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Manteca OKs $19M in bonds for sewer work

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POSTED May 13, 2009 1:37 a.m.
Manteca’s elected leaders authorized the issuance of $19 million in bonds Tuesday to complete the final phase of the retrofit and expansion of the wastewater treatment plant.

Bonds issued for the payment of state-mandated upgrades plus the expansion in the initial phases that started in 2003 are also being rolled into the latest insurance to retire them and reduce the ultimate interest that is paid.

The final phase is for the desalination process mandated by new state standards as well as a larger maintenance building to accommodate operations that have expanded significantly over the past 20 years as the plant’s size and operations have grown with Manteca’s population.

Lathrop is paying for their share in cash out of proceeds they have received in advance for sewer allocations from developers like Cambay Group that is pursuing the 11,000-home River Islands at Lathrop project.

The costs of the bonds are already factored into the five-year rate schedule adopted last year by the Manteca City Council.

The rates in place also reflected increased operational costs that are led by electricity, manpower, and chemicals as well as improvements to old lines that collect waste water. The household charge is now $39.50 a month. It will go to $43.30 on Jan. 1, 2010; $46.55 on Jan. 1, 2011; $48.30 on Jan. 1, 2012; and $51.25 on Jan. 1, 2013. Overall, it reflects a 40 percent increase over the five years for all users whether they are residential, industrial or businesses.

The firm that handles Manteca’s bond issuance noted due diligence from Finance Director Suzanne Mallory to provide bond insurance underwriters with the historical data and other information that was needed for them to upgrade Manteca’s bond rating to an A+. In the past Manteca has gone as high as AA and AAA . The higher the rating the lower the interest rate. It was considered a major accomplishment for Manteca to get an A+ rating given the dismal state of California’s governments in terms of fiscal  soundness.

The bond firm noted that it was a testimonial to the fact Manteca has established a solid enterprise account that has adequate funds coming in from monthly charges and sewer connections plus adequate reserves in the appropriate accounts.

The wastewater account is an enterprise fund and is separate from the general fund where the city is experiencing the potential for red ink after July 1. It is illegal to use enterprise funds for purposes other than what they were collected for in the first place.
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