View Mobile Site

City dodges garbage rate hike

Pre-emptive cut in wages brought costs in line

Text Size: Small Large Medium
City dodges garbage rate hike

Toters are stacked and ready for delivery at the City of Manteca Solid Waste Division facility on Wetmore Street.

HIME ROMERO/The Bulletin


POSTED January 15, 2010 3:09 a.m.

A pre-emptive move to cut labor costs in the city’s enterprise operations – sewer, water, garbage, and the golf course – is helping Manteca avoid rate increases induced by The Great Recession that other cities are now pondering.

The triple whammy of a drop-off in construction coupled with a wave of foreclosures and depressed prices for recyclable materials have left many cities eating into reserves in their enterprise accounts where municipal operations are covered by the fees paid by users.

Tracy, as an example, lost $1.1 million last fiscal year making it the third time in four years they have received less revenue than annual operating expenses. Another year of losses would wipe out that city’s reserves.

City Manager Steve Pinkerton noted that salary concessions secured from various employee unions to help bridge the $14 million general fund deficit covered the enterprise operations as well despite none of the accounts - at the time - being were in danger of going into deficit spending.

Essentially, city employees agreeing to cutbacks in their compensation not only helped protect their jobs and municipal services but also helped Manteca avoid a rate increase in the enterprise funds other than ones already scheduled to pay for capital costs such as in the sewer division.

And in the case of water, wage concessions combined with a drop in the cost of construction of water line replacement projects helped residential users see a slight drop in their 2010 water rates.

“In a recession funds that rely on revenue (other than taxes and fees) are much more vulnerable,” the city manager said.

A year ago the City of Manteca would issue 1,000 final notices to cut off water service for non-payment of municipal utility bills. Of those, 200 actually ended up with service turned off.

Today there are 1,800 final notices mailed each month. City workers end up turning water service off to 400 homes in any given month.

Finance Director Suzanne Mallory told the City Council late last year that the current delinquency rate of 5.10 percent is costing the city’s water, sewer, and solid waste accounts $149,350.16 annually. That is up from $87,945.99 from the previous year. And with unemployment at 14 percent in Manteca coupled with the continuing foreclosure mess, Mallory predicted this year that the delinquency rate could hit 10 percent and cost ratepayers who pay on time as much as $300,000 since they ultimately will have to absorb the losses Manteca is forced to write off.

Concessions employee groups agreed to include forgoing a pre-negotiated 4 percent pay raise this year and another 4 percent in 2011 plus taking unpaid furlough days that are the rough equivalent of a 3 percent loss in pay. Workers also are paying more toward their retirements.

The reduction in labor costs has helped counter other cost increases.

Manteca this fiscal year is expected to collect $8.2 million and spend $8.8 million running the solid waste operations. Part of the increase in expenses was from shifting street sweeping operation from the street maintenance portion of the general fund to the solid waste account. The city did that after more than 90 percent of the street sweeping efforts qualified as a solid waste function based on an analysis confirmed by an attorney specializing in laws governing enterprise accounts.

Even so, Manteca is projected to have a $4.7 million balance on June 30, 2010 in the solid waste account. A large chunk of that money is earmarked for capital expenses such as truck replacement,

The city is facing some steep expenses just like neighboring jurisdictions are including a mandate by the California Air Resources Board to switch to cleaner engines for refuse collection trucks. The cost to Manteca over multiple years is pegged in excess of $2 million.

Manteca also may have to start looking at another place to take their trash as the facility on Austin Road just north of the city is expected to reach capacity within the next 10 or so years. That would require incurring additional time and costs to truck garbage further or – if a nearby location isn’t secured – to transport it out of state to Nevada.


Commenting is not available.

Commenting not available.

Please wait ...