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$200M in cash as of Sept. 30; sewer fund being ‘in dark’ is accounting issue
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Manteca’s elected leaders were more that frustrated last week when they were asked to authorize spending $6.8 million more on a critical sewer trunk line project but staff was unable to tell them whether there was adequate money in the appropriate account to pay for the work.

That might sound like Manteca is running out of money but that is far from reality.

At the end of the third quarter on Sept. 30 the city had $200 million in cash.

That may raise some hackles among people who questioned the need for the one cent sales tax hike voters rejected in November. But most of that cash can’t legally be spent on day-to-day services covered by the general fund such as police, fire, parks and recreation, street upkeep, and general government.

The $200 million represents all city funds and not just the general fund. Most of the $200 million are funds that were collected for a specific purpose and can only legally be spent on what it designated for.

This typically includes growth fees assessed specifically for items such as parks and government facilities, state and federal grants, and enterprise accounts such as water, sewer, and solid waste.


City working on closing

out books for last fiscal

year to clarify finances

The fund accounting issue goes back to irregularities in the city’s books uncovered last fall that the finance department is still trying to sort out. Included is the fact the last time the city’s ledger was properly balanced was at the end of the 2018-2019 fiscal year 19 months ago.

Interim Finance Director Stephanie Beauchaine noted staff is not comfortable providing account balance numbers in a number of cases. That’s because funds that are restricted by law were placed in the wrong accounts over the years.

She noted that as the finance department steadily works at putting the puzzle together numbers change almost daily as charges and revenue are assigned the correct account. The process is tedious and time consuming as the city wants to have all the pieces in the right place so going forward the council and public will have a correct and current snapshot of municipal finances.

There are also issues where the finance department has uncovered capital improvement projects such as the trunk line were rolled over into a second budget year but were double budgeted in the process. In other cases too much money was set aside for projects that did not end up being spent.

Until the finance department can properly close out the 2019-2020 books, they will not have solid numbers to build expenditures on for the current fiscal year that started July 1, 2020 and runs through June 30, 2021.


City can borrow from

other funds in a

worst case scenario


In a worst case scenario if the sewer account the council authorized to be tapped to complete the sewer trunk work ends up actually having a shortfall, there are other accounts the city could borrow from to cover the deficit. If an inter-fund loan was eventually needed, it would be paid back with interest from sewer fees collected from the city’s 30,000 plus ratepayers each month to pay for maintenance and operations.

Councilman Charlie Halford joined the rest of his colleagues in approving the additional appropriations needed to complete the sewer project that is essentially to replace a deteriorating trunk line that serves 40 percent of the city’s residents.

But before he did, Halford expressed his displeasure with the council not being provided even ballpark figures on what may be in the accounts they were authorizing to be tapped to pay the trunk line work.

Halford had inquired before the meeting about the fund balance information. He was provided a memo that said it could be $1.5 million in the negative but that there were accounting corrections that were in the process of being sorted out that could wipeout the negative balance and then some.

“We are not intentionally keeping you in the dark,” City Manager Miranda Lutzow said. “We are in the dark ourselves.”


Trunk line work originally

pegged at $12.3 million

The trunk line work — designated as an urgent endeavor after it was discovered segments were near collapse several years ago following the failure of a sewer trunk in Union Road — was originally expected to cost $12.3 million.

It was expected to cost upwards of $16 million plus face delays securing right-of-way if the city went with a different route for the new 54-inch trunk line than alongside the existing 36-inch trunk line.

Severe dewatering issues along with unknown utility issues such as buried communication lines have created additional costs. Also just as work started crews were diverted to make an emergency repair when part of the trunk line near Airport Way started to collapse.

Of the $6.8 million in additional appropriations, $3.6 million is going toward issues that have popped up since work started including upgrading Swanson Road when work is done from residential to industrial pavement per the new general plan.

Essentially that means any cost savings obtained by not going with a new alignment will be negated. By going with the existing route the need to obtain right-of-way was eliminated to save at least a year’s time.

The additional $2.6 million is basically a contingency so that if other issues are encountered work will not be delayed by having to return to the council for authorization to spend more money.

A collapse on the line would essentially severely hamper the city’s ability to keep sewage flowing from homes housing 40,000 residents to the wastewater treatment plant.



To contact Dennis Wyatt, email