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SSJID to the rescue?

Offer to cover $1.7M state took from cities, fire districts

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SSJID to the rescue?

The South San Joaquin Irrigation District offer means Manteca is able to reduce potential cuts in public safety and other employees by essentially replacing the $1 million the state is taking from ...

Bulletin file photo/


POSTED September 28, 2009 1:07 a.m.

South San Joaquin Irrigation District is stepping up to help Manteca, Ripon, and Escalon as well as fire districts within its boundaries to weather the state’s strong-armed borrowing of local property taxes.

The SSJID board has offered to “securitize” the property tax that the state is taking from the local jurisdictions by providing them the money now and then being repaid when the state makes good on its promise to return the money over the next three years with interest.

SSJID General Manager Jeff Shields said his board’s intent is “to do what we can to help the cities and fire districts avoid cutbacks in services and layoffs” that are being caused in part by the California Legislature’s taking the property tax to cover the state’s deficit.

The overall amount is $1.7 million including close to $1 million for the City of Manteca.

The SSJID would tap its undistributed reserves of $45 million accumulated from their share of the Tri-Dan Project power generation proceeds to securitize the property tax payments. If the fund transfer proceeds, it will have virtually no impact on the district’s ability to go forward with its efforts to reduce power costs across the board by 15 percent in Manteca, Ripon, and Escalon. The model for that to happen takes $10 million from that reserve to get the ball rolling. Currently, the district’s share of annual Tri-Dam power sales is in excess of $10 million.

Manteca City Manager Steve Pinkerton said the city is weighing the offer with that of a proposed consortium of municipalities being pieced together through the League of California Cities to secure a low-interest loan to replace the [pilfered property tax.

“It is a great offer,” said Pinkerton of the SSJID proposal.

He noted that after the city was approached with the option by the SSJID, it took some pressure off the city which has a $3.5 million deficit still to cover for the current budget year. Being able to secure $1 million to replace the property tax that was lost would reduce the deficit to $2.5 million.

Then, if they are able to gain concessions from employee groups concerning future raises in 2010 and 2011 plus some other compensation adjustments, it would cut that remaining amount down by about $1.8 million leaving roughly $700,000 to cover.

Pinkerton is confident the remaining $700,000 could be covered by one-time expenditure cuts.

“It (the SSJID offer) allowed us to proceed with budgeting with a lot more confidence,” Pinkerton said.

Without it, the city would have had to come up with a plan to reduce employees by another $1 million which would have probably meant at least 10 to 12 layoffs on top of the 54 possible layoffs that will occur in mid-October if the city is unable to gain concessions from employee groups.

The SSJID board during their meeting Tuesday will receive an update on Proposition 1A property tax reallocation and securitization. At that time staff may ask the board for authority to start negotiating the purchase of the city’s receivables from the state.

The SSJID meets at 9 a.m. at the district office, 11011 East Highway 120.

To contact Dennis Wyatt, e-mail dwyatt@mantecabulletin.com

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