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The $1 million proceeds from the sale of 200 acres purchased with wastewater account funds may be diverted into Manteca’s Economic Development Reserve to be used for purposes not connected with the city’s wastewater treatment system

At least that is the recommendation municipal staff is making to the City Council when they met Tuesday at 7 p.m. to convey a conservation easement for 200 acres to the San Joaquin Council of Government to meet habitat conservation mandates required of large scale land development.

The city bought 417 acres at 2300 Hays Road on June 21, 2011 using $3.4 million paid through sewer connection fees assessed on new development. The fee is assessed to pay for development’s fair share of wastewater treatment facility as well as the cost of connecting to the city’s sewer system.

The memo prepared for the council in justifying the diversion of the $1 million into a general fund reserve notes “other than wastewater funds used to purchase the property, the conservation easement does not relate to or perform any wastewater function.” It uses that as the rationale not to return the $1 million to the wastewater fee account that is a separate account not included in the municipal general fund.

State law makes it clear fees may only be used for the purpose they are collected. City staff is rationalizing the conservation easement is a byproduct of the land acquisition. The memo notes the city still retains ownership of the 200 acres that it currently leases to a farmer. It also noted the land could still be sold in the future although it would still have the conservation restriction attached.

The city, however, did not use any general funds to purchase the 422 acres. And it is clear they would not own the 422 acres if they weren’t able to tap into the wastewater connection fees.

If the site is never used for wastewater related activities and is used for other purposes it may raise legal questions down the road whether the money used to purchase the property in the first place should be repaid to the wastewater treatment account.

The city has separate accounts under state law because taxpayers, ratepayers, and those building in he city aren’t necessarily one in the same and therefore aren’t interchangeable.

At the time the land was purchased city officials indicated it would enable Manteca to pursue a number of options including:

*create spray fields to pipe untreated agricultural waste water from Eckert’s for disposal.

*use those same spray fields to actively go after securing food processors that seek locations to expand near crop production in the San Joaquin Valley.

*the relocation of spray fields plus the transporting of sewer sludge for drying to the Hays Road location.

*to replace wetlands that are part of more than 100 acres of city-owned wastewater treatment property west of Costco and Big League Dreams to allow the land to be converted into prime commercial uses.

*create the first wetland mitigation bank in San Joaquin County working in conjunction with the Army Corps of Engineers that they can they sell easements to other jurisdictions in the county for the replacement of wetlands when needed within their communities.

*develop its own green waste composting facility.

*secure a site for a possible regional wastewater treatment plant 50 years or more into the future.

The deal before the council on Tuesday when they meet at 7 p.m. at the Civic Center, 1001 W. Center St., also conveys the remaining 217 acres into a habitat conservation bank held by SJCOG as a credit bank for the city to be applied in-lieu against habitat conservation fees that may be due for current and future development and infrastructure projects, at the discretion of the City Council. If the habitat credits are not used, the City Council can decide in the future to sell them to SJCOG for the full appraised value similar to the 200 acres.

There is no discussion in the memo that if a developer in Manteca is required to pay a habitat conservation fee where that money would go.

While it would buy the required easement out of the credit bank, it doesn’t cover the cost incurred buying the actual land. The city would not have the 417 acres to generate what eventually could be in excess of $2 million for habitat conservation easements if the land wasn’t bought with sewer connection fees.

The annual lease payments the city has received from farming apparently have been returned to the sewer connection account based on comments made when the initial agreement was initiated.


To contact Dennis Wyatt, email