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It’s been 11 years since last rate increase; funds have been using borrowed money that must be paid back
union sewer work
It’s been 11 years since last rate increase; funds have been using borrowed money that must be paid back

The ball will start rolling on the inevitable Tuesday.

The City of Manteca is going to be raising sewer rates.

On Tuesday the City Council will consider hiring Stantec Consulting Services for $1,048,000 to devise a wastewater master plan and conduct a sewer rate study.
Four months ago the council obtained the services of HyrdroScience Engineers for just under $1 million to develop a citywide water and water rate study.

There is no doubt rates have to be raised. It’s an assessment built on a number of factors.

*There hasn’t been a water or sewer rate increase since 2009.

*The two enterprise accounts were kept going by inter-fund loans from other accounts such as growth fees collected for new street work that has to legally paid back with interest.

*Inflation is increasing the cost of ongoing maintenance and operations.

*The city’s utility funds that include solid waste, water, and sewer have roughly $2 million in utility billings that haven’t been collected.

*There is a need to fund replacement projects going forward for aging pipes and equipment.

The staff report for the item indicates the last rate increase was in 2013. That, however, is only true on paper.

The council back in 2008 adopted four annual rate increases for sewer and water that covered projected operating and maintenance costs as well as building up set aside funds for replacement projects.

However, the same council — and  the council seated over the next election cycles — subsequently suspended each of the annual hikes that were supposed to go into effect in 2010, 2011, 2012, and 2013 based on the last rate hike studies the city commission.

They did so at the depth of the Great Recession and after they obtained concessions that cutback pay and eliminated agreed upon pay hikes for city workers including those whose jobs are with the city utility divisions that are funded through users who pay into enterprise accounts.

The rationale was the city was cutting costs so they would provide stressed households and businesses with relief by suspending the rate hikes.

 Those concessions at the time amounted to a 20 percent reduction in wage costs. Since then the lost wages have been restored and then some.

Then mostly without the knowledge of elected officials city staff instituted interfund borrowing to underwrite major water and wastewater projects to avoid the funds from being depleted.

And while current City Manager Toby Wells has cautioned an exact dollar amount of interfund borrowing that has to be paid back will not be known until the city is through with unraveling its accounting mess, former City Manager Miranda Lutzow put the amount the water fund owed other funds in excess of $16.2 million with several more million dollars the sewer fund owed in similar loans

 The revelation earlier this month the city has $4 million in uncollected debt including $2 million for its water and sewer funds add even more pressure for rate hikes.

It is an astronomical figure given at the height of the foreclosure crisis in 2010 the city was forced to write off $261,954 in uncollected utility billings.

At the same time in 2010 other uncollected receivables reached $581,526 with the council at the time writing off $202,841 as uncollectable.

The $2 million in debt owed the cityballooned when the city at the start of the pandemic suspended cutoffs for unpaid water, sewer, and solid waste accounts.

But that is clearly not the main cause of the nosebleed debt owed that likely will have to be absorbed by other ratepayers through future rate hikes.

The last time the City Council was presented with an annual report on either delinquent utility bills or other uncollected receivables was in June of 2015 near the end of the fiscal year. The following year after Finance Director Suzanne Mallory retired the practice of presenting the council with a status report of uncollected debt involving utility debt and seeking permission to write off what staff had made several attempts to correct suddenly stopped.

The water rate study is being broken down into two separate rate hikes.

The need for two rate studies reflects the urgency of the city’s financial situation when it comes to the water fund account.

The “interim” rate needs to address covering that deficit as well as covering maintenance and operations costs going forward.

The “final rate” will be an add on to generate funds needed for project capital improvement work to upgrade wells, replace aging water lines, and upgrade the system to handle growth. That analysis is expected to take well over a year to complete.

The City Council meets Tuesday at 7 p.m. at the Civic Center, 1001 W. Center St.


To contact Dennis Wyatt, email