Modesto City Council
April 12, 2022

February 4, 2022
#13..
- 335 -
i) Rupture of a known earthquake fault, as
delineated on the most recent Alquist-Priolo
Earthquake Fault Zoning Map issued by the State
Geologist for the area or based on other substantial
evidence of a known fault? Refer to Division of
Mines and Geology Special Publication 42?
ii) Strong seismic ground shaking?
iii) Seismic-related ground failure, including
liquefaction?
iv) Landslides?
b) Result in substantial soil erosion or the loss of
topsoil?
EK1 c) Be located on a geologic unit or soil that is unstable, or that would become unstable as a result of the project, and potentially result in on- or off-site landslide, lateral spreading, subsidence,
liquefaction or collapse?
d) Be located on expansive soil, as defined in
Table 18-1-Bofthe Uniform Building Code (1994)
creating substantial risks to life or property?
e) Have soils incapable of adequately supporting
the use of septic tanks or alternative waste water
disposal systems where sewers are not available
for the disposal of waste water?
Discussion
a) The amendment area is level and comprised of loam and sandy loam soils. The area is not located near a seismic zone and would not be susceptible to liquefaction or landslide. b) The amendment would not result in substantial soil erosion. c) The site is not located on a geologic unit or soil that is unstable or would become unstable as a result of subsequent development. d) The soils at the site are predominately loam soils and sandy loam soils, not expansive soils. The City’s Urban Area General Plan MEIR found that there is low exposure to expansive soils and any exposure can be reasonably controlled by the adopted Uniform Building Code. e) Future development at the site will utilize the City’s sewer system for the disposal of waste water. Resource: See pages V-17-1 through V-17-14 of the MEIR. Page 17 of 31 February 4, 2022
#13..
- 336 -
Less Than Less Than No
Significant Significant impact
Impact
Potentially
Significant
Impact with
Mitigation
VII. GREENHOUSE GAS EMISSIONS: Would the
project:
a) Generate greenhouse gas emissions, either
directly or indirectly, that may have a significant
impact on the environment?
b) Conflict with an applicable plan, policy or
regulation adopted for the purpose of reducing the
emissions of greenhouse gases?
Discussion
a) Generation of greenhouse gases would predominately occur with vehicle traffic, but not at levels that would exceed those assumed by the MEIR. Previous traffic studies conducted for the site assumed business park uses would generate 9,220 daily trips. Under the General Plan’s model for daily trip rates for residential uses, fewer trips would be generated if the amendment area develops at a medium-high density of residential uses up to 16 units per acre. Therefore, impacts would be less than significant. b) The project would not conflict with an applicable plan, policy or regulation adopted for the purpose of reducing the emissions of greenhouse gasses. Resource: See pages V-2-38 through V-2-43 of the MEIR. Also referenced: Kiernan Business Park South FMP/IFP and Mana/Wagner Tentative Parcel Maps Initial Study/Mitigated Negative Declaration, EA/C&ED No. 2006-58, Table XV-1. Potentially Less Than Less Than No Significant
Impact
Significant Significant Impact
with Impact
Mitigation
VIII. HAZARDS AND HAZARDOUS MATERIALS:

Would the project:
a) Create a significant hazard to the public or the
environment through the routine transport, use, or
disposal of hazardous materials?
b) Create a significant hazard to the public or the
environment through reasonably foreseeable upset
and accident conditions involving the release of
hazardous materials into the environment?
c) Emit hazardous emissions or handle hazardous Q
or acutely hazardous materials, substances, or
waste within one-quarter mile of an existing or
proposed school?

February 4, 2022
#13..
- 337 -
El d) Be located on a site which is included on a list of hazardous materials sites compiled pursuant to
Government Code Section 65962.5 and, as a
result, would it create a significant hazard to the
public or the environment?
e) For a project located within an airport land use [X] plan or, where such a plan has not been adopted,
within two miles of a public airport or public use
airport, would the project result in a safety hazard
for people residing or working in the project area?
f) For a project within the vicinity of a private
airstrip, would the project result in a safety hazard
for people residing or working in the project area?
El g) Impair implementation of or physically interfere
with an adopted emergency response plan or
emergency evacuation plan?
h) Expose people or structures to a significant risk
of loss, injury or death involving wildland fires,
including where wildlands are adjacent to
urbanized areas or where residences are
intermixed with wildlands?
Discussion
a) The proposed amendments would allow for mixed uses including medium-high density residential uses. Any impacts would be related to development of the amendment area. Upon development as a result of the amendments, subsequent projects would be subject to compliance with all applicable federal, state and local regulations pertaining to the handling, storage, disposal and transport of toxic or hazardous materials or wastes. b) See item A above. c) See item A above. d) The amendment area is not on the list of hazardous materials sites. e) The amendment area is more than six miles away from the nearest airport. f) The amendment area is not within the vicinity of a private airstrip. g) The proposed amendment would not interfere with an emergency access plan or evacuation plan. Subsequent development would be subject to review by Modesto Police and Fire regarding emergency access. h) No forest or wildland is in the vicinity of the amendment area. Resource: See pages V-16-1 through V-16-15 of the MEIR. Page 19 of 31 February 4, 2022
#13..
- 338 -
Significant Significant Significant Impact ;
IX. HYDROLOGY AND WATER QUALITY: Would
the project:
a) Violate any water quality standards or waste
discharge requirements
?
b) Substantially deplete groundwater supplies or
K
interfere substantially with groundwater recharge
such that there would be
a net deficit in aquifer
volume or
a lowering of the local groundwater table
level (e.g., the production rate of pre-existing
nearby wells would drop to
a level which would not
support existing land uses or planned uses for
which permits have been granted)?
c) Substantially alter the existing drainage pattern
of the site or area, including through the alteration
of the course of
a stream or river, in
a manner
which would result in substantial erosion or siltation
on- or off-site
?
d) Substantially alter the existing drainage pattern
E
of the site or area, including through the alteration
of the course of
a stream or river, or substantially
increase the rate or amount of surface runoff in
a
manner which would result in flooding on- or off- site
?
e) Create or contribute runoff water which would
exceed the capacity of existing or planned
stormwater drainage systems or provide
substantial additional sources of polluted runoff?
f) Otherwise substantially degrade water quality
?
El
g) Place housing within
a 100-year flood hazard
area as mapped on
a federal Flood Hazard
Boundary or Flood Insurance Rate Map or other
flood hazard delineation map
?
h El
) Place within
a 100-year flood hazard area
structures which would impede or redirect flood
flows?
El
i) Expose people or structures to
a significant risk
of loss, injury or death involving flooding, including
flooding as
a result of the failure of
a levee or dam
?
j) Inundation by seiche, tsunami, or mudflow

February 4, 2022
#13..
- 339 -
Discussion
a) The proposed amendments to the General Plan land use diagram and Kiernan Business Park Specific Plan land use diagram would not cause a violation of any standards. Subsequent development that may occur as a result of the amendments would be required by the City and state regulations to comply with water quality standards and waste discharge requirements. b) The proposed amendments would not substantially deplete groundwater supplies or interfere substantially with groundwater recharge. Subsequent development will be required to incorporate on-site storm water handling and drainage as provided by the Kiernan Business Park Specific Plan. c) The amendments would not substantially alter the existing drainage pattern of the site or area in a manner which would result in substantial surface runoff, erosion or siltation. There are no streams within or in the vicinity of the amendment area. The nearest river is the Stanislaus River, approximately 2.5 miles away to the north. d) See item C above. e) Any subsequent development as a result of the land use amendments would be required to treat and retain stormwater as provided by the stormwater plans of the Kiernan Business Park Specific Plan and City standards, and would therefore not be expected to result in substantial runoff. f) See items B through E above. g) The amendment area is not located within a 100-year floodplain or a 200-year floodplain. h) See item G above. i) See item G above. j) The City is not subject to impacts as a result of seiche or tsunami. The City is inland approximately 90 miles from the Pacific Ocean and has no large water bodies within its jurisdiction or nearby. The amendment area is flat land and is not subject to mudslides. Resource: See pages V-9-1 through V-9-13 of the MEIR. mpact X. LAND USE AND PLANNING: Would the
project:
a) Physically divide an established community?

February 4, 2022
#13..
- 340 -
b)Conflict with any applicable land use plan, policy, Q or regulation of an agency with jurisdiction over the
project (including, but not limited to the general
plan, specific plan, local coastal program, or zoning
ordinance) adopted for the purpose of avoiding or
mitigating an environmental effect?
c) Conflict with any applicable habitat conservation Q
plan or natural community conservation plan?
E
Discussion
a) The proposed amendments and any subsequent development as a result of the amendments would not physically divide a community. The area is a portion of the Kiernan Business Park Specific Plan, adopted in April of 1997. b) Regulations of the City of Modesto and development policies of the Kiernan Business Park Specific Plan (as amended) would be applicable to any subsequent development at the site. The proposed amendment to the General Plan and Specific Plan would allow for mixed uses including medium-high density residential development within the amendment area. c) The amendment would not conflict with any applicable habitat conservation plans or natural community conservation plans. The City currently does not have habitat conservation plans in place. Resource: V-20-1 through V-20-14 of the MEIR. Impacl ....

XI. MINERAL RESOURCES: Would the project:
a) Result in the loss of availability of a known
mineral resource that would be of value to the
region and the residents of the state?
b Kl ) Result in the loss of availability of a locally- important mineral resource recovery site delineated on a local general plan, specific plan or other land
use plan?
Discussion
a) The amendment area is surrounded by urban uses and has no known mineral resources. b) The amendment area is not identified on any plan as being a location with mineral resources. Resource: See pages V-17-1 through V-17-14 of the MEIR. Page 22 of 31 February 4, 2022
#13..
- 341 -
Potentially Less Than
Significant
Impact
Less Than No
Significant Significant Impact
with Impact
Mitigation
XII. NOISE: Would the project result in:
a) Exposure of persons to or generation of noise
levels in excess of standards established in the
local general plan or noise ordinance, or applicable
standards of other agencies?
b) Exposure of persons to or generation of
excessive groundborne vibration or groundborne
noise levels?
IEI c) A substantial permanent increase in ambient
noise levels in the project vicinity above levels
existing without the project?
^ d) A substantial temporary or periodic increase in
ambient noise levels in the project vicinity above
levels existing without the project?
e) For a project located within an airport land use
plan or, where such a plan has not been adopted,
within two miles of a public airport or public use
airport, would the project expose people residing or
working in the project area to excessive noise
levels?
^ f) For a project within the vicinity of a private
airstrip, would the project expose people residing
or working in the project area to excessive noise
levels?

February 4, 2022
#13..
- 342 -
Discussion
a) The amendment area is adjacent to arterial streets and therefore subsequent development would expose the project site to traffic-related noise, but at a less than significant level with development standards of the Specific Plan and mitigation measures from the MEIR for noise control barriers applied. b) Subsequent development as a result of the land use amendments would not be expected to generate excessive groundborne vibration or groundborne noise levels. The allowable uses of the land use amendments would include medium-high density residential uses which would not produce groundborne noise or vibration. c) Subsequent development as a result of the land use amendments would generate a temporary increase in ambient noise as a result of construction processes, but at a less than significant level. d) See item C above. e) The amendment area is more than six miles away from the nearest airport. f) The amendment area is not within the vicinity of a private airstrip. Resource: See pages V-3-1 through V-3-46 of the MEIR. XIII. POPULATION AND HOUSING: Would the project:
a) Induce substantial population growth in an area,
either directly (for example, by proposing new
homes and businesses) or indirectly (for example,
through extension of roads or other infrastructure)?
b) Displace substantial numbers of existing
housing, necessitating the construction of
replacement housing elsewhere?
c) Displace substantial numbers of people, [x]
necessitating the construction of replacement
housing elsewhere?

February 4, 2022
#13..
- 343 -
Discussion
a) The proposed amendments to the land use diagrams of the General Plan and Kiernan Business Park Specific Plan would allow for mixed uses including medium-high density residential uses at a minimum of 15 dwelling units per acre and a maximum of 16 units per acre. Subsequent development at such density would not increase population growth by a significant amount; however, such development would add much needed medium-high density dwelling units to the housing stock of the City of Modesto and contribute to its Regional Housing Needs Allocation (RHNA) of the Housing Element. b) The amendment area is vacant, and therefore no existing residential development would be displaced as a result of development. c) See item B above. Potentially Less Than Less Than No Significant Significant Significant Impact
Impact with Impact
Mitigation
XIV. PUBLIC SERVICES:

IEI a) Would the project result in substantial adverse
physical impacts associated with the provision of
new or physically altered governmental facilities,
need for new or physically altered governmental
facilities, the construction of which could cause
significant environmental impacts, in order to
maintain acceptable service ratios, response times
or other performance objectives for any of the
public services:

M
[x]
IEl
K
M
Fire protection?
Police protection?
Schools?
Parks?
Other public facilities?

February 4, 2022
#13..
- 344 -
Discussion
a) Subsequent development of the area as a result of the amendments to the land use diagrams of the General Plan and Kiernan Business Park Specific Plan would increase demand for police and fire services to any new residential uses, but subsequent development will be expected to pay into Community Facilities Districts (CFDs) and pay associated Capital Facilities Fees (CFF) at the time of building permit issuance, to mitigate the impact to less than significant. The police and fire departments indicated no concerns with the project. The nearest fire station is Station No. 11 at 4225 Carver Road, 1.2 miles to the east. New residential development as a result of the amendments would increase demand for public school services, and any subsequent development would pay school impact fees at the time of building permit issuance. Any subsequent development will be required to pay CFF for their fair share contribution towards the development and maintenance of parks in the vicinity to the site, in addition to paying into a Community Finance District (CFD) to cover the maintenance of the Specific Plan’s amenities. The nearest park to the amendment area is McKinney Colony Park, approximately 0.45 miles away to the southeast. Pi
Significant Significant Secant Impact j
Mitigation
XV. RECREATION:

IEI a) Would the project increase the use of existing
neighborhood and regional parks or other
recreational facilities such that substantial physical
deterioration of the facility would occur or be
accelerated?
El b) Does the project include recreational facilities or require the construction or expansion of
recreational facilities which might have an adverse
physical effect on the environment?

February 4, 2022
#13..
- 345 -
Discussion
a) The proposed amendments would allow for new residential development which would potentially increase the use of existing parks in the vicinity of the amendment area, but not at a level that would cause substantial physical deterioration of the facilities. Any subsequent development would be required to pay Capital Facilities Fees (CFF) for its fair share contribution towards the development of any new parks. b) Subsequent development may include on-site recreational facilities or parks as amenities of the development, but is not expected to have an adverse physical effect on the environment. Resource: See pages V-11-1 through V-11-13 of the MEIR. XVI. TRANSPORTATION/TRAFFIC: Would the project:
policy
a) Conflict
establishing
with an applicable plan, ordinance or E
measures of effectiveness for
the performance of the circulation system, taking
into account all modes of transportation including
mass transit and non-motorized travel and relevant
components of the circulation system, including but
not limited to intersections, streets, highways and
freeways, pedestrian and bicycle paths, and mass
transit?
b) Conflict with an applicable congestion
management program, including, but not limited to
level of service standards and travel demand
measures, or other standards established by the
county congestion management agency for
designated roads or highways?
c) Result in a change in air traffic patterns, E including either an increase in traffic levels or a change in location that results in substantial safety
risks?
d) Substantially increase hazards due to a design
feature (e.g., sharp curves or dangerous
intersections) or incompatible uses (e.g., farm
equipment)?
e) Result in inadequate emergency access?

February 4, 2022
#13..
- 346 -
f) Conflict with adopted policies, plans or programs Q
regarding public transit, bicycle, or pedestrian
facilities, or otherwise decrease the performance or
safety of such facilities?
Discussion
a) The proposed amendments would not be in conflict with any adopted transportation plan or policy. The proposed General Plan amendment of 67 acres from Business Park uses to Mixed Uses, and associated 67-acre amendment of the Kiernan Business Park Specific Plan from business park uses to Mixed Uses 3 (MU3) would allow for the development of medium- high density residential uses at a minimum density of 15 units per acre and a maximum density of 16 units per acre within the amendment area. Previous traffic studies conducted for business park uses considered for the amendment area assumed 9,220 daily trips for business park uses. If developed with residential uses, the amount of trips would decrease under the General Plan’s model for daily vehicle trip rates for residential uses. Therefore, trip generation associated with subsequent development as a result of the amendments would be less than that assumed with the existing General Plan land use designation. The proposed amendments would not conflict with any congestion management program. The Kiernan Business Park Specific Plan provides for a roadway system that accommodates vehicles, pedestrians and bicycles, and includes transit stops. The proposed amendment to the Circulation Plan of the Specific Plan would change Bangs Avenue from a four-lane major collector street to a two-lane collector street, its current configuration. However, with subsequent development within the amendment area, required improvements to Bangs Avenue along the project frontage including the provision landscaping and sidewalks would increase the effectiveness of the roadway. b) See item A above. c) The amendment area is not within the vicinity of an airport or private airstrip. d) The proposed amendments would not substantially increase hazards due to a design feature (e.g., sharp curves or dangerous intersections) or incompatible uses (e.g., farm equipment). e) The Fire Department reviewed the proposed amendment and did not identify any issues with emergency access. Resources: See pages V-1-1 through V-1-46 of the MEIR. Also referenced: Kiernan Business Park South FMP/IFP and ManaA/Vagner Tentative Parcel Maps Initial Study/Mitigated Negative Declaration, EA/C&ED No. 2006-58, Table XV-1. Page 28 of 31 February 4, 2022
#13..
- 347 -
XVII. UTILITIES AND SERVICE SYSTEMS:

Would the project:
a) Exceed wastewater treatment requirements of E
the applicable Regional Water Quality Control
Board?
b) Require or result in the construction of new
water or wastewater treatment facilities or
expansion of existing facilities, the construction of
which could cause significant environmental
effects?
c) Require or result in the construction of new
storm water drainage facilities or expansion of
existing facilities, the construction of which could
cause significant environmental effects?
d) Have sufficient water supplies available to serve
the project from existing entitlements and
resources, or are new or expanded entitlements
needed?
e) Result in a determination by the wastewater
treatment provider which serves or may serve the
project that it has adequate capacity to serve the
project's projected demand in addition to the
provider’s existing commitments?
f) Be served by a landfill with sufficient permitted K
capacity to accommodate the project’s solid waste
disposal needs?
g) Comply with federal, state, and local statutes
and regulations related to solid waste?

February 4, 2022
#13..
- 348 -
Discussion
a) The amendments would not exceed treatment requirements of an applicable water quality control board. b) The amendment would not result in the construction of new water or wastewater treatment facilities. The proposal was referred to the City’s Land Development Engineering Department and the Public Works Department, who indicated no concerns with the amendments. c) Subsequent development as a result of the proposed amendments will provide for storm water handling and treatment with the installation of new underground storm drain lines and onsite or offsite treatment and drainage facilities as provided in the Kiernan Business Park Specific Plan. Projects would also comply with the City’s Stormwater Management Program Guidance Manual for New Development. d) There are sufficient water supplies to serve the amendment area. e) The City has sufficient wastewater capacity to serve the amendment area. f) Solid waste service is handled by the Gilton Solid Waste Management company, who indicated ability to serve the area at the time of the Specific Plan’s adoption. g) Subsequent development will be required to comply with statues and regulations related to solid waste. Impact I
XVIII. MANDATORY FINDINGS OF

SIGNIFICANCE
a) Does the project have the potential to degrade EH EH EH EH the quality of the environment, substantially reduce
the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self-sustaining
levels, threaten to eliminate a plant or animal
community, substantially reduce the number or
restrict the range of a rare or endangered plant or
animal or eliminate important examples of the
major periods of California history or prehistory?
b) Does the project have impacts that are
individually limited, but cumulatively considerable?
("Cumulatively considerable" means that the
incremental effects of a project are considerable
when viewed in connection with the effects of past
projects, the effects of other current projects, and
the effects of probable future projects)?

February 4, 2022
#13..
- 349 -
[x] c) Does the project have environmental effects which will cause substantial adverse effects on human beings, either directly or indirectly?
Discussion
a) As discussed in Section IV: Biological Resources, development at the site as a result of the land use amendments would not substantially impact wildlife habitat with mitigation measures applied. b) As discussed in Section III: Air Quality and Section VII: Greenhouse Gases, the proposed amendments would result in the development of mixed uses including medium-high density residential uses within the 67-acre amendment area, to a minimum density of 15 units per acre and a maximum of 16 units per acre. Generation of greenhouse gases would predominately occur with vehicle traffic, but not at levels that would exceed those assumed by the MEIR or the amounts assumed by previously-conducted traffic study of the amendment area for business park uses. Potential impacts to air quality would be due to construction practices, but at levels less than significant with the application of mitigation measures from the MEIR and the KBPSP SPA No. 4 EIR. As discussed in Section XIV: Public Services, above, new residential development as a result of the amendments would increase demand for public school services and parks, but not at a level that would cause substantial impacts to those facilities. Any subsequent development would pay school impact fees, and Capital Facilities Fees (CFF) for their fair share contribution towards the development and maintenance of parks in the vicinity to the site. c) This document identifies that the proposed amendments would have some cumulative environmental impact, but not at significant levels with the application of mitigation measures upon the onset of development. Therefore, impacts that may result from the proposed amendments to the General Plan and Kiernan Business Specific Plan are less than significant. Page 31 of 31
February 4, 2022
#13..
- 350 -
\
#13..
- 351 -
#13..
- 352 -
#13..
- 353 -
#13..
- 354 -
#13..
- 355 -
#13..
- 356 -
#13..
- 357 -
#13..
- 358 -
#13..
- 359 -
#13..
- 360 -
#13..
- 361 -
#13..
- 362 -
#13..
- 363 -

PLANNING COMMISSION
RESOLUTION NO. 2022-08

A RESOLUTION RECOMMENDING TO THE CITY COUNCIL ADOPTION OF

AN AMENDMENT TO THE MODESTO URBAN AREA GENERAL PLAN
(GRUPE-HUBER COMPANY)
WHEREAS, a General Plan for the City of Modesto entitled "City of Modesto Urban Area General Plan"(UAGP), was adopted by the City Council by Resolution No. 95-409 on August 15, 1995,in accordance with Section 65300 of the Government Code; WHEREAS, said General Plan has been amended by Modesto City Council Resolution Nos. 95-584,96-20, 96-338,96-639, 97-3, 97-137, 97-158, 98-293, 99-162, 99-564, 2000-303, 2000-633, 2001-47, 2001-476, 2002-154, 2002-526, 2003-101, 2003-122, 2007-066, 2007-599, 2008-142, 2008-583, 2009-419, 2011-253, 2011-254, 2011-436, 2012-430, 2014-17, 2014-422, 2015-262, 2016-34, 2017-21, 2019-109 copies of which are on file in the office of the City Clerk;
WHEREAS, Government Code Section 65358 permits the amendment of General Plans by the legislative body;and
WHEREAS,the Grupe-Huber Company has filed an application for a General Plan Amendment (File No. GPA-21-003) to amend the Land Use Diagram of the General Plan to change 67 acres from Business Park (BP) uses to Mixed Uses (MU), properties located south of Bangs Avenue,north of Pelandale Avenue and west of American Avenue, within the Kiernan Business Park Specific Plan; and
WHEREAS, said application was made concurrently with a proposed amendment to the Kiernan Business Park Specific Plan to amend the land use designation of the above 67 acres from Business Park (BP) to the new designation of Mixed Use 3 (MU3), (File No. SPA-21-003);and
WHEREAS, a public hearing was held by the Planning Commission on March 7, 2022,in Chambers, 1010 Tenth Street, Modesto, California, at which hearing evidence both oral and documentary was received and considered.

NOW,THEREFORE, BE IT RESOLVED, by the Planning Commission of the City of Modesto that it hereby recommends that the City Council approve the amendment to the Land Use Diagram of the General Plan to change the designation of 67 acres from Business Park (BP) to Mixed Use (MU), and to find as follows:

The proposed General Plan amendment will allow for diversity in the development of Mixed Uses including Medium-High Density Residential uses within the Kiernan Business Park Specific Plan, consistent with the Mixed Use designation.

A Negative Declaration,Environmental Assessment No. EA/C&ED No. 2022-6, was prepared by the City of Modesto that analyzed the proposed General Plan Amendment and the Planning Commission has determined that, on the basis of the whole record before it,there is no substantial evidence that the amendment will have a significant effect on the

1. 2.

GPA-21-003
#13..
- 364 -
Res No. 2022-08 Page 2
environment and that the Negative Declaration should be adopted by the City Council.

BE IT FURTHER RESOLVED by the Planning Commission of the City of Modesto that it hereby recommends to the City Council adoption of the proposed amendment to the Land Use Diagram of the Urban Area General Plan as described in Exhibit "A," attached hereto and incorporated herein by reference.

The foregoing resolution was introduced at the regular meeting of the Planning Commission held on March 7, 2022, by Commissioner Shanks, who moved its adoption, which motion was seconded by Commissioner Vazquez, and carried by the following vote:

Birring, Pollard, Shanks, Vazquez, Morad
None
Silva, Vohra
None
Ayes:

Noes:

Absent:

Recused:

BY ORDER OF THE PLANNING COMMISSION OF THE CITY OF MODESTO.2Z Steve Mitchell, Secretary
GPA-21-003
#13..
- 365 -
EXHIBIT "A"

GENERAL PLAN AMENDMENT
MU Q
Cki
o

BP BCR DCO
5 umsBtm
I oc TH O 8 MJ IX : \ -L > n 3 i
i x
FLEUR UJ C ££y / i T K \ - u /^;/ 7 _v - "Hi / ') _SX ! | a > -3_ ,. KI 2 I - » S I R
W rjl 1 uj 5 sm £>£P 3 R IrirrTWrimn
iLum
I s
KK
TmWNDALEWVEl PELANDALE AVE , , rrn '^i-mmrxLLmj PELANDALE AVE § , :
_
-rftj
|-r-rjjJ'-E T1 SPRINGSDT- *
EffifRHra
1 lift R I ITTme „ c Q VESTRELLA DR y_jji- < i % 1 ’i spiym .in. - ii. TOTTp a cMU- iJAUHTO' S/nrr,, On ^j)U § 5 —y T 3Tv MU f V— I

CURRENT GENERAL PLAN LAND USE
MU
BP BCR
% ErS 7J i * 3 / LU TiTW :; As. a
7 3Q —S--4 MU
$r Q u § S
PRlt^ y*1 M>- )- ' /'I X V
1 .-^^ VVARM SPRINGS DR1
3ELANDALE-AVE PELANDALE AVE- * N
/
'1 -y l Siii- 1 T" S - R Q l I C VESTRELLA DR HTrhS ' FrFfcilXrt n 4 HTTP %-LlLl JJil.'c:
l^t»asa( s*, 5 :- o T MU i H I J ~rIn -iu

PROPOSED GENERAL PLAN LAND USE
GPA-21-003
#13..
- 366 -
FILE GPA-21-003/SPA-21-003 – Proposed General Plan Amendment and Amendment to the Kiernan Business Park Specific Plan; submitted by the Grupe-Huber Company Planning Commission MINUTES – March 7, 2022
Item B GPA-21-003/SPA-21-003 – Proposed General Plan Amendment and Amendment to the Kiernan Business Park Specific Plan; submitted by the Grupe-Huber Company Contact Info: Katharine Martin, 577-5267, [email protected] Motion/Action (Approved)
It was moved by Commissioner Shanks, seconded by Commissioner Vazquez, and carried by majority (Birring, Pollard, Shanks, Vazquez, Morad, ayes; None, noes; Silva, Vohra, absent; None, recused) that the Planning Commission adopt Resolution No. 2022-07 A RESOLUTION RECOMMENDING TO THE CITY COUNCIL APPROVAL OF SPECIFIC PLAN AMENDMENT NO. 12 TO THE KIERNAN BUSINESS

PARK SPECIFIC PLAN TO CREATE THE NEW LAND USE DESIGNATION OF MIXED USE 3 (MU3) TO ALLOW FOR MIXED USES OR MEDIUM-HIGH RESIDENTIAL USES AT A MINIMUM OF 15 UNITS TO THE ACRE AND A MAXIMUM OF 16 UNITS TO THE ACRE,

OR A MIXTURE OF THE TWO, PROPERTY LOCATED SOUTH OF BANGS AVENUE,

NORTH OF PELANDALE AVENUE AND WEST OF AMERICAN AVENUE (GRUPE HUBER

COMPANY)
Motion/Action (Approved)
It was moved by Commissioner Shanks, seconded by Commissioner Vazquez, and carried by majority (Birring, Pollard, Shanks, Vazquez, Morad, ayes; None, noes; Silva, Vohra, absent; None, recused) that the Planning Commission adopt Resolution No. 2022-08 A RESOLUTION RECOMMENDING TO THE CITY COUNCIL

ADOPTION OF AN AMENDMENT TO THE MODESTO URBAN AREA GENERAL PLAN (GRUPE-HUBER COMPANY)
#13..
- 367 -
ITEM B
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 1

CITY OF MODESTO

PLANNING COMMISSION STAFF REPORT
1010 10th STREET
MODESTO, CA 95354
(209) 577-5267 – (209) 491-5798 (fax)
TO: Chairperson Vohra and Members of the Planning Commission PREPARED BY: Katharine Martin, Senior Planner
Contact Info: 577-5267 [email protected]
APPROVED BY: Steve Mitchell, Planning Manager
MEETING DATE: March 7, 2022
SUBJECT: GPA-21-003/SPA-21-003 – Proposed General Plan Amendment and Amendment to the Kiernan Business Park Specific Plan; submitted by the Grupe-Huber Company

RECOMMENDATION
Resolution recommending to the City Council approval of a General Plan Amendment, to amend the Land Use Diagram from Business Park (BP) to Mixed Use (MU).

Resolution recommending to the City Council approval of Specific Plan Amendment No. 12 to the Kiernan Business Park Specific Plan, to amend the land use diagram and circulation plan.

BACKGROUND
Within the 614-acre Kiernan Business Park Specific Plan is a sub-area of the Specific Plan generally referred to as Kiernan Business Park South, bounded by Bangs Avenue and MID Lateral No. 6 to the north, Pelandale Avenue to the south, American Avenue to the east and Dale Road to the west. The land use designation for the area is Business Park (BP) in both the land use diagram of the Kiernan Business Park Specific Plan and the General Plan. The area is developed along the Dale Road corridor with two churches, a restaurant and event center, and a branch of the Bank of Stockton. In 2009, property owners of the easterly 38-acres of the area submitted two tentative parcel maps to divide the acreage into parcels for business park uses as provided by the Specific Plan, but only one Parcel Map was recorded and no business park development has occurred over any of the Kiernan South area since then.

In recent months there has been substantial developer interest in constructing multi-family residential uses in the area, the demand being driven primarily by the existing medical uses along the Dale Road corridor, including the Kaiser Modesto Medical Center. Currently, the portions of the Specific Plan which allows for multi-family residential development are either built out or are in varying stages of entitlement and development.

PROJECT DESCRIPTION
On December 8, 2021, the Grupe-Huber Company submitted an application to amend the land use diagram of the Specific Plan to change the land use designation the Kiernan South area from Business Park (BP) to a new designation of Mixed Use 3 (MU3), with a concurrent proposal #13..
- 368 -
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 2
to amend the underlying General Plan Land Use Diagram from Business Park (BP) to Mixed Uses (MU), to facilitate the future development of multi-family residential uses, and provide a more appropriate land use designation for the existing bank, church and restaurant uses along the Dale Road frontage of the amendment area.

The proposed amendments are as follows: An amendment to the Land Use Diagram of the City of Modesto Urban Area General Plan, to change the designation of 67 acres from Business Park (BP) to Mixed Uses (MU), and an amendment to the land use diagram of the Kiernan Business Park Specific Plan to change the designation of the same 67 acres from Business Park (BP) uses to a new designation of Mixed Use 3 (MU3) which would provide for Mixed Uses as provided for in Section III of the Specific Plan, or Medium-High Density Residential uses at a minimum of 15 units per acre and a maximum of 16 units per acre. The amendment area is 67 acres located south of Bangs Avenue, north of Pelandale Avenue, east of American Avenue and west of Dale Road. The proposed amendment to the Specific Plan also proposes an amendment to its Circulation Plan, to change Bangs Avenue from a four-lane major collector street to a two-lane minor collector street.

ANALYSIS
General Plan and Specific Plan Amendments: To date, no developer interest has been expressed for business park uses at the Kiernan South area. With the increased demand in higher density residential uses in proximity to the existing medical uses along the Dale Road corridor, staff recognizes that additional portions of the Specific Plan could be considered for mixed uses that allows for multi-family residential uses. Additionally, staff recognizes that recent market trends for business park development leans toward developments with mixed uses that include multi-family residential uses, such as the Bishop Ranch Business Park in San Ramon which contains varied commercial, office, residential and open space uses.

If approved, new development would remain subject to the Development Plan Review or Conditional Use Permit process as required by the Kiernan Business Park Specific Plan, depending on the proposed use as permitted in Section III-B of the Specific Plan, and also be subject to the development and design standards of the Specific Plan.

Traffic Impact: With the 2009 tentative maps for business park development, traffic studies were conducted to estimate the number of daily trips generated by business park uses. The study, referenced in a Mitigated Negative Declaration prepared for the project (Environmental Assessment No. EA/C&ED 2006-58), assumed 9,220 daily trips for business park uses. If developed with residential uses at a maximum density of 16 units per acre, the amount of trips would decrease a significant amount under the General Plan’s model for daily vehicle trip rates for residential uses. Therefore, trip generation associated with subsequent development as a result of the amendments would be less than that assumed with the existing General Plan and Specific Plan land use designations.

Kiernan Business Park Circulation Plan: Currently, Bangs Avenue operates as a two-lane minor collector street and is now designated as such in the General Plan’s Circulation Element. The Specific Plan’s circulation plan designates the street to be a four-lane major collector street with a centered two-way left-turn lane and an overall right-of-way of 97 feet. However, the Circulation Element of the General Plan’s 2019 update changed the designation of Bangs Avenue from a four-lane collector street to a two-lane collector street. The proposed amendment to the Specific Plan’s circulation plan is to bring the Specific Plan document into conformance with the General Plan’s updated Circulation Element. #13..
- 369 -
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 3

GENERAL PLAN CONSISTENCY AND ENVIRONMENTAL ASSESSMENT
General Plan Section I-F-3(c) provides criteria for analysis of a proposed General Plan Amendment. The policy requires the proposed amendment’s impacts to be analyzed for the amendment’s effects compared to the adopted General Plan on the following issues:
(1) Compatibility with surrounding, existing, and planned land uses; (2) Traffic impacts, both existing and planned;
(3) Air quality impacts, as addressed in the Master EIR; (4) Water quality impacts, as addressed in the Master EIR; (5) Water supply and wastewater, as addressed in the Master EIR; (6) Preservation of open space, both existing and planned; (7) Public facilities and public services, both existing and planned, including financing approaches.
(8) Consistency with the overall goals and policies contained within the General Plan.

A Negative Declaration was prepared for this project, which references and uses information from the 2019 Urban Area General Plan Master EIR. The Initial Study, Environmental Assessment No. EA/C&ED 2022-6, prepared for the Negative Declaration (Attachment No. 3) provides an analysis of each of the above topics in detail and concludes there are no significant impacts as a result of the amendments to the land use and changes to the Specific Plan’s circulation element.

ATTACHMENTS

1. Draft Planning Commission Resolution (GPA)

2. Draft Planning Commission Resolution (SPA)

3. Initial Study/Negative Declaration, Environmental Assessment No. EA/C&ED 2022-6

4. Financial Interest Disclosure Form

5. Large-Format Map(s) (Maps included with Commissioners' packets only) #13..
- 370 -
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 4

PROPOSED GENERAL PLAN LAND USE AMENDMENT
GPA-21-003
#13..
- 371 -
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 5

PROPOSED SPECIFIC PLAN LAND USE AMENDMENT
SPA-21-003
#13..
- 372 -
Planning Commission Agenda Report March 7, 2022
Public Hearing Item B Page 6

PROPOSED AMENDMENT TO SPECIFIC PLAN CIRCULATION DIAGRAM SPA-21-003
#13..
- 373 -
3/1/2022

LIST OF INVOLVED PARTIES FOR THE PLANNING COMMISSION
AGENDA OF MARCH 7, 2022
At the Commission’s request, staff has compiled a list of persons having a personal/financial interest in the matters contained in the accompanying agenda report to help identify potential conflicts of interest.

ITEM A GPA-21-003/SPA-21-003 – Proposed General Plan Amendment and Amendment to the Kiernan Business Park Specific Plan; submitted by the Grupe-Huber Company
Relationship Name/Address
Applicant Grupe Huber Company, Atten: Fritz Huber, 1203 N. Grant Street, Stockton, CA 95202 Owner Please see attachment
Applicant
Representative
Newman – Romano, LLC 1034 12th Street, Modesto, CA 95354 #13..
- 374 -
#13..
- 375 -
#13..
- 376 -
#13..
- 377 -
#13..
- 378 -
#13..
- 379 -

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

April 12, 2021
March 23, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Proposition 218 Hearing Regarding Proposed Sewer Rate Increase CONTACT: William Wong, Director of Utilities, [email protected], (209) 571-5801 DESCRIPTION:

Hearing to consider proposed sewer rate increase for Fiscal Year 2022-23 through Fiscal Year 2026-27. (Funding Source: Wastewater Fund)
STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City’s Strategic Plan Initiatives, Goal D:

Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

The City provides wastewater (sewer) service to over 60,000 accounts consisting of residential, multi-family, commercial, and industrial customers located within the City of Modesto, as well as the Empire Sanitary District, and portions of the City of Ceres and unincorporated Stanislaus County. The City’s wastewater system consists of a sewer collection system, the Sutter Wastewater Treatment Plant (primary treatment), the Jennings Wastewater Treatment Plant (secondary and tertiary treatment), a Cannery Segregation Pipeline (CanSeg Line), and the Ranch at the Jennings Wastewater Treatment Plant. The City’s sewer utility is a self-supporting utility enterprise funded by customer revenues.

In 1996, California voters adopted Proposition 218 which amended the California Constitution to establish a process that public agencies must follow when imposing new or increasing “property-related fees.” (Cal. Const. Article XII D). In 2007, the California Supreme Court ruled that sewer service fees are property-related fees, thus subject to Proposition 218 requirements.

The requirements under Proposition 218 are procedural and substantive in nature.

Proposition 218 requires that a public agency mail a notice of the proposed rate increases to all affected property owners or ratepayers and conduct a public hearing to consider the proposed increase. The notice must include the proposed rate and fee amounts, state how the rates and #14..
- 380 -
City Council, April 12, 2022
Proposition 218 Hearing Regarding Proposed Sewer Rate Increase

fees were calculated, the reason for the fees, and the date, time and location of the public hearing in which the agency will consider adopting the rate increase. The notice must inform affected property owners or ratepayers that the rate increase is subject to a majority protest, meaning that if more than 50% of affected property owners or ratepayers submit written protests against the proposed rate increase, the increase will not be adopted. The notice must be sent to the affected property owners or ratepayers at least 45 days before the date of the public hearing.

Proposition 218 further mandates that any property-related fee imposed by a public agency cannot exceed the cost of providing that service by imposing certain restrictions on the rate and fee amounts to be charged, and limiting what costs can be funded by the revenue generated by the proposed rates and fees. The rate or fee charged to a customer cannot exceed the proportional cost of providing service attributable to that customer.

Changes in the City’s sewer utility, including escalating operation and maintenance costs, new regulatory requirements, and major capital improvements of wastewater system requires the City to update its sewer rate structure under a five-year schedule of adjustments.

On December 8, 2020, by Resolution Nos. 2020-522 and 2020-523, Council approved an agreement with Bartle Wells Associates (BWA) for the Wastewater (Sewer) Rate and Fee Study (Study) update, as well as an agreement with Carollo Engineers Inc. (Carollo), for preparation of the Wastewater Engineer’s Report Update.

On December 7, 2021, by Resolutions 2021-478, 2021-479, and 2021-480, Council (i) approved the Wastewater Engineer’s Report prepared by Carollo as complete; (ii) approved the 2021 Sewer Rate and Fee Study prepared by Bartle Wells Associates as complete; and (iii) authorized staff to initiate a Proposition 218 process to adjust the City’s sewer rates beginning in Fiscal Year 2022-23 through Fiscal Year 2026-27.

DISCUSSION:

The City engaged BWA to conduct a comprehensive cost of service review or fee study of sewer rates and charges to ensure that the City’s rate structure adequately supports and funds the system’s updated needs. Sewer services provided by the City include the normal operation and maintenance of the sewer utility, as well as capital improvement projects that are needed to ensure the City’s capacity to provide current and future levels of sewer service. The current Wastewater Engineer’s Report Update has identified various infrastructure improvement projects that are necessary to maintain the system.

Proposition 218 Procedural Requirements
On February 25, 2022, the City mailed affected property owners and ratepayers a notice of the public hearing regarding the proposed rate increase to be conducted before Council at today’s meeting (Attachment 3). The notice provided a detailed summary of the Sewer Rate and Fee Study, the proposed rate structure, and information about how to submit a written protest against the proposed rate increase. Upon confirmation that a majority protest has not occurred following the close of the Proposition 218 hearing, Council may adopt the proposed rate increase.

Proposition 218 Substantive Requirements
#14..
- 381 -
City Council, April 12, 2022
Proposition 218 Hearing Regarding Proposed Sewer Rate Increase

Based on the proposed projects identified in the Engineer’s Report calculation of the financing needs for those projects, BWA prepared a Sewer Rate and Fee Study (Study) that analyzes the costs associated with the projects, the operation and maintenance of the system, and other funding needs to develop sewer system’s financial plan or “revenue requirement.” The revenue requirement is the cost of maintaining the system in order to provide sewer service (i.e. cost of service). The Study further breaks down that revenue requirement based on the particular service being provided given the customer service account type, flow, and pollutants that must be treated (e.g. BOD- biochemical oxygen demand; TSS-total suspended solids), which are collectively referred to as “cost components.” This part of the analysis ensures that the costs are proportionally allocated to each customer based on how they use sewer service as required by Proposition 218. The Study then designs a rate structure for the following five years that would allow the City to proportionately recover the costs of service from customers.

Proposed Rate Increases – Residential, Commercial, Industrial, and Septage Sewer Rates.

Customers pay a monthly account charge plus additional charges based on account type. For example residential customers are charged with per dwelling unit charge and commercial customers are assigned to a class of users based on the strength of their discharge, and charged a quantity charge per 100 cubic feet (748 gallons) of flow. These customers are expected to experience a 3.5% percent annual increase over the next five years.

Proposed Rate Increases – CanSeg1 Rates.

CanSeg customers are expected to experience a 2.5% rate increase annually over the next five years. BWA is recommending lower rate increases for CanSeg than M&I because a larger portion of CanSeg expenses consists of debt service which will not increase with inflation.

Additionally, due to the slowdown in capital spending caused by the COVID-19 pandemic, the City has coordinated with CanSeg customers to reprioritize capital projects associated with the CanSeg system.

Wastewater (Sewer) Rate Review
The Wastewater Engineer’s Report has been completed by Carollo Engineers, and BWA has completed the Sewer Rate and Fee Study. Due to the importance of sewer rates and sensitivity of the impacts this action may have on rate payers, BWA worked with staff to carefully analyze the wastewater revenues projections, formulate a reasonable Capital Improvement Program (CIP) schedule over the next five to ten years, revise operating expenses, and analyze the proforma.

The Engineer’s Report is complete; CIP projects that have been identified include:

Project Component
Phase 1
(2021-2025)
Phase 2-4
(2026-2040)
Total
(Phases 1-4)
Collection System Improvements $161 Million $103 Million $264 Million Sutter Plant Improvements $7 Million $49.5 Million $56.5 Million Outfall Pipeline Improvements $0.2 Million $93 Million $93.2 Million 1 Cannery Segregation Service (CanSeg) -
#14..
- 382 -
City Council, April 12, 2022
Proposition 218 Hearing Regarding Proposed Sewer Rate Increase

Jennings Plant Improvements $63 Million $137 Million $200 Million TOTAL $231.2 Million $382.5 Million $613.7 Million
Major projects requiring funding within Phase 1 include:
 River Trunk Realignment – Pump Station project – Construction Estimate $45M  Secondary Wastewater Treatment upgrades – Construction Estimate $44M Improvements needed to address increased regulatory requirements for cannery segregation waste discharge.
 Sewer Trunk rehabilitation throughout the City, including areas in downtown Modesto and major trunk lines such as the West Trunk. Construction Estimate $77M In addition to the Capital Improvement Program, when evaluating any rate increase, there are other factors to be considered, including debt service coverage ratio and retained earnings. The debt service coverage ratio is the ratio of net operating revenues divided by the total debt service. Although the legal requirement for the debt service coverage ratio is 1.25, and the City’s adopted policy is to maintain a 1.50 ratio, the City’s credit rating agencies recommend maintaining a debt service ratio of at least 2.00 to maintain the City’s current favorable bond rating (currently AA with Standard & Poor). Another important factor is net position (wastewater reserves), which should be a minimum of 25% of annual operating costs.

BWA evaluated several scenarios during the development of the sewer rate schedule for FY 2022-23 through FY 2026-27 and has provided a recommended rate structure. Rate increases are necessary to fund increasing wastewater operational costs and capital improvement projects.

In an effort to minimize financial impacts to customers and maintain necessary services, staff incorporated a strategy to reduce Operating and Capital Program budgets to support lower rate increases.

Based on BWA’s analysis, the table below presents the proposed annual 3.5% sewer rate increase for municipal and Industrial (M&I) customers and 2.5% sewer rate increase for CanSeg customers:
#14..
- 383 -
City Council, April 12, 2022
Proposition 218 Hearing Regarding Proposed Sewer Rate Increase

FISCAL IMPACT:

The City’s wastewater utility relies almost entirely on customer revenues to sustain its operations. The proposed increases will generate revenue to fund system operational and infrastructure needs identified in the Wastewater Engineer’s Report, and to continue to provide reliable and high-quality wastewater services. This rate will allow the City to maintain its current debt service coverage ratio of over 1.50, which is essential to maintain a strong credit rating and financial health of the Wastewater Fund.

COMMITTEE RECOMMENDATION:

This item was considered by the Finance Committee at the November 22, 2021 meeting where it was recommended that it be forwarded to Council.
#14..
- 384 -
City Council, April 12, 2022
Proposition 218 Hearing Regarding Proposed Sewer Rate Increase

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution adopting sewer service rates, effective July 1, 2022, for Fiscal Years 2022-23 through 2026-27 in accordance with Proposition 218.

Approved by:

William Wong, Utilities Director
Joseph P. Lopez, City Manager
Attachments:

1. Resolution

2. Sewer Rate & Fee Study

3. Notice of Public Hearing on Proposed Sewer Rate Increase

4. 2021 Single Family Sewer Rate Survey
#14..
- 385 -

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-?
RESOLUTION ADOPTING SEWER SERVICE RATES, EFFECTIVE JULY 1, 2022, FOR FISCAL YEARS 2022-23 THROUGH 2026-27 IN ACCORDANCE WITH PROPOSITION 218
WHEREAS, the City’s sewer utility is a self-supporting enterprise funded by customer revenues, and
WHEREAS, the City engaged Bartle Wells Associates (BWA) to conduct a comprehensive review of the City’s current sewer rates and fees in accordance with Proposition 218, and
WHEREAS, BWA prepared a report dated November 19, 2021 entitled City of Modesto Sewer Rate and Fee Study (the “Report”), containing analyses and recommendations for adjusting the City’s sewer rates and charges, and WHEREAS, a copy of the Report is on file with the City Clerk, and WHEREAS, the report concludes that the revenues generated under the existing sewer service rates and fees are insufficient to meet the revenue requirements for fiscal year 2022-23 and subsequent years, and
WHEREAS, the Report demonstrates that updated sewer service rates and fees established pursuant to this resolution:

Recover the reasonable estimated cost of the services for which the rates are charged
Provide that such costs are allocated among City sewer customers so as to bear a fair and reasonable relationship to customers burdens’ on and benefits from City sewer service
Ensure that charges for sewer services do not exceed the proportionate cost of providing sewer services attributable to each parcel
#14..
- 386 -
Secure the financial stability of the sewer system
Ensure high quality service
Provide a sound financial plan that will assist in funding capital improvement projects necessary to serve sewer customers
WHEREAS, the updated sewer service rates and fees established pursuant to this resolution are not levied for general revenue purposes, and WHEREAS, the City mailed a notice of the public hearing, and a notice of oral and written protest procedures against the proposed rate increases to all affected property owners and ratepayers in compliance with California Constitution Article XIIID, Section 6, at least forty-five (45) days in advance of the public hearing at which this resolution was considered, and
WHEREAS, on April 12, 2022 the City Council duly held the public hearing and at its conclusion the City Clerk tabulated the number of written protests received and reported that there was not a majority protest of the proposed sewer service rates and fees by property owners, ratepayers or their authorized representatives, and WHEREAS, the City Council desires to establish new sewer service rates and fees as shown in Exhibit A, which is attached to this Resolution and incorporated by reference herein.

NOW, THEREFORE BE IT RESOLVED by the Council of the City of Modesto that the above recitals are true and correct, and incorporated herein.

BE IT FURTHER RESOLVED that the Council of the City of Modesto hereby approves the Report and adopts updated sewer service rates and fees as shown in Exhibit A, attached hereto and incorporated herein, effective July 1, 2022. #14..
- 387 -
The foregoing resolution was introduced at a regular meeting of the Council of the City of Modesto held on the 12th day of April 2022, by Councilmember ?, who moved its adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST:

DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ____________________________________
JOSE M. SANCHEZ, City Attorney
#14..
- 388 -

EXHIBIT A
#14..
- 389 -

SEWER RATE AND FEE STUDY
November 19, 2021
#14..
- 390 -
#14..
- 391 -
City of Modesto – Sewer Rate and Fee Study 2021

TABLE OF CONTENTS
SECTION 1: INTRODUCTION AND EXECUTIVE SUMMARY ....................................................................... 1

1.1 Background ............................................................................................................................... 1

1.2 Study Overview......................................................................................................................... 1

1.3 Procedural Requirements of Proposition 218 .......................................................................... 1

1.4 Rate Study Process.................................................................................................................... 2

1.5 Findings and Recommendations............................................................................................... 4

1.5.1 Revenue Requirement .................................................................................................. 4

1.5.2 Cost Allocation .............................................................................................................. 4

1.5.3 Rate Design ................................................................................................................... 4

1.5.4 Proposed Rates ............................................................................................................. 5

1.5.5 Bill Impacts.................................................................................................................... 6 SECTION 2: CURRENT SEWER RATES........................................................................................................ 8

2.1 Account Charge......................................................................................................................... 8

2.2 Flow and Strength Rates........................................................................................................... 8

2.2.1 Industrial Rates ............................................................................................................. 8

2.2.2 Cannery Segregation (CanSeg) Line Rates .................................................................... 8

2.2.3 Commercial Rates ......................................................................................................... 8

2.2.4 Residential Rates........................................................................................................... 9

2.2.5 Septage Rate ................................................................................................................. 9

2.3 Current Rate Schedule .............................................................................................................. 9 SECTION 3: REVENUE REQUIREMENT.................................................................................................... 11

3.1 Current Revenues.................................................................................................................... 11

3.2 Operating Expenses ................................................................................................................ 11

3.3 Debt Service ............................................................................................................................ 11

3.4 Capital Expenditures............................................................................................................... 11

3.5 Financial Policies, Assumptions, and Targets.......................................................................... 12

3.6 CanSeg Line Revenue Requirement........................................................................................ 12

3.6.1 CanSeg Reserve........................................................................................................... 12

3.6.2 Operating Expenses and Non‐rate Revenue............................................................... 12

3.6.3 CanSeg Line Capital Expenses..................................................................................... 13

3.6.4 CanSeg Line Capital Funding ....................................................................................... 13

3.6.5 CanSeg Line Cash Flow................................................................................................ 14

3.7 Municipal and Industrial (M&I) Revenue Requirement.......................................................... 15

3.7.1 M&I Reserve................................................................................................................ 15

3.7.2 Operating Expenses and Non‐rate Revenue............................................................... 15

3.7.3 M&I Capital Expenses ................................................................................................. 15

3.7.4 M&I Capital Funding ................................................................................................... 15

3.7.5 M&I Cash Flow ............................................................................................................ 16

3.8 Total Wastewater Fund Revenue Requirement ..................................................................... 16

3.8.1 Total Wastewater Capital Funding.............................................................................. 17

3.9 Wastewater Fund Master Cash Flow...................................................................................... 17 SECTION 4: COST OF SERVICE ALLOCATION........................................................................................... 19

4.1 Methodology........................................................................................................................... 19

4.2 Customer Service (per Account) Allocation ............................................................................ 19

4.3 Allocation of Non‐Rate Revenues Between CanSeg and M&I ................................................ 20

4.4 Debt Service ............................................................................................................................ 20 #14..
- 392 -
City of Modesto – Sewer Rate and Fee Study 2021

4.5 Allocation to Flow and Strength (BOD & TSS)......................................................................... 20

4.6 Septage ...................................................................................................................................23 SECTION 5: RATE DESIGN....................................................................................................................... 24

5.1 M&I Rate Design ..................................................................................................................... 24

5.1.1 Billing Units ................................................................................................................. 24

5.2 CanSeg Line Rate Design ......................................................................................................... 27

5.3 Final Rates............................................................................................................................... 28 SECTION 6: RESIDENTIAL BILL COMPARISON......................................................................................... 29 SECTION 7: CONCLUSIONS AND RECOMMENDATIONS......................................................................... 30

7.1 Conclusions............................................................................................................................. 30

7.2 Recommendations.................................................................................................................. 30 Appendix A:  Rate Study Tables
Appendix B:  Capital Improvement Plan

#14..
- 393 -
City of Modesto – Sewer Rate and Fee Study 2021

LIST OF TABLES
Table 1‐1: Proposed Rates............................................................................................................................ 5 Table 1‐2: Proposed Single Family Bill Impacts............................................................................................. 6 Table 1‐3: Example Commercial Bill Impacts with Proposed Rates.............................................................. 6 Table 1‐4: Projected Average Industrial Monthly Bill Impacts ..................................................................... 7 Table 1‐5: Projected Average CanSeg Monthly Bill Impacts......................................................................... 7 Table 2‐1: Current Rate Schedule ................................................................................................................. 9 Table 3‐1: Summary of Capital Improvement Projects............................................................................... 11 Table 3‐2: CanSeg Line 5‐Year Capital Improvement Plan.......................................................................... 13 Table 3‐3: CanSeg Capital Funding Sources................................................................................................ 14 Table 3‐4: CanSeg Cashflow........................................................................................................................ 14 Table 3‐5: M&I Capital Improvement Plan (CIP) Summary ........................................................................ 15 Table 3‐6: M&I Capital Funding Sources..................................................................................................... 16 Table 3‐7: M&I Cash Flow Projections........................................................................................................ 16 Table 3‐8: Total Wastewater Capital Funding Sources............................................................................... 17 Table 3‐9: Wastewater Fund Master Cash Flow......................................................................................... 17 Table 4‐1: Number of Customer Service Allocation.................................................................................... 19 Table 4‐2: M&I Capital Allocation ............................................................................................................... 21 Table 4‐3: CanSeg Capital Allocation .......................................................................................................... 21 Table 4‐4: M&I Cost Allocation to Flow and Strength ................................................................................ 22 Table 4‐5: CanSeg Cost Allocation to Flow and Strength............................................................................ 23 Table 5‐1: Number of Customer Accounts ................................................................................................. 24 Table 5‐2: Total M&I Flows and Loads for Rate Design .............................................................................. 25 Table 5‐3: M&I Allocation Unit Rates ......................................................................................................... 26 Table 5‐4: Projected M&I Sewer Revenue Requirements.......................................................................... 26 Table 5‐5: Projected M&I Sewer Rates After Cost Allocation..................................................................... 27 Table 5‐6: CanSeg Line Sewer Rates ........................................................................................................... 27 Table 5‐7: Proposed Sewer Rates ............................................................................................................... 28 Table 6‐1: Typical Customer Bill.................................................................................................................. 29

LIST OF FIGURES
Figure 1:  Comprehensive Cost of Service Study Process............................................................................. 3 Figure 2:  Master Wastewater Cashflow..................................................................................................... 18 Figure 3:  Residential Bill Comparison ........................................................................................................ 29 #14..
- 394 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 1
SECTION 1: INTRODUCTION AND EXECUTIVE SUMMARY

1.1 Background
The City of Modesto provides wastewater (sewer) service to a population of over 215,000. The City’s wastewater system consists of a sewer collection system, the Sutter Wastewater Treatment Plant (primary treatment), the Jennings Wastewater Treatment Plant (secondary and tertiary treatment), the Cannery Segregation Pipeline (CanSeg Line), and the Ranch (a functioning 2,226 acre farmland which receives and land‐applies the effluent discharge from the CanSeg Line). The City last conducted an in‐ depth cost of service rate study in 2015, which was approved and implemented by the City in compliance with Proposition 218. Since 2015, the City hasreviewed and updated itsrates on a nearly annual basis and many of the rates have remained below the maximum rates approved under the Proposition 218 process.

The City engaged Bartle Wells Associates (BWA) to conduct a comprehensive cost of service review of the wastewater rates and charges. A rate update is needed due to infrastructure improvements identified in the 2016 Wastewater Master Plan Update, adopted in January 2020, and to fund operations as costs continue to increase.

A Wastewater Capital Improvement Plan (CIP) was prepared by the City’s consulting engineer, Carollo Engineers. The Wastewater Master Plan Update identifies repair and replacement projects and capacity improvements needed over the next twenty years. The City’s current rate revenues are insufficient to fund these costs.

1.2 Study Overview
This rate study provides a financial plan incorporating the City’s operating and capital costs, reserve targets, and funding mechanisms to develop the Wastewater Fund revenue requirements. First, separate revenue requirements are developed for the CanSeg Line and the Municipal and Industrial (M&I) system.

The M&I system consists of the municipal residential, commercial, and industrial treatment stream. As a second step, the revenue requirement is allocated to customer service, flow, and pollutant loading to determine the unit costs of service. As the last step, the unit costs are developed into rates for the next five year period.

1.3 Procedural Requirements of Proposition 218
Proposition 218, the “Right to Vote on Taxes Act”, was approved by California voters in November 1996 and is codified as Articles XIIIC and XIIID of the California Constitution. Proposition 218 establishes requirementsforimposing any new orincreasing any existing property‐related fees and charges. For many years, there was no legal consensus on whether water and sewer service fees met the definition of “property‐related fees.”  In July 2007, the California Supreme Court essentially confirmed that Proposition 218 applies to water and sewer service fees.
#14..
- 395 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 2
The City must follow the procedural requirements of Proposition 218 for all sewer rate increases. These requirements include:

1. Noticing Requirement – The City must mail a notice of the proposed rate increases to all affected property owners or ratepayers. The notice must specify the amount of the fee, the basis upon which it was calculated, the reason for the fee, and the date/time/location of a public rate hearing at which the proposed rates will be considered/adopted.

2. Public Hearing – The City must hold a public hearing prior to adopting the proposed rate increases. The public hearing must be held not less than 45 days after the required notices are mailed.

3. Rate Increases Subject to Majority Protest ‐ At the public hearing, the proposed rate increases are subject to majority protest. If more than 50% of affected property owners or ratepayers submit written protests against the proposed rate increases, the increases cannot be adopted.

Proposition 218 also established substantive requirements that apply to sewer rates and charges, including:

1. Cost of Service ‐ Revenues derived from the fee or charge cannot exceed the funds required to provide the service. In essence, fees cannot exceed the “cost of service”.

2. Intended Purpose ‐ Revenues derived from the fee or charge can only be used for the purpose for which the fee was imposed.

3. Proportional Cost Recovery ‐ The amount of the fee or charge levied on any customer shall not exceed the proportional cost of service attributable to that customer.

4. Availability of Service ‐ No fee or charge may be imposed for a service unless that service is used by, or immediately available to, the owner of the property.

5. General Government Services  ‐ No fee or charge may be imposed for general governmental services where the service is available to the public at large.

Charges for water, sewer, and refuse collection are exempt from additional voting requirements of Proposition 218, provided the charges do not exceed the cost of providing service and are adopted pursuant to procedural requirements of Proposition 218.

1.4 Rate Study Process
This section details the development of the City of Modesto’s sewer rates and compliance with Proposition 218 through a comprehensive cost of service and rate design study process as shown in the following figure.

#14..
- 396 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 3
Figure 1:  Comprehensive Cost of Service Study Process
The following is a brief description of the sewer rate study process:
 Revenue Requirements ‐ Revenue requirement is essentially a financial plan developed from the Wastewater Fund budget.  Based on the best information currently available, the financial plan incorporates projected operation and maintenance costs, capital expenditures, debt service, and growth to estimate annual revenue requirements. The plan serves as a roadmap for funding the City’s future operating and capital programs while maintaining long‐term fiscal stability. The financial plan projections determine the annual wastewater revenue requirements to be recovered through sewer rates and other revenue sources.  Cost of Service Allocation ‐ The cost of service process builds on the financial plan analysis and assigns wastewater system costs to functional cost components (accounts, flow, BOD (biochemical oxygen demand), and TSS (total suspended solids)). This process is intended to proportionately allocate costs to each customer based on how he or she takes wastewater service.

#14..
- 397 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 4
 Rate Design ‐ Rate design involves developing a rate structure that proportionately recovers costs from sewer system customers. Final rate recommendations are designed to (a) fund the utility’s short‐ and long‐term costs of providing service; (b) proportionately allocate costs to all customers and customer classes; and (c) comply with the substantive requirements of Proposition 218.

1.5 Findings and Recommendations
The findings and recommendations presented in this report were developed with substantial input and overview from City staff and stakeholders. The rate recommendations include modifications to the cost of service allocations and sewer rates. The final rates are designed to recover the sewer utility’s cost of service and proportionately recover costs from all customer classes.

1.5.1 Revenue Requirement
Currently, the Wastewater Fund is in healthy financial shape. The service charges generate positive net revenues, debt coverage requirements are met, and the City has accumulated a cash reserve. Due to the COVID‐19 pandemic capital spending slowed down and cash reserves increased. With the City’s improved financial position, the City was able to avoid raising ratesin FY 2021/22. However, to fund future operating cost increases and capital improvements, the service charges must increase to meet the City’s future financial obligations.

1.5.2 Cost Allocation
BWA proposes that the City continue to allocate costs to accounts, flow, BOD, and TSS for ratemaking purposes. These cost categories are common amongst wastewater purveyors and reflect how customers utilize wastewater service. The customer service (Account) functional cost allocation component includes customer service, billing, and administration. Flow is the quantity of wastewater generated by each customer. BOD and TSS are wastewater pollutants that the City must treat.

BWA found that the City’s current rates should be adjusted to collect a greater portion of costs from BOD and TSS charges. With tertiary treatment coming online and secondary treatment improvements planned, a greater portion of the City’s cost ofservice is attributable to pollutant loading. Thisshift in cost allocation has a greater impact on some commercial and industrial customers who have higher concentrations of BOD and TSS than domestic strength customers.

1.5.3    Rate Design
BWA proposes to maintain the City’s current rate structure based on unit charges for accounts, flow, and strength.
#14..
- 398 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 5

1.5.4 Proposed Rates
A summary of the current and proposed municipal and industrial sewer rates is provided below. BWA recommends rate revenue increase approximately 3.5% annually over the next five years. It is important to note that while total rate revenue is increasing at 3.5% annually, the impact to each rate in FY 2022/23 will vary due to the updated cost of service allocation.

Table 1‐1: Proposed Rates

Proposed Sewer Rates FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Existing Proposed Proposed Proposed Proposed Proposed
Monthly Account Charge ($/Account) $4.68 $4.86 $5.04 $5.22 $5.41 $5.60 Residential Rates ($/Dwelling Unit)
Single Family Residential, Mobile
Home on a lot $37.10 $38.31 $39.65 $41.04 $42.48 $43.97 Multiple Family (2‐4 Dwelling Units),
one additional Dwelling Unit or
Mobile Home on a lot
$28.60 $29.11 $30.13 $31.18 $32.27 $33.40
Apartments (5 or more Dwelling
Units), Mobile Home Space in a
Mobile Home Park
$25.33 $25.97 $26.88 $27.82 $28.79 $29.80
Commercial Quantity Charge ($/100 cubic feet)
Group 1‐BOD + TSS is 400 mg/l or less $3.69 $3.85 $3.98 $4.12 $4.26 $4.41 Group 2‐BOD + TSS is 401 mg/l to 900
mg/l $4.89 $5.05 $5.23 $5.41 $5.60 $5.80
Group 3‐BOD + TSS is 901 mg/l to
1,400 mg/l $6.08 $6.29 $6.51 $6.74 $6.98 $7.22
Group 4‐BOD + TSS is 1,401 mg/l or
more
$7.52 $7.79 $8.06 $8.34 $8.63 $8.93
Industrial Charges (these three components are additive) Flow Charge ($/Million gallons) $3,657 $3,739.76 $3,870.65 $4,006.12 $4,146.33 $4,291.45 BOD Charge ($/1,000 lbs) $256 $278.79 $288.55 $298.65 $309.10 $319.92 TSS Charge ($/1,000 lbs) $511 $519.81 $538.00 $556.83 $576.32 $596.49 Septage Quantity Charge
Flow charge per 1,000 gallons $67.00 $69.35 $71.78 $74.29 $76.89 $79.58 CanSeg Line Charges (these three components are additive) Flow Charge ($/Million Gallons) $3,319.00 $2,852.34 $2,923.65 $2,996.74 $3,071.66 $3,148.45 BOD Charge ($/1,000 lbs) $1.73 $19.01 $19.49 $19.98 $20.48 $20.99 TSS Charge ($/1,000 lbs) $5.00 $37.46 $38.40 $39.36 $40.34 $41.35 #14..
- 399 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 6

1.5.5 Bill Impacts
All customers pay the account charge as well as the charges related to their classification. The following table shows the change in residential bills with the proposed rates. Variations in the FY 2022/23 rate increase percentages are due to the updated cost of service analysis (Section 4) leading to updated cost of service based rates (Section 5). It is important to note that all customers pat the account charge plus the charges related to their customer class.

The existing and proposed single family residential monthly bills are shown in the following table. Due to the updated cost of service analysis residential bills will increase by slightly less than the overall 3.5% increase in FY 2022/23.

Table 1‐2: Proposed Single Family Bill Impacts

Existing and proposed example commercial monthly bills are shown in the following table. Due to the updated cost ofservice analysis some commercial bills will change by slightly more or lessthan the overall

3.5% increase in FY 2022/23.

Table 1‐3: Example Commercial Bill Impacts with Proposed Rates Proposed average industrial monthly bills are shown in the following table. Due to the updated cost of service analysis average industrial bills are projected to increase slightly more than the overall 3.5% increase in FY 2022/23. Individual customer bill impacts will vary based on each customer’s system utilization.

Monthly Commercial Bill Impacts
CCF per
Month
Bill at Existing
FY 21/22 Rates
Bill at Proposed
FY 22/23 Rates Bill Impact
Commercial Quantity Charge ($/100 cubic feet) Example CCF Group 1‐BOD + TSS is 400 mg/l or less 150 $558.18 $582.36 4.3% Group 2‐BOD + TSS is 401 mg/l to 900 mg/l 150 $738.18 $762.36 3.3% Group 3‐BOD + TSS is 901 mg/l to 1,400 mg/l 150 $916.68 $948.36 3.5% Group 4‐BOD + TSS is 1,401 mg/l or more 150 $1,132.68 $1,173.36 3.6% #14..
- 400 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 7
Table 1‐4: Projected Average Industrial Monthly Bill Impacts Proposed average CanSeg monthly bills are shown in the following table. Due to the updated cost of service analysis average CanSeg bills are projected to increase at 2.5% in FY 2022/23. Individual customer bill impacts will vary based on each customer’s system utilization.

Table 1‐5: Projected Average CanSeg Monthly Bill Impacts Average Industrial
Customer Monthly Bill
Billing
Units FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Account 1.0 $4.68 $4.86 $5.04 $5.22 $5.41 $5.60
Flow (Million Gallons) 2.6 $9,473.57 $9,687.96 $10,027.04 $10,377.98 $10,741.20 $11,117.13 BOD(1,000 lbs) 26.6 $6,808.51 $7,414.63 $7,674.20 $7,942.82 $8,220.74 $8,508.51 TSS (1,000 lbs) 5.0 $2,536.88 $2,580.62 $2,670.92 $2,764.40 $2,861.16 $2,961.30 Total Monthly Bill $18,823.64 $19,688.07 $20,377.20 $21,090.42 $21,828.51 $22,592.54 Average Bill % Increase 4.6% 3.5% 3.5% 3.5% 3.5%
Average Customer
Monthly Bill
Billing
Units FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Existing Proposed Proposed Proposed Proposed Proposed
Account 1.0 $4.68 $4.86 $5.04 $5.22 $5.41 $5.60
Flow (Million Gallons) 75.0 $248,925.00 $213,925.50 $219,273.75 $224,755.50 $230,374.50 $236,133.75 BOD(1,000 lbs) 1,225.0 $2,119.25 $23,287.25 $23,875.25 $24,475.50 $25,088.00 $25,712.75 TSS (1,000 lbs) 621.7 $3,108.33 $23,287.63 $23,872.00 $24,468.80 $25,078.03 $25,705.92 Total Monthly Bill $254,157.26 $260,505.24 $267,026.04 $273,705.02 $280,545.94 $287,558.02 Average Bill % Increase 2.5% 2.5% 2.5% 2.5% 2.5%
#14..
- 401 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 8
SECTION 2: CURRENT SEWER RATES
The City of Modesto assigns rates based on accounts, flow, BOD, and TSS unit costs. Each customer’s wastewater bill is proportional to that customer’s use or benefit from the wastewater system. The City’s current rate schedule is provided at the end of this section.

2.1 Account Charge
Resolution No. 2007‐463 describes the monthly account charge as “a monthly fee charged to every sewer account to pay the actual fixed sewersystem costs not allocable to sewer flow and strength components.” The account charge is intended to recover general, administrative, and customer service costs. The FY2021/22 account charge is $4.68 per month.

2.2 Flow and Strength Rates
In addition to the account charge, each customer is billed based on their proportional use of the wastewater system based on flow and pollutant strength characteristics. Provided below is a description of the flow and strength charges for each customer class. The City’s rates are based on unit costs for flow ($/million gallons), BOD ($/thousand pounds), and TSS ($/thousand pounds). These unit costs are applied to flow and strength of each customer class to calculate the rates.

2.2.1 Industrial Rates
The City has forty‐seven industrial customers. The point of discharge for each industrial customer is metered and sampled by the City of Modesto to determine flow and pollutant loading. Industrial customers are then billed for their observed flow, BOD, and TSS. Industrial wastewater flow is billed on a $/million gallon (MG) basis, BOD is billed on a $/thousand pound (klbs) basis, and TSS is also billed on a $/thousand pound (klbs) basis.

2.2.2 Cannery Segregation (CanSeg) Line Rates
The CanSeg Line is used by four cannery customers during the canning season that typically runs from July through September. The CanSeg Line collects and conveys the canneries’ process flow directly to the Ranch for land application. The point of discharge for each CanSeg customer is metered and sampled by the City of Modesto to determine flow and pollutant loading. CanSeg customers are then billed for their observed flow, BOD, and TSS. CanSeg wastewater flow is billed on a $/million gallon (MG) basis, BOD is billed on a $/thousand pound (klbs) basis, and TSS is also billed on a $/thousand pound (klbs) basis.

2.2.3 Commercial Rates
The wastewater flow of other customer groups is not individually metered and sampled. The City estimates the flow and loading of non‐industrial customers for rate design. Commercial customers are categorized into four groups based on pollutant loading. When a new commercial customer applies for service, the City of Modesto assigns the customer to a loading group based on typical strength characteristics for the type of business.
#14..
- 402 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 9
The City uses metered water use of commercial customers as a proxy for wastewater flow. City policy dictates that commercial customers must utilize dedicated irrigation water meters for outdoor use and separate meters for indoor water use. Indoor water use flows into the sewer system and outdoor water use does not. Because water use is billed on a hundred cubic foot (hcf) basis, the indoor water use/sewer flow of commercial customer is also billed for sewer on an hcf basis.

Unlike industrial customers, commercial customers are not billed separately for flow, BOD, and TSS.

Instead, commercial customers have bundled rates which combine the costs of flow, BOD, and TSS into a single charge per hcf. The commercial flow is multiplied by the concentration (mg/l) to estimate the pounds of BOD and TSS produced per hcf of wastewater flow. The flow, BOD, and TSS are then multiplied by the unit charges (i.e., industrial rates) to determine a $/hcf rate based on the loading of each commercial group.

2.2.4 Residential Rates
The residential customer class includes single family, multiple family (two to four dwelling units per account), and apartment customers (five or more dwelling units per account). Residential customers are charged for wastewater flow and strength on a per dwelling unit basis.

2.2.5 Septage Rate
The City also charges for the dumping of septic waste at the sewage treatment plant. The current rate is $67 per 1,000 gallons of sewage. The septage rate was established as proportional to the unit costs of flow, BOD, and TSS less a collection system discount applied to the flow rate.

2.3 Current Rate Schedule
The City’s current rate schedule is provided below. It should be noted that schools have the option of being charged based on the average daily attendance (ADA) of pupils plus staff. ADA rates are subject to service agreements between participating schools and the City of Modesto.

Table 2‐1: Current Rate Schedule
Sewer Rates FY 21‐22
Existing
Monthly Account Charge – All Accounts ($/Account) $4.68 Residential Rates ($/Dwelling Unit)
Single Family Residential, Mobile Home on a lot $37.10
Multiple Family (2‐4 Dwelling Units), one additional Dwelling Unit or Mobile Home on a lot $28.60
Apartments (5 or more Dwelling Units), Mobile Home Space in a Mobile Home Park $25.33
Commercial Quantity Charge ($/100 cubic feet)
Group 1‐BOD + TSS is 400 mg/l or less $3.69
Group 2‐BOD + TSS is 401 mg/l to 900 mg/l $4.89
#14..
- 403 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 10 Group 3‐BOD + TSS is 901 mg/l to 1,400 mg/l $6.08
Group 4‐BOD + TSS is 1,401 mg/l or more $7.52
Industrial Charges (these three components are additive) Flow Charge ($/Million gallons) $3,657
BOD Charge ($/1,000 lbs) $256
TSS Charge ($/1,000 lbs) $511
Septage Quantity Charge
Flow charge per 1,000 gallons $67.00
CanSeg Line Charges (these three components are additive) Flow Charge ($/Million Gallons) $3,319.00
BOD Charge ($/1,000 lbs) $1.73
TSS Charge ($/1,000 lbs) $5.00
#14..
- 404 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 11 SECTION 3: REVENUE REQUIREMENT
This section develops the Wastewater Fund revenue requirement for the next five years. The revenue requirement is the financial plan for the wastewater utility projecting operating and capital expenses and calculating the revenue needed to fund these expenses. A portion of the wastewaterservice costsis offset by non‐rate revenues and use of reserves and the remainder must be funded by wastewater service charges. BWA developed a master revenue requirement for the Wastewater Fund as a whole and subordinate revenue requirements for the M&I system and the CanSeg Line.

3.1 Current Revenues
Year‐end estimates for FY2020/21 indicate that the Wastewater Fund generated approximately $67.0 million in revenue. Approximately $59.2 million was collected from rate revenue and approximately $7.8 million was collected from non‐rate revenue sources. The City projects annual customer growth of 0.5%.

3.2 Operating Expenses
For FY2021/22, the wastewater operating expenses are budgeted at $37.1 million. Based on input from City staff BWA reduced the budget by 5% for the rate study (actual expenses typically come in below budget). The revised operating budget for FY 2021/22 is $35.3 million. Operating expenses consist of ongoing annual costs including staffing, materials, supplies, power, chemicals, and maintenance.

Operating costs are projected to increase by 3.5% annually due to inflation. BWA adjusted the inflation assumption up from the previous 2% to reflect the current, elevated inflation levels.

3.3 Debt Service
The City of Modesto currently has several outstanding wastewater loans and bonds including State Revolving Fund (SRF) Loans and revenue bonds. In FY 2022/23 the City is budgeting $12.2 million dollars in debt service.

3.4 Capital Expenditures
Building on the Wastewater Master Plan Update, Carollo Engineers developed a capital improvement plan for the sewer collection system and the wastewater treatment stream. Over the next five years, a total of $237.8 million in capital improvements are planned. The fully detailed capital improvement plan is provided in Appendix B. This capital plan is the projected maximum capital spending scenario.

Table 3‐1: Summary of Capital Improvement Projects
Capital Spending
Category FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 CanSeg $160,000 $1,304,100 $1,821,083 $2,470,711 $20,541,791 $1,131,542 M&I $32,348,500 $60,259,311 $57,461,841 $25,917,832 $39,992,053 $26,948,983 #14..
- 405 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 12

3.5 Financial Policies, Assumptions, and Targets
The City’s financial reserve policies include a reserve target and debt service coverage goal. The City intends to maintain a minimum cash reserve equal to 25% of its operating costs plus the annual SRF debt service payment. For FY2022/23, the minimum cash reserve is $10.3 million.

The Wastewater Capital Improvement Plan (CIP) identifies $237.9 million in capital improvement projects to be completed over the next five years. To mitigate rate impacts, the City intendsto fund $133.70 million from reserves and rate revenue (referred to as “pay‐as‐you‐go” funding). The beginning FY2021/22 unaudited cash reserve is estimated to be nearly $93 million, well in excess of the minimum reserve target.

In FY 2022/23 the cash reserve is projected to be $88.8 million. Although the reserve cannot fund all capital improvements over the next five years, it can be spent down in lieu of issuing additional debt. The build‐up of reserves in FY 2020/21 was due to a slowdown in capital project work caused by the COVID‐ 19 pandemic.

For financial planning purposes, it is assumed that annual capital expenditures in excess of the pay‐as‐ you‐go funding amount will be debt financed over a thirty year term via municipal revenue bonds. The City will pursue grants and low cost financing, including SRF loans, where possible. Municipal bond financing acts as a “worst case” financing scenario for the purpose of determining rates.

Most municipal debt requires that the issuer generate net operating revenues of 1.25 times the total annual debtservice payment or greater. Thisisreferred to as “debtservice coverage.” To support a strong credit rating and good financial health, the City typically maintains a debt coverage ratio of 2.0 times the annual payment or greater.

3.6 CanSeg Line Revenue Requirement
BWA developed a revenue requirement and cash flow for the CanSeg Line to facilitate rates reflecting the cost to provide CanSeg service.

3.6.1 CanSeg Reserve
The CanSeg Line came into operation in September 1999. The first full canning season utilizing the CanSeg Line occurred in 2000 (FY2000/01). Based on the CanSeg line revenues and expenditures since the last rates study, the projected cash reserve attributable to the CanSeg line at the beginning of FY 2022/23 is $8.1 million.

3.6.2 Operating Expenses and Non‐rate Revenue
The CanSeg Line operating expenses are now a line item in the City’s budget. The total CanSeg operating expenses are budgeted to be $512,178 in FY2021/22. The city is also projecting an additional expense of $100,000 to purchase water to blend with the flows being applied to the Ranch to evenly distribute the strength of the CanSeg flows around the Ranch. The water purchase is an estimate of the annual average #14..
- 406 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 13 cost, the actual price and water purchase amounts are likely to fluctuate from year‐to‐year. CanSeg Line expenses are projected to increase due to inflation at 3.5% annually.

Expenses are offset by approximately $509,271 in non‐rate revenues, largely from the rent revenue from the Ranch. Allocation of non‐rate revenues to the CanSeg Line is discussed in Section 4.3. Allocation of Non‐Rate Revenues and detailed revenue and expense worksheets for the CanSeg Line are provided in Appendix A.

3.6.3 CanSeg Line Capital Expenses
Building on the Wastewater Master Plan Update, Carollo Engineers developed a capital improvement plan for both the M&I system and the CanSeg Line. Over the next five years, $32.4 million in capital improvement projects are planned for the CanSeg Line. The CanSeg Line projected capital costs are shown below.

Table 3‐2: CanSeg Line 5‐Year Capital Improvement Plan
Projected CanSeg Capital
Improvement Plan FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 CanSeg Bank Armament ‐

2,391,000

2,439,000   ‐   ‐
R&R Can Seg (River Trunk Gravity Line)

‐

‐

554,359

8,835,151

‐
Odor Control Facilities

38,813

803,419

‐

‐

‐
Secondary Treatment Facilities
Upgrades

‐

1,916,352

11,706,639

1,131,542

1,171,146
River Diversion Facilities

1,035,000

‐

‐

‐

‐
Ranch Irrigation System Flow
Monitoring Modifications

87,975

‐

‐

‐

‐
CV Salts Compliance

103,500

214,245

‐

‐

‐
Total CIP $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146

3.6.4 CanSeg Line Capital Funding
The following table shows the projected capital funding sources for CanSeg. BWA projects the City will need $20 million from financing and $12.4 million in pay‐go funding to support the CanSeg CIP. #14..
- 407 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 14 Table 3‐3: CanSeg Capital Funding Sources

3.6.5 CanSeg Line Cash Flow
The following table provides the cash flow for the CanSeg Line. To fund operating and capital expenses, BWA projects the CanSeg rate revenue requirement will be $3.0 million in FY2022/23. BWA recommends rate increases of 2.5% annually. BWA is recommending lower rate increasesfor CanSeg than M&I because a larger portion of CanSeg expenses consists of debt service which will not increase with inflation. Due to the slowdown in capitalspending caused by the COVID‐19 pandemic the City decided to not increase rates during 2021/22.

Table 3‐4: CanSeg Cashflow
Capital Funding FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Capital Revenues
Use of Debt Proceeds $12,000,000 $8,000,000
Rate Funded Capital $1,265,288 $5,325,016 $2,699,998 $1,966,693 $1,171,146 ________ ________ ________ ________ ________ Total Capital Revenue $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146 Total Capital Expenditures $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146 CanSeg Line Cash Flow
Projections FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Reserves
Beginning Balance $8,127,935 $8,355,087 $5,449,894 $4,580,345 $3,866,339 Revenue Escalation
Rate Revenue Increase 2.50% 2.50% 2.50% 2.50% 2.50%
Revenues
Rate Revenue $3,049,831 $3,126,077 $3,204,229 $3,284,334 $3,366,443 Rate Increase Revenue 76,246 78,152 80,106 82,108 84,161 Other Revenue 509,271 509,271 509,271 509,271 509,271
Interest on Reserves $40,640 $41,775 $27,249 $22,902 $19,332 ________ ________ ________ ________ ________ Total Revenue $3,675,987 $3,755,275 $3,820,855 $3,898,615 $3,979,206 Expenses
Inflation 3.5% 3.5% 3.5% 3.5% 3.5%
Operating Expenses $530,104 $548,658 $567,861 $587,736 $608,307 Water Purchase $103,500 $107,123 $110,872 $114,752 $118,769 Existing Debt Service 1,549,943 679,672 679,672 679,440 579,020 New Debt Service $632,000 $1,264,000 $1,264,000
Rate Funded Capital $1,265,288 $5,325,016 $2,699,998 $1,966,693 $1,171,146 ________ ________ ________ ________ ________ Total Expenses $3,448,835 $6,660,468 $4,690,403 $4,612,621 $3,741,241 Net Revenues $227,152 ‐$2,905,193 ‐$869,548 ‐$714,006 $237,965 Ending Balance $8,355,087 $5,449,894 $4,580,345 $3,866,339 $4,104,304 #14..
- 408 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 15

3.7 Municipal and Industrial (M&I) Revenue Requirement
All but four customers have all their waste treated by the M&I system. BWA developed a revenue requirement and cash flow forthe M&Isystem to facilitate ratesreflecting the costto provide M&Iservice.

3.7.1 M&I Reserve
The projected cash reserve attributable to the M&I line at the beginning of FY 2022/23 is $69.0 million.

3.7.2 Operating Expenses and Non‐rate Revenue
The total M&I operating expenses are budgeted to be $34.8 million in FY2021/22. M&I expenses are projected to increase due to inflation at 3.5% annually.

Expenses are offset by approximately $7.3 million in non‐rate revenues. About $2.8 million of the non‐ rate revenue is from the sale of water from tertiary treatment.

3.7.3 M&I Capital Expenses
As part of the Wastewater Master Plan Update, Carollo Engineers developed a capital improvement plan for both the M&I system and the CanSeg Line. Over the next five years, $211.3 million in capital improvement projects are planned for the M&I system. Projected M&I capital spending summarized below.

Table 3‐5: M&I Capital Improvement Plan (CIP) Summary
M&I CIP Summary FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Collection System
Improvements       48,677,661         52,685,570         18,404,539         15,146,528         12,145,172 Sutter Plant
Improvements         1,875,938           2,410,256           1,884,820                            ‐           9,228,631 Jennings Plant
Improvements         8,694,000           2,687,382           5,517,601         24,271,764           5,456,411 Engineering Studies

879,750

482,051

110,872

573,762

118,769
Total CIP $ 60,127,349   $ 58,265,260   $ 25,917,832   $ 39,992,053   $ 26,948,983

3.7.4 M&I Capital Funding
The following table shows the projected capital funding sources for M&I. BWA projects the City will need $90.0 million from financing and $121.3 million in pay‐go funding to support the M&I CIP. #14..
- 409 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 16 Table 3‐6: M&I Capital Funding Sources

3.7.5 M&I Cash Flow
The following table provides the cash flow for the M&I system. To fund operating and capital expenses, BWA projects a M&I rate revenue requirement $58.6 million in FY2022/23. BWA projects rate increases of 3.5% annually. Due to the slowdown in capital spending caused by the COVID‐19 pandemic the City decided to not increase rates during 2021/22.

Table 3‐7: M&I Cash Flow Projections

3.8 Total Wastewater Fund Revenue Requirement
Capital Funding FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Capital Revenues
Use of Debt Proceeds $55,000,000 $30,000,000 $5,000,000 Grant Revenue
Rate Funded Capital $60,127,349 $3,265,260 $25,917,832 $9,992,053 $21,948,983 ________ ________ ________ ________ ________ Total Capital Revenue $60,127,349 $58,265,260 $25,917,832 $39,992,053 $26,948,983 Total Capital Expenditures $60,127,349 $58,265,260 $25,917,832 $39,992,053 $26,948,983 M&I Cash Flow Projections FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Reserves
Beginning  Balance $69,042,634 $28,093,588 $44,366,759 $37,675,221 $47,319,900 Revenue Escalation
Rate Revenue Increase 3.50% 3.50% 3.50% 3.50% 3.50%
Growth 0.5% 0.5% 0.5% 0.5% 0.5%
Revenues
Rate Revenue $56,630,743 $58,905,883 $61,272,427 $63,734,046 $66,294,562 Rate Increase Revenue 1,982,076 2,061,706 2,144,535 2,230,692 2,320,310 Other Revenue 6,868,103 6,868,103 6,868,103 6,868,103 6,868,103 Interest on Reserves $345,213 $140,468 $221,834 $188,376 $236,599 ________ ________ ________ ________ ________ Total Revenue $65,826,135 $67,976,160 $70,506,899 $73,021,217 $75,719,574 Expenses
Inflation 3.5% 3.5% 3.5% 3.0% 3.0%
Total Operating Expenses* $35,966,214 $37,225,032 $38,527,908 $39,683,745 $40,874,257 Existing Debt Service 10,681,619 9,672,697 9,672,697 9,672,740 9,556,666 New Debt Service $0 $1,540,000 $3,080,000 $4,028,000 $4,976,000 Rate Funded Capital $60,127,349 $3,265,260 $25,917,832 $9,992,053 $21,948,983 ________ ________ ________ ________ ________ Total Expenses $106,775,182 $51,702,988 $77,198,437 $63,376,538 $77,355,906 Net Revenues ‐$40,949,047 $16,273,172 ‐$6,691,539 $9,644,679 ‐$1,636,332 Ending Unrestricted Balance $28,093,588 $44,366,759 $37,675,221 $47,319,900 $45,683,568 Debt Coverage (Target 2.0) 2.80 2.74 2.51 2.43 2.40
*Adjusted to reflect forecast based on prior expenditures #14..
- 410 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 17 The following sections combine the M&I and CanSeg financial projections.

3.8.1 Total Wastewater Capital Funding
The following table shows the projected combined capital funding sources for the Wastewater Fund.

BWA projects the City will need $110.0 million from financing and $133.7 million in pay‐go funding to support the Wastewater CIP.

Table 3‐8: Total Wastewater Capital Funding Sources

3.9 Wastewater Fund Master Cash Flow
The following table provides the Wastewater Fund master cash flow, which incorporates the revenues and expenses for both the M&I and CanSeg Line systems. Current rate revenues are budgeted at $59.2 million in FY 2021/22 and are proposed to increase to $71.8 million by FY2026/27.

Table 3‐9: Wastewater Fund Master Cash Flow
Capital Funding FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Capital Revenues
Use of Debt Proceeds $0 $55,000,000 $12,000,000 $38,000,000 $5,000,000 Grant Revenue
Rate Funded Capital $61,392,636 $8,590,276 $28,617,831 $11,958,747 $23,120,129 ________ ________ ________ ________ ________ Total Capital Revenue $61,392,636 $63,590,276 $40,617,831 $49,958,747 $28,120,129 Total Capital Expenditures $61,392,636 $63,590,276 $40,617,831 $49,958,747 $28,120,129 Wastewater Fund Cash
Flow Projections FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Reserves
Beginning Balance $77,170,569 $36,293,070 $49,428,325 $41,627,553 $50,118,758 Revenues
Rate Revenue $61,583,291 $63,939,872 $66,463,552 $69,087,493 $71,815,695 Other Revenue 7,377,374 7,377,374 7,377,374 7,377,374 7,377,374 Interest on Reserves $385,853 $181,465 $247,142 $208,138 $250,594 ________ ________ ________ ________ ________ Total Revenue $69,346,517 $71,498,711 $74,088,067 $76,673,005 $79,443,663 Expenses
Inflation 3.5% 3.5% 3.5% 3.5% 3.5%
Total Operating Expenses* $36,599,818 $37,880,812 $39,206,640 $40,578,873 $41,999,133 Existing Debt Service 12,231,562 10,352,368 10,352,369 10,352,180 10,135,686 New Debt Service $0 $1,540,000 $3,712,000 $5,292,000 $6,240,000 Rate Funded Capital $61,392,636 $8,590,276 $28,617,831 $11,958,747 $23,120,129 ________ ________ ________ ________ ________ Total Expenses $110,224,017 $58,363,456 $81,888,840 $68,181,799 $81,494,948 Net Revenues ‐$40,877,499 $13,135,255 ‐$7,800,772 $8,491,205 ‐$2,051,285 Ending Unrestricted Balance $36,293,070 $49,428,325 $41,627,553 $50,118,758 $48,067,473 Debt Coverage (Target 2.0) 2.68 2.83 2.48 2.31 2.29
*Adjusted to reflect forecast based on prior expenditures #14..
- 411 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 18 Figure 2:  Master Wastewater Cashflow

#14..
- 412 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 19 SECTION 4: COST OF SERVICE ALLOCATION
The revenue requirements detailed in the previous section determine the amount of revenue to be recovered from sewer rates. The cost of service analysis advances the rate study process by providing a mechanism for recovery of revenues from customers based on the service that they receive from the wastewater system. Proposition 218 requires that agencies providing “property‐related services” (including wastewater utility service) set rates and charges that are based on the cost of providing those services. Detailed cost allocation worksheets supporting this section are provided in Appendix A.

4.1 Methodology
BWA’s cost of service analysis reviewed each non‐rate revenue and expense line item listed in the wastewater budget and allocated the revenues and expenses to customer service, the M&I wastewater system, and the CanSeg Line. All expenses and revenues not allocated to customer service were further allocated by function category. Functional categories include wastewater flow, total suspended solids (TSS) and Biochemical oxygen demand (BOD). Allocations were based on how the City incurs each revenue or expense and which customer group generates or benefits from each line item.

4.2 Customer Service (per Account) Allocation
Consistent with Resolution 2007‐463, the customerservice function encompassesrevenues and coststhat are not attributable to wastewater flow or strength characteristics. Customer service expenses are recovered through the account charge on all accounts.

The following table provides the budget line items allocated to customer service. The amounts allocated to Customer Service in each expense category are the portions which benefit each wastewater customer (large and small) equally. A substantial portion of the amount allocated to this category is management and administration related.

Table 4‐1: Number of Customer Service Allocation
Budget Line Item
Allocation to
Customer Service
Operating Expenses
UPP ‐ Wastewater General 70.0%
UPP ‐ Wastewater Utility Billing and Collections 100.0% UPP ‐ Sphere of Influence Area Expansion 70.0%
UPP  ‐  Wastewater Inventory & Condition
Assessment 70.0%
UPP ‐ Wastewater Services Administration 70.0%
UPP ‐ Wastewater Collections Administration 70.0%
UPP ‐ Wastewater Operations Administration 70.0%
UPP ‐ Wastewater Electrical Services 5.0%
General Fund Transfer 70.0%
#14..
- 413 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 20

4.3 Allocation of Non‐Rate Revenues Between CanSeg and M&I The following non‐rate revenues are allocated between the M&I system and the CanSeg Line:

Interest Revenue and Earnings – Interest earnings are conservatively estimated to be 0.5% on the cash reserves allocated to CanSeg and M&I. Interest is allocated to M&I and CanSeg based on the projected beginning reserve balance of each cashflow. [how allocated??] Lease of Land – Lease/rental revenue generated from the rental of the Ranch to a farmer. City of Modesto M&I treated wastewater effluent and CanSeg Line process water is used by the farmer to irrigate the Ranch. The Ranch only benefitsthe CanSeg Line; therefore, allrevenues and expensesrelated to the Ranch are allocated to the CanSeg Line.

General Fund (Repayment of Interfund Loan) – Resolution No. 2000‐446 describes the repayment of transfers made from the water and wastewater funds to the General Fund from July 1997 to September 1999. BWA evaluated the historical wastewater rate revenue collected during that period and estimates that the CanSeg rate revenues accounted for 3.1% (noting that the CanSeg Line came into service July of 1999 and thus paid no rates prior to that date). The CanSeg Line is therefore allocated 3.1% of the General Fund repayments.

4.4 Debt Service
All existing debt which benefitted CanSeg was allocated to CanSeg in the prior rate study. Existing obligations benefitting CanSeg in FY 2022/23 are the 2015 Wastewater Revenue/Refunding Revenue Bonds and the 2018A Refunding Bonds (2006A). CanSeg is allocated 46.41% of the debt service for these obligations. Debt service on existing obligations in FY2022/23 for CanSeg is projected to be $1.55 million and for M&I is projected to be $10.69 million.

4.5 Allocation to Flow and Strength (BOD & TSS)
The final step in the cost allocation process is to allocate the M&I and CanSeg Line expenses and revenues to flow and strength categories based on input form City operations and engineering staff and the City’s engineering consultants.

To determine the allocation for future debtservice and pay‐go capitalspending City engineers determined allocations for each project. The following tables show the results of the capital allocation for M&I and CanSeg.
#14..
- 414 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 21 Table 4‐2: M&I Capital Allocation
Table 4‐3: CanSeg Capital Allocation
Each budget line item was assigned a function allocation category. The following tables present a summary of the cost allocation to flow and loadings by allocation category for M&I and CanSeg. The allocation categorization for each budget line is shown in the Appendix A.

CanSeg Capital Functional
Allocation 5‐Year Average Flow BOD TSS
CanSeg Bank Armament $2,415,000 100.0%
Gravity Line) $1,877,902 100.0%
Odor Control Facilities $168,446 50.0% 25.0% 25.0%
Upgrades $3,185,136 40.0% 30.0% 30.0%
River Diversion Facilities $207,000 100.0%
Ranch Irrigation System Flow
Monitoring Modi fications $17,595 100.0%
CV Salts Compliance $63,549 50.0% 25.0% 25.0%
Allocation Amount $ $7,934,628 $5,907,549 $1,013,540 $1,013,540 Allocation % 74.5% 12.8% 12.8%
#14..
- 415 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 22 Table 4‐4: M&I Cost Allocation to Flow and Strength

#14..
- 416 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 23 Table 4‐5: CanSeg Cost Allocation to Flow and Strength
*Does not include customer service

4.6 Septage
Septage customers transport their effluent directly to the wastewater treatment plant and do not use the sewer collection system. BWA believes the costs recovered by the rates are reasonable and recommends applying the overall revenue increase percentage to the septage rates.

CanSeg Functional
Allocation Categories
5‐Year Average
Amount Flow BOD TSS
Operating Expenses $549,307.31 100.0%
Water Purchase $107,249.32 50.0% 25.0% 25.0%
Existing Debt Service $1,028,823.60 100.0%
New Debt Service $948,000.00 74.5% 12.8% 12.8%
Rate Funded Capital $2,283,399.09 74.5% 12.8% 12.8%
Total $4,916,779.32 $4,037,621.10 $439,579.11 $439,579.11 Flow, BOD, TSS Total $4,916,779.32 82.1% 8.9% 8.9%
$3,049,831.00
Flow, BOD and TSS
Revenue Requirement $3,049,831.00 $2,504,497.60 $272,666.70 $272,666.70 Revenue Requirement Based on Projected System Demands
#14..
- 417 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 24 SECTION 5: RATE DESIGN
The previous section determined the amount of revenue allocated to flow, BOD, and TSS for the M&I service, CanSeg Line, and secondary scalping service. The allocated revenue is then divided by the billing units to calculate the rates. A detailed schedule of billing units and projected ratesis provided in Appendix A.

5.1 M&I Rate Design

5.1.1 Billing Units
BWA estimated the number of accounts, number of residential dwelling units, and flows and loads for the next five years.

5.1.1.1 Accounts
The City of Modesto currently provides wastewater service to 62,162 accounts consisting of residential, multiple family, commercial, industrial customers. The City projects growth of 0.5% annually for all customers.

Table 5‐1: Number of Customer Accounts
Customer Class Current (FY 2021) FY2022
Growth in # Residential and Commercial      0.50%
Growth of Major Industrial    0.50%

Accounts
SF Residential 53,422   55,000
Multi Residential 4,377   4,399
Commercial 2,698   2,711
Industrial 47   47
CanSeg 4   4
Total Accounts 60,548   62,162
#14..
- 418 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 25

5.1.1.2 Flow and Loadings
The following table showsthe calculations used to estimate the flows and loadings of each customer class.

Table 5‐2: Total M&I Flows and Loads for Rate Design

5.1.1.3 Unit Cost
Using revenue requirement from the cost allocation described in the previous section divided by the demand units derived from the flows and loading, the unit costs for each category can be calculated. The revenue requirement is based on FY 2021/22 revenues.

M&I Functional Allocation
Categories
5‐Year Average
Amount Account Flow BOD TSS General
Revenue
General Composite $3,109,958 100%
Rates Paid 1997‐1999 $366,429 60.1% 17.9% 22.0%
Tertiary $2,856,716 33.3% 33.3% 33.3%
Total $6,333,103 $1,172,813.16 $1,017,643.24 $1,032,688.91 $3,109,958.00 Expense
General Composite $2,513,889 100%
Existing Debt $10,079,195 50.2% 18.0% 31.8%
CIP ‐ 5 year average $15,883,388 80.2% 14.5% 5.3%
Tertiary $3,568,600 25.0% 25.0% 50.0%
Collection System & Pumping $9,264,393 100.0% 0.0% 0.0% Lab, Enviro, Monitoring $3,679,235 0.0% 50.0% 50.0%
All Treatment $4,987,967 55.3% 19.8% 24.9%
Primary $4,159,654 70.0% 10.0% 20.0%
Secondary $4,019,158 40.0% 30.0% 30.0%
Recycled Water $1,698,118 100.0% 0.0% 0.0%
Electrical $2,266,318 60.0% 30.0% 10.0%
Account $3,884,170 100.0%
Total $66,004,086 $3,884,170 $38,290,385 $10,139,788 $11,175,855 $2,513,889 Net $59,670,983 $3,884,170 $37,117,572 $9,122,145 $10,143,166 ‐$596,069 Flow, BOD, TSS Total $56,382,882 65.8% 16.2% 18.0%
With General Composite $ $59,670,983 $3,884,170 $36,725,172 $9,025,707 $10,035,934 With General Composite % 6.5% 61.5% 15.1% 16.8%
FY 2021‐22 Revenue Requirement* $53,820,901
Flow, BOD and TSS Revenue
Requirement $53,820,901 $3,503,370 $33,124,674 $8,140,836 $9,052,022 *For rate making purposes the FY 2021/22 Revenue Requirement is based on available billing units multiplied by FY 2021/22 rates. This amount excludes the "Sewer Only" customer class as it includes customers from all customer classes and is not a class of its own. BWA feels allocations excluding the "Sewer Only" customers represents the wastewater system.
#14..
- 419 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 26 Table 5‐3: M&I Allocation Unit Rates

5.1.1.4 Class Revenue Requirements
The projected units in each class are the multiplied by the unit costs to calculate the revenue requirement for each class.

Table 5‐4: Projected M&I Sewer Revenue Requirements
Finally, the class revenue requirements are divided by the rate units used for each class to derive the rate.

The calculated rates at FY 21/22 revenue are then multiplied by the recommended rate increase amount to derive the recommended rates for FY 2022/23.

M&I Allocation
Units Account Flow BOD TSS
# (CCF) (LBS) (LBS)
Demand Units 62,158 12,255,110 30,223,764 18,023,764
Revenue Requirement 3,503,370 33,124,674 8,140,836 9,052,022 Unit Rate $56.36 $2.70 $0.27 $0.50
M&I Class Revenue
Requirement Flow BOD TSS
Revenue
Requirement
(CCF) (LBS) (LBS) ($)
Single Family 6,574,911 8,621,095 8,621,095 $24,423,364.74 Multifamily 723,425 971,147 971,147 $2,704,682.06
Apartments 1,224,222 1,643,432 1,643,432 $4,577,020.08
Group 1 1,306,483 1,713,075 1,713,075 $4,853,101.88
Group 2 133,228 374,336 374,336 $648,935.32
Group 3 117,607 514,025 514,025 $714,494.44
Group 4 222,083 1,386,653 1,386,653 $1,670,186.09
Industrial 1,953,152 15,000,000 2,800,000 $10,725,746.91 Flow Charge
($/Million gallons) 1,953,152 $5,279,228.94
BOD Charge ($/1,000
lbs) 15,000,000 $4,040,282.30
TSS Charge ($/1,000
lbs) 2,800,000 $1,406,235.68
Total 12,255,110 30,223,764 18,023,764 $50,317,531.53
#14..
- 420 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 27 Table 5‐5: Projected M&I Sewer Rates After Cost Allocation

5.2 CanSeg Line Rate Design
The following table presents the CanSeg Line flow and strength charges. The allocated flow, BOD, and TSS rate revenue requirements are divided by the CanSeg billing units to calculate the rates. In addition to the charges shown below, the cannery customers will pay the proposed monthly account charge.

Table 5‐6: CanSeg Line Sewer Rates
CanSeg Rate Derivation Flow BOD TSS
(1,000,000 gallons) (1,000 LBS) (1,000 LBS)
Demand Units 900 14,700 7,460
Revenue Requirement $2,504,498 $272,667 $272,667
Unit Rate at FY 2020/21
Revenue Requirement $2,782.78 $18.55 $36.55
Projected FY 2022/23 Rates $2,852.34 $19.02 $37.47
#14..
- 421 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 28

5.3 Final Rates
The recommended rates resulting from the rate study are summarized in the following table.

Table 5‐7: Proposed Sewer Rates
#14..
- 422 -
City of Modesto – Sewer Rate and Fee Study 2021 Page 29 SECTION 6: RESIDENTIAL BILL COMPARISON
Under the proposed rate increases, the typicalsingle family residential monthly bill is proposed to increase approximately 3.5% annually over the next five years.

Table 6‐1: Typical Customer Bill
Although the typical residential bill is proposed to increase, the City of Modesto bill will remain competitive with other local wastewater agencies, see figure below.

Figure 3:  Residential Bill Comparison
Single Family Residential Bill FY 21‐22 FY 22‐23 FY 23‐24 FY 24‐25 FY 25‐26 FY 26‐27 Existing Proposed Proposed Proposed Proposed Proposed
Monthly Account Charge ($/Account) $4.68 $4.86 $5.04 $5.22 $5.41 $5.60 Single Family Residential, Mobile
Home on a lot ($/Dwelling Unit) $37.10 $38.31 $39.65 $41.04 $42.48 $43.97 Total Single Family Residential Monthly
Bill $41.78 $43.17 $44.69 $46.26 $47.89 $49.57
% Increase 3.33% 3.52% 3.51% 3.52% 3.51%
#14..
- 423 -
City of Modesto – Sewer Rate and Fee Study 2021
SECTION 7: CONCLUSIONS AND RECOMMENDATIONS
This Sewer Rate and Fee Study report presents a comprehensive review of the City of Modesto’s wastewater revenue requirement, cost allocation, and rate structure. The City last conducted a comprehensive cost of service review in 2015.

7.1 Conclusions
The City practices sound financial planning that has provided for the financial health of the wastewater enterprise. Historically, the City has gradually increased rates to keep up with inflationary cost increases and to accumulate reserves. This allows the City to avoid rate spikes when new costs are incurred, such as the new tertiary treatment plant operating and debt service costs. The City has been very successful in securing grants and low cost State Revolving Fund loans providing savings to the ratepayers. The City’s financial targets are to maintain debt service coverage of 2.0 times the annual payment and to maintain reserves above 25% of operating costs plus one year’s SRF debt service payment. These policies provide financial stability and benefit the ratepayers.

The City’s rate structure, composed of account charges, flow charges, BOD charges, and TSS charges, is consistent with generally accepted rate making principles and industry standard practice. These functional categories reflect how the City provides wastewater service: the City provides customer service and billing, the City collects and conveys effluent, the City treats wastewater pollutants, and the City disposes of the wastewater. BWA finds the City’s functional categories to be reasonable and appropriate.

Rates must increase over the next five yearsto fund the City’s wastewater operating and capital expenses, meet debt coverage requirements, and to maintain emergency reserves. M&I rates are proposed to increase by 3.5% annually and CanSeg rates are proposed to increase at 2.5% annually.

7.2 Recommendations
BWA recommends that the City adopt the rates shown in this report. Rates were developed as part of a collaborative process that included workshops with City staff, including personnel from Engineering, Wastewater Operations, and Finance, the City’s consulting engineer, and cannery stakeholders.

At minimum, BWA recommends that the City review and update its cost allocation every five years and/or concurrent with Wastewater Master Plan Updates. Proposition 218 allows public agencies to adopt rates over a five year planning horizon. Any further rate increases must be supported by a cost of service analysis.
#14..
- 424 -
Appendix A
#14..
- 425 -
Sewer Rate Study 2021-22
November 19, 2021

BARTLE WELLS ASSOCIATES
Independent Public Finance Advisors
#14..
- 426 -
Table 1
City of Modesto Sewer Rate and Fee Study
Proposed Sewer Rates
Proposed Sewer Rates FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Existing Proposed Proposed Proposed Proposed Proposed
Monthly Account Charge ($/Account) $4.68 $4.86 $5.04 $5.22 $5.41 $5.60 Residential Rates ($/Dwelling Unit)
Single Family Residential, Mobile Home
on a lot $37.10 $38.31 $39.65 $41.04 $42.48 $43.97
Multiple Family (2-4 Dwelling Units), one
additional Dwelling Unit or Mobile Home
on a lot
$28.60 $29.11 $30.13 $31.18 $32.27 $33.40
Apartments (5 or more Dwelling Units),
Mobile Home Space in a Mobile Home
Park
$25.33 $25.97 $26.88 $27.82 $28.79 $29.80
Commercial Quantity Charge ($/100 cubic feet)
Group 1-BOD + TSS is 400 mg/l or less $3.69 $3.85 $3.98 $4.12 $4.26 $4.41 Group 2-BOD + TSS is 401 mg/l to 900
mg/l $4.89 $5.05 $5.23 $5.41 $5.60 $5.80
Group 3-BOD + TSS is 901 mg/l to 1,400
mg/l $6.08 $6.29 $6.51 $6.74 $6.98 $7.22
Group 4-BOD + TSS is 1,401 mg/l or more $7.52 $7.79 $8.06 $8.34 $8.63 $8.93 Industrial Charges (these three components are additive) Flow Charge ($/Million gallons) $3,657 $3,739.76 $3,870.65 $4,006.12 $4,146.33 $4,291.45 BOD Charge ($/1,000 lbs) $256 $278.79 $288.55 $298.65 $309.10 $319.92 TSS Charge ($/1,000 lbs) $511 $519.81 $538.00 $556.83 $576.32 $596.49 Septage Quantity Charge
Flow charge per 1,000 gallons $67.00 $69.35 $71.78 $74.29 $76.89 $79.58 CanSeg Line Charges (these three components are additive) Flow Charge ($/Million Gallons) $3,319.00 $2,852.34 $2,923.65 $2,996.74 $3,071.66 $3,148.45 BOD Charge ($/1,000 lbs) $1.73 $19.01 $19.49 $19.98 $20.48 $20.99 TSS Charge ($/1,000 lbs) $5.00 $37.46 $38.40 $39.36 $40.34 $41.35 #14..
- 427 -
Table 2
City of Modesto Sewer Rate and Fee Study
Billing Units
Actuals Projected
Customer Class Current (FY 2021) FY2022
Growth in # Residential and Commercial 0.50%
Growth of Major Industrial 0.50%
Accounts
SF Residential 53,422 55,000
Multi Residential 4,377 4,399
Commercial 2,698 2,711
Industrial 47 47
CanSeg 4 4
Total Accounts 60,548 62,162
Residential Dwelling Units
Single Family 53,422 53,689
Multiple Family 8,014 8,054
Apartments 15,206 15,282
Commercial Flow (hcf)
Group 1 1,301,663 1,308,172
Group 2 134,718 135,391
Group 3 111,210 111,766
Group 4 286,505 287,937
Industrial (Major and Minor)
Flow (MG) 1,454 1,461
BOD (klbs) 14,752 14,825
TSS (kbs) 2,709 2,723
Canning Season (10MGD)
Flow (MG) 892 904
BOD (klbs) 13,799 14,238
TSS (kbs) 6,291 6,918
#14..
- 428 -
Table 3
City of Modesto Sewer Rate and Fee Study
Operating Revenues and Expenses
Account Account Rate Can Seg CanSeg M&I
Non-Rate Revenue Allocation Category FY 2022 FY 2022 Allocation Rev Req Rev Req Allocation % Rev Req Rev Req Lease of Land Ranch - Flow Only 497,700 497,700 - 497,700 100% 497,700 Miscellaneous Lease General Composite 25,044 25,044 - 25,044 - 25,044 Interfund Charges - Service Credit Labor Charges General Composite 2,962,517 2,962,517 - 2,962,517 - 2,962,517 Interfund Charges - Equipment Rental General Composite 24,274 24,274 - 24,274 - 24,274 Wastewater Developmental Fees (4211-42500) CIP - 6 year average 535,000 535,000 - 535,000 - 535,000 General Fund (Repayment of InterFund Loan) Rates Paid 1997-1999 378,000 378,000 - 378,000 3.1% 11,571 366,429 Compost Fund (Repayment of InterFund Loan) Tertiary 51,919 51,919 - 51,919 - 51,919 JT (Repayment of JTF Interfund Loan) General Composite 98,123 98,123 - 98,123 - 98,123 Intergov - Local - Del Puerto Water District (Debt Service) Tertiary 1,153,663 1,153,663 - 1,153,663 - 1,153,663 Intergov - Local - Del Puerto Water District (O & M) Tertiary 1,056,134 1,056,134 - 1,056,134 - 1,056,134 Intergov - Other Government Agencies (DPWD Water Sales) Tertiary 495,000 495,000 - 495,000 - 495,000 Intergov - Local - City of Turlock Tertiary 100,000 100,000 - 100,000 - 100,000 Total Non-Rate Revenue 7,377,374 7,377,374 - 7,377,374 509,271 6,868,103 #14..
- 429 -
Table 3
City of Modesto Sewer Rate and Fee Study
Operating Revenues and Expenses
Account Account Rate Can Seg CanSeg M&I
Operating Expenses Allocation Category FY 2022 FY 2022 Allocation Rev Req Rev Req Allocation % Rev Req Rev Req UPP - Wastewater General General Composite 861,095 818,040 70.0% 572,628 245,412 245,412 UPP - Wastewater Utility Billing and Collections Customer Service 1,158,120 1,100,214 100.0% 1,100,214 - - UTL - Wastewater Engineering Design General Composite 967,886 919,492 - 919,492 919,492 UPP - Wastewater PCE Litigation (6210) Collection System & Pumping 125 119 - 119 119 UPP - Capital Improvement Services CIP - 5 year average 720,367 684,348 0.0% - 684,348 684,348 UTL - Construction Administration CIP - 5 year average 512 486 0.0% - 486 486 UPP - Wastewater System Analysis General Composite 214,359 203,641 - 203,641 203,641 UPP - Sphere of Influence Area Expansion General Composite 35,941 34,144 70.0% 23,901 10,243 10,243 UPP - Wastewater Rate Analysis General Composite 214,455 203,732 - 203,732 203,732 UPP - Wastewater Inventory & Condition Assessment General Composite 104,974 99,725 70.0% 69,808 29,918 29,918 UPP - Wastewater Services Administration General Composite 1,700,443 1,615,421 70.0% 1,130,795 484,626 484,626 UPP - Laboratory and Environmental Services Administration Lab, Enviro, Monitoring 382,008 362,908 0.0% - 362,908 362,908 UPP - Laboratory Services Lab, Enviro, Monitoring 1,412,987 1,342,338 0.0% - 1,342,338 1,342,338 UPP - Environmental Services Lab, Enviro, Monitoring 1,465,865 1,392,572 0.0% - 1,392,572 1,392,572 UPP - Wastewater Collections Administration Collection System & Pumping 218,846 207,904 70.0% 145,533 62,371 62,371 UPP - Sewer Collections Collection System & Pumping 7,507,203 7,131,843 0.0% - 7,131,843 7,131,843 UPP - Utility Cuts Repavement Collection System & Pumping 4 4 0.0% - 4 4 UPP - Sewer Lateral Cost Sharing Program Collection System & Pumping 83,429 79,258 0.0% - 79,258 79,258 UPP - Wastewater Operations Administration All Treatment 650,636 618,104 70.0% 432,673 185,431 185,431 UPP - Wastewater Plant Operations All Treatment 4,225,583 4,014,304 0.0% - 4,014,304 4,014,304 UPP - Sutter Plant Maintenance Primary 3,686,650 3,502,317 0.0% - 3,502,317 3,502,317 UPP - Jennings Plant Maintenance Secondary 3,562,130 3,384,023 0.0% - 3,384,023 3,384,023 UPP - Sewer Lift Stations Collection System & Pumping 554,501 526,776 0.0% - 526,776 526,776 UPP - Tertiary Treatment Tertiary 3,162,806 3,004,665 0.0% - 3,004,665 - 3,004,665 UPP - Cannery Segregation Line Can Seg 539,135 512,178 0.0% - 512,178 100.00% 512,178 UTL - NVRRWP (North Valley Regional Recycled Water
Program) Recycled Water 1,505,021 1,429,770 0.0% - 1,429,770 1,429,770 UPP - Wastewater Electrical Services Electrical 2,114,325 2,008,609 5.0% 100,430 1,908,179 1,908,179 General Fund General Composite 68,640 65,208 70.0% 45,646 19,562 19,562 Total Operating Expense 37,118,046 35,262,143 3,621,627 31,640,517 512,178 31,128,339 #14..
- 430 -
Table 4
City of Modesto Sewer Rate and Fee Study
Existing Debt
Existing Debt Service
CanSeg
Allocation FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 2005 Series A & B Bonds 46.41% 0 0 0 0 0 0
2006 Series A Bonds 46.41% 0 0 0 0 0 0
SRF Recycled Water 0% 1,154,310 1,152,162 1,152,162 1,152,162 1,152,162 1,152,162 2015 Wastewater Revenue/Refunding Revenue Bonds 46.41% 2,790,750 2,784,358 909,130 909,130 908,630 0 SRF Loan Payments: Phase 2 - Tertiary Treatment Project (201 0% 0 0 0 0 0 0 2018A Refunding Bonds (2006A) 46.41% 560,747 555,400 555,400 555,400 555,400 1,247,650 Series 2020A Bonds (2011 State Loan Refunding) 0% 6,467,911 6,466,143 6,462,177 6,462,177 6,462,488 6,462,374 Series 2020B Bonds (2011 State Loan Refunding) 0% 1,277,897 1,273,500 1,273,500 1,273,500 1,273,500 1,273,500 Total Debt Service 12,251,615 12,231,562 10,352,368 10,352,369 10,352,180 10,135,686 Total CanSeg Debt Service 1,555,391 1,549,943 679,672 679,672 679,440 579,020 Total M&I Debt Service 10,696,224 10,681,619 9,672,697 9,672,697 9,672,740 9,556,666 #14..
- 431 -
Table 5
City of Modesto Sewer Rate and Fee Study
Future Bond Debt Service Estimates
Debt Service per $10 Million of Project Funding
30-Year Bonds 30-Year Bonds
Assumptions Near Term Future
Funding Target $10,000,000 $10,000,000
Total Debt Issue $10,300,000 $10,300,000
Project Fund Proceeds $9,997,200 $10,001,600
Costs of Issuance
Underwriter Discount 0.70% $72,100 $72,100
Issuance Costs est. 150,000 150,000
Bond Insurance (tbd) 0.20% 33,600 37,900
Reserve Surety Bond (tbd) 2.00% 11,200 12,600
Contingency/Rounding 35,900 25,800
Total 302,800 298,400
Financing Terms
Term (Years) 30 30
Average Interest Rate 3.50% 4.50%
Annual Debt Service 560,000 632,300
Rounded Estimate 560,000 632,000
Estimates shown for financial planning purposes.
#14..
- 432 -
Table 6
City of Modesto Sewer Rate and Fee Study
CanSeg CIP
CanSeg Capital
Improvement Plan
Projected CanSeg
Cost FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27
CanSeg Bank Armament $4,830,000 2,391,000 2,439,000
R&R Can Seg (River Trunk Gravity Line) 9,389,510 - - 554,359 8,835,151 - Odor Control Facilities 842,231 38,813 803,419 - - -
Tuolumne River Pipe Crossings Subtotal 100,000 - - - - - Secondary Treatment Facilities Upgrades 19,690,847 - 1,916,352 11,706,639 1,131,542 1,171,146 River Diversion Facilities 1,035,000 1,035,000 - - - -
Ranch Irrigation System Flow Monitoring
Modifications 87,975 87,975 - - - -
CV Salts Compliance $377,745 103,500 214,245 - - -
Total CIP $67,493,388 $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146 #14..
- 433 -
Table 7
City of Modesto Sewer Rate and Fee Study
CanSeg Cash Flow Projections
CanSeg Line Cash Flow
Projections FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Reserves
Beginning Balance $7,013,146 $8,127,935 $8,355,087 $5,449,894 $4,580,345 $3,866,339 Revenue Escalation
Rate Revenue Increase 2.50% 2.50% 2.50% 2.50% 2.50%
Revenues
Rate Revenue $2,898,021 $3,049,831 $3,126,077 $3,204,229 $3,284,334 $3,366,443 Rate Increase Revenue 0 76,246 78,152 80,106 82,108 84,161 Other Revenue 509,271 509,271 509,271 509,271 509,271 509,271 Interest on Reserves $35,066 $40,640 $41,775 $27,249 $22,902 $19,332 ________ ________ ________ ________ ________ ________ Total Revenue $3,442,358 $3,675,987 $3,755,275 $3,820,855 $3,898,615 $3,979,206 Expenses
Inflation 3.5% 3.5% 3.5% 3.5% 3.5%
Operating Expenses $512,178 $530,104 $548,658 $567,861 $587,736 $608,307 Water Purchase $100,000 $103,500 $107,123 $110,872 $114,752 $118,769 Existing Debt Service 1,555,391 1,549,943 679,672 679,672 679,440 579,020 New Debt Service $632,000 $1,264,000 $1,264,000
Rate Funded Capital $160,000 $1,265,288 $5,325,016 $2,699,998 $1,966,693 $1,171,146 ________ ________ ________ ________ ________ ________ Total Expenses $2,327,569 $3,448,835 $6,660,468 $4,690,403 $4,612,621 $3,741,241 Net Revenues $1,114,789 $227,152 -$2,905,193 -$869,548 -$714,006 $237,965 Ending Balance $8,127,935 $8,355,087 $5,449,894 $4,580,345 $3,866,339 $4,104,304 Capital Funding FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Capital Revenues
Use of Debt Proceeds $12,000,000 $8,000,000
Rate Funded Capital $160,000 $1,265,288 $5,325,016 $2,699,998 $1,966,693 $1,171,146 ________ ________ ________ ________ ________ ________ Total Capital Revenue $160,000 $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146 Total Capital Expenditures $160,000 $1,265,288 $5,325,016 $14,699,998 $9,966,693 $1,171,146 #14..
- 434 -
Table 8
City of Modesto Sewer Rate and Fee Study
Can Seg Functional Allocation and Rate Derivation
CanSeg Functional
Allocation Categories
5-Year Average
Amount Flow BOD TSS
Operating Expenses $549,307.31 100.0%
Water Purchase $107,249.32 50.0% 25.0% 25.0%
Existing Debt Service $1,028,823.60 100.0%
New Debt Service $948,000.00 74.5% 12.8% 12.8%
Rate Funded Capital $2,283,399.09 74.5% 12.8% 12.8%
Total $4,916,779.32 $4,037,621.10 $439,579.11 $439,579.11 Flow, BOD, TSS Total $4,916,779.32 82.1% 8.9% 8.9%
$3,049,831.00
Flow, BOD and TSS
Revenue Requirement $3,049,831.00 $2,504,497.60 $272,666.70 $272,666.70 CanSeg Rate Derivation Flow BOD TSS
(1,000,000 gallons) (1,000 LBS) (1,000 LBS)
Demand Units 900 14,700 7,460
Revenue Requirement $2,504,498 $272,667 $272,667
Unit Rate at FY 2020/21
Revenue Requirement $2,782.78 $18.55 $36.55
Projected FY 2022/23 Rates $2,852.34 $19.02 $37.47
Revenue Requirement Based on Projected System Demands
#14..
- 435 -
Table 9
City of Modesto Sewer Rate and Fee Study

M&I CIP
M&I CIP Summary FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Collection System
Improvements 48,677,661 52,685,570 18,404,539 15,146,528 12,145,172 Sutter Plant Improvements 1,875,938 2,410,256 1,884,820 - 9,228,631 Jennings Plant Improvements 8,694,000 2,687,382 5,517,601 24,271,764 5,456,411 Engineering Studies 879,750 482,051 110,872 573,762 118,769 Total CIP $ 60,127,349 $ 58,265,260 $ 25,917,832 $ 39,992,053 $ 26,948,983 #14..
- 436 -
Table 10
City of Modesto Sewer Rate and Fee Study
M&I Cash Flow Projections
M&I Cash Flow Projections FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Reserves
Beginning Balance $85,842,510 $68,890,825 $27,783,111 $43,890,478 $37,025,706 $46,489,423 Revenue Escalation
Rate Revenue Increase 3.50% 3.50% 3.50% 3.50% 3.50%
Growth 0% 0.5% 0.5% 0.5% 0.5% 0.5%
Revenues
Rate Revenue $56,197,188 $56,478,174 $58,747,185 $61,107,353 $63,562,341 $66,115,958 Rate Increase Revenue 0 1,976,736 2,056,151 2,138,757 2,224,682 2,314,059 Other Revenue 6,868,103 6,868,103 6,868,103 6,868,103 6,868,103 6,868,103 Interest on Reserves $429,213 $344,454 $138,916 $219,452 $185,129 $232,447 ________ ________ ________ ________ ________ ________ Total Revenue $63,494,504 $65,667,468 $67,810,355 $70,333,666 $72,840,255 $75,530,567 Expenses
Inflation 3.5% 3.5% 3.5% 3.0% 3.0%
Total Operating Expenses* $34,749,965 $35,966,214 $37,225,032 $38,527,908 $39,683,745 $40,874,257 Existing Debt Service 10,696,224 10,681,619 9,672,697 9,672,697 9,672,740 9,556,666 New Debt Service $0 $1,540,000 $3,080,000 $4,028,000 $4,976,000 Rate Funded Capital $35,000,000 $60,127,349 $3,265,260 $25,917,832 $9,992,053 $21,948,983 ________ ________ ________ ________ ________ ________ Total Expenses $80,446,189 $106,775,182 $51,702,988 $77,198,437 $63,376,538 $77,355,906 Net Revenues -$16,951,685 -$41,107,714 $16,107,367 -$6,864,771 $9,463,716 -$1,825,339 Ending Unrestricted Balance $68,890,825 $27,783,111 $43,890,478 $37,025,706 $46,489,423 $44,664,083 Debt Coverage (Target 2.0) 2.69 2.78 2.73 2.49 2.42 2.38 *Adjusted to reflect forecast based on prior expenditures Capital Funding FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Capital Revenues
Use of Debt Proceeds $55,000,000 $30,000,000 $5,000,000 Grant Revenue
Rate Funded Capital $35,000,000 $60,127,349 $3,265,260 $25,917,832 $9,992,053 $21,948,983 ________ ________ ________ ________ ________ ________ Total Capital Revenue $35,000,000 $60,127,349 $58,265,260 $25,917,832 $39,992,053 $26,948,983 Total Capital Expenditures $35,000,000 $60,127,349 $58,265,260 $25,917,832 $39,992,053 $26,948,983 #14..
- 437 -
Table 11
City of Modesto Sewer Rate and Fee Study
Master Cash Flow Projections
Wastewater Fund Cash
Flow Projections FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Reserves
Beginning Balance $92,855,656 $77,018,760 $35,986,388 $49,111,557 $41,297,942 $49,773,366 Revenues
Rate Revenue $59,095,210 $61,429,178 $63,931,319 $66,452,293 $69,073,360 $71,798,512 Other Revenue 7,377,374 7,377,374 7,377,374 7,377,374 7,377,374 7,377,374 Interest on Reserves $464,278 $385,094 $179,932 $245,558 $206,490 $248,867 ________ ________ ________ ________ ________ ________ Total Revenue $66,936,862 $69,191,645 $71,488,625 $74,075,224 $76,657,223 $79,424,753 Expenses
Inflation 3.5% 3.5% 3.5% 3.5% 3.5%
Total Operating Expenses* $35,362,143 $36,599,818 $37,880,812 $39,206,640 $40,578,873 $41,999,133 Existing Debt Service 12,251,615 12,231,562 10,352,368 10,352,369 10,352,180 10,135,686 New Debt Service $0 $0 $1,540,000 $3,712,000 $5,292,000 $6,240,000 Rate Funded Capital $35,160,000 $61,392,636 $8,590,276 $28,617,831 $11,958,747 $23,120,129 ________ ________ ________ ________ ________ ________ Total Expenses $82,773,758 $110,224,017 $58,363,456 $81,888,840 $68,181,799 $81,494,948 Net Revenues -$15,836,896 -$41,032,372 $13,125,169 -$7,813,615 $8,475,424 -$2,070,195 Ending Unrestricted Balance $77,018,760 $35,986,388 $49,111,557 $41,297,942 $49,773,366 $47,703,170 Debt Coverage (Target 2.0) 2.58 2.66 2.83 2.48 2.31 2.29 *Adjusted to reflect forecast based on prior expenditures Capital Funding FY 21-22 FY 22-23 FY 23-24 FY 24-25 FY 25-26 FY 26-27 Capital Revenues
Use of Debt Proceeds $0 $0 $55,000,000 $12,000,000 $38,000,000 $5,000,000 Grant Revenue
Rate Funded Capital $35,160,000 $61,392,636 $8,590,276 $28,617,831 $11,958,747 $23,120,129 ________ ________ ________ ________ ________ ________ Total Capital Revenue $35,160,000 $61,392,636 $63,590,276 $40,617,831 $49,958,747 $28,120,129 Total Capital Expenditures $35,160,000 $61,392,636 $63,590,276 $40,617,831 $49,958,747 $28,120,129 #14..
- 438 -
Table 12
City of Modesto Sewer Rate and Fee Study
M&I Flows and Loadings
GPD6 BOD7 TSS8 BOD TSS
Residential
Single Family 55,000 10.0 13,475,000 210 210 8,621,095 8,621,095 Multifamily 8,014 7.5 1,482,628 215 215 971,147 971,147 Apartments 15,206 6.7 2,508,990 215 215 1,643,432 1,643,432 Total Residential 78,220 17,466,618 11,235,675 11,235,675 Nonresidential
Group 1 Varies 2,677,581 210 210 1,713,075 1,713,075
Group 2 Varies 273,045 450 450 374,336 374,336
Group 3 Varies 241,031 700 700 514,025 514,025
Group 4 Varies 455,149 1000 1000 1,386,653 1,386,653
Industrial Varies 4,002,903 15,000,000 2,800,000
Total Nonresidential 7,649,709 18,988,089 6,788,089
Total 25,116,327 30,223,764 18,023,764 1
"EDU" stands for equivalent dwelling unit
3 "HCF" stands for hundred cubic feet
4 Flow factor based on estimated flow returning to sewer 5 "MG" stands for 1,000 gallons
6 "GPD" stands for gallons per day
7 "BOD" stands for biochemical oxygen demand
8 "TSS" stands for total suspended solids
9 State Water Resource Control Board (SWRCB) Guidelines for Wastewater Agencies 2 Flow estimate based on input from City staff, average winter use and unit occupancy estimates from the 2019 American Community Survey
Wastewater Flows Loadings (lbs)
and Loadings
# of Sewer
EDUs1
Est. Mo Flow
HCF Per EDU2
Projected
Wastewater Flow Strength (mg/l)9
#14..
- 439 -
Table 13
City of Modesto Sewer Rate and Fee Study
M&I Functional Allocation
M&I Functional Allocation
Categories
5-Year Average
Amount Account Flow BOD TSS General
Revenue
General Composite $3,109,958 100%
Rates Paid 1997-1999 $366,429 60.1% 17.9% 22.0%
Tertiary $2,856,716 33.3% 33.3% 33.3%
Total $6,333,103 $1,172,813.16 $1,017,643.24 $1,032,688.91 $3,109,958.00 Expense
General Composite $2,513,889 100%
Existing Debt $10,079,195 50.2% 18.0% 31.8%
CIP - 5 year average $15,883,388 80.2% 14.5% 5.3%
Tertiary $3,568,600 25.0% 25.0% 50.0%
Collection System & Pumping $9,264,393 100.0% 0.0% 0.0% Lab, Enviro, Monitoring $3,679,235 0.0% 50.0% 50.0%
All Treatment $4,987,967 55.3% 19.8% 24.9%
Primary $4,159,654 70.0% 10.0% 20.0%
Secondary $4,019,158 40.0% 30.0% 30.0%
Recycled Water $1,698,118 100.0% 0.0% 0.0%
Electrical $2,266,318 60.0% 30.0% 10.0%
Account $3,884,170 100.0%
Total $66,004,086 $3,884,170 $38,290,385 $10,139,788 $11,175,855 $2,513,889 Net $59,670,983 $3,884,170 $37,117,572 $9,122,145 $10,143,166 -$596,069 Flow, BOD, TSS Total $56,382,882 65.8% 16.2% 18.0%
With General Composite $ $59,670,983 $3,884,170 $36,725,172 $9,025,707 $10,035,934 With General Composite % 6.5% 61.5% 15.1% 16.8%
FY 2021-22 Revenue Requirement* $53,820,901
Flow, BOD and TSS Revenue
Requirement $53,820,901 $3,503,370 $33,124,674 $8,140,836 $9,052,022 #14..
- 440 -
Table 14
City of Modesto Sewer Rate and Fee Study
M&I Revenue Requirement by Class
M&I Allocation Units Account Flow BOD TSS
# (CCF) (LBS) (LBS)
Demand Units 62,158 12,255,110 30,223,764 18,023,764
Revenue Requirement 3,503,370 33,124,674 8,140,836 9,052,022 Unit Rate $56.36 $2.70 $0.27 $0.50
M&I Class Revenue
Requirement Flow BOD TSS
Revenue
Requirement
(CCF) (LBS) (LBS) ($)
Single Family 6,574,911 8,621,095 8,621,095 $24,423,364.74 Multifamily 723,425 971,147 971,147 $2,704,682.06
Apartments 1,224,222 1,643,432 1,643,432 $4,577,020.08
Group 1 1,306,483 1,713,075 1,713,075 $4,853,101.88
Group 2 133,228 374,336 374,336 $648,935.32
Group 3 117,607 514,025 514,025 $714,494.44
Group 4 222,083 1,386,653 1,386,653 $1,670,186.09
Industrial 1,953,152 15,000,000 2,800,000 $10,725,746.91 Flow Charge ($/Million
gallons) 1,953,152 $5,279,228.94
BOD Charge ($/1,000
lbs) 15,000,000 $4,040,282.30
TSS Charge ($/1,000
lbs) 2,800,000 $1,406,235.68
Total 12,255,110 30,223,764 18,023,764 $50,317,531.53
#14..
- 441 -
Table 15
City of Modesto Sewer Rate and Fee Study
M&I Rate Derivation
Class
Revenue
Requirement Units
Rate at FY
2021/22
Revenue
Propsed FY
2022/23 Rate Rate Unit
Account $3,503,369.80 62,162 $4.70 $4.86 $/Account/Month Single Family $24,423,364.74 55,000 $37.01 $38.31 $/Dwelling/Month Multifamily $2,704,682.06 8,014 $28.13 $29.11 $/Dwelling/Month Apartments $4,577,020.08 15,206 $25.09 $25.97 $/Dwelling/Month Group 1 $4,853,101.88 1,306,483 $3.72 $3.85 $/CCF
Group 2 $648,935.32 133,228 $4.88 $5.05 $/CCF
Group 3 $714,494.44 117,607 $6.08 $6.29 $/CCF
Group 4 $1,670,186.09 222,083 $7.53 $7.79 $/CCF
Industrial
Flow Charge $5,279,228.94 1,461 $3,613.29 $3,739.76 $/Million gallons BOD Charge $4,040,282.30 15,000 $269.36 $278.79 $/1,000 lbs TSS Charge $1,406,235.68 2,800 $502.23 $519.81 $/1,000 lbs #14..
- 442 -
Appendix B
#14..
- 443 -
Sewer CIP (Adjusted for 3.5% Inflation)
City of ModestoSewer Rate and Fee Study
Project Project Total Project Can Seg Capital Improvement Program Cost per Phase ($) Allocation % Phase 1
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Collection System Improvements
Capacity Improvements 115,016,200 100% 13,048,500 33,489,847 43,705,465 15,078,385 ‐ 1,820,723 1,884,448 1,950,404 2,018,668 2,089,322 New Growth Improvements 41,541,000 100% ‐ 3,082,230 ‐ ‐ 3,442,569 1,789,368 1,851,996 1,916,816 1,983,904 2,053,341 R&R Improvements 86,056,701 100% 1,600,000 5,636,834 6,034,236 2,771,795 11,130,197 5,461,120 5,652,259 5,850,088 6,054,841 6,266,761 R&R Can Seg (River Trunk Gravity Line) 100% 0% ‐ ‐ ‐ 554,359 8,835,151 ‐ ‐ ‐ ‐ ‐ Reliability Improvements 17,440,962 100% 1,500,000 3,363,750 2,410,256 ‐ ‐ 2,480,117 2,566,922 2,656,764 2,749,751 2,845,992 Storm Drain Removal 12,500,000 100% 500,000 3,105,000 535,613 554,359 573,762 593,843 614,628 636,140 658,405 681,449 Total ‐ Collection System Improvements 272,554,863 16,648,500 48,677,661 52,685,570 18,958,898 23,981,679 12,145,172 12,570,253 13,010,212 13,465,569 13,936,864 Sutter Plant Improvements
Influent Screw Pump Addition SP‐1 2,562,000 100% ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Influent Screw Pump Replacement SP‐1A 3,400,000 100% ‐ 1,759,500 ‐ 1,884,820 ‐ ‐ ‐ ‐ ‐ ‐ Outfall Pump Station Replacement SP‐3 20,202,000 100% ‐ ‐ ‐ ‐ ‐ 4,798,728 4,966,683 5,320,435 5,506,650 Demolition of Sutter Treatment Facilities SP‐4 5,760,300 100% ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5,140,517 ‐ ‐ Allowance for Flood Protection of Remaining Sutter
Treatment Facilities SP‐5 2,331,200 100% ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Biosolids Dewatering Facilities tss SP‐6 18,649,300 100% ‐ ‐ ‐ ‐ ‐ 4,429,904 4,584,950 4,745,424 4,911,513 5,083,416 Odor Control Facilities SP‐7 3,150,000 25% 75% ‐ 155,250 3,213,675 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Subtotal ‐ Sutter Plant 56,054,800 ‐ 1,914,750 3,213,675 1,884,820 ‐ 9,228,631 9,551,633 9,885,941 10,231,949 10,590,067 Outfall Pipelines
Tuolumne River Pipe Crossings Subtotal OP‐1 30,358,000 50% 50% 200,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Third Outfall Pipeline OP‐2 70,726,700 20% 80% ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Slip Lining Portion of the Can‐Seg Outfall OP‐3 12,187,400 100% 0% ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Subtotal ‐ Outfall Pipelines 113,272,100 200,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ #14..
- 444 -
Project Project Total Project Can Seg Capital Improvement Program Cost per Phase ($) Allocation % Phase 1
2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Jennings Plant Improvements
BNR/Tertiary Treatment Facilities Expansion JP‐1 54,465,700 100% ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Secondary Treatment Facilities Upgrades JP‐2 23,848,200 70% 30% ‐ ‐ ‐ 2,737,646 16,723,771 1,616,489 1,673,066 1,731,623 1,792,230 1,854,958 Jennings Dewatering & MW Network JP‐7 100% 50,000 2,070,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ WAS Handling Facilities JP‐4 21,690,100 100% ‐ 155,250 ‐ 2,196,924 11,221,972 2,322,948 2,404,251 2,488,400 2,575,494 2,665,636 Primary Treatment and Solids Handling Facilities JP‐5 91,498,600 100% ‐ ‐ ‐ ‐ ‐ 2,173,442 2,249,513 2,328,246 2,409,734 2,494,075 Membrane Replacement/Optimization Project JP‐8 5,000,000 100% ‐ ‐ ‐ ‐ 5,737,615 ‐ ‐ ‐ ‐ ‐ Biosolids Removal Project JP‐9 10,000,000 100% ‐ 2,070,000 2,142,450 2,217,436 2,295,046 475,075 491,702 508,912 526,724 545,159 Corrosion Control Facilities JP‐10 2,200,000 100% 200,000 2,070,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ River Diversion Facilities JP‐11 2,000,000 50% 50% ‐ 2,070,000 0 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Ranch Irrigation System Flow Monitoring Modifications JP‐12 250,000 100% 0% ‐ 258,750 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐Solids Removal Equipment JP‐13 1,000,000 100% ‐ 1,035,000 0 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Miscellaneous Repairs JP‐6 1,013,000 100% ‐ 258,750 544,932 281,947 ‐ ‐ ‐ ‐ ‐ ‐ Subtotal ‐ Jennings Plant Improvements 212,965,600 250,000 9,987,750 2,687,382 7,433,953 35,978,403 6,587,953 6,818,532 7,057,180 7,304,182 7,559,828 Engineering Studies
Master Plan Updates ES‐1 2,150,000 100% 150,000 ‐ ‐ ‐ 573,762 118,769 122,926 127,228 131,681 136,290 WDR Required Studies (West Yost to get costs) ES‐3 400,000 100% 200,000 207,000 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ CV Salts Compliance ES‐4 360,000 100% 0% 60,000 103,500 214,245 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Asset Management Plan ES‐5 600,000 100% ‐ 414,000 214,245 ‐ ‐ ‐ ‐ ‐ ‐ ‐ Biosolids Master Plan ES‐6 350,000 100% ‐ ‐ 267,806 110,872 ‐ ‐ ‐ ‐ ‐ ‐ Land Application Study ES‐2 250,000 100% ‐ 258,750 ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ Subtotal ‐ Engineering Studies 4,110,000 410,000 983,250 696,296 110,872 573,762 118,769 122,926 127,228 131,681 136,290 Total ‐ Wastewater Treatment Improvements 386,402,500 860,000 12,885,750 6,597,353 9,429,646 36,552,165 15,935,353 16,493,091 17,070,349 17,667,811 18,286,185 Total ‐ Collection System and Wastewater Treatment 658,957,363 17,508,500 61,563,411 59,282,923 28,388,544 60,533,844 28,080,525 29,063,343 30,080,561 31,133,380 32,223,048 #14..
- 445 -

NOTICE OF PUBLIC HEARING ON

PROPOSED SEWER RATE INCREASE
AVISO DE AUDIENCIA PÚBLICA SOBRE EL AUMENTO DE TARIFAS

PROPUESTO PARA EL SERVICIO DE ALCANTARILLADO SANITARIO
April 12, 2022, at 5:30 pm
City Of Modesto-City Hall
1010 Tenth Street, Basement Level, Modesto
12 de abril de 2022 a las 5:30 pm
Ciudad de Modesto - Ayuntamiento
1010 Tenth Street, Nivel Sótano, Modesto
For additional information regarding proposed sewer rate increases, contact Customer Service at (209) 577-5395 or e-mail [email protected] Para obtener información adicional con respecto a los aumentos propuestos a las tarifas de alcantarillado sanitario, contacte a Servicio al Cliente al (209) 577-5395 o envíe un correo electrónico a [email protected] City of ModestoCity ClerkP.O. Box 6421010 Tenth Street, Suite 6600Modesto, CA 95353 #14..
- 446 -
Proposed Sewer Rate Increases
The City of Modesto is proposing sewer rate increases over the next five years. The City’s sewer utility is self-supporting and relies on rates paid by customers to fund the costs of operations and maintenance and capital improvement projects. Future rate increases are needed due to the increasing cost of providing service.

Although rate increases are needed, the City actively pursues cost saving measures for the benefit of the customers and only raises rates when necessary. The City did not raise sewer rates in fiscal year 2021-2022. The City has a history of success in winning grants and securing low-cost loans to improve the sewer system. Additionally, the City sells recycled water produced at the tertiary treatment plant to an irrigation district. Recycled water sales revenue reduces the amount of rate revenue which must be collected from Modesto rate payers.

The City retained an independent consultant to perform a study that calculated the proportional cost of providing sewer services to each property owner and customer. The study explains how the proposed rates and charges were developed, in compliance with applicable California law, including Article XIIID of the California Constitution. The study may be viewed at www.modestogov.com/uppd/reports/wastewater/rates/sewer rate.asp or 1010 Tenth Street, Suite 4600, Modesto, CA 95354, Utilities Department.

Public Notice and Majority Protest Process
The City Council will conduct a public hearing on April 12, 2022, to consider approving the proposed rates and charges. Any property owner or customer of record subject to the proposed rates and charges may submit a written protest for the proposed increases. Protests will be counted from customers or property owners for the same property. The proposed rates cannot be adopted if written protests are received from a majority of affected parcels. Written protests must be submitted prior to the close of the Public Hearing.

If you desire to submit a written protest, it must: 1) identify whether you are the property owner or customer and state that the property owner or customer opposes the proposed sewer rate increases and/or charges; 2) provide the location of the identified parcel (by assessor’s parcel number or street address); and 3) include the name and signature of the property owner or customer submitting the protest. Written protests may be submitted by mail to the City Clerk, P.O. Box 642, Modesto, CA 95353; or in person at 1010 Tenth Street, Suite 6600, Modesto, CA 95354; or at the public hearing. Any protest submitted via e-mail, fax, or other electronic means will not be accepted. Please identify on the front of the envelope for any protest, whether mailed or submitted in person to the City Clerk, that the enclosed letter is for the Public Hearing on the Proposed Increases to Sewer Rates and Charges.

City Council will receive and consider all written and oral protests to the proposed rates and charges at the Public Hearing. Upon conclusion of the Public Hearing, the City Council will consider adoption of the proposed rates and charges. Oral comments at the public hearing will not qualify as formal protests unless accompanied by a written protest. If written protests against the proposed rates and charges as outlined above are not presented by a majority of property owners or customers of the identified parcels upon which the rates and charges are proposed to be imposed, the City will be authorized to impose the rates and charges.

Pursuant to California Government Code 53759, there will be a 120 day statute of limitations for challenging any new, increased, or extended fee including water or sewer service charges adopted, modified, or amended after January 1, 2022.

The proposed sewer rate increases for all customers are shown in the following table. Sample residential bills are provided in the box on the lower right. If approved, the first rate adjustments for residential, commercial, industrial, and cannery customers would take effect July 1, 2022. The subsequent rate increases will take place on July 1 in the following four years.

Proposed Sewer Rates Existing Proposed Proposed Proposed Proposed Proposed July 1, 2022 July 1, 2023 July 1, 2024 July 1, 2025 July 1, 2026 Monthly Account Charge
($/Account) $4.68 $4.86 $5.04 $5.22 $5.41 $5.60
Residential Rates ($/Dwelling Unit)
Single Family Residential,
Mobile Home on a lot $37.10 $38.31 $39.65 $41.04 $42.48 $43.97 Multiple Family (2-4 Dwelling
Units), one additional
Dwelling Unit or Mobile Home
on a lot
$28.60 $29.11 $30.13 $31.18 $32.27 $33.40
Apartments (5 or more
Dwelling Units), Mobile Home
Space in a Mobile Home Park
$25.33 $25.97 $26.88 $27.82 $28.79 $29.80
Commercial Quantity Charge ($/100 cubic feet)
Group 1-BOD + TSS is 400 mg/l
or less $3.69 $3.85 $3.98 $4.12 $4.26 $4.41
Group 2-BOD + TSS is 401 mg/l
to 900 mg/l $4.89 $5.05 $5.23 $5.41 $5.60 $5.80
Group 3-BOD + TSS is 901 mg/l
to 1,400 mg/l $6.08 $6.29 $6.51 $6.74 $6.98 $7.22
Group 4-BOD + TSS is 1,401 mg/l
or more $7.52 $7.79 $8.06 $8.34 $8.63 $8.93
Industrial Charges (these three components are additive) Flow Charge ($/Million
gallons) $3,657.00 $3,739.76 $3,870.65 $4,006.12 $4,146.33 $4,291.45 BOD Charge ($/1,000 lbs) $256.00 $278.79 $288.55 $298.65 $309.10 $319.92 TSS Charge ($/1,000 lbs) $511.00 $519.81 $538.00 $556.83 $576.32 $596.49 Septage Quantity Charge
Flow charge per 1,000 gallons $67.00 $69.35 $71.78 $74.29 $76.89 $79.58 CanSeg Line Charges (these three components are additive) Flow Charge ($/Million
Gallons) $3,319.00 $2,852.34 $2,923.65 $2,996.74 $3,071.66 $3,148.45 BOD Charge ($/1,000 lbs) $1.73 $19.01 $19.49 $19.98 $20.48 $20.99 TSS Charge ($/1,000 lbs) $5.00 $37.46 $38.40 $39.36 $40.34 $41.35 Sample calculation for monthly charges applied to residential properties beginning July 1, 2022:

Single Family Residential:
$38.31 + $4.86/account = $43.17
Duplex:
$29.11/unit x 2 = $58.22
+ $4.86/account = Total $63.08
10-Unit Apartment
$25.97/unit x 10 = $259.70
+ $4.86/account = Total $264.56
Abbreviations:

BOD – biochemical oxygen demand
TSS – total suspended solids
lbs – pounds
mg/l – milligrams per liter
#14..
- 447 -
Aumentos de tarifas de alcantarillado sanitario propuestos La Ciudad de Modesto propone una serie de aumentos en las tarifas de alcantarillado sanitario durante los próximos cinco años. El servicio público de alcantarillado sanitario de la Ciudad es económicamente independiente y depende de las tarifas pagadas por los clientes para financiar los costos de sus operaciones y de los proyectos de mantenimiento y mejoras de capital. Los futuros aumentos de tarifas son necesarios debido a los costos crecientes de prestación del servicio.

Aunque se necesitan aumentos de tarifas, la Ciudad implementa activamente medidas de ahorro de costos en beneficio de sus clientes y solo aumenta sus tarifas cuando es necesario hacerlo. La Ciudad no aumentó las tarifas de alcantarillado sanitario durante el año fiscal 2021-2022. La Ciudad tiene una historia de éxitos en adquirir subvenciones y obtener préstamos de bajo costo para mejorar el sistema de alcantarillado sanitario.

Asimismo, la Ciudad le vende a un distrito de irrigación agua reciclada producida en la planta de tratamiento terciario. Los ingresos resultantes de la venta de agua reciclada reducen la cantidad de los ingresos obtenidos por el pago de tarifas que deben ser recolectados a partir de los clientes del servicio en Modesto.

La Ciudad contrató a un consultor independiente para preparar un estudio que calculó el costo proporcional de prestar servicios de alcantarillado sanitario a cada tipo de propietario y cliente. El estudio explica cómo se desarrollaron las tarifas y cargos propuestos, de conformidad con las leyes aplicables de California, tal como el Artículo XIII D de la Constitución de California. Para ver una copia del estudio, visite ww.modestogov.com/uppd/reports/wastewater/rates/sewer_rate.asp o en 1010 Tenth Street, Suite 4600, Modesto, CA 95354, Departamento de Servicios Públicos (Utilities Department).

Aviso público y proceso de protestas mayoritarias
El Concejo Municipal realizará una audiencia pública el 12 de abril de 2022 para considerar la aprobación de las tarifas y los cargos propuestos. Cualquier dueño de propiedad o cliente registrado que esté sujeto a estas tarifas y cargos puede presentar por escrito una protesta a los aumentos propuestos. Se contabilizarán las protestas de clientes o dueños de propiedades para una misma propiedad. Las tarifas propuestas no podrán adoptarse si se reciben protestas por escrito por parte de la mayoría de las parcelas afectadas. Las protestas por escrito deben presentarse antes del cierre de la audiencia pública.

Si desea presentar una protesta por escrito, usted deberá: 1) indicar si usted es el dueño de la propiedad o cliente y declarar que como dueño o cliente usted se opone a los aumentos y/o cargos propuestos para las tarifas de alcantarillado sanitario; 2) proporcionar la ubicación de la parcela identificada (número de parcela del tasador o dirección postal); y 3) incluir el nombre y la firma del dueño de la propiedad o cliente que presenta la protesta. Las protestas por escrito pueden ser enviadas por correo postal al Secretario Municipal a la siguiente dirección: City Clerk, P.O. Box 642, Modesto, CA 95353; o entregarse personalmente en 1010 Tenth Street, Suite 6600, Modesto, CA 95354; o presentarse en la audiencia pública. No se aceptarán protestas enviadas por correo electrónico, fax u otro medio electrónico. Por favor indique en el frente del sobre, ya sea que lo envíe por correo o lo entregue personalmente al Secretario de la Ciudad, que la carta con su protesta es para la audiencia pública sobre los aumentos propuestos a las tarifas y cargos de alcantarillado sanitario (Public Hearing on the Proposed Increases to Sewer Rates and Charges).

El Concejo Municipal recibirá y considerará todas las protestas por escrito y orales a las tarifas y cargos propuestos recibidas en la audiencia pública. Tras la conclusión de la audiencia pública, el Concejo Municipal considerará la adopción de las tarifas y cargos propuestos. Los comentarios orales en la audiencia pública no se considerarán protestas formales, a menos que vayan acompañados de una protesta por escrito. Si la mayoría de los propietarios o clientes de las parcelas identificas sobre las que se propone imponer las tarifas y los cargos no presentan protestas por escrito contra las tarifas y los cargos propuestos, como se describe anteriormente, la Ciudad estará autorizada a imponer tales tarifas y cargos.

De conformidad con la Sección 53759 del Código de Gobierno de California, habrá un estatuto de limitaciones de 120 días para inconformarse con cualquier cargo nuevo, aumentado o extendido incluyendo cargos de servicio de agua o alcantarillado sanitario adoptados, modificados o enmendados después del 1 de enero de 2022.

Los aumentos propuestos en el servicio de alcantarillado para todos los clientes se indican en el cuadro siguiente. En el recuadro incluido en la esquina inferior derecha se muestran ejemplos de facturas residenciales. Si esto es aprobado, los primeros ajustes de tarifas para clientes residenciales, comerciales, industriales y fábricas de conservas entrarán en vigencia el 1 de julio de 2022. Los aumentos subsecuentes en las tarifas se llevarán a cabo el 1 de julio de los cuatro años siguientes.

Tarifas de alcantarillado
propuestas Existentes Propuesta Propuesta Propuesta Propuesta Propuesta 1 julio, 2022 1 julio, 2023 1 julio, 2024 1 julio, 2025 1 julio, 2026 Cargo mensual de la cuenta
($/cuenta) $4.68 $4.86 $5.04 $5.22 $5.41 $5.60
Tarifas residenciales ($ unidad de vivienda)
Residencial unifamiliar, casa
móvil en terreno $37.10 $38.31 $39.65 $41.04 $42.48 $43.97 Multifamiliar (2-4 unidades de
vivienda), una unidad de
vivienda adicional o casa
móvil en terreno
$28.60 $29.11 $30.13 $31.18 $32.27 $33.40
Apartamentos (5 o más
unidades de vivienda),
espacio de casa móvil en
parque de casas móviles
$25.33 $25.97 $26.88 $27.82 $28.79 $29.80
Cargo comercial por cantidad ($/100 pies cúbicos)
Grupo 1: BOD + TSS de 400 mg/l
o menos $3.69 $3.85 $3.98 $4.12 $4.26 $4.41
Grupo 2: BOD + TSS de 401 mg/l
a 900 mg/l $4.89 $5.05 $5.23 $5.41 $5.60 $5.80
Grupo 3: BOD + TSS de 901 mg/l
a 1,400 mg/l $6.08 $6.29 $6.51 $6.74 $6.98 $7.22
Grupo 4: BOD + TSS de 1,401
mg/l o más $7.52 $7.79 $8.06 $8.34 $8.63 $8.93
Cargos industriales (estos tres componentes son aditivos) Cargo por caudal ($/millón de
galones) $3,657.00 $3,739.76 $3,870.65 $4,006.12 $4,146.33 $4,291.45 Cargo por BOD ($/1,000 lbs) $256.00 $278.79 $288.55 $298.65 $309.10 $319.92 Cargo por TSS ($/1,000 lbs) $511.00 $519.81 $538.00 $556.83 $576.32 $596.49 Cargo por cantidad de residuos sépticos
Cargo por caudal cada 1,000
galones $67.00 $69.35 $71.78 $74.29 $76.89 $79.58
Cargos de separación de línea para fábricas de conservas (estos tres componentes son aditivos) Cargo por caudal ($/millón de
galones) $3,319.00 $2,852.34 $2,923.65 $2,996.74 $3,071.66 $3,148.45 Cargo por BOD ($/1,000 lbs) $1.73 $19.01 $19.49 $19.98 $20.48 $20.99 Cargo por TSS ($/1,000 lbs) $5.00 $37.46 $38.40 $39.36 $40.34 $41.35 Apartamento de 10 unidades
$25.97/unidad x 10 = $259.70
+ $4.86/cuenta = Total de $264.56
Muestra del cálculo de los cargos mensuales aplicados a las propiedades residenciales a partir del 1 de julio de 2022:

Residencial unifamiliar:
$38.31 + $4.86/cuenta = $43.17
Dúplex:
$29.11/unidad x 2 = $58.22
+ $4.86/cuenta = Total de $63.08
Abreviaturas:

BOD – demanda bioquímica de oxígeno
TSS – total de sólidos suspendidos
lbs – libras
mg/l – miligramos por litro
#14..
- 448 -
Utility Billing Assistance Program: www.modestogov.com/2207 Sewer Rate Increase FAQ: https://www.modestogov.com/2440/Upcoming-Rate-Increases #14..
- 449 -
$22.40
$25.75
$31.56 $34.00
$40.29 $41.78 $43.17 $43.30 $44.01 $44.16 $46.30 $46.75 $46.96 $49.48 $49.94 $51.00 $59.03 $61.27
$74.95 $75.00
$0
$10
$20
$30
$40
$50
$60
$70
$80
2021 City of Modesto Single Family Sewer Rate Survey
Based on flat rate or 8 hcf of monthly winter water use #14..
- 450 -
1 https://calbudgetcenter.org/resources/californians-and-mental-health-what-we-know-about-poverty-and-race/ 2 https://www.latimes.com/california/story/2019-10-07/homeless-population-mental-illness-disability

CITY OF MODESTO

COUNCIL AGENDA REPORT
DATE OF MEETING:

April 12, 2022
Date: March 16, 2022
TO: Mayor and City Council
THROUGH: Joseph P. Lopez, City Manager
FROM: Brandon Gillespie, Chief of Police
SUBJECT: Alternative Response Programs
CONTACT: Brandon Gillespie, Chief of Police, [email protected], 209.572.9501 DESCRIPTION:

Consider amending the position allocation for Fiscal Year 2021-22 to hire two additional Outreach Specialists for the Community Health and Assistance Team (CHAT), and approving a First Amendment to County/City agency Memorandum of Understanding between the County of Stanislaus and the Modesto Police Department (MPD), for the County to provide two mental health clinicians or behavioral health specialists to ride with crisis intervention trained police officers and respond to mental health calls for service in the City of Modesto; for a total amount not to exceed $800,000 to support both programs. (Funding Source: American Rescue Plan Act)
STRATEGIC PLAN ELEMENT:

This item is related to the 2020-2025 Strategic Plan goal of improving community safety and quality of life through a combination of prevention and intervention efforts that address safety and its underlying issues.

BACKGROUND:

Modesto police officers respond to a variety of calls for service 24 hours a day, seven days a week, including calls relating to homelessness, substance abuse, and/or mental health emergencies. According to data from the California Budget and Policy Center, nearly 1 in 6 adults in California experience a mental illness of some kind, 1 in 24 have a serious mental illness that effects major life activities, and 1 in 13 children have an emotional disturbance that affects their daily activities1. Additionally, analysis by the Los Angeles Times in 2019 found 67% of homeless individuals (in Los Angeles) had a mental illness or substance abuse disorder2.

With limited outreach services for those experiencing homelessness, and the deinstitutionalization of individuals with severe mental illness, police officers are often the first ones to be called to contact these individuals when they are in crisis. Even though behavioral health calls for service have been occurring for decades, they have #15..
- 451 -
City Council, April 12, 2022
Alternative Response Programs

recently began receiving national media coverage due to the proliferation of cell phones, body worn cameras, and social media platforms. Some of these encounters have resulted in tragic outcomes and have sparked robust conversations across the nation regarding the entire behavioral healthcare system, alternative response options, police training, and de-escalation.

DISCUSSION:

In 2020, the Modesto Police Department identified approximately 19,000 calls for service involving quality of life related crimes (often homelessness related) and calls for service containing behavioral health related keywords. This represents 11.1% of the total calls for service received by the Modesto Police Department. Of the 19,000 calls for service, nearly 7,000 (4%) contained keywords indicating a potential officer safety/public safety concern associated with the call. The additional 12,000 calls for service (7.1%) did not contain any safety related keywords, indicating there were no known safety concerns associated with the call.

In 2021, in an effort to use an alternative means to police officers responding to homeless and behavioral health/substance abuse related calls for service that had no safety concerns, the Modesto Police Department created the Community Health and Assistance Team (CHAT). This team consists of four civilian outreach specialists who have extensive experience in working with individuals experiencing homelessness, as well as those suffering from behavioral health and/or substance abuse issues.

A primary goal of CHAT is to handle calls for service that do not require a sworn officer to respond, and be the first contact at as many behavioral health, homeless, and quality of life related calls for service as possible. This response model thereby frees up police officers to handle calls for service that require a sworn officer and utilizes specialists who have more training and time to handle these types of calls for service. Early results from CHAT show positive progress with over 4,500 homeless contacts made where service and support options were provided, and 127 calls for service diverted away from a police response and handled solely by CHAT. The analysis of this data shows additional CHAT specialists would further the effectiveness of this unit and the Modesto Police Department is seeking authorization to allocate two additional Outreach Specialist positions to CHAT.

CHAT is currently funded through a Housing and Urban Development (HUD) emergency solutions grant and must focus on the homeless population. These two additional allocations would be funded through American Rescue Plan Act of 2021 (ARPA) funds, allowing CHAT to expand its response to behavioral health related calls beyond the homeless population.

The Modesto Police Department is also seeking approval for a First Amendment to County/City agency Memorandum of Understanding between the County of Stanislaus through its department of Behavioral Health and Recovery Services (BHRS) and the Modesto Police Department (MPD), for the County to provide two Mental Health Clinicians (MHC) and/or Behavioral Health Specialists (BHS) to ride with crisis intervention trained MPD police officers, and respond to behavioral health calls for service in a co-responder model. BHRS will prioritize the deployment of MHCs but may underfill at times with specially trained BHS staff to ensure continuity of services – #15..
- 452 -
City Council, April 12, 2022
Alternative Response Programs

invoicing will be according to which level of staff is utilized. This co-responder model, locally called the Mobile Crisis Emergency Response Team (MCERT), was previously used in Modesto until approximately 2017 when various staffing and funding issues halted its continuation. MPD has maintained an MOU with BHRS to provide crisis response support in limited situations. The identified ARPA funding allows for the reinstitution of this important partnership, with the City reimbursing the County for the costs of two full-time Mental Health Clinicians and/or Behavioral Health Specialists and will extend the term of the existing MOU to June 30, 2023.

A primary goal of the MCERT teams would be to respond to the estimated 7,000 behavioral health related calls for service that do have safety concerns and would not be appropriate for a CHAT response. The aim of this co-responder team model is to improve the experiences and outcomes of persons in crisis by providing effective crisis de-escalation, diversion from the criminal justice system, and connection to appropriate behavioral health services.

Together, the CHAT expansion and amending the MCERT MOU fulfill the intention of “mental health support program” under the Quality of Life theme of the Modesto Forward Pandemic Recovery Strategy which was adopted on May 25, 2021 by Resolution No. 2021-194.

FISCAL IMPACT:

As approved in the Modesto Forward Pandemic Recovery Strategy (Reso No. 2021-194) there is $800,000 allocated for a mental health support program. Below is a breakdown of how these funds will be used to fund both programs – CHAT will be funded for two years and MCERT will be funded for one year.

CHAT Expansion Year 1 (FY 22-23) Year 2 (FY 23-24)
Outreach Specialist Allocations (2) $165,540 $177,128
Materials & Supplies $13,653 $4,376
Vehicle $49,000 n/a
CHAT Sub-Total: $228,193 $181,504
MCERT Program Year 1 (FY 22-23) Year 2 (FY 23-24)
2 Mental Health Clinicians/Behavioral Health
Specialists
$304,740 $0
Materials & Supplies $15,786 $0
Indirect Rate (21.77% $69,777 $0
MCERT Sub-Total: $390,303 $0
COMMITTEE RECOMMENDATION:

This item was presented to and approved by the Safety & Communities Committee on March 14, 2022.

RECOMMENDED COUNCIL ACTION:

Staff Recommendations:

Resolution amending the position allocation for Fiscal Year 2021-22 to hire two additional Outreach Specialists for the Community Health and Assistance Team (CHAT). #15..
- 453 -
City Council, April 12, 2022
Alternative Response Programs

Resolution approving a First Amendment to County/City agency Memorandum of Understanding between the County of Stanislaus and the Modesto Police Department (MPD), for the County to provide two mental health clinicians and/or behavioral health specialists to ride with crisis intervention trained police officers and respond to mental health calls for service in the City of Modesto, and authorizing the City Manager, or his designee, to execute the agreement.

Approved by:

Brandon Gillespie, Chief of Police
Joseph P. Lopez, City Manager
Attachments:

1. Resolution – Amending Position Allocation

2. Resolution – Alternative Response Program amendment

3. First Amendment to County/City agency Memorandum of Understanding #15..
- 454 -

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-?

RESOLUTION AMENDING THE POSITION ALLOCATION FOR FISCAL
YEAR 2021-22 AS ADOPTED IN THE OPERATING BUDGET
WHEREAS, a Position Allocation for the City of Modesto was adopted by Modesto City Council on June 23, 2021, as part of the Annual Budget of the City of Modesto for Fiscal Year 2021-22, and
WHEREAS, classification studies are conducted to ensure that a classification system is equitable and consistent within an organization and that positions are correctly classified, and
WHEREAS, per Personnel Administrative Order 2.2-87-12, a classification study may be conducted in response to a reclassification request, to develop/revise a classification specification, or to assist in a reorganization, and WHEREAS, classification studies were conducted by Human Resources to determine appropriate classifications, and
WHEREAS, position changes will be effective the first day of the pay period upon adoption, unless otherwise noted.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves amending the Position Allocation and the Fiscal Year 2021-22 Operating Budget for various departments as follows:

1. Add two (2) Homeless Outreach Specialists in the HUD ESG Outreach Division (19205) of the Modesto Police Department.

The foregoing resolution was adopted at a regular meeting of the Council of the City of Modesto held on the 12th day of April 2022, by Councilmember ?, who moved its #15..
- 455 -
adoption, which motion being duly seconded by Councilmember ?, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:?
NOES: Councilmembers: ?
ABSENT: Councilmembers: ?
ATTEST:

DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: ___________________________________
JOSE M. SANCHEZ, City Attorney
#15..
- 456 -

MODESTO CITY COUNCIL
RESOLUTION NO. 2022-XX

RESOLUTION APPROVING A FIRST AMENDMENT TO THE COUNTY/CITY

AGENCY MEMORANDUM OF UNDERSTANDING BETWEEN THE COUNTY

OF STANISLAUS AND THE MODESTO POLICE DEPARTMENT, FOR THE

COUNTY TO PROVIDE TWO MENTAL HEALTH CLINICIANS AND/OR

BEHAVORIAL HEALTH SPECIALISTS TO RIDE WITH CRISIS

INTERVENTION TRAINED POLICE OFFICERS AND RESPOND TO MENTAL

HEALTH CALLS FOR SERVICE IN THE CITY OF MODESTO, AND

AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE

THE AGREEMENT
WHEREAS, in 2020, the Modesto Police Department (MPD), identified approximately 19,000 calls for service involving quality of life related crimes and calls for service containing behavioral health related keywords; and WHEREAS, of the 19,000 calls for service, nearly 7,000 (4%) contained keywords indicating a potential officer safety/public safety concern associated with the call; and
WHEREAS, MPD has maintained a Memorandum of Understanding (MOU) with the County of Stanislaus through its department of Behavioral Health and Recovery Services (BHRS) for the provision of a co-responder model called the Mobile Crisis Emergency Response Team (MCERT) where behavioral health professionals would ride with crisis intervention trained MPD officers and respond to behavioral health calls for service together; and WHEREAS, this model was used until approximately 2017 when various staffing and funding issues halted its continuation: and WHEREAS, MPD has maintained an MOU with BHRS to provide crisis response support in limited situations: and
#15..
- 457 -
WHEREAS, MPD seeks to amend the existing MOU with BHRS to allow for the reinstitution of this important partnership with the City reimbursing the County for the costs of two full-time Mental Health Clinicians and/or Behavioral Health Specialists in an amount not to exceed $390,303 and extend the term of the existing MOU to June 30, 2023.

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Modesto that it hereby approves a first amendment to the County/City agency Memorandum of Understanding.

BE IT FURTHER RESOLVED, that the City Manager, or his designee, is hereby authorized to execute the MOU, in a form approved by the City Attorney.

The foregoing resolution was introduced in a regular meeting of the Council of the City of Modesto held on the 12th day of April 2022, by Councilmember ________, who moved its adoption, which motion being duly seconded by Councilmember ______, was upon roll call carried and the resolution adopted by the following vote:

AYES: Councilmembers:

NOES: Councilmembers:

ABSENT: Councilmembers:

ATTEST: _____________________________
DANA SANCHEZ, Interim City Clerk
(SEAL)
APPROVED AS TO FORM:

BY: _________________________________
JOSE M. SANCHEZ, City Attorney
#15..
- 458 -
MPD – M-CERT
AMEND 1
FY 21.22

FIRST AMENDMENT

TO COUNTY/CITY AGENCY MEMORANDUM OF UNDERSTANDING
This Amendment for County/City Agency Memorandum of Understanding (the “Agreement”) is made and entered into by and between the County of Stanislaus through its department of Behavioral Health and Recovery Services ("County") and City of Modesto Police Department (“MPD”) effective the date of the last signature, for and in consideration of the premises, and the mutual promises, covenants, terms, and conditions hereinafter contained.

Recitals
WHEREAS, the Mental Health Services Act (MHSA), as set forth in California Welfare and Institutions Code section 5830(a)(3) provides that county mental health plans shall promote interagency collaboration; and
WHEREAS, MPD proposed a partnership with County that would pair trained behavioral health clinical staff with police officers in the field to respond to sub-acute mental health situations; and
WHEREAS, MPD police officers trained in Critical Incident Training perform 5150 evaluations, assist in disposition of 5150 evaluations, including transportation; WHEREAS, due to a funding opportunity, MPD has approved the addition of two (2) mental health clinicians or behavioral health specialists; NOW, THEREFORE, in consideration of the mutual promises, covenants, terms, and conditions hereinafter contained, the Agreement is hereby amended to add funding in the amount of $390,303. This Amendment is incorporated into the Agreement as follows:

I. Under Terms and Conditions, Sections 1 – 10 are deleted in their entirely and replaced with the following:

1. SCOPE OF SERVICES

1.1. Given the circumstances present in a given situation, MPD police officers trained in Critical Incident Training will endeavor to provide safety for MCERT members;

1.2. MPD police officers trained in Critical Incident Training will provide information on subjects and situations in which COUNTY BHRS M-CERT staff may find helpful, as allowed by law; and,

1.3. MPD police officers trained in Critical Incident Training will provide consultation and training on police/public safety issues/practices to COUNTY as provided to other non-sworn personnel who frequently accompany sworn officers in patrol operations. (i.e. Police Chaplains, Police Psychologists, etc.). Typically, this training will be approximately 8 #15..
- 459 -
MPD – M-CERT
AMEND 1
FY 21.22
hours and will consist of a visit to SR911 and a visit to the department range to discuss gun safety.

1.4. COUNTY shall make the following contributions to ensure the success of this collaboration:

1.4.1. Provide two (2) behavioral health clinical staff to perform designated M-CERT roles and responsibilities under the
supervision of one working M-CERT Coordinator.

1.4.2. Provide clinical and administrative supervision for M-CERT clinical staff;

1.4.3. Provide all non-safety related equipment and supplies required by COUNTY BHRS M-CERT staff to perform their designated roles and responsibilities; and,

1.4.4. Designate a liaison with responsibility for monitoring M-CERT implementation and to assist with resolution of problems encountered in the operation of M-CERT.

1.5. MPD shall make the following contributions to ensure the success of this collaboration:

1.5.1. Provide sworn peace officers trained in Critical Incident Training to perform M-CERT roles and responsibilities;

1.5.2. Provide supervision for MPD staff/employees, including in-the-field supervision;

1.5.3. Provide all equipment and supplies needed for officers to perform their roles and responsibilities in the M-CERT roles;

1.5.4. Designate a liaison with responsibility for monitoring M-CERT implementation and to assist with resolution of problems encountered in the operation of M-CERT;

1.5.5. Provide safety equipment, specifically, a fitted ballistic vest, and fitted ballistic helmet, for all M-CERT personnel, clinicians and registered staff in the field; and,

1.5.6. Provide a police vehicle used for the mobile teams’ operations.

1.5.7. MPD officers will respond to the COUNTY facility located at 1904 Richland Ave to meet the M-CERT clinician to complete an 8-hour shift Monday-Friday.
#15..
- 460 -
MPD – M-CERT
AMEND 1
FY 21.22

2. COMPENSATION

2.1 The maximum amount of this Agreement shall not exceed $390,303.

2.2 This is a cost reimbursement Agreement.

2.3 MPD shall reimburse COUNTY for the actual salary and benefits of 2.0 FTE Mental Health Clinicians or Behavioral Health Specialists, operational costs, and an indirect cost rate equal to the COUNTY current year Indirect Cost Rate Memo.

2.4 COUNTY shall apply any revenue generated from billing services to Medi-Cal prior to invoicing MPD.

3. INVOICES

3.1 COUNTY shall submit invoices, in an MPD specified format, within twenty (20) days following the end of service month.

3.2 Invoices will be submitted to:

City of Modesto
Attention: Accounts Payable
Address: PO Box 642 Modesto, CA 95353
Phone Number: (209) 571-5151
Email: [email protected]

4. PAYMENTS
MPD shall pay, on or before the thirtieth (30th) day of each month following the month of invoice receipt, the sum of money claimed by the approved invoice (less any credit due MPD for adjustments of current or prior invoices).

5. TERM

5.1 These services shall commence on July 1, 2021 and continue through June 30, 2023.

5.2 Either party may terminate this agreement by giving thirty (30) calendar days written notice to the other party.

6. INDEMNIFICATION
Each of the parties hereto shall defend, indemnify, and hold each other, their officers, employees, and agents harmless from any and all liability, loss, expense, attorneys’ fees, or claims for injury or damages arising out of the performance of this Agreement, but only in proportion to and to the extent such liability, loss, expense, attorneys’ fees, or claims for injury or damages are caused by or result from the negligent or intentional acts or omissions of the #15..
- 461 -
MPD – M-CERT
AMEND 1
FY 21.22
other party, its officers, agents, volunteers, or employees.

7. CONFIDENTIALITY

7.1 All parties to this Agreement acknowledge that information regarding the clients from each agency is confidential and all parties agree that information shared among the parties shall not be re-disclosed, contrary to law. All parties agree to keep confidential all information obtained or learned during the course of furnishing services under this Agreement and to not disclose or reveal such information for any purpose not directly connected with the matter for which services are provided. All parties shall comply with all laws including the Health Insurance Portability and Accountability Act of 1996 (HIPAA) regulations privacy rules and security standards, applicable to that agency.

7.2 Patient related records shall be considered confidential in accordance with California Welfare and Institutions Code, Section 5328 and 42 CFR, Part 2. Such records shall be disclosed only in accordance with all applicable State and Federal laws and regulations, including those relating to the confidentiality of medical records, patient consents to release information, and the psychotherapist-patient privilege.

7.3 MPD shall comply with all laws, policies, and procedures pertaining to public records, including the “Public Records Act.”

8. RELATIONSHIP OF PARTIES
This is an Agreement by and between independent contractors and is not intended to, and shall not be construed to be, nor create the relationship of agent, servant, employee, partnership, joint venture, or any other similar association.

9. REFERENCES TO LAWS AND RULES
In the event any law, regulation, or policy referred to in this MOU is amended during the term hereof, the parties agree to comply with the amended provisions as of the effective date of such amendment.

10. ENTIRE AGREEMENT
This Agreement contains all the terms and conditions agreed upon by County and MPD and no other understanding, oral or otherwise, regarding the Agreement, shall be deemed to exist or to bind any of the parties to this Agreement.
#15..
- 462 -
MPD – M-CERT
AMEND 1
FY 21.22

11. AMENDMENT
This Agreement may be modified, amended, changed, added to, or subtracted from by mutual consent of the parties hereto if such amendment or change is in written form and executed with the same formalities as this Agreement and attached to the original Agreement to maintain continuity.

12. DUPLICATE COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which, taken together, shall constitute one and the same agreement.

II. All other terms and conditions of said Agreement shall remain in full force and effect. (SIGNATURES SET FORTH ON FOLLOWING PAGE)
#15..
- 463 -
MPD – M-CERT
AMEND 1
FY 21.22
IN WITNESS WHEREOF, the parties have executed this Amendment on the date(s) shown below.

COUNTY OF STANISAUS

BEHAVIORAL HEALTH AND

RECOVERY SERVICES
___________________________________
Ruben Imperial, MBA Date
Director

APPROVED AS TO FORM
Thomas E. Boze, County Counsel
Marc Hartley
Deputy County Counsel

CITY OF MODESTO
___________________________________
Joseph P. Lopez Date
City Manager for the City of Modesto

APPROVED AS TO FORM
Jose Sanchez Date
City Attorney for the City of Modesto
BOS Item #:_____________________________ Date:________________________________ #15..
- 464 -

OFFICE OF THE CITY CLERK

NOTICE OF SPECIAL MEETING
Please take notice that a special Closed Session meeting of the Council of the City of Modesto has been called pursuant to Section 2-1.02 of the Modesto Municipal Code to be convened on
TUESDAY, APRIL 12, 2022 at 4:30 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
One Case (Pursuant to Section 54956.9(d)(1) of the Government Code) Name of Case: City of Modesto v. California State Water Resources Control Board Superior Court of California, County of Sacramento
Sacramento County Case No: 34-2019-80003051
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
Employee Organization: Modesto Police Non-Sworn Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
#16..
- 465 -
Employee Organization: Modesto Police Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees April 8, 2022 BY ORDER OF THE CHAIR
/S
Dana Sanchez, Interim City Clerk
Posted pursuant to Government Code Section 54956 on the bulletin board at Tenth Street Place on at by
date time signature
#16..
- 466 -
TO: THE CLERK OF THE CITY OF MODESTO
RE: CLOSED SESSION
Pursuant to Section 2-1.02 of the Modesto Municipal Code, you are hereby authorized and empowered to call a special Closed Session meeting of the Council of the City of Modesto to be convened on
TUESDAY, APRIL 12, 2022 at 4:30 PM
and after the regularly scheduled meeting in the Tenth Street Place, Chambers Conference Room, Basement Level, 1010 Tenth Street, Modesto, California.

Any and all of the following agenda items are subject to action being taken by the Modesto City Council.

The business to be considered at said City Council meeting shall consist of a Closed Session concerning the following:

CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
One Case (Pursuant to Section 54956.9(d)(1) of the Government Code) Name of Case: City of Modesto v. California State Water Resources Control Board Superior Court of California, County of Sacramento
Sacramento County Case No: 34-2019-80003051
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCEA Negotiator: Christina Alger
Employee Organization: Modesto City Employees Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCMA Negotiator: Christina Alger
Employee Organization: Modesto Confidential & Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPOA Negotiator: Christina Alger
Employee Organization: Modesto Police Officers’ Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MPNSA Negotiator: Christina Alger
Employee Organization: Modesto Police Non-Sworn Association #16..
- 467 -
CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) –MPMA Negotiator: Christina Alger
Employee Organization: Modesto Police Management Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – MCFFA Negotiator: Christina Alger
Employee Organization: Modesto City Firefighters Association CONFERENCE WITH LABOR NEGOTIATOR:
(Pursuant to Section 54957.6 of the Government Code) – Unrepresented Negotiator: Christina Alger
Employee Organization: Unrepresented Management and Confidential Employees April 8, 2022 BY ORDER OF THE CHAIR
/S
__________________________
SUE ZWAHLEN, Mayor
#16..
- 468 -