The appropriateness of the City of Manteca retroactively invoicing the City of Lathrop for $5.4 million in what is basically wastewater treatment plant depreciation charges is being questioned by Lathrop municipal leadership.
“Lathrop has set its sewer rates based on the amounts billed by Manteca over time, and it is neither responsible or appropriate to impose retroactive charges on Lathrop ratepayers for costs that were not previously invoiced or disclosed,” stated a press release issued Thursday by the City of Lathrop clarifying is sewer billing history for the regional wastewater treatment plant operated by Manteca.
That said, the sewer rate increase Manteca imposed on its residential customers factored in an “estimated” depreciation charge being collected from Lathrop.
The Manteca household sewer rate implemented in 2025 in increments over four years will take the rate that was $43.40 a month at the time to $72.50 a month by July 1, 2028.
Without the assumption Lathrop would pay depreciation that was estimated in the rate study, the Manteca household rates would have been higher. In other words, the rate study assumed Lathrop would pay its share of depreciation as outlined in the master agreement entered in 1984.
Manteca officials said they were unable to determine precise deprecation costs as they had a number of years of back audits that hadn’t been completed.
Audits for back fiscal years were all brought up to date in the second half of 2025.
Lathrop noted they have paid roughly $15.8 million to Manteca for wastewater services for the fiscal years 2016 through 2025.
The Lathrop press release noted, “contrary to recent reporting, Lathrop has paid all invoices it has received from the City of Manteca.”
It was also noted in the release that Lathrop is currently reviewing the invoice the city received Thursday from Manteca regarding depreciation dating back to 2016.
Lathrop also was in communication with Manteca during the period the current rate charges were being vetted for both Manteca households and businesses as well as bulk “customers” such as the City of Lathrop and Raymus Village, a rural neighborhood to the northeast of Manteca that also sends wastewater to the treatment plant.
The determination of the depreciation factored into the Manteca rate study and an estimate of what Lathrop’s share would be was buried in the data that supported the ultimate charges for both Manteca customers and bulk.
It is not clear that Lathrop was ever made aware the rates being charged for their 14.7 percent usage didn’t reflect 100 percent of the real depreciation charge given that Manteca indicated they were not able to zero in on that exact number until audits were completed.
That means the actual depreciation back to 2016 that Lathrop could be responsible may be higher than $5.3 million given Lathrop has been paying a rate since last year that reflects the rate study that had a depreciation estimate collapsed into it.
The Manteca sewer rate hike was the first in 14 years.
Manteca staff in December communicated in an email to Lathrop that the depreciation chares were coming.
Federal funding for the plant built in the early 1980s on West Yosemite Avenue near the train tracks that serve as the border between the two cities, was based on Lathrop being able to access 14.7 percent of the facility’s original design capacity.
Manteca’s issues with audits being current started when there was a change in the finance department and a replacement department director was promoted from within.
That was immediately followed by Manteca going through six city managers in less than five years plus almost a 100 percent turnover in department heads with several being replaced multiple times.
Lathrop, it was noted in that city’s press release, benefits from long-term continuity in its executive leadership, including a City Manager who has served the community for nearly two decades. It further stated the “continuity helps provide the institutional knowledge needed to accurately interpret historical agreements and ensure compliance with their terms.”
“Recent claims suggesting that Lathrop has failed to pay for services or has been subsidized by Manteca do not reflect the full contractual, financial, or factual context. Any outstanding questions must be resolved through the processes established in the agreements, not through public assertions that mischaracterize the record.”
“Lathrop values its regional partnership with the City of Manteca and remains committed to working collaboratively and professionally to review the billing, clarify obligations, and identify a clear and mutually agreed-upon path forward. The city looks forward to assisting its partner in correcting the public record and ensuring transparency for residents of both communities.”
“The City of Lathrop will continue to keep its residents informed and remains committed to fiscal responsibility, accuracy, and good regional governance.”
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
