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Manteca writing off $294,366 with 72% bad utility accounts

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POSTED June 22, 2012 1:27 a.m.

The Manteca economy is improving a bit.

At least that’s what one barometer - a drop in uncollected municipal utility debt for the second straight year - indicates.

Prior to 2011, uncollected municipal utility account debt had grown for four consecutive years.

The City Council Tuesday wrote off $294,366 in debt deemed by staff to be uncollectable. That included 690 utility accounts for water, sewer, and solid waste that have been inactive since June 30, 2011 representing $211,400 in debt. That represents an unpaid debt of $306 per account. The losses are absorbed by other ratepayers.

Last year Manteca wrote off $225,722.89 in uncollectable utility accounts. That reflects 745 accounts that have stuck the city with an average of $302 each in unpaid services.

Most of the non-collectable accounts are from renters and homes that have gone into foreclosure. And as such, they have served as an indicator of the impact of foreclosures on Manteca.

The city three years ago instituted a policy requiring a renter’s agreement when water servcie is opened. That means to open a service, you must have a copy of the rental agreement. That makes it harder to simply shift the account into someone else’s name after it goes delinquent for several months unless a new rental agreement has been signed.

A number of those who were delinquent and had received final notices for water cutoffs would send someone else living in the household to say they were the new tenants and that they knew nothing about an outstanding water bill.

In most cases, the city had no way of verifying the validity of the story.

Oftentimes people who have stopped paying mortgage payments will - a month or so before they are sure they have to vacate the property - will stop paying for municipal utilities as well.

The city by instituting cutbacks in compensation for workers employed by municipal utility operations such as sewer, water and garbage has been able to absorb the losses without triggering rate hikes. Rate shave been unchanged for all three services now for four years.

City officials had predicted without tightening up the rules on rentals plus sending out late notices quicker that the delinquency rate could have 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.

In 2007, the city 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.

By 2008 when the housing market collapse started in earnest, there were 1,800 final notices mailed each month. City workers end up turning water service off to 400 homes in any given month.

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