$9 million MID-city dispute headed to trial

An April trial may resolve a $9 million dispute between Modesto City Hall and the Modesto Irrigation District over the botched expansion of a water treatment plant near Waterford, which is six years late and still not finished.

The addition will more than double the plant’s capacity for turning Tuolumne River water into tap water, from 30 million gallons to 66 million gallons per day. Delays related to more than 100 deficiencies have pushed the expected completion date from 2009 to early 2016, with total costs rising from $62.9 million to about $107.5 million.

The city and district recovered nearly $15 million in lawsuits against contractors but disagree on who should pay for the final $9 million in cost overruns. They sued each other in 2013; work stayed on track when the city put that amount in an escrow account to await resolution before a neutral reference judge selected by both sides.

The city restated its side in a new Dec. 1 claim to the district, which MID board members are expected to reject Tuesday in what looks like a procedural formality.

“We paid for a water plant that after six years has put forth no water,” said the city’s special counsel, Roland Stevens. “We say if (delays) were on account of negligence on the part of MID or its contractors, we don’t have to pay that money. They view it differently.”

Construction “is proceeding well,” MID spokeswoman Melissa Williams said, adding that the expansion should produce water in the fall with completion expected in about a year.

Attention at Tuesday’s MID meeting is expected to center on a staff recommendation to restructure farmers’ irrigation rates. Customers not receiving water but reserving the right to do so someday would pay sharply higher fees, while those receiving water would pay less than last year unless the board reinstates a per-acre drought surcharge. The recommendation assumes revenue neutrality and ignores the recent outcry about MID overcharging electricity customers $44 million a year to keep 3,100 farmers’ irrigation prices artificially low.

The board on Tuesday will learn that reservoirs held 113,111 acre-feet of MID water on Dec. 21, compared with 181,356 acre-feet on the same date a year earlier during the driest season on record. That amounts to a 37 percent decrease.

Discussion may touch on a long-term approach to water pricing, revising irrigation rules, groundwater legislation and the district’s historic practice of cloud seeding.

Other items on the MID agenda:

▪ University of California at Davis scientists will update the board on their study of how the massive 2013 Rim fire has affected the Tuolumne River’s water quality and the city’s water treatment plant and possible modifications.

▪ The board will decide whether to lease office space for an upgrade of MID’s billing and metering systems. The office space is at 1300 K St. in downtown Modesto near the State Theatre. The district would pay $235,000 to buy equipment plus $77,500 a year in rent.

Tuesday’s MID board meeting will start at 9 a.m. in the chamber at 1231 11th St., Modesto.

This story was originally published January 12, 2015 at 6:28 PM with the headline "$9 million MID-city dispute headed to trial."