Modesto sells water systems to Waterford for $2.6 million

Modesto has agreed to sell the Waterford Hickman water systems to Waterford for $2.6 million, with the sale giving Modesto cash to offset some of its decline in water revenue because of the drought while Waterford gains more control over its future.

Modesto acquired the systems when it purchased the Del Este Water Co. in 1995. The Waterford Hickman systems include eight wells and about 2,400 water connections, according to a Modesto report. Waterford attempted to purchase the systems in 1996 and 2003. The negotiations that resulted in this deal started in 2012. The city councils of Waterford and Modesto each recently approved the deal. The sale is expected to close Wednesday or Thursday.

“Buying the water system from the city of Modesto is a great accomplishment for Waterford,” Mayor Mike Van Winkle said in an emailed statement. “It gives Waterford control over our growth in the future.”

Waterford will operate the system for its more than 8,600 residents and the few hundred residents of Hickman, the unincorporated community just south of Waterford.

Waterford City Manager Tim Ogden said in an email that the purchase will let his city upgrade the systems and set water rates based on the needs of Waterford and Hickman. He added that once the drought ends, Waterford can negotiate with Modesto or the Modesto Irrigation District to augment its wells with water from the Tuolumne River.

“This is a big deal for our citizens,” Ogden said in the email.

Waterford will conduct a rate study but does not expect any changes to what customers pay until next year, he said. He added that the increases are expected to be less than what Modesto customers face when Modesto does its rate study during roughly the same time period.

Modesto has seen its water fund revenues fall during the drought because its customers are using less water. The state has mandated that Modesto, like many other Northern San Joaquin Valley cities, reduce its water consumption by 36 percent.

Modesto is considering raising customers’ water bills next year to make up for the decrease in revenue. A Modesto report states the Waterford sale will help “sustain the necessary funds needed for improvements for our water system.”

This story was originally published June 30, 2015 at 2:45 PM with the headline "Modesto sells water systems to Waterford for $2.6 million."