issue generated a lot of heat, with one of Siemens’ competitors claiming it could upgrade the streetlights – the majority of the $8.4 million project – at significantly less cost. A Siemens official questioned those claims and said the competitor – Tanko Lighting President Jason Tanko – has a habit of making last-minute claims against Siemens.

But former Councilman Dave Geer told council members to investigate those claims before making a decision. He warned council members they would be “in political hot water like you’ve never seen before” if the public perceives them as passing up savings while making cuts to public safety.

City officials said that was an apples-to-oranges comparison and that those savings would be on energy bills. They also said Siemens was prepared to lend Modesto the money for the project, with the city paying off the loan with the savings from lower power bills and maintenance and operations costs. Tanko was not offering the city financing.

Siemens is guaranteeing that the project will generate enough savings for Modesto to pay off its loan and have money left over. A city report said the project will generate more than $4 million for the city over 15 years. The agreement calls for Siemens to pay Modesto for any shortfalls in expected savings or provide operational upgrades at its own expense to make up for a shortfall.

The city and Siemens have been working on the project for 17 months, and the city selected Siemens through a competitive process. Interim City Manager Jim Holgersson advised the council to move forward on the project before the state imposes more stringent energy conservation standards July 1. A city report says those standards would add cost to the project without corresponding savings.

The deal with Siemens will not be complete unless the council votes June 24 on the financing package for the project. Holgersson said the two weeks until the next council meeting will give the city time to evaluate Tanko’s claims.

The council vote was 6-1, with Councilman Bill Zoslocki voting “no.”

The council voted 7-0 to terminate the agreement among Modesto, Stanislaus County and Salida Fire Protection that formed the Modesto Regional Fire Authority in 2011, when the three governments merged fire operations. The county Board of Supervisors and the Salida board also voted Tuesday to disband MRFA. The MRFA board – composed of representatives from the city, county and district – is expected to vote today to unwind MRFA as of July 1.

The votes to disband MRFA included approving a memorandum of understanding that will aid the three governments in transitioning to providing their own services and a one-year contract in which Modesto will provide Salida with fire services at a cost of $1.2 million. Salida’s professional firefighters became Modesto employees when MRFA was formed.

Officials say MRFA needed to expand by adding other fire agencies but was not able to do so for a variety of reasons. But officials say they will continue to pursue regional cooperation among agencies through a model that promotes efficiencies while maintaining agencies’ independence.

Those efficiencies include standardizing equipment, training and policies and boundary drops, in which the nearest fire company responds to a call regardless of the jurisdiction. Agreements instituting these efficiencies could come before governing boards in August.

Bee staff writer Kevin Valine can be reached at kvaline@modbee.com or (209) 578-2316.

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