What they didn’t tell you about last year’s water rate hike in Modesto

Rain in January 2017 left huge puddles throughout Modesto, including this one on Crows Landing Road.
Rain in January 2017 left huge puddles throughout Modesto, including this one on Crows Landing Road. File Photo

Don’t worry about your water bill going up to cover a newly created storm drain charge. You’re already paying it.

Last summer, the Modesto City Council dramatically raised water fees. Much of the justification focused on the city running low on water revenue because people had been using much less water in the drought.

Lost in the conversation was the city’s behind-the-scenes decision to finally go along with demands from the Modesto Irrigation District for storm drain money. After rain, MID canals for many decades have carried that stormwater away – a service for which the city is responsible but pays nothing.

Two years of negotiating led to a private handshake agreement last year that the city would begin compensating MID. The charge will fluctuate depending on MID’s costs for a given year; for 2017, it’s $1.2 million.

What you’ve put together is very good.

Jake Wenger, MID board, speaking to staff

When proposing steep water bill hikes last year, the city included an extra $1.2 million for stormwater in overall calculations without bringing attention to its origin: the quiet negotiations with MID.

Fast-forward to this week, when on Tuesday the MID board approved its end of the historic storm drain agreement. The City Council is expected to consider its part on July 5.

Both sides say it’s a fair deal, and signals a new era of cooperation between the two agencies.

We’re not working against MID; actually, we’re working together. We’re all in the business of trying to protect what water we have in this area.

Will Wong, Modesto engineering manager

“The past couple of years, our relationship with the city has gotten a lot better,” MID board chairman Nick Blom said.

A city consultant’s report justifying last year’s water rate increase did not pinpoint how much of it stemmed from the new stormwater charge. Simple math suggests that the new fee accounts for 11 percent of the price jump.

The new water rate is expected to bring Modesto $58.3 million this fiscal year, up from $47.5 million last year; $1.2 million would be 11.1 percent of that increase.

A typical family’s monthly water bill was expected to jump from $41.77 to $54.20 under the new rate, an increase of nearly 30 percent, and that’s just the beginning; last year’s vote put in motion a series of rate hikes that eventually could bring that same family’s bill to as much as $71.31 in three years. The City Council must revisit rate proposals each year.

The next is expected in a few weeks. Numbers could depend on whether people have been using more water – bringing the city more water revenue – since the council last month approved three days of outdoor watering per week, up from two.

Before this week, the city and MID had 17 separate storm drain agreements, one for each of the 17 points throughout Modesto where the city pumps rainwater into MID canals. The old agreements envisioned a city payment at some point, but no money ever changed hands until now.

$17 million 2016 farm water subsidy borne by MID’s residential customers

MID has cited the free storm drain service when discussing the district’s uncompensated value to city residents. It’s part of a larger debate over MID’s long-standing practice of overcharging electricity customers in order to keep farmers’ water prices low; the subsidy came to more than $17 million last year.

That debate evolved into a class-action lawsuit against MID which has yet to be resolved. The lawsuit claims that homeowners also subsidize large industrial customers like food and beverage processors.

The storm drain deal is not all one-sided in favor of MID, both sides said. It provides a new guarantee that the city can pump rainwater at any time, rather than waiting for MID approval; that could prove inconvenient if MID, for example, wants to perform canal maintenance, assistant general manager John Davids said.

Ultimately, the deal provides MID with $1.2 million more each year, which the city covers with money exacted from regular people who are paying more without receiving more service. On Monday, Davids was asked if the MID board might adjust its rates accordingly; “The board’s going to have to discuss that,” he said, but nothing of the sort surfaced at Tuesday’s MID meeting.

Garth Stapley: 209-578-2390