Manteca discharges it’s treated wastewater into the San Joaquin River.

As such, it must meet ever increasing state-mandated water quality standards.

The city, at the same time on the behalf of its existing users, faces similar issues that households do with aging plumbing. Components deteriorate and wear down requiring replacement.

And like everything else, a state-of-the-art ultraviolet disinfection system that destroys harmful bacteria costs more today than it did 25 years ago just like toilets.

The decision Tuesday by the Manteca City Council to issue $30 million in revenue bonds to replace aging or deteriorating equipment as well as to meet stricter treatment standards to essentially gain state approval to keep operating the treatment facility was factored into the recent rate increase.

As such, the bonds are being issued to pay for the impact Manteca’s existing 95,000 residents have on the wastewater treatment facility.

The adopted rate that future users will pay when they connect to the system covers their share of the cost.

State law prohibits growth from subsidizing the fair share of existing users to maintain and operate water and wastewater treatment systems or build new facilities like a police station.

At the same time, expanded capacity at the treatment plant is a cost born by growth through connection fees that primarily cover the cost of creating sewer capacity for a typical household. The balance is for material and labor costs to make the actual connection happen.

The new 2025 bonds will pay for work connected with:

*a dewatering centrifuge unit.

*a sludge thickener unit.

*side stream treatment.

*control equipment to operate the plant.

*a secondary effluent equalization pond liner.

*improvements to the collection system.

Again, the cost of the bond is already factored into sewer rates already in place that have annual step increases through 2028.

Bond work is not being funded through property taxes or general fund revenue that underwrites day-to-day municipal services.

And legally, since the cost of the work being done is not attributed to growth, the city can’t make growth pay for it.

Decision also cuts

existing bond rates

The overall bond amount the city is issuing is for $47.9 million in principal carrying a 4.31 percent interest rate.

The final payment for the $30 million for the new work is on Dec. 1, 2055.

The rest goes to pay off two previous wastewater bond issues for previously needed work.

One is $19 million bond issued in 2009.

The outstanding debt is $18.44 million.

The other is a 2012 refunding bond that the city issued for $22.6 million.

Those bonds were issued to refinance prior bond indebtedness from 2003.

The outstanding debt is $6.975 million.

The current refinancing - and the one in 2012— take advantage of lower interest rates without prepayment penalties.

The maturities on the two bonds being refinanced are not being extended and will be paid off years ahead of the $30 million for the needed new projects.

The net savings in the existing bonds being refinanced is $3.03 million.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com