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Bad city utility debt jumps
Manteca cant collect $261K for sewer, water, garbage
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Bad debt from Manteca’s municipal utility accounts has tripled in the past two years to $261,594.

It is part of $305,121 in bad debt the Manteca City Council is being asked to write off when they meet Tuesday at 7 p.m. at the Civic Center, 1001 W. Center St.

Finance Director Suzanne Mallory noted that the city has exhausted internal efforts to collect the debt and that they have been sent to a collection agency. The debts, though, remain uncollected.

The city annually writes off accounts receivables that they have determined have little chance of being collected.

The $261,594 in bad utility debt is almost exclusively residential accounts. They reflect 819 accounts that have been inactive with service terminated since June 30, 2008.

They account for 0.86 percent of the initial utility revenue realized for the 2007-08 fiscal year.

The city two years ago when they were trimming general fund expenses to wipe out an $11.3 million deficit also cut back on expenses in the enterprise accounts that included water, sewer, and garbage service even though they were all in good financial standing.

At the time, City Manager Steve Pinkerton said reducing expenses was essential as the finance department anticipated an increase in bad debt and a slowdown in new accounts being added which in turn would dip into operating reserves for the three utility accounts. Essentially, the cost is being shifted to those in good standing but by reducing expenses in advance the city was able to avoid creating pressure to increase rates for water, sewer, and garbage.

Last year bad debt write off for utilities was $149,350.16 or 0.52 percent of all utility revenue realized for the 2006-07 fiscal year.

Two years ago Manteca wrote off $87,945 in bad utility account debts.

Eleven months ago, Mallory expressed concern that the delinquency rate could hit 10 percent for all accounts compared to the actual 6.53 percent for the past fiscal year ending June 30.

The lower-than-anticipated default rate is due to two things. Last September the city started working with struggling households more aggressively to avoid water shut-off whenever possible

Manteca also made it more difficult for deadbeat renters to run up a water bill, not pay it, and then open a new service under the name of someone else that is living in the house.

The city now requires 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 will make 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.

The remaining $43,527 in receivables the council is being asked to write off includes $6,084 for business license fees and $5,679 in weed abatement fees, with the balance spread through numerous other accounts. A year ago, the city wrote off $17,402 in bad debt that connected with utility services.

All delinquent weed abatement accounts in excess of $100, though, will not go permanently uncollected. The city can place a lien on the property in question and collect the outstanding bill when the property is sold.