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Higher water rates on the way for Manteca
Rates will likely have to go up more than 20% in first wave
WATER PUMP2 6-21-13
A City of Manteca arsenic removal facility on Moffat Boulevard cleans up water pumped from three nearby wells. It was part of a strategy that reduced municipal water costs. - photo by HIME ROMERO/The Bulletin

Manteca municipal water rates will be going up.

Based on what rate increases the city adopted 13 years ago and then suspended, the “interim” water rates will likely go up at least 20 percent

The city is going to have to spend some serious cash to find out exactly how much the “interim” rate and the final rate will be as well as identify replacement needs as the system ages plus upgrades to accommodate projected growth for the next 50 years.

The Manteca City Council on Tuesday is being asked to hire HyrdroScience Engineers for close to $1 million to:

*do an interim water rate study.

*do a final water rate study.

*develop a citywide water masterplan.

*develop a website and use social media to keep the public updated.

When all is said and done the city expects they could spend close to $2.7 million. The remainder of money is needed to prepare environmental, grant, and preliminary engineering documents. Any remaining budget not spent will be returned to the appropriate fund at the conclusion of the project.

Water rates haven’t increased in Manteca since 2008. That’s when the council at the time commissioned a new rate study with a four-year plan to increase rates to cover maintenance, operations, and improvement projects primarily to replace aging lines.


Planned rate hikes were

skipped due to the

Great Recession hitting

Shortly after the new water rate was established and targeted to start going into place over a four-year period starting Jan. 1, 2009, the Great Recession hit.

The city was facing an $18 million annual general fund deficit within four years if they didn’t cut spending. They imposed a 20 percent across the board cut in salaries that included existing and negotiated pay raises yet to go into effect as well as employee benefits.

All enterprise fund employees — those providing municipal services such as waste water, solid waste collection and water paid for by user fees — also agreed to the 20 percent cut although those funds were not impacted by the drop in property tax and sales tax.

The council then for the next four years suspended planned water rate hikes when they came up.

That turned the 2008 water increase adoption into a rate cut because the rates were adjusted that year to comply with a state law passed in 2008 requiring public water purveyors to put in higher usage rates to encourage conservation while allowing fixed rates per meter size to be reduced.

Manteca residential customers were paying $19.95 plus water usage. The meter charge dropped by $2.80 down to $17.15 per month.

That meant the adopted rates that took into account $33.60 cut from the residential metering charge never went into effect.

Even though labor costs were rolled back 20 percent and stayed there until four years later when pay started to be reinstated, the city in the initial year after the rate changes were supposed to go into effect lost $840,000 in projected revenue.

That annual amount of lost income by holding the programmed water rate hikes in abeyance grew in each subsequent year as connections were added due to growth.

The ability to keep rates in line while spending on capital improvements was  attributed in 2012 by city management to reduced staff costs since 2009 as well as operational efficiencies. Also helping was the fact Manteca was able to pool money in advance allowing it to take advantage of construction costs that had dropped as much as 35 percent due to the recession to make large scale system improvements.

Day-to-day costs from labor to chemicals have since increased substantial. Construction costs have rebounded and taken off to the highest levels on record.

Had the raises scheduled in 2010, 2011, 2012, and 2013 gone into effect Manteca water users would currently pay 18.8 percent more or $1.43 for the first block of 2,000 cubic feet of water each month instead of the current $1.16.

The 18.8 percent rate hike that went into effect is just a start of what rates going forward will be once the rate studies or completed and needed capital improvement projects are identified.


Water fund on track to hit

$16.2M deficit by June 30

The need for two rate studies reflects the urgency of the city’s financial situation when it comes to the water fund account. In February, city management told the council the water fund was on pace to end this fiscal year on June 30 with a deficit of $16.2 million.

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 water rate increase is just one of three Manteca residents and businesses will be hit with in the coming year or so.

The sewer fund is on pace to end this fiscal year on June 30 with a negative balance of $4.7 million.

Meanwhile the solid waste is also being rapidly depleted.

Making the situation worse are outstanding inter-fund loans — an accumulation of tens of millions of dollars — that were not being properly tracked nor being paid back as legally required. Enterprise accounts such as sewer and water alone owe the city’s streets fund $20 million in loans with interest for which payments haven’t been made for at least several years.

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


To contact Dennis Wyatt, email