Lathrop residents are getting a Christmas gift this year in the form of a cancelled utility rate increase.

And it could end up saving families more than $120 a year.

Water and sewer rates were scheduled to go up in Lathrop in 2020 – the fifth of a five-year increase plan that was approved by the council in 2016.

But thanks to an increase in development and the fact that the funds that service the city’s utilities are outperforming their expectations, that increase will be put on hold for the next calendar year.

The news was met with great fanfare when it was shared on social media by Mayor Sonny Dhaliwal who has been constantly asked questions about when residents would get a break in their payments – several residents called it a great Christmas gift that comes just in time for the holidays.

According to the staff report that was prepared for the council, a review of the planned increase by staff determined that the sewer fund revenues were “trending at levels equal to the rate study’s projection.” Because sewer rates are based on a flat rate rather than a consumption model and staff will be able to monitor the fund’s performance against the backdrop of current development, staff recommended postponing the planned $4-a-month increase until at least next year.

While the sewer fund maintained at the levels that were forecasted in the initial rate study, the water fund has far outpaced those expectations thanks to a burst of development that has completely erased drought-specific issues within the way the fund operates. Because of drought mandates for water usage during California’s historic run of dry seasons, residents were forced to use less water which meant that the debt that the city incurred to provide the utility needed increased rates to keep up with it – something that even after the drought was officially over residents had a hard time coming to terms with.

With development exploding in both residential and light industrial sectors and a return to normal water usage, the city recommended postponing the current increase for at least another year.

Because the city has a growing customer base, the cancellation of the increases will not create any fiscal impact for the city. Staffers will continue to monitor both the water and sewer systems and the requirements to operate them and will make recommendations accordingly next year.

The decision ends the consecutive run of rate increases that has led to customers east of I-5 paying $25 more every month for water and $15 more every month for sewer over than they did when the rate increase first went into effect.

To contact reporter Jason Campbell email jcampbell@mantecabulletin.com or call 209.249.3544.