Economic Development Committee
December 2, 2024

- 1 -
12/2/2024 4:00:00 PM
www.modestogov.com
AGENDA
City of Modesto

ECONOMIC DEVELOPMENT COMMITTEE

COUNCIL WORKSHOP
2001-40 Del Puerto Room.

Tenth Street Place, 1010 10th Street
Modesto, California
Monday, December 02, 2024 at 4:00 PM
Roll Call: Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
Alternates: Nick Bavaro, Rosa Escutia-Braaton, Jeremiah Williams, David Wright Council has not delegated directive or final approval authority to the Committees.

Committee actions are recommendations to the full City Council, not final decisions on an issue. * Public Comment will only be in-person. Members of the public who wish to address the Committee, by providing public comment, during the meeting must do so in-person in the 2001-40 Del Puerto Room. As an alternative, members of the public may also provide written public comment submitted via email as indicated in the Submitting Comments by Email instructions on this agenda. Zoom will still be available for viewing and Wordly translation. *Members of the public will be allowed to provide public comment through Zoom if a Committee Member is participating remotely pursuant to the provisions of Assembly Bill 2449. *Effective March 1, 2023, if a technical issue arises with Zoom or the phone dial-in option, the Committee meeting will continue unless the meeting is being held pursuant to the provisions of Assembly Bill 2449. Alternative viewing options are listed below, and the meeting is physically open to the public.
“Wordly” can translate into 25+ different languages! To access written translation during the meeting, please scan the QR Code or click this link https://attend.wordly.ai/join/RJDY-6364.
- 1 -
12/2/2024
- 2 -
12/2/2024 4:00:00 PM
"Wordly" puede traducir a más de 25 idiomas diferentes! Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace https://attend.wordly.ai/join/RJDY-6364.

THE MEETING CAN BE VIEWED BY ZOOM VIDEO

CONFERENCING OR TELEPHONE
Joining the Committee meeting via Zoom
The City of Modesto is now offering the ability to view Committee meetings via telephonic conferencing via “Zoom” video conferencing computer technology. The meeting may be accessed through the use of Zoom using the following options:
 Enter the following link into an Internet Browser
https://us02web.zoom.us/j/86945970570,
 Enter the following link into an Internet Browser https://zoom.us/ and using the Webinar ID 869 4597 0570
 Passcode 84326
To use Zoom, please visit: https://zoom.us/ and either sign-up for a free Zoom account or continue as a guest. Once you have downloaded the app onto your mobile device, joined from your web browser, or downloaded the Zoom software on your computer you will be ready for the upcoming Committee meeting.

Joining the Committee meeting via Telephone
If you don’t have a smart phone or computer to access the meeting via Zoom, you can listen by phone, by calling 1-877-853-5257 (Toll Free) or 1-888-475-4499 (Toll Free) and enter the Webinar ID 869 4597 0570 Passcode 84326

PUBLIC COMMENTS IN PERSON
Three-minute time limit per speaker.

Only interested persons in the audience may present these matters.

Under State law, Committee Members may respond to matters being presented under this item only as follows:
a. Briefly respond to statements made or questions raised. b. Ask a question for clarification.
c. Provide a reference to staff or other resources for factual information. d. Request staff to report back at a subsequent meeting. e. Finally, a Committee Member or the Committee itself may take action to direct staff to place a matter of business on a future agenda.

SUBMITTING COMMENTS BY E-MAIL
Written comments may be submitted via email to: [email protected] (include Agenda Item Number in the subject line). All comments will be shared with the Committee - 2 -
12/2/2024
- 3 -
12/2/2024 4:00:00 PM
Members and placed in the record but will not be read aloud during the meeting. Written comments must be received two hours before the meeting.

This Agenda is on file in the City Clerk’s Office, Sixth Floor, 10th Street Place, Posting Board at entry of 10th Street Place, and is available on the City’s Web site at www.modestogov.com.

Materials related to an item on this Agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the Clerk’s office during normal business hours. Such documents are also available online, subject to staff’s ability to post the documents before the meeting, at the following website www.modestogov.com/councilmeetings In accordance with the requirements of Title II of the Americans with Disabilities Act (“ADA”) of 1990, the Fair Employment & Housing Act (“FEHA”), the Rehabilitation Act of 1973 (as amended), Government Code section 11135 and other applicable codes, the City of Modesto (“City”) will not discriminate against individuals on the basis of disability in the City’s services, programs, or activities. For more information, please visit the City of Modesto website at https://www.modestogov.com/865/Americans-with-Disabilities-Act-ADA In compliance with the Americans with Disabilities Act, if you need special assistance to participate in this meeting, please contact the City Clerk (209) 577-5396. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting
Any and all of the following agenda items are subject to action by the Modesto City Council.

CONSENT ITEMS – ROLL CALL VOTE REQUIRED:

Information concerning the consent items listed below has been forwarded to each Committee Member prior to this meeting for study. Unless some member of the audience or Committee Member has a question concerning an item and asks that it be withdrawn from the consent list, the Committee approves the items at one time. The action taken by the Committee in approving consent items is set forth in the explanation of this individual item.

CONSENT
An item may be removed from consent and discussed at the request of an audience member or committee member.

Consent

1. Consider a Grant of Permanent Easement to Modesto Irrigation District associated with existing irrigation facilities within a 5-foot-wide uniform strip of APN 084-002-046, consenting to the recordation thereof and forwarding to Council for approval. (Funding Source: Water Fund)
 Motion recommending a Grant of Permanent Easement to Modesto Irrigation District to cover existing irrigation facilities within a 5-foot-wide uniform strip - 3 -
12/2/2024
- 4 -
12/2/2024 4:00:00 PM
of APN 084-002-046, consenting to the recordation thereof and forwarding to Council for approval.

UTILITIES; Edgar Vargas, 209-577-5424, [email protected] Consent

2. Consider the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency 2024 Memorandum of Understanding for undertaking groundwater sustainability planning, reporting, studies, mutual aid and support services within the Modesto Sub-basin and forwarding to Council for approval. (Funding Source: Water Fund)
 Motion recommending entering into a Memorandum of Understanding with the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency for undertaking groundwater sustainability planning, reporting, studies, mutual aid and support services within the Modesto Subbasin and forwarding to Council for approval.  Motion recommending an Amendment to the Fiscal Year 2024-25 Operating Budget in the amount of $150,000 from Water Fund Reserves to fund the City of Modesto’s share of the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency’s activities within the Modesto Sub-basin and forwarding to Council for approval.

UTILITIES; Tim Barahona, 209-577-5485, [email protected]

NEW BUSINESS

3. Consider a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-3 (Kiernan Business Park #2) and replacing City of Modesto Community Facilities District No. 2012-1 (Kiernan Business Park South) and designate a future annexation area and forwarding to Council for approval. (Funding Source:

Developer Deposits)
 Motion recommending a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-3 (Kiernan Business Park #2) replacing CFD No. 2012-1 and designate a future annexation area and forwarding to Council for approval.

CED; Edgar Garcia, 209-577-5211, [email protected]

ADJOURNMENT
Posted pursuant to Government Code Section 54954.2 on the bulletin board at Tenth Street Place on at by
date time signature
- 4 -
12/2/2024

CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

December 2, 2024
Date: October 17, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Approve Grant of Permanent Easement to Modesto Irrigation District CONTACT: Edgar Vargas, Senior Civil Engineer, [email protected], 209-577-5424 DESCRIPTION:

Consider a Grant of Permanent Easement to Modesto Irrigation District associated with existing irrigation facilities within a 5-foot-wide uniform strip of APN 084-002-046, consenting to the recordation thereof and forwarding to Council for approval. (Funding Source: Water Fund) STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City of Modesto Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

On October 18, 2021, by Resolution 2021-19, the Planning Commission approved the Vesting Parcel Map of property located at the northwest corner of Litt Road and Sylvan Avenue.

Staff became aware that the Modesto Irrigation District (MID) facilities located on the property did not have an easement to permit the placement of the facilities, nor access to upgrade, maintain, repair, replace or modify those facilities.

DISCUSSION:

On September 24, 2024, by Resolution 2024-340, the City Council approved the summary vacation of a 40-foot strip of former Litt Road alignment (14,579 square feet) road right-of-way; and authorized the City Manager to sign the final Parcel Map to complete the land division in the area.

The MID grant of easement will need to be recorded and noted on the final Parcel Map before the City Manager can sign for recording.
#1..
- 5 -
Economic Development Committee, November 4, 2024
Approve Grant of Permanent Easement to Modesto Irrigation District

The Utilities Department and MID routinely work together to coordinate infrastructure maintenance, installation, repair, upgrades, removal and modifications throughout the City.

The existing MID infrastructure on the property in question includes an irrigation line which is utilized primarily to convey irrigation water to their agricultural customers.

Staff is recommending the approval of a Grant of Permanent Easement to allow MID the ability to continue to operate and maintain the facilities located at 3409 Sylvan Avenue.

FISCAL IMPACT:

There are no expenses associated with this action.

CEQA/NEPA REQUIREMENTS:

There are no CEQA/NEPA requirements associated with this administrative action.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending a Grant of Permanent Easement to Modesto Irrigation District to cover existing irrigation facilities within a 5-foot-wide uniform strip of APN 084-002-046, consenting to the recordation thereof and forwarding to Council for approval.

Approved by:

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

1. Grant of Easement

2. Grant of Easement – Exhibits A & B

3. Grant of Easement – Certificate of Acceptance
#1..
- 6 -
1 No Recording Fees Required Per Government
Code Section 27383
The Undersigned Declares:

No Documentary Transfer Tax (R&T Code 11911)

MAIL TAX STATEMENT

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Modesto Irrigation District
Secretary, Board of Directors
P.O. Box 4060
Modesto, California 95352
APN: 084-002-046 Space Above This Line for Recorder's Use

GRANT OF EASEMENT
THIS GRANT OF EASEMENT (“Grant”) is made and entered into as of _____________________, 2024 (the “Effective Date”), by and between the CITY OF MODESTO, a MUNICIPAL CORPORATION (“Grantor”) and the MODESTO IRRIGATION DISTRICT, an irrigation district organized and existing under the Constitution and laws of the State of California, its successors, and assigns (“Grantee”).

RECITALS
Grantor holds a fee interest in certain real property in the City of Modesto, California (the “Property”), as more particularly described on Exhibit “A” and depicted on Exhibit “B”, attached hereto and made a part hereof by reference. Grantor has agreed to grant to Grantee an easement over the Property (the “Easement Area”), on the terms and condition set forth in this Grant, for the right to construct, install, operate, place, inspect, maintain, replace and forever use thereon irrigation facilities and appurtenances, including a pipeline and/or ditch as may, in Grantee’s opinion, be necessary or desirable.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Grantee hereby agree as follows:

1. Grantor hereby grants and conveys to Grantee, and its agents, contractors, successors and assigns, a permanent easement and right-of-way for the right to construct, install, place, operate, inspect, maintain, replace and forever use thereon irrigation facilities and appurtenances, including a pipeline and/or ditch as may, in Grantee’s opinion, be necessary or desirable, in, on, under, over and across the real property hereinafter described, situated in the City of Modesto, State of California, as described as follows:

See attached Exhibit “A” and Exhibit “B” attached hereto and made a part hereof by reference.
#1..
- 7 -
2 2. Grantor shall not install in the Easement Area any buildings, structures, fences, explosives, or any other obstruction interfering or which may interfere with the use of said easement and rightof-way by Grantee (each, a “Prohibited Encroachment”). Grantee shall have the right to remove any Prohibited Encroachment, as well as any excessive tree growth, shrubs, or other materials or growths in the Easement Area that the Grantee deems, in Grantee’s sole discretion, is interfering or may interfere with the use of said easement and right-of-way or as Grantee deems necessary, in Grantee’s sole discretion, to comply with applicable local, state, or federal laws and regulations.

3. Grantee is granted the right to construct, place, inspect, maintain, replace and use across, upon, in and under said right-of-way such additional underground and aboveground facilities as may be necessary or convenient in connection with the construction, operation, inspection, maintenance, relocation and replacement of irrigation facilities and appurtenances as may, in Grantee’s opinion, be necessary or desirable. Grantee is also granted the right from time to time to increase or decrease the size, weight, number, or capacity and to change the position of Grantee’s facilities installed over, across, upon, in, along or under the land described above. Grantee, its contractors, agents and employees shall at all times have the right of ingress to and egress from said Grantee facilities and the right-of-way hereby granted. Grantee shall further have the right to place tools, equipment, implements and materials within the Easement Area as necessary to exercise the rights conveyed hereunder. Grantee shall be responsible for storing all such tools, equipment, implements and materials in a commercially safe and secure manner.

4. Grantor further grants to Grantee the right to assign to any public utility the right to construct, install, inspect, place, maintain, operate, replace, remove and use irrigation facilities and appurtenances within the Easement Area (including ingress thereto and egress therefrom).

5. Grantor reserves the right to use such land for purposes that will not interfere with Grantee’s full enjoyment of the rights hereby granted. Grantor shall not increase or decrease, or permit to be increased or decreased, the now existing ground elevations of said Easement Area without the prior written consent of the Grantee.

6. As a condition of this grant of Easement and right of way, Grantor’s use and enjoyment of the Easement Area shall not hinder, conflict or interfere with the exercise of the Grantee’s rights hereunder, and no excavation, building, structure or obstructions shall be constructed within the Easement Area.

7. Grantor shall not relocate the Easement Area irrigation facilities and appurtenances without Grantee’s consent. In the event the irrigation facilities and appurtenances within the Easement Area are relocated, Grantor shall be responsible for such costs. Grantor shall provide a replacement easement for said irrigation facilities and appurtenances of the same width as the Easement Area and containing the same terms and conditions as herein provided. No less than 30 days prior to such relocation, Grantor shall provide the plans and/or specifications of any such irrigation facilities and appurtenances to be relocated for Grantee’s approval.

8. In order to assure the Easement cannot be eliminated through foreclosure or other enforcement of an existing mortgage, deed of trust, lien or judgment of record, Grantor agrees that the holders of any such mortgages, deeds of trust, judgments or liens shall subordinate their respective interests to the Easement.
#1..
- 8 -
3 9. Grantor covenants that it is the owner of the above described Property and has full right, power, and authority to grant this easement, and that the Property is free and clear of encumbrances and liens of whatsoever character except those recorded against the Property.

10. In consideration for this grant of easement, Grantee for itself, and for its respective heirs, successors and assigns agree to indemnify and hold harmless Grantor its directors, officers, employees and agents, and each of them, from and against any and all claims, damages, loss, liability and expenses, including reasonable court costs and attorneys’ fees, arising out of or on account of injury to or death of any person or loss of or damage to any property in connection Grantee’s use of the Easement Area, except to the extent of the adjudicated proportionate fault of any of the Grantor or any party seeking indemnification under this Section.

The terms and provisions of this easement and right-of-way shall be binding upon and inure to the benefit of the respective heirs, executors, administrators, personal representatives, successors, and assigns of Grantee and Grantor.

EXECUTED:________________, 20_____
GRANTOR: CITY OF MODESTO, a MUNICIPAL CORPORATION
By: _____________________________
Joseph P. Lopez, City Manager
#1..
- 9 -
EXHIBIT “A”

LEGAL DESCRIPTION - IRRIGATION EASEMENT
The land referred to herein below is situate in the City of Modesto, County of Stanislaus, State of California and is described as follows:

A 5.00 foot wide strip of land, uniform in width, being a portion of the those lands of the City of Modesto as described in that Grant Deed recorded September 27, 2006, as Document No. 2006-0143080, Official Records of said County, situate in the North half of Section 12, Township 3 South, Range 9 East, Mount Diablo Meridian, the southerly line of said strip is described as follows:

COMMENCING from the Southwest corner of the land shown on that Record of Survey 2012-0058929 recorded in Book 33 of Surveys at Page 24, Official Records of said County said corner being on the northerly line of the 20.00' half-width of Sylvan Avenue; Thence along the West line of said land, North 00°17’38” West, 44.06 feet to the POINT OF BEGINNING; thence South 85°19’19” East, 18.44 feet; thence North 89°48’45” East, 140.42 feet to the beginning of a tangent curve, concave Northerly, having a radius of 3537.25 feet; thence Easterly along said curve through a central angle of 3°23’58”, an arc length of 209.87 feet; thence North 81°59’05” East, 49.64 feet to the POINT OF TERMINATION.

The sidelines of said strip shall be lengthened or shortened as to terminate westerly on the west line of said lands of the City of Modesto and easterly perpendicular to the point of termination.

Containing an area of approximately 2,090 Square feet.

A PLAT OF THE ABOVE DESCRIBED PARCEL(S) OF LAND IS ATTACHED HERETO AS EXHIBIT “B” AND BY THIS REFERENCE MADE A PART HEREOF.

END DESCRIPTION
This real property description has been prepared by me, or under my direction, in conformance with the requirements of the Professional Land Surveyors’ Act. 27 JUNE 2023
Stephen J. Pyle Date
Professional Land Surveyor
California No. 8385
#1..
- 10 -
SOUTH LINE OF THE NORTH HALF OF SEC 12 T.3.S. R.9.E.

CENTERLINE SYLVAN AVE P.O.C.

SOUTHWEST CORNER OF LANDS OF THECITY OF MODESTO AS SHOWN ON 33-S-24 P.O.B.
5' IRRIGATION

EASEMENT
N89°48'45"E 140.42' R=3537.25' Δ=3°23 5' 8" L=209.87' 33 S 24

WEST LINE OF AREA DESCRIBED IN THE GRANT DEED
RECORDED SEPTEMBER 27, 2006, AS DOC# 2006-0143080
2090 S.F.

P.O.T.

NORTH LINE OF

EXISTING SYLVAN AVE

FUTURE R/W
S03°35'13"E (R)
S00°11'15"E (R)

CITY OF MODESTO
MARY E. GROGAN PARK
DOC NO. 2006-0143080, SCR
S85°19'19"E 18.44'
N0°17'38"W 44.06'
N81°59'05"E 49.64'
N89°48'45"E (BASIS OF BEARINGS 34-S-07)
34 S 07
odellengineering.com
of
1165 Scenic Drive, Suite A
Modesto, CA 95350 11 0 30 60 120
SCALE: 1" = 60'
P.O.B. POINT OF BEGINNING
P.O.C. POINT OF COMMENCEMENT
P.O.T. POINT OF TERMINATION
(R) RADIAL BEARING

RS RECORD OF SURVEY

SCR STANISLAUS COUNTY RECORD
S.F. SQUARE FEET
LEGEND
EXHIBIT "B"

CITY OF MODESTO, CA

VICINITY MAP
#1..
- 11 -
5 CERTIFICATE OF ACCEPTANCE
Pursuant to Section 27281 of the
California Government Code
This is to certify that the interest in real property conveyed by the Grant of Easement dated , 2024, from CITY OF MODESTO, a MUNICIPAL CORPORATION, as Grantor thereunder, to Modesto Irrigation District, an irrigation district, as Grantee thereunder, is hereby accepted by the undersigned officer on behalf of Modesto Irrigation District, pursuant to the authority conferred by Resolution No. _______, adopted by the Board of Directors of the Modesto Irrigation District on ______________, and the Grantee consents to recordation thereof by its duly authorized officer.

Dated: MODESTO IRRIGATION DISTRICT
By:

Name: ___________________________
Its: ____________________________
#1..
- 12 -

CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

December 2, 2024
Date: October 30, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: William Wong, Director of Utilities
SUBJECT: Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency 2024 Memorandum of Understanding CONTACT: Tim Barahona, Assistant Engineer, [email protected], 209-577-5485 DESCRIPTION:

Consider the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency 2024 Memorandum of Understanding for undertaking groundwater sustainability planning, reporting, studies, mutual aid and support services within the Modesto Sub-basin and forwarding to Council for approval. (Funding Source: Water Fund) STRATEGIC PLAN ELEMENT:

The recommended action supports the 2020-2025 City of Modesto Strategic Plan Initiatives, Goal D: Provide safe, efficient, and reliable infrastructure through proactive community investment, maintenance, and sustainability efforts.

BACKGROUND:

In September of 2014, Governor Edmund G. Brown signed into law the Sustainable Groundwater Management Act of 20141 (SMGA) which required, among other items, the formation of Groundwater Sustainability Agencies with a focus on long-term groundwater management.

On January 24, 2017, by Resolution No. 2017-30, Council authorized entering into a Memorandum of Understanding (MOU) to form the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency2 (STRGBA GSA). 1 https://water.ca.gov/programs/groundwater-management/sgma-groundwater-management 2 https://www.strgba.org/
#2..
- 13 -
Economic Development Committee, December 2, 2024
Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency 2024 Memorandum of Understanding

The STRGBA GSA member agencies are as follows:

City of Modesto
City of Oakdale
City of Riverbank
City of Waterford
Stanislaus County
Tuolumne County
Modesto Irrigation District
Oakdale Irrigation District
DISCUSSION:

The 2017 STRGBA GSA MOU established an initial means of cooperation amongst the member agencies to ensure that the Modesto Sub-basin remains locally and sustainably managed; The 2024 STRGBA GSA MOU is meant to supplement the 2017 STRGBA GSA MOU with language formalizing the process by which to allow member agencies to reimburse another member agency designated as a budget or consultant agreement administrator for their equitable share.

Any member agency that proposes hiring a consultant will be required to obtain the other participating agencies’ written approval of the proposed agreement, scope of work and budget before a consultant can be hired to preform work on behalf of the STRGBA GSA. It will be the responsibility of the hiring member agency to execute and administer the agreement for consultant services and serve as the project manager.

Consulting services may consist of research activities concerning subjects such as groundwater pumping and usage, evaluation of the sub-basin’s need for additional or improved water extraction, storage, delivery, conservation and recharge facilities, groundwater recharge, hydrology, climatology, land usage and landscape processes.

The 2024 STRGBA GSA MOU also makes provisions for member agencies to provide direct services to another member agency or agencies. The member agency providing the direct services will prepare a task order for written approval that describes the scope of work, schedule of completion, names and hourly rates of staff involved and the total budget associated with the direct services to be performed.

FISCAL IMPACT:

There is no immediate fiscal impact associated with entering into the 2024 STRGBA GSA MOU.

Future expenses for the City’s share associated with the 2024 STRGBA GSA MOU will be housed in the following Water Fund Cost Center:
43010 - Groundwater Management Plan
CEQA/NEPA REQUIREMENTS:

The approval of the 2024 STRGBA GSA MOU does not constitute a Project for the purposes of the California Environmental Quality Act.
#2..
- 14 -
Economic Development Committee, December 2, 2024
Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency 2024 Memorandum of Understanding

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending a Memorandum of Understanding with the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency for undertaking groundwater sustainability planning, reporting, studies, mutual aid and support services within the Modesto Sub-basin and forwarding to Council for approval.

Motion recommending an Amendment to the Fiscal Year 2024-25 Operating Budget in the amount of $150,000 from Water Fund Reserves to fund the City of Modesto’s share of the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency’s activities within the Modesto Sub-basin and forwarding to Council for approval.

Approved by:

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

1. 2017 STRGBA GSA MOU

2. 2024 STRGBA GSA MOU
#2..
- 15 -

MEMORANDUM OF UNDERSTANDING FORMING THE STANISLAUS

AND TUOLUMNE RIVERS GROUNDWATER BASIN ASSOCIATION

GROUNDWATER SUSTAINABILITY AGENCY
J_oo_~----~-• ____ _.2017

1. PARTIES. The Parties to this Memorandum of Understanding (MOU} are: the County of Stanislaus, a political subdivision of the State of California; the Oakdale Irrigation District, a California irrigation district; the City of Oakdale, a California public agency; the City of Riverbank, a California public agency; the City of Modesto, a California public agency; the City of Waterford, a California public agency; and the Modesto Irrigation District, a Calffornia irrigation district (each referred to individually as a "Party• or collectively as the "Parties·}.

2. RECITALS. This MOU is entered into with regard to the following facts and circumstances, among others:

2.1 Groundwater and surface water resources within the Modesto Sub-basin of the San Joaquin Valley Groundwater Basin (DWR Bulletin 118 No. 5-22.02) ("Subbasin") are vitally important resources, in that they provide the foundation to maintain and fulfill current and future environmental, agricultural, domestic, municipal and industrial needs, and to maintain the economic viability, prosperity, and sustainable management of the Sub-basin.

2.2 Agriculture has been prominent in making Stanislaus County one of the world's foremost agricultural areas, and has played a major role In the development of the economy of Stanislaus County; in an era of increasing competition for the area's finite water resources, it is important to understand and plan for the local area's economic well-being.

2.3 Although each of the Parties overlies and has rights to extract groundwater from the Sub-basin, each Party's. individual surface and groundwater rights, historical groundwater production, and groundwater recharge and conveyance activities vary greatly from one another. .

2.4 The California Legislature has adopted, and the Governor has signed into law, the Sustainable Groundwater Management Act ("SGMA"), which authorizes local agencies to manage groundwater in a sustainable fashion.

2.5 The Parties intend to enter into this MOU in order to ensure that the Sub-basin remains locally and sustainably managed.

2.6 SGMA requires groundwater basins designated as either medium or high-priority to be managed by one or more Groundwater Sustainability Agencies (uGSA") by June 30, 2017 and that GSAs adopt a groundwater sustainability plan ("Plan") by January 31, 2022.

2. 7 The Sub-basin is currently designated as a high-priority basin, and thus must comply with the deadlines in the previous recital.

2.8 Pursuant to SGMA, a combination of local agencies may form a GSA through a memorandum of understanding or other legal agreement.
1 #2..
- 16 -
• I

2.9 Each of the Parties overlies a portion of the Sub-basin and is a local agency as defined by SGMA.

2.10 In order to coordinate groundwater management activities and to comply with SGMA, the Parties desire to form a GSA for the portion of the Sub-basin that lies within their coilective jurisdictions.

2.11 This MOU is intended to be an agreement for formation of a GSA as authorized by section 1 0723.6( a }(2) of the Water Code.

2.12 The Parties further intend and will work cooperatively to develop a separate operating agreement for the Stanislaus and Tuolumne River Groundwater Basin Association ("STRGBg) GSA ("STRGBA GSA").

2.13 The Parties believe that cooperative and coordinated actions by local agencies and users within the Sub-basin wilt resutt in the continued sustainable use of the groundwater within the Sub-basin.

3. DEFINITIONS. The following terms, whether in the singular or the plural, and when used herein with initial capitalization, shall have the meanings specified below:

3.1 Annual Budget. The GSA budget developed annually, pursuant to Section 6.2, to fund certain project(s) to advance the goals and objectives of this MOU.

3.2 Committee. That body, consisting of one representative from each of the Parties, which governs the GSA, as established pursuant to Section 4.3 of this MOU.

3.3 Coordinator. The individual appointed by the Committee pursuant to Section 5.

3.4 Funding Percentage. A Party's Funding Percentage as set forth in Section 7.1 of this MOU.

3.5 Governing Bodies. The governing entities of the Parties to this MOU.

3.6 GSA. A Groundwater Sustainability Agency created pursuant to SGMA.

3.7 MOU. This Memorandum of Understanding creating the STRGBA GSA

3.8 Parties. Each of those entities named in Section 1 of this MOU, or those Parties added pursuant to Section 4.5 of this MOU.

3.9 Plan. A Groundwater Sustainability Plan developed and adopted pursuant to SGMA.

3.10 SGMA. The Sustainable Groundwater Management Act of 2014.

3.11 Stanislaus and Tuolumne River Groundwater Basin Association GSA or STRGBA GSA. The GSA created pursuant to this MOU to manage the Subbasin. 2 #2..
- 17 -
• I

3.12 Sub-basin. The Modesto Sub-basin of the San Joaquin Valley Groundwater Basin (DWR Bulletin 118 No. 5-22.02), which is geographically defined as that area in the State of California bounded on the west by the San Joaquin River; on the north by the Stanislaus River, on the east by the base of the Sierra Nevada foothills; and on the south by the Tuolumne River, and includes the area of land overlying that Sub-basin and all tributaries therein as defined by the then-current Department of Water Resources Bulletin 118.

3.13 Voting Percentage. A Party's Voting Percentage as set forth in Section 7.3 of this MOU.

4. THEGSA.

4.1 Creation of GSA. The Parties hereby establish the STRGBA GSA to manage the portion of the Sub-basin within the Parties' collective jurisdictions.

4.2 Purposes and Powers. The purposes and powers of the STRGBA GSA are as foJ.Iows:

4.2.1 This MOU is entered into by and between the Parties to, consistent with SGMA, exert local control over the management of the Sub-basin and to facilitate a cooperative and ongoing working relationship that will allow compliance with SGMA and state law, as amended from time to time.

4.2.2 The STRGBA GSA shall act on behalf of its members to coordinate the Parties' activities and actions to further the sustainable management of the Sub-basin and facilitate compliance with SGMA. It shall in no way determine or modify the surface water rights or groundwater rights, if any, of any Party.

4.2.3 The STRGBA GSA shall determine and evaluate the Sub-basin's existing groundwater supply;

4.2.4 The STRGBA GSA shall promote co_ordination of groundwater management planning activities within the Sub-basin;

4.2.5 The STRGBA GSA shall evaluate the Sub-basin's need for additional or improved water extraction, storage, delivery, conservation, and recharge facilities;

4.2.6 The STRGBA GSA shall provide and share information and guidance for the management, preservation, protection and enhancement of groundwater quality and quantity in the Sub-basin; and

4.2.7 The STRGBA GSA shall have the powers and authorities granted to GSAs under SGMA.
3 #2..
- 18 -
. \

4.3 Committee. The STRGBA GSA shall be governed by a Committee whose membership and responsibilities are set forth herein.

4.3.1 Each Party shall designate one staff person to serve as a member of the Committee, and one or more alternates. The names of the member and alternates will be submitted to the Coordinator. Each member of the Committee, and each alternate, shall serve at the pleasure of the Party appointing such member. A Party's alternate may serve in the place of that Party's member in the absence of such member and, in such case, the alternate shall have the powers of the member.

4.3.2 The Committee shall elect a chair and vice chair from its members at the first meeting of each calendar year. The chair shall be responsible for presiding over meetings of the Committee, and shall notify members and the Coordinator of meetings of the Committee. The Committee shall establish a date, time and place for its regular meetings, and may hold special meetings when required for the proper transaction of business. All meetings of the Committee will be held in accordance with the provisions of the Brown Act, California Government Code Section 54950 et seq. The Committee shall prescribe such procedures for the conduct of its business as it deems appropriate.

4.3.3 A quorum will consist of a simple majority of the Parties, subject to the provisions of section 6.5, except that Jess than a quorum may adjourn meetings of the Committee from time to time. Alternatively, the Coordinator may adjourn a meeting of the Committee to a specified time, date and place if there is less than a quorum of members present for a meeting.

4.3.4 The Committee shall have the following duties and responsibilities:
a. Develop and implement activities designed to achieve the objectives of SGMA.
b. Designate a Party that will enter into contracts, and approve all amendments thereto, for and on behalf of the STRGBA GSA, necessary to carry out the powers and duties of the STRGBA GSA.
c. Establish an Annual Budget for the STRGBA GSA, and approve proposed revisions to such budget, provided that no action of the STRGBA GSA shall be deemed to bind any party to contribute such funds absent approval of each Party's Governing Body. d. Recommend for approval by each Party's Governing Body's Annual Budget(s} necessary to carry out proposed project(s). e. Establish such committees as may be necessary or desirable to carry out the purposes of the STRGBA GSA, and to exercise general supervision over such committees.
4 #2..
- 19 -
.. • t

4.3.5 Except for actions for which a different approval standard is set forth in this MOU, all actions of the Committee will be approved by a majority of the members present.

4.4 Staff. The staff of the STRGBA GSA shall be composed of staff from each Party.

The STRGBA GSA shall also have the authority to hire or retain agents, contractors and consultants as the Committee shall determine necessary and appropriate.

4.5 New Parties. New parties may join the STRGBA GSA, provided that they meet the requirements set forth below:

4.5.1 Any county or local public agency that meets the definition of "local agency" as set forth in Sc;3MA.

4.5.2 Application for membership will be subject to simple majority approval by the Committee.

4.5.3 As a condition of admission to the STRGBA GSA, any new Party to this MOU shall agree to be subject to the terms of this MOU and shall be required to first pay its proportionate share of back contributions or as otherwise determined appropriate by the Committee.

5. COORQ!NATOR.

5.1 Appointment. The Committee shall appoint a one of the Committee members as the Coordinator, who shall have the duties and responsibilities set forth in this Section 5.

5.2 Duties and Responsibilities. The Coordinator will have the following duties and responsibilities:

5.2.1 Develop and submit for review and approval by the Committee a work plan and schedule of activities designed to comply with the requirements of SGMA, or as may be otherwise directed by the Committee.

5.2.2 Propose an Annual Budget, and from time to time such revisions as the Coordinator may feel necessary or desirable, to the Committee for its review and approval.

5.2.3 Submit to the Committee, as directed by the Committee, a progress report as to the STRGBA GSA's activities and a report which compares actual expenditures with the Annual Budget, as adopted.

5.2.4 Execute and administer contracts as directed by the Committee.

5.2.5 Maintain proper records and accounts of work performed by the Committee.

5.2.6 Receive and disburse funds at or under the direction of the Committee. 5 #2..
- 20 -
.. • I

5.2.7 Act as secretary/treasurer to the STRGBA GSA, and acting in that capacity, prepare, record and distribute minutes of all Committee meetings.

5.2.8 Perform such other actions as may be necessary or desirable to promote the work of the Committee and the STRGBA GSA

6. GSA BUDGET AND COSTS.

6.1 Budget Cycle. The budget cycle of the STRGBA GSA shall be on a calendar year basis.

6.2 Annual Budget The Coordinator shall prepare an Annual Budget for each calendar year that the Committee determines certain projects are necessary.

The Coordinator's draft Annual Budget for the following year shall be delivered to the Committee members no later than June 1 of each year. The Committee shall approve or revise the draft Annual Budget and distribute the draft Annual Budget to each Party no later than July 1 of each year. The Committee shall meet to review input from the Parties' Governing Bodies no later than August 1 of each year, and shall approve a final budget no later than September 1 of each year for the following year. The respective Governing Bodies of the Parties shall review the Annual Budget no later than October 1 of each year and notify the Coordinator that it has allocated or appropriated its respective contribution to the Annual Budget no later than October 15 of each year. The Committee shall adopt and approve the Annual Budget and have it in place and effect by January 1 of each year, or as approved by the Parties.

6.3 Allocation of Funds. Within the Annual Budget adopted pursuant to Section

6.2, the Committee shall have the authority to make minor adjustments in the allocation of funds between budget categories; provided, however, that the cumulative change in the budget category does not exceed ten percent (10%) of the amount authorized in the Annual Budget and the total amount of the Annual Budget is not increased. Other budget adjustments require approval of the Governing Bodies.

6.4 Budget Increases. Increases in the total amount of a budget must be approved by the Goveming Bodies of a simple majority of the Parties.

6.5 Failure to Pay. If any Party fails to pay its respective share of any Annual Budget or budget increase when due, whether or not that Party's Goveming Body approved the Annual Budget or the budget increase, then that Party shall be ineligible to vote on any subject or issue unless such failure is excused by the Committee through formal action and majority approval of the Committee. During any period of time during which a Party is Ineligible to vote on a matter by reason of the application of this Section 6.5, such Party shall not be counted as a Party in determining a quorum, or in determining a "majority" with regard to the approval of any action. In order to restore its eligibility to vote, a Party must be current on all amounts due, including any expenditures approved by the Committee while such Party was ineligible to vote.
6 #2..
- 21 -
.. • I

6.6 Expenditures. STRGBA GSA funds may be properly expended for all costs approved by the Committee and properly incurred in the performance of the work approved by the Committee, or under such authority as may be delegated to the Coordinator by the Committee.

6.7 Non Reimbursable Costs. Costs incurred by any Party in connection with any functions of the STRGBA GSA, or any committee established by the Committee, and expenses of a Party's personnel including, without limitation, the regular and alternate members appointed by a Party to any committee while performing such functions, shall not be reimbursed by the STRGBA GSA except through formal action and majority approval of the Committee provided that a Party shall be reimbursed for the services performed ·by such Party's employees while serving as ~taff to the STRGBA GSA as approved through the Annual Budget process.

7. FUNDING AND VOTING PERCENTAGES.

7.1 ·Funding Percentage. Each Party shall be responsible for its proportionate share of the funding requirements of the STRGBA GSA. The proportionate shares of each Party shall be determined by dividing the funding requirements of the STRGBA GSA by the number of Parties. During Committee approval of certain projects that beneficially affect the Parties disproportionately, equitable project funding shall be determined through formal action and majority approval of the Committee.

The Parties shall provide funding consistent with the Annual Budget adopted by the Committee on the schedule set forth in such budgets, or pursuant to the Coordinator's discretion. Funding needs of the STRGBA GSA payable by the Parties shall be determined by the Committee, and such funds shall be transmitted by the Party to the Coordinator within sixty (60) days of project approval. Upon receipt, the Coordinator will immediately deposit funds in an interest-bearing bank account, separate from other acc_punts of the Parties. The funds in such account shall remain the property of each contributing Party until spent, and interest earned thereon shall belong to each contributing Party.

7.2 Payment Reduction. Each Party agrees that the Parties' respective obligations to make payments hereunder shall not be subject to any reduction, whether by offset, counter claim, recoupment or otherwise. A Party's funding contributions to the STRGBA GSA, or a portion thereof, may be reimbursed upon termination of that Party's participation in the STRGBA GSA and approval by a simple majority vote of the Committee.

7.3 Voting Percentage. Each Party's representative on the Committee shall be entitled to one vote; provided however, that if a matter being decided by the Committee will have a disproportionate effect on the financial obligations of one or more Parties, as contemplated in Section 7.1, each Party shall be entitled to a weighted vote proportionate to the financial obligation or benefit of the Parties.

The Voting Percentages set forth in this Section shall remain in effect only until voting percentages are established in the operating agreement for the STRGBA GSA.
7 #2..
- 22 -

7.4 Modification by Party. Funding Percentages and/or Voting Percentages m'ay be changed only upon simple majority approval of the Committee.

8. BELAT!ONSHIPOFPABTICIPANTS.

8.1 Each Party's Action Independent. The obligation of each Party to make payments under Section 7.1 of this MOU is an individual and several obligation and not a joint obligation of the Parties. Each Party shall be individually responsible for its own covenants, obligations and liabilities under this MOU. No Party shall be under the control of or shall be deemed to control any other Party or the Parties collectively. No Party shall be the agent of or have the right or power to bind any other Party without such . Party's express written consent, except as expressly provided in this MOU. ·

8.2 Indemnity. No Party, nor any officer or employee of a Party, shall be responsible for any damage or liability occurring by reason of anything done or omitted to be done by another Party under or in connection with this MOU. The Parties further agree, pursuant to Government Code Section 895.4, that each Party shall fully indemnify and hold harmless each other Party and its agents, officers, employees and contractors from and against all claims, damages, · losses, judgments, liabilities, expenses and other -costs, including litigation costs and attorney fees, arising out of, resulting from, or in connection with any work delegated to or action taken or omitted to be taken by such Party under this MOU.

In no event, except for any claim, demand, liability, loss or damage arising out of or resulting from any action taken or not taken by one Party at the direction of its directors, officers, or employees of management or administrative responsibility, which is knowingly or intentionally taken or not taken with conscious indifference to the consequences thereof or with the intent that injury or damage would result or wouid probably result therefrom, shall a Party be liable to any other Party for any indirect or consequential damage claim, demand, liability, loss, expense (including attorney's fees}, or damage arising out of or in any way connected with this MOU, including any negligence in connection therewith.

8.3 No Creation of a Joint Powers Authority. The Parties agree that by this MOU they do not intend to provide for the creation of an agency or entity which is separate from the Parties pursuant to Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code, relating to the joint exercise of powers.

9. IEBMOETHISMOU. The term of this MOU shall commence once all named parties have executed this MOU and shall remain in effect unless terminated by the mutual written consent of all Parties. Upon termination of this MOU, the Committee shall determine the assets and liabilities of the STRGBA GSA, make every effort to satisfy all obligations within sixty (60) days of the termination of this MOU, and equitably distribute any remaining fund balance to each Party in proportion to each Party's Funding Percentage.

10. GENERALPROV!S!ONGOVERN!NGMOU.

10.1 Severability. In the event that any of the terms, covenants or conditions of this MOU or the application of any such term, covenant or condition shall be held 8 #2..
- 23 -
' ' ..
invalid as to any Party, person or circumstance by any court of competent jurisdiction, all other terms, covenants or conditions of this MOU and their application shall not be affected thereby, but shall remain in full force and effect unless any such court holds that those provisions are not separable from all other provisions of this MOU.

10.2 No Third Party Beneficiaries. This MOU is for the sole benefit of the Parties and shall not be construed as granting rights to any person other than the Parties or imposing obligations on any person other than another Party.

10.3 Good Faith. Subject to the right of a Party to withdraw or terminate its membership in the STRGBA GSA, each Party shall use its best efforts and work wholeheartedly and in good faith for the expeditious completion of the objectives of this MOU and the satisfactory performance of the terms and provisions contained herein. ·

10.4 Withdrawal or Termination of Membership. Except in the event of the termination of this MOU pursuant to Section 9, a Party who withdraws or terminates its membership in the STRGBA GSA shall not be entitled to a refund of its funding contributions. Any Party may terminate membership and withdraw from the STRGBA GSA upon thirty (30) days written notice of termination to the STRGBA GSA If a Party withdraws from the STRGBA GSA when the Party is in arrears as to complying with its Funding Percentage, that Party's entitlement to use any groundwater model or other work product of the STRGBA GSA as provided for herein shall be determined by the Committee. Whenever a Party withdraws from the STRGBA GSA, it is the intent of the Parties and of the STRGBA GSA that the withdrawal shall remove the area within the Party's water service area from further management by the STRGBA GSA, provided that the withdrawal shall be in accordance with the requirements of SGMA and shall leave no area within the Basin unmanaged.

10.5 Amendment. Unl.ess provided otherwise, this MOU may be amended upon the affirmative vote of the Governing Bodies of a simple majority of the Parties.

10.6 Counterpart Execution. This MOU may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

10.7 Governance. This MOU is made under and shall be governed by the laws of the State of California. Venue of any action arising from this MOU shall be in the County of Stanislaus.

10.8 Reasonable Delivery of Documents. The Parties agree to act in good faith to promptly execute any documents that are necessary, or may become necessary, to implement activities approved by the Governing Bodies in the Annual Budget, subject to the authority and the right of the Governing Bodies to terminate participation in this MOU.

10.9 Attorney Fees. If any action at Jaw or in equity, including action for declaratory relief, is brought to enforce or interpret provisions of this MOU, the prevailing Party shall be entitled to reasonable attorney's fees and costs that may be set by 9 #2..
- 24 -
.. .. . :

IN WITNESS WHEREOF, the City of Modesto, a municipal corporation, has authorized the execution of this Memorandum of Understanding forming the Stanislaus and Tuolumne Rivers Groundwater Basin Association Groundwater Sustainability Agency in duplicate by its City Manager and attestation by its City Clerk under authority of Resolution No. 2017-~, adopted by the Council of the City of Modesto on the 24th day of January , 2017.

CITY OF MODESTO,
A municipal corporatiiYLL----
" (Seal)
10 #2..
- 25 -
1 MEMORANDUM OF UNDERSTANDING
by and between the

STANISLAUS AND TUOLUMNE RIVERS GROUNDWATER BASIN ASSOCIATION

GROUNDWATER SUSTAINABILITY AGENCY MEMBER AGENCIES
for

UNDERTAKING GROUNDWATER SUSTAINABILITY PLANNING, REPORTING, STUDIES, MUTUAL AID, and SUPPORT SERVICES WITHIN MODESTO SUB-BASIN THIS MEMORANDUM OF UNDERSTANDING (“MOU”), made in the State of California as of the ___ day of _________, 2024, is by and between the member agencies of the Stanislaus and Tuolumne Rivers Groundwater Basin Association (STRGBA), Groundwater Sustainability Agency (GSA), which includes: the County of Stanislaus, a political subdivision of the State of California; the Oakdale Irrigation District, a California irrigation district; the City of Oakdale, a California public agency; the City of Riverbank, a California public agency; the City of Modesto, a California public agency; the City of Waterford, a California public agency; and the Modesto Irrigation District, a California irrigation district (each referred to individually as a “Member Agency” or collectively as the “Member Agencies”.

RECITALS
WHEREAS, groundwater and surface water resources within the Modesto Sub-basin of the San Joaquin Valley Groundwater Basin (DWR Bulletin 118 No. 5-22.02) (“Sub-basin”) are vitally important resources for necessary for maintaining the economic viability, environmental sustainability, and prosperity of the Modesto Sub-basin, and its individual constituents; and WHEREAS, although each of the Member Agencies overlies, and has rights to extract groundwater from the Sub-basin, each member agency’s individual surface and groundwater rights, historical groundwater production, and groundwater recharge and conveyance activities vary greatly from one another; and
WHEREAS, the Sustainable Groundwater Management Act (“SGMA”) authorizes local agencies to manage groundwater locally, and in a sustainable fashion; and WHEREAS, SGMA requires groundwater basins designated as either medium or high priority to be managed by one or more Groundwater Sustainability Agencies (“GSA”) by June 30, 2017, and that GSAs adopt a groundwater sustainability plan (“GSP”) by January 31, 2022; and WHEREAS, pursuant to SGMA, a combination of local agencies may form a GSA through a memorandum of understanding, or other legal agreement; and WHEREAS, each of the Member Agencies overlies a portion of the Sub-basin, and is a local agency as defined by SGMA; and
WHEREAS, in order to coordinate groundwater management activities and to comply with SGMA, the Member Agencies desire to form a GSA for the portion of the Sub-basin that lies within their collective jurisdictions; and
WHEREAS, the Member Agencies entered into a Memorandum of Understanding in 2016 to form the Stanislaus and Tuolumne Rivers Groundwater Basin Association, Groundwater Sustainability Agency (STRGBA GSA); and
WHEREAS, an agreement is needed to allow current or incoming Member Agencies to reimburse another member agency designated as a budget or consultant contract administrator Member Agency for their equitable share (which is based on the number of participating member #2..
- 26 -
2 agencies) of activities conducted under auspices of SGMA, and to permit the Member Agencies to pay for services provided by third party consultants, or another Member Agency’s employees involving collaborative planning, reporting, monitoring, research, mutual aid, and other activities performed on behalf of the STRGBA GSA.

NOW, THEREFORE, it is mutually understood and agreed as follows:

SECTION 1: AUTHORITY OF MEMBER AGENCIES

1.1 Districts are special purpose irrigation districts formed under California Law.

1.2 The City of Modesto, City of Oakdale, City of Riverbank, and City of Waterford, are responsible for managing municipal utilities within their respective jurisdictional areas pursuant to their City Charters, Municipal Codes, and applicable California law.

1.3 The County of Stanislaus and County of Tuolumne are political subdivisions of the State of California
SECTION 2: DEFINITIONS

2.1 "Consulting Services" refers to planning, reporting, monitoring and research activities performed by Contractors hired by a Member Agency on behalf of the STRGBA GSA for the management of collective groundwater and surface water resources, that the Member Agencies may agree to jointly fund during the term of this MOU. Consulting Services are described in more detail in Section 3.1.

2.2 "Contractors" refers to third party professional service consultants hired by a Member Agency to perform any of the Consulting Services described in Section 3.1 using funding provided by the Member Agencies under the terms of this MOU.

2.3 “Direct Services” means mutual aid and support services, including administrative, project management, or field investigation activities, that are provided by employees of one Member Agency for one or more other Member Agencies using the Task Order process described in Section 3.2.

2.4 “Districts” means the Modesto and Oakdale Irrigation Districts.

2.5 “Fiscal Year” refers to the Cities’ and/or Counties’ fiscal year beginning on July 1 of one calendar year and ending on June 30 of the succeeding calendar year.

2.6 “GSA” means Groundwater Sustainability Agency

2.7 “MID” refers to the Modesto Irrigation District.

2.8 “OID” refers to the Oakdale Irrigation District.

2.9 “Member Agencies” means MID, OID, County of Stanislaus, City of Modesto, City of Riverbank, City of Waterford, and the City of Oakdale.

2.10 “Stanislaus County” refers to the County of Stanislaus

2.11 “STRGBA GSA” means Stanislaus and Tuolumne Rivers Groundwater Basin Association, Groundwater Sustainability Agency
#2..
- 27 -
3 2.12 “Sub-Basin” means the Modesto Sub-basin of the San Joaquin Valley Groundwater Basin (DWR Bulletin 118 No. 5-22.02)/

2.13 “Task Order” refers to the form exchanged by the Member Agencies for the performance of Direct Services.

2.14 “Tuolumne County” refers to the County of Tuolumne. Tuolumne County is an independent GSA in the Modesto Sub-basin. Tuolumne County has established a separate agreement with Stanislaus County for participation in the STRGBA GSA.

SECTION 3: PLANNING, REPORTING, MONITORING, RESEARCH, STUDIES, AND

SUPPORTING ACTIVITIES

3.1 Consulting Services: Any Member Agency may propose hiring Contractors to perform Consulting Services that benefit the Sub-Basin’s collective groundwater and surface water resources. Consulting Services may consist of planning, reporting, monitoring, research, studies, and supporting services that promote the coordination of groundwater management planning activities within the Sub-basin, such as groundwater monitoring and project development and implementation. Consulting Services may consist of research activities concerning subjects such as groundwater pumping and usage, evaluation of the Sub-basin's need for additional or improved water extraction, storage, delivery, conservation, and recharge facilities, groundwater recharge, hydrology, climatology, land usage, and landscape processes. All Member Agencies may agree to participate in the proposed Consulting Services, or only certain Member Agencies may agree to participate in the proposed Consulting Services, depending on the nature of the proposed Consulting Services and available funding. The implementation and funding of Consulting Services shall be subject to the following requirements:

3.1.1 Scope of Work and Budget: The Member Agencies participating in the Consulting Services shall jointly agree in writing on the scope of work and budget for each proposed planning, monitoring, and research activity to be performed by Contractors, and on any amendments to work scopes or budgets for Consulting Services using Contractors that were previously approved by the Member Agencies.

3.1.2 Funding: The Member Agencies participating in the Consulting Services shall share the costs of any agreed upon Consulting Services equally, or in such other proportion as those Member Agencies may agree in writing. Stanislaus County agrees and promises that, for all cost-share obligations under this Agreement, including cost-share for Base Fee and Contingency Services, it shall also be responsible for all cost-share amounts allocable to Tuolumne County.

3.1.3 Execution and Administration of Contracts with Contractors: Any Member Agency that proposes to hire one or more Contractors to perform Consulting Services must obtain the other participating Member Agency, or Member Agencies’ written approval of the proposed contract, scope of work, and budget before hiring the Contractors. The hiring Member Agency will execute the contract(s) for Consulting Services and administer and serve as the project manager of the contract(s). The hiring Member Agency shall obtain the other participating Member Agency or Member Agencies’ advance written approval for any amendment(s), changes in scope, or compensation paid to Contractors under previously approved contracts for Consulting Services. All contract(s) for Consulting Services shall contain language that deems the Contractor(s) to be an #2..
- 28 -
4 independent contractor of the hiring Member Agency, and not an agent or employee of any other Member Agency to this MOU. Each Member Agency participating in Consulting Services under this MOU shall have the right to review and comment on draft versions of all reports submitted as deliverables by Contractor(s) that were prepared using funding provided in whole or part by that Member Agency. The hiring Member agency shall transmit the draft deliverables or direct the Contractor(s) to transmit the draft deliverables, to the other participating Member Agency or Member Agencies for review and comment. If a reviewing Member Agency does not provide comments on draft deliverables within thirty (30) calendar days from the date of receipt, that Member Agency will be deemed to have approved the content of the draft deliverables. The hiring Member Agency shall transmit final versions of all deliverables to the other Member Agencies providing funding for the Consulting Services.

3.2 Direct Services: Any Member Agency to this MOU may (a) request that another Member Agency provide it with Direct Services, or (b) offer to provide Direct Services to another Member Agency. The Member Agency providing the Direct Services shall prepare, and the Member Agency or Member Agencies receiving the Direct Services shall approve, a Task Order that describes the scope of work, schedule for completion, names and hourly rates of personnel involved, and total estimated budget for the Direct Services to be performed. The Member Agency providing the Direct Services and the Member Agency or Member Agencies receiving the Direct Services will agree in writing on the allocation of costs among the Member Agencies for the Direct Services before the Direct Services are provided.

SECTION 4: GENERAL PROVISIONS

4.1 Fiscal Limitations: This MOU is subject to the budget and fiscal provisions of the Member Agencies’ respective Charters, Financial Policies, and the budget decisions of its Board of Directors, Board of Supervisors, or Council. No funds will be available hereunder until prior written authorization is approved by the respective Member Agencies’ authorized designee(s).

4.2 Guaranteed Maximum Costs. The Member Agencies’ payment obligation to Member Agencies or Contractors cannot at any time exceed the amount approved for the purpose and period stated in such written approval. No Member Agencies are required to honor, any offered or promised payments to other Member Agencies or Contractors under this Agreement in excess of the approved maximum amount without the Member Agencies having first approved the additional promised amount, and the Member Agencies having modified the contractual agreement.

4.3 Invoices: Any Member Agency that has hired Contractor(s) for Consulting Services, and/or is providing Direct Services under Section 4 of this MOU shall invoice the other Member Agencies benefiting from such services for their agreed upon shares of the costs on a monthly basis, unless another arrangement has been agreed upon in writing. Such invoices shall be paid within thirty (30) calendar days of receipt by the Member Agency being charged for such services. All invoices shall set forth in detail the Direct or Consulting Services provided, and the expenses incurred, and shall identify which Member Agency and/or Contractor(s) provided such services.
#2..
- 29 -
5 4.4 Insurance: The Member Agencies’ contract(s) with Contractor(s) for Consulting Services performed shall require all Contractors to maintain in force during the course of the contract insurance in the following amounts and coverages, with insurers satisfactory to the Member Agencies: (i) Commercial General Liability Insurance with limits not less than $1,000,000 each occurrence Combined Single Limit for Bodily Injury and Property Damage, including Contractual Liability, Personal Injury, Products and Completed Operations; and (ii) Automobile Liability Insurance with limits not less than $1,000,000 each occurrence Combined Single Limit for Bodily Injury and Property Damage, including Owned, NonOwned and Hired auto coverage, as applicable. Each policy shall: (i) name the other Member Agency or Member Agencies funding the Consulting Services, and their officers, officials, employees and agents, as additional insureds; (ii) provide that the insurance is primary to any other insurance available to any additional insured, with respect to any claims arising out of this MOU; (iii) provide that it applies separately to each insured against whom claim is made or suit is brought; and (iv) provide for at least thirty (30) days' advance written notice to the Member Agencies of cancellation or modification.

4.4.1 Workers Compensation Insurance for Direct Services: Each Member Agency agrees to maintain in force, during the term of this MOU, Workers' Compensation insurance, in statutory amounts, with Employers' Liability Limits of not less than $1,000,000 each accident. Each Member Agency will provide the other Member Agencies evidence of Workers’ Compensation insurance prior to entering into this MOU. With respect to employees of a particular Member Agency who are performing Direct Services for another Member Agency, the Member agency that is the recipient of the Direct Services shall not be considered a joint employer of any such employees, who shall be solely managed and controlled by the Member Agency providing the Direct Services.

4.5 Indemnification: Member Agencies shall indemnify and hold each respective Member Agency, its officers, employees and agents, harmless from and against any and all liability, loss, expense, attorneys’ fees, or claims for injury or damages (collectively, “Claims”) arising out of the performance of this MOU, but only in proportion to, and to the extent such Claims are caused by or result from the negligent or intentional acts or omissions of Member Agencies, their officers, agents or employees. In the event of concurrent negligence of a Member Agency, its officers, employees and agents, the liability for any and all Claims shall be apportioned under the California theory of comparative negligence as presently established or as may hereafter be modified.

4.6 Third Party Beneficiary Status and Indemnity: All contracts with Contractors for Consulting Services shall (1) contain language granting third party beneficiary status to any Member Agency contributing funds towards the performance of the Consulting Services; and (2) name all Member Agencies funding the Consulting Services as additional indemnitees in any indemnity clause customarily used by the contracting Member Agency in relation to any and all claims for bodily injury or property damage arising out of the negligence or willful misconduct of the Contractor.

4.7 Audit and Inspection of Records: Each Member Agency agrees to maintain and make available to the other Member Agencies, during regular business hours, accurate books and accounting records relating to their activities under this MOU. Each Member Agency will permit any other Member Agency to audit, examine and make excerpts and transcripts from such books and records, and to make audits of all invoices, materials, payrolls, records or personnel and other data related to all other matters covered by this MOU, whether funded in whole or in part under this MOU. Each Member Agency shall maintain such data and records in an accessible location and condition for a period of not fewer than five years after final payment under this MOU or until after final audit has been resolved, whichever is later. #2..
- 30 -
6 The State of California or any Federal agency having provided grant funds for any work under this MOU shall have the audit and inspection rights as conferred by the grant funding.

Each hiring Member Agency under Section 3.1.3 shall include the same audit and inspection rights and record retention requirements in all Consulting Services contracts.

4.8 Ownership of Results: The Member Agencies shall have joint ownership of the deliverables that are produced under this MOU, including any drawings, plans, specifications, blueprints, studies, reports, memoranda, computation sheets, computer files and media or other documents prepared by the Member Agencies or their Contractors for the purposes of this MOU. To the extent that deliverables are produced under this MOU through Consulting Services that are funded by only two Member agencies, rather than all Member Agencies, the two Member Agencies that have funded those Consulting Services shall have joint ownership of those deliverables.

4.9 Payment of Prevailing Wages: Member Agencies agree to comply with all applicable local, state and federal laws respecting the payment of prevailing wages for Direct Services provided under this MOU and ensure that all contracts for Consulting Services include a requirement for the Contractor to comply with applicable laws regarding the payment of prevailing wages.

4.10 Term: The term of this MOU shall commence once all named parties have executed this MOU and shall remain in effect unless terminated by the mutual written consent of all Parties. Every Member Agency has the ability to withdraw from this MOU upon thirty (30) days written notice. Upon termination of this MOU, or withdrawal of any Member Agency, the Committee shall determine the assets and liabilities of the STRGBA GSA, make every effort to satisfy all obligations within sixty (60) days of the termination of this MOU, or withdrawal of any Member Agency and equitably distribute any remaining fund balance to each Member Agency in proportion to each Member Agency’s Funding Percentage

4.11 Invalidity of Any Term Not to Invalidate Entire Memorandum: In the event that any of the terms, covenants, or conditions of this MOU or the application of any such term, covenant, or condition shall be held invalid as to any Member Agency by any court of competent jurisdiction, all other terms, covenants, or conditions of this MOU and their application shall not be affected thereby, but shall remain in full force and effect unless any such court holds that those provisions are not separable from all other provisions of this MOU.

4.12 Construction of Terms: This MOU is for the sole benefit of the Member Agencies comprising the STRGBA GSA, and shall not be construed as granting rights to, or imposing any obligations on any person or entity other than the Member Agencies.

4.13 Limitation of Liability: The Member Agencies’ obligations under this agreement shall be limited to the payment of the compensation provided for in Section 3.3 of this MOU.

Notwithstanding any other provision of this MOU, in no event shall any Member Agency be liable, regardless of whether any claim is based on contract or tort, for any special, consequential, indirect, or incidental damages, including, but not limited to, lost profits, arising out of or in connection with this agreement or the services performed in connection with this agreement.

4.14 Termination for Convenience: The Member Agencies may each terminate this MOU for convenience and without cause at any time by giving the other Member Agencies at least thirty (30) days prior written notice of such termination. The terminating Member Agency’s written notice shall specify the date on which the termination shall become effective. In the event of termination, each Member Agency shall not be obligated to perform any further #2..
- 31 -
7 activities described in this MOU except as specified in this Section 4.14. In the event of termination, each Member Agency remains obligated to pay for its share of any Consulting or Direct Services performed by Contractors or employees of a Member Agency for which the terminating Member Agency has previously agreed in writing to share costs pursuant to this MOU up to the effective termination date; and all Contractors and the Member Agencies shall be required to complete any Consulting or Direct Services previously funded by the Member Agencies to their satisfaction. In no event will any Member Agency be liable for Consulting Services costs incurred by Contractors or Direct Services costs incurred by a Member Agency under this MOU after the effective termination date.

4.15 Amendment: The Member Agencies may agree to modify the terms of this MOU by written agreement authorized by the governing boards of the Member Agencies.

4.16 Dispute Resolution: The Member Agencies shall make good faith efforts to resolve disputes or disagreements arising from this MOU. If a dispute or disagreement arises, the Member Agencies shall meet and confer within ten (10) calendar days of receiving written notification from a Member Agency describing the dispute and shall thereafter schedule and participate in further meetings, if appropriate, in an effort to resolve the dispute or disagreement.

4.17 Governing Law: This MOU is made under and shall be governed by the laws of the State of California.

4.18 Counterparts: This MOU may be executed in one or more counterparts, each of which shall be deemed to be an original, and all of which together shall constitute one and the same agreement.

In WITNESS WHEREOF, the Member Agencies have executed this Memorandum of Understanding by their duly authorized representatives as of the day and year indicated on the first page of this MOU.
[Signatures on Following Page]
#2..
- 32 -

CITY OF MODESTO

COMMITTEE AGENDA REPORT
DATE OF MEETING:

December 2, 2024
Date: October 24, 2024
TO: Economic Development Committee
Chris Ricci, Chair
Eric Alvarez, Vice-Chair
Sue Zwahlen, Member
THROUGH: Joseph P. Lopez, City Manager
FROM: Jessica Hill, Director of Community and Economic Development SUBJECT: Dissolution of Community Facilities District No. 2012-1 (Kiernan Business Park South) and Formation of Community Facilities District No. 2024-3 (Kiernan Business Park South #2)
CONTACT: Edgar Garcia, Community Development Manager, [email protected], 209-577-5211
DESCRIPTION:

Consider a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-3 (Kiernan Business Park #2) and replacing City of Modesto Community Facilities District No. 2012-1 (Kiernan Business Park South) and designate a future annexation area and forwarding to Council for approval. (Funding Source: Developer Deposits) STRATEGIC PLAN ELEMENT:

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

Provide Safe, Efficient, and Reliable Infrastructure through proactive community investment, maintenance and sustainability efforts.

BACKGROUND:

In 1982, the Mello-Roos Community Facilities Act of 1982 (Act) was adopted by the State of California as a method for financing infrastructure improvements and services associated with new developments. The Act allows infrastructure improvements and services to be funded through a special tax paid by property owners.

The Kiernan Business Park Specific Plan Area encompasses 614 acres and is comprised of regional commercial, office, medical campus, mixed use, medium high density residential and business park land uses.
#3..
- 33 -
Economic Development Committee, December 2, 2024
Formation of City of Modesto Community Facilities District No. 2024-3 (Kiernan Business Park South #2)

The Kiernan Business Park South sub-area (KBP South) is bounded by American Avenue to the east, Dale Road to the west, Pelandale Avenue to the south, and Bangs Avenue to the north, and consists of approximately eighty (80) acres.

On December 7, 2010, the City Council approved the Facilities Master Plan and Infrastructure Financing Plan for KBP South.

On April 21, 2012, the City Council established City of Modesto Community Facilities District No. 2012-1 (Kiernan Business Park South).

On May 1, 2012, the City established the City of Modesto Community Facilities District No. 2012-1 (Kiernan Business Park South) (“CFD No. 2012-1”) pursuant to the Act. No special taxes have been levied or collected by CFD No. 2012-1. Given the changes in use for the new projects within the CFD, it is recommended to replace CFD No. 2012-1 with a new community facilities district (CFD No. 2024-3) that better reflects the proposed development and to include a future annexation area for the CFD No. 2024-3 that will accommodate a streamlined process for annexation of undeveloped parcels not currently within the CFD No. 2024-3 but which are part of Kiernan Business Park South when development of such parcels occur.

Upon the formation of CFD No. 2024-3 and successful election approving the levy of special taxes, the City Council, as the legislative body of CFD 2012-1, will take action by ordinance to dissolve CFD No. 2012-1 and record a notice of cessation of any special tax lien relating to CFD No. 2012-1.

DISCUSSION:

The Mello-Roos Community Facilities Act requires that within 90 days after receiving a petition, the legislative body shall adopt a Resolution of Intention (ROI). The ROI is the first step in establishing a CFD. City staff expects to receive signed petitions by December 31, 2024.

While the boundaries of CFD No. 2024-3 will ultimately encompass the entire Kiernan Business Park South area, the initial boundaries will consist of five parcels totaling approximately 52 acres that will be designated as Improvement Area No. 1 (the “Properties”). The parcels are owned by Latter Day Saints (LDS) and Valley Development Partners, LLC. Additional properties will annex to CFD No. 2024-3 as they are ready to develop. The proposed boundary map also identifies the future annexation area and is provided as Attachment 3. Additional improvement areas may be identified, as parcels included in the future annexation area are eventually annexed into CFD No. 2024-3.

The facilities to be provided by CFD No. 2024-3 include but are not limited to improvements on Bangs Avenue from Dale Road to American Avenue. The services to be provided encompass maintenance, repair and replacement of parkways, tree pruning and landscaped medians. A description of the facilities and services are set forth in Attachment 1.

Prior to the January 14, 2025, City Council meeting, the project proponents will have submitted the appropriate executed forms in order for the City to proceed with the replacement of CFD No. 2012-1 and the formation of CFD No. 2024-3, which includes the Request, Consent and Waiver and approval of the Landowner-Voter Ballot form. The Request, Consent and Waiver form waives certain noticing and voting requirements, and requests the City execute and record a #3..
- 34 -
Economic Development Committee, December 2, 2024
Formation of City of Modesto Community Facilities District No. 2024-3 (Kiernan Business Park South #2)

notice of special tax lien pertaining to the properties and records such notice within the official records of the County Recorder.

CFD No. 2024-3 will not include any bonding authority.

The Rate and Method of Apportionment (RMA) that identifies the maximum special tax rates for the parcel types within CFD No. 2024-3, as well as a description of how the special taxes are calculated and collected, is included as Attachment 2.

Only four parcels are requesting to be part of the initial CFD No. 2024-3 boundaries and only those four parcels will be subject to levy and collection of the special taxes until additional properties annex to CFD No. 2024-3 in the future.

The Annual Maintenance Special Tax is only levied on a parcel after a building permit has been issued for that property (except for single family detached which commences after a final map is recorded). The One-Time Facilities Special Tax is levied prior to issuance of a certificate of occupancy. The maximum special tax rates for CFD No. 2024-3 are as follows:

Maximum Special Tax Rates Fiscal Year 2024-25
Assessor’s Parcel
Number
Maximum One-Time
Facilities Special Tax
Fiscal Year 2024-25
Maximum Annual
Maintenance
Special Tax
Fiscal Year 2024-25
078-018-018 $80,914 $2,323
078-018-031 $1,169,261 $33,567
078-018-036 $0 $5,084
Resultant Parcel #1 $825,712 $23,705
Resultant Parcel #2 $931,164 $26,732
Resultant Parcel #3 $580,983 $16,679
On July 1, 2025, and on each July 1 thereafter, all figures shown in the table above shall be increased by the annual Escalation Factor. In any Fiscal Year, the annual Escalation Factor will be the greater of either, the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or four percent (4.0%).

At least thirty (30) days, and no more than sixty (60) days, following the date of the adoption of the ROI, the City Council will hold a public hearing and consider a Resolution of Formation. The public hearing is currently scheduled for February 25, 2025. The special tax may only be levied if approved by a two-thirds vote of the property owners within the boundaries at a special election currently scheduled for February 25, 2025. For future annexations the unanimous written consent of the property owners via a signed Waiver and Declaration of Landowner will be obtained without the need for a public hearing or election. #3..
- 35 -
Economic Development Committee, December 2, 2024
Formation of City of Modesto Community Facilities District No. 2024-3 (Kiernan Business Park South #2)

Upon formation of CFD No. 2024-3, a successful election and adoption of an ordinance levying the special tax for CFD No. 2024-3, an ordinance dissolving CFD No. 2012-1 will be considered.

The authorization for the levy of special taxes for CFD No. 2024-3 shall only be effective once the CFD No. 2012-1 has been dissolved.

FISCAL IMPACT:

The formation of CFD No. 2024-3 is paid by the applicant through a developer deposit. There is no General Fund impact.

RECOMMENDED COMMITTEE ACTION:

Staff Recommendations:

Motion recommending a Resolution of Intention to form City of Modesto Community Facilities District (CFD) No. 2024-3 (Kiernan Business Park #2) replacing CFD No. 2012-1 and designate a future annexation area and forwarding to Council for approval.

Approved by:

Jessica Hill, Director of Community
and Economic Development
Joseph P. Lopez, City Manager
Attachments:

1. List of Facilities and Services

2. Rate and Method of Apportionment KBPS #2

3. Proposed Boundary Map for CFD No. 2024-3 (Kiernan Business Park South #2) #3..
- 36 -

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-2
(KIERNAN BUSINESS PARK SOUTH #2)

LIST OF FACILITIES
The types of Facilities and Services proposed to be financed by Community Facilities District No. 2024-1 (CFD) are as follows:

Authorized Facilities:

The Facilities shall include all hard and soft costs associated with the improvements on Bangs Avenue from Dale Road to American Avenue, including the costs of acquisition of land and rights-of-way, the costs of design, engineering and planning, the costs of environmental or traffic studies, surveys or other reports, costs related to landscaping and irrigation, soils testing, permits, plan check, and inspection fees, insurance, legal and related overhead costs, coordination and supervision and any other costs or appurtenances related to any of the foregoing. The CFD may also fund, and the special taxes may also be used to directly pay for, the purchase, construction, expansion, improvement or rehabilitation of any of the Facilities, and to reimburse the City or any third parties for advances made to purchase, construct, expand, improve or rehabilitate any of the Facilities.
#3..
- 37 -

LIST OF SERVICES
The services to be funded in whole or in part by the CFD include all direct and incidental costs related to providing the maintenance of public infrastructure within the area of the CFD, the future annexation area, and areas adjacent to or in the vicinity of such areas. More specifically, the services shall include, but not be limited to: maintenance, repair and replacement of parkways, tree pruning, landscaped medians.

The services to be provided include, but are not limited to, litter and debris removal, pruning, staking, fertilizing, plant replacement and restoration, fire and weed control, erosion control, trimming of vegetation, and storm drain system maintenance. Authorized services shall also include the following: (i) related reserves for the replacement of plants and materials.

The services to be financed by the CFD are in addition to those provided in the territory of the CFD before the date of creation of the CFD and will not supplant services already available within that territory when the CFD was created.

Administrative Expenses
The administrative expenses to be funded by the CFD include the direct and indirect expenses incurred by the City in carrying out its duties with respect to the CFD including, but not limited to, the levy and collection of special taxes, fees and expenses of attorneys, any fees of the County of Stanislaus related to the CFD or the collection of special taxes, an allocable share of the salaries of the City staff related thereto, and expenses incurred by the City in undertaking action to foreclose on properties for which the payment of special taxes is delinquent, and all other costs and expenses of the City in any way related to the CFD.
#3..
- 38 -
CFD No. 2024-3 (KBPS #2) 1 November 14, 2024

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-3
(KIERNAN BUSINESS PARK SOUTH #2)

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAX
Special Taxes applicable to each Assessor’s Parcel in the City of Modesto Community Facilities District No. 2024-3 (Kiernan Business Park South #2) shall be levied and collected according to the tax liability determined by the City Council through the application of the appropriate amount or rate for Taxable Property, as described below. All property in the CFD, unless exempted by law or by the provisions of Section G below, shall be taxed for the purposes, to the extent, and in the manner herein provided, including property subsequently annexed into the CFD unless a separate Rate and Method of Apportionment is adopted for the annexation area.

A. DEFINITIONS
The terms hereinafter set forth have the following meanings:
“Acre” or “Acreage” means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map, or if the land area is not shown on an Assessor’s Parcel Map, the land area shown on the applicable Final Map or other Development Plan.
“Act” means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5, (commencing with Section 53311), Part 1, Division 2 of Title 5 of the California Government Code.
“Administrative Expenses” means any or all of the following: the expenses of the City in carrying out its duties with respect to the CFD, including, but not limited to, the levy and collection of Special Taxes, the fees and expenses of its counsel, charges levied by the County in connection with the levy and collection of Special Taxes, costs related to property owner inquiries regarding the Special Taxes, costs associated with appeals or requests for interpretation associated with the Special Taxes and this RMA, costs associated with foreclosure and collection of delinquent Special Taxes, and all other costs and expenses of the City in any way related to the establishment or administration of the CFD.
“Administrator” means the person or firm designated by the City to administer the Special Taxes according to this RMA.
“Annual Maintenance Special Tax” means a special tax levied in any Fiscal Year to pay the Maintenance Special Tax Requirement, as defined below.
“Assessor’s Parcel” or “Parcel” means a lot or parcel shown on an Assessor’s Parcel Map with an assigned Assessor’s Parcel number.
“Assessor’s Parcel Map” means an official map of the County Assessor designating parcels by Assessor’s Parcel Number.
#3..
- 39 -
CFD No. 2024-3 (KBPS #2) 2 November 14, 2024
“Assessor’s Parcel Number” means a unique number assigned to an Assessor’s Parcel by the County Assessor for purposes of identifying a property. “Authorized Facilities” means the public facilities authorized to be funded by the CFD as set forth in the documents adopted by the City Council when the CFD was formed. “Authorized Services” means the public services authorized to be funded by the CFD as set forth in the documents adopted by the City Council when the CFD was formed. “Building Permit” means a permit that allows for vertical construction of a building or buildings, which shall not include a separate permit issued for construction of the foundation thereof. “CFD” means the City of Modesto Community Facilities District No. 2024-3 (Kiernan Business Park South #2).
“CFD Formation” means the date on which the Resolution of Formation to form the CFD was adopted by the City Council.
“City” means the City of Modesto.
“City Council” means the City Council of the City of Modesto, acting as the legislative body of the CFD.
“County” means the County of Stanislaus.
“Developed Property” means, in any Fiscal Year, the following:

For purposes of levying the Annual Maintenance Special Tax:
• for Single Family Detached Property, all Parcels for which a Final Map was recorded prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2024; • for Single Family Attached Property, all Parcels for which a Building Permit was issued prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2024; • for Other Property, all parcels for which a Building Permit was issued prior to June 30 of the preceding Fiscal Year.

For purposes of levying the One-Time Facilities Special Tax: all Parcels for which a Building Permit was issued prior to June 30 of the preceding Fiscal Year but not prior to June 30, 2024.
“Development Class” means, individually, Developed Property and Undeveloped Property. “Development Plan” means a condominium plan, apartment plan, site plan or other development plan that identifies such information as the type of structure, the acreage, the square footage, and/or the number of Units that will be developed on Single Family Attached Property or Other Property. #3..
- 40 -
CFD No. 2024-3 (KBPS #2) 3 November 14, 2024
“Escalation Factor” means, in any Fiscal Year, the greater of (i) the percentage increase, if any, in the construction cost index for the San Francisco region for the prior twelve (12) month period as published in the Engineering News Record or other comparable source if the Engineering News Record is discontinued or otherwise not available, or (ii) four percent (4.0%). “Final Map” means a final map, or portion thereof, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq) that creates Single Family Detached Lots. The term “Final Map” shall not include any large-lot subdivision map, Assessor’s Parcel Map, or subdivision map or portion thereof, that does not create Single Family Detached Lots, including Assessor’s Parcels that are designated as remainder parcels. “Fiscal Year” means the period starting July 1 and ending on the following June 30. “Future Annexation Area” means that geographic area that, at the time of CFD Formation, was considered potential annexation area for the CFD and which was, therefore, identified as “future annexation area” on the recorded CFD boundary map. Such designation does not mean that any or all of the Future Annexation Area will annex into the CFD, but should property designated as Future Annexation Area choose to annex, the annexation may be processed pursuant to the streamlined annexation procedures provided in the Act.
“Maintenance Special Tax Requirement” means the amount of revenue needed in any Fiscal Year to pay for: (i) Authorized Services, (ii) establishment of reserves, (iii) Administrative Expenses, and (iv) amounts needed to cure any delinquencies in the payment of Annual Maintenance Special Taxes which have occurred in prior Fiscal Years. “Maximum Annual Maintenance Special Tax” means the greatest amount of Annual Maintenance Special Tax that can be levied on an Assessor’s Parcel in any Fiscal Year determined in accordance with Sections C and D below.
“Maximum One-Time Facilities Special Tax” means the greatest amount of One-Time Facilities Special Tax that can be levied on an Assessor’s Parcel in any Fiscal Year determined in accordance with Sections C and D below.
“Maximum Special Taxes” means, collectively, the Maximum One-Time Facilities Special Tax and Maximum Annual Maintenance Special Tax.
“One-Time Facilities Special Tax” means a special tax, levied on Taxable Property to pay the One-Time Facilities Special Tax Requirement and collected by the City prior to a Building Permit being issued on a Parcel of Taxable Property.
“One-Time Facilities Special Tax Requirement” means, for a Parcel of Taxable Property in the CFD, the amount needed to pay the Parcel’s share of the cost of Authorized Facilities as determined by the City, which amount shall not exceed the Maximum One-Time Facilities Special Tax assigned to the Parcel pursuant to this RMA.

“Original Parcel” means an Assessor’s Parcel in the CFD at the time of CFD Formation, or added to the CFD upon annexation, as identified in Attachment 1 (which shall be updated after each #3..
- 41 -
CFD No. 2024-3 (KBPS #2) 4 November 14, 2024
annexation). A Successor Parcel that is being further subdivided shall also be considered an Original Parcel for purposes of determining the Maximum Special Taxes pursuant to Section C below.
“Owners Association” means a homeowners association or property owners association that provides services to, and collects assessments, fees, dues, or charges from, property within the CFD.
“Owners Association Property” means any property within the boundaries of the CFD that is owned in fee or through easement by the Owners Association, not including any such property that is located directly under a residential structure.
“Other Property” means any Parcel of Developed Property in the CFD that is not Single Family Attached Property or Single Family Detached Property.
“Proportionately” means, for each Development Class, that the ratio of the actual Annual Maintenance Special Tax levied in any Fiscal Year to the Maximum Annual Maintenance Special Tax authorized to be levied in that Fiscal Year is equal for all parcels assigned to the Development Class.
“Public Property” means any property within the boundaries of the CFD that is owned by the federal government, State of California, County, City, or other public agency. “Resultant Parcel” means one of the legal parcels created as a result of the lot line adjustment recorded with the Stanislaus County Recorder on October 25, 2024 as document #2024-0051886. “RMA” means this Rate and Method of Apportionment of Special Taxes. “SFD Unit” means a residential dwelling unit that does not share a common wall with another residential dwelling unit.
“Single Family Attached Property” means, in any Fiscal Year, all Parcels of Developed Property for which a building permit was issued for construction of a residential structure consisting of two or more Units that share common walls and are offered as for-sale Units, including such residential structures that meet the statutory definition of a condominium contained in Civil Code Section 1351.
“Single Family Detached Lot” means an individual residential lot, identified and numbered on a recorded Final Map, on which a Building Permit has been or is permitted to be issued for construction of an SFD Unit without further subdivision of the lot and for which no further subdivision of the lot is anticipated pursuant to an approved Tentative Map. “Single Family Detached Property” means, in any Fiscal Year, all Parcels of Developed Property for which a Building Permit was issued or will be issued for construction of a SFD Unit. “Special Taxes” means, collectively, the One-Time Facilities Special Tax and the Annual Maintenance Special Tax.
#3..
- 42 -
CFD No. 2024-3 (KBPS #2) 5 November 14, 2024

“Subdivision Map” means a Final Map, large lot subdivision map, or other map recorded with the County that results in the subdivision of an Original Parcel into two or more Successor Parcels. “Successor Parcel” means an Assessor’s Parcel of Taxable Property created by the subdivision or reconfiguration of an Original Parcel on which construction of a residential or non-residential structure is permitted.
“Taxable Property” means all Assessor’s Parcels within the boundaries of the CFD that are not exempt from the Special Tax pursuant to law or Section G below. “Tentative Map” means a tentative map or substantial conformance exhibit for property in the CFD, including any adjustments or amendments thereto.
“Undeveloped Property” means, in any Fiscal Year, all Parcels of Taxable Property within the CFD that are not Developed Property.
“Unit” means (i) for Single Family Detached Property, an SFD Unit and (ii) for Single Family Attached Property, an individual residential unit within a duplex, triplex, fourplex, townhome, or condominium structure.

B. DATA FOR ANNUAL ADMINISTRATION
On or about July 1 of each Fiscal Year, the Administrator shall identify the current Assessor’s Parcel numbers for all Parcels of Taxable Property. The Administrator shall also: (i) assign each Parcel of Taxable Property to the appropriate Development Class; (ii) determine whether each Assessor’s Parcel of Taxable Property is Developed Property or Undeveloped Property, (iii) for Developed Property, categorize each Parcel as Single Family Detached Property, Single Family Attached Property, or Other Property, (iv) for Parcels of Single Family Attached Property, determine the number of Units on each Parcel, (v) for Other Property, determine the Acreage of each Parcel, and (vi) determine the Maintenance Special Tax Requirement.

For Single Family Attached Property, the number of Units shall be determined by referencing the relevant Development Plan. If, in any Fiscal Year, an Assessor’s Parcel includes both Developed Property and Undeveloped Property, the Administrator shall determine the acreage associated with the Developed Property, subtract this acreage from the total Acreage of the Assessor’s Parcel, and use the remaining acreage to calculate the Special Tax that will apply to Undeveloped Property within the Assessor’s Parcel. The Special Tax shall then be calculated for Developed Property on the Parcel, and the total Special Tax levied on the Assessor’s Parcel shall be the sum of the Special Taxes determined separately for the Undeveloped Property and Developed Property on the Parcel.

C. CALCULATING THE MAXIMUM SPECIAL TAXES
The Administrator shall use the procedures set forth below to calculate the Maximum Special Taxes for each Parcel in the CFD in each Fiscal Year.
#3..
- 43 -
CFD No. 2024-3 (KBPS #2) 6 November 14, 2024

1. Original Parcels
The Maximum Special Taxes for each Original Parcel in the CFD as of CFD Formation are identified in Attachment 1. Attachment 1 will be updated by the Administrator as needed to reflect Original Parcels added to the CFD due to annexations.

2. Successor Parcels
a. All Successor Parcels are Single Family Detached Lots If the Parcels created by a recorded Subdivision Map are all Single Family Detached Lots, the Administrator shall apply the following steps to allocate the Maximum Special Taxes assigned to the Original Parcel to each of the Successor Parcels created by the subdivision:

Step 1: Identify the Maximum Special Taxes assigned to the Original Parcel; Step 2: Divide the Maximum Special Taxes from Step 1 by the number of Single Family Detached Lots created by the Subdivision Map to determine the Maximum Special Taxes for each Single Family Detached Lot.
b. No Successor Parcels are Single Family Detached Lots If none of the Successor Parcels created by recordation of a Subdivision Map are Single Family Detached Lots, the Administrator shall apply the following steps to allocate the Maximum Special Taxes assigned to the Original Parcel to each of the Successor Parcels:

Step 1: Identify the Maximum Special Taxes assigned to the Original Parcel; Step 2: Determine the total Acreage of Taxable Property created by subdivision of the Original Parcel;
Step 3: Divide the Maximum Special Taxes from Step 1 by the Acreage from Step 2 to calculate Maximum Special Taxes per acre;
Step 4: Multiply the per-acre Maximum Special Taxes from Step 3 by the Acreage in each Successor Parcel to calculate the Maximum Special Taxes for each Successor Parcel.

If, after subdivision of an Original Parcel, a Successor Parcel is further subdivided, the Successor Parcel shall be treated as an Original Parcel for purposes of allocating Maximum Special Taxes pursuant to Section C.2a, C.2b, or C.2c, as appropriate. c. Some, But Not All, Successor Parcels are Single Family Detached Lots If a Subdivision Map divides an Original Parcel into Successor Parcels, of which some are Single Family Detached Lots and some are not, the Administrator shall apply the following steps to allocate the Maximum Special Taxes assigned to the Original Parcel to each of the Successor Parcels:
#3..
- 44 -
CFD No. 2024-3 (KBPS #2) 7 November 14, 2024
Step 1: Identify the Maximum Special Taxes assigned to the Original Parcel; Step 2: Determine the total Acreage of Taxable Property created by subdivision of the Original Parcel;
Step 3: Determine the total Acreage of Single Family Detached Property created by the subdivision by taking the sum of the Acreage in the individual Single Family Detached Lots;
Step 4: Divide the Maximum Special Taxes from Step 1 by the Acreage calculated in Step 2 to calculate Maximum Special Taxes per Acre; Step 5: Multiply the per-acre Maximum Special Taxes calculated in Step 4 by the Acreage of Single Family Detached Property calculated in Step 3 to determine the total Maximum Special Taxes to be assigned to the Single Family Detached Property created by the subdivision; Step 6: Divide the amount calculated in Step 5 by the number of Single Family Detached Lots created by the subdivision to determine the Maximum Special Taxes for each Single Family Detached Lot;
Step 7: Multiply the per-acre Maximum Special Taxes calculated in Step 4 by the Acreage of each Successor Parcel that is not Single Family Detached Property to calculate the Maximum Special Taxes for such Parcels.

If, after subdivision of an Original Parcel, a Successor Parcel is further subdivided, the Successor Parcel shall be treated as an Original Parcel for purposes of allocating Maximum Special Taxes pursuant to Section C.2a, C.2b, or C.2c, as appropriate.

After each reallocation of the Maximum Special Taxes upon subdivision or reconfiguration of Original Parcels, the sum of the Maximum Special Taxes assigned to Successor Parcels shall never be less than the Maximum Special Taxes assigned to the Original Parcels prior to such reallocation.

D. ESCALATION OF MAXIMUM SPECIAL TAXES

1. One-Time Facilities Special Tax
Beginning in January 2025 and each January thereafter, the Maximum One-Time Facilities Special Tax assigned to each Parcel shall be adjusted by the Escalation Factor. Each annual adjustment of the Maximum One-Time Facilities Special Tax shall become effective on the subsequent July 1.

2. Annual Maintenance Special Tax
Beginning in January 2025 and each January thereafter, the Maximum Annual Maintenance Special Tax shall be adjusted by the Escalation Factor. Each annual adjustment of the Maximum Annual Maintenance Special Tax shall become effective on the subsequent July 1. #3..
- 45 -
CFD No. 2024-3 (KBPS #2) 8 November 14, 2024
E. METHOD OF LEVY OF SPECIAL TAXES

1. One-Time Facilities Special Tax
Prior to issuance of a Building Permit for a Parcel of Taxable Property, the One-Time Facilities Special Tax shall be levied on the Parcel in the amount of the One-Time Special Tax Requirement for the Parcel, as determined by the City.

2. Annual Maintenance Special Tax
Each Fiscal Year, the Administrator shall determine the Maintenance Special Tax Requirement for that Fiscal Year. The Annual Maintenance Special Tax shall then be levied on all Parcels of Taxable Property as follows:

Step 1: The Annual Maintenance Special Tax shall be levied Proportionately on each Parcel of Developed Property within the CFD up to 100% of the Maximum Annual Maintenance Special Tax for each Parcel for such Fiscal Year; Step 2: If additional revenue is needed after Step 1, the Annual Maintenance Special Tax shall be levied Proportionately on each Assessor’s Parcel of Undeveloped Property within the CFD, up to 100% of the Maximum Annual Maintenance Special Tax for each Parcel of Undeveloped Property for such Fiscal Year.

F. COLLECTION OF SPECIAL TAXES
The One-Time Facilities Special Tax shall be collected prior to a Building Permit being issued for any residential or non-residential structure on Taxable Property and shall be immediately delinquent if not so paid.

The Annual Maintenance Special Tax shall be collected in the same manner and at the same time as ordinary ad valorem property taxes, provided, however, that the City may directly bill, collect at a different time or in a different manner, and/or collect delinquent Annual Maintenance Special Taxes through foreclosure or other available methods. The Annual Maintenance Special Tax will continue to be levied and collected unless and until the City determines that Annual Maintenance Special Tax revenues are no longer needed to pay for Authorized Services.

G. EXEMPTIONS
No Special Taxes shall be levied on Public Property or Owners Association Property, as defined herein. Notwithstanding the foregoing, if in any Fiscal Year, a Parcel of Public Property is converted to private use, such Parcel shall be subject to the levy of Special Taxes. In such case, the City shall determine the appropriate Maximum Special Taxes for the Parcel based on the land uses to be constructed on the Parcel.
#3..
- 46 -
CFD No. 2024-3 (KBPS #2) 9 November 14, 2024
H. INTERPRETATION OF SPECIAL TAX FORMULA
The City reserves the right to make minor administrative and technical changes to this document that does not materially affect the rate and method of apportioning the Special Taxes. In addition, the interpretation and application of any section of this document shall be left to the City’s discretion. Interpretations may be made by the City by ordinance or resolution for purposes of clarifying any vagueness or ambiguity in this RMA.
#3..
- 47 -
ATTACHMENT 1

CITY OF MODESTO
COMMUNITY FACILITIES DISTRICT NO. 2024-3
(KIERNAN BUSINESS PARK SOUTH #2)
Maximum Special Taxes Assigned to Each Original Parcel
Assessor’s
Parcel
Number
Fiscal Year 2024-25
Maximum One-Time
Facilities Special Tax [1]
Fiscal Year 2024-25
Maximum Annual
Maintenance Special Tax [2]
078-018-018 $80,914 $2,323
078-018-031 $1,169,261 $33,567
078-018-036 $0 $5,084
Resultant Parcel #1 $825,712 $23,705
Resultant Parcel #2 $931,164 $26,732
Resultant Parcel #3 $580,983 $16,679

1. Beginning in January 2025 and each January thereafter, the Maximum One-Time Facilities Special Tax shall be adjusted by the Escalation Factor. Each annual adjustment of the Maximum One-Time Facilities Special Tax shall become effective on the subsequent July 1.

2. Beginning January 2025 and each January thereafter, the Maximum Annual Maintenance Special Tax shall be adjusted annually by the Escalation Factor. Each annual adjustment of the Maximum Annual Maintenance Special Tax shall become effective on the subsequent July 1. #3..
- 48 -
#3..
- 49 -