It was straight talk.

A citizen at Tuesday’s meeting inquired why the Bulletin had reported the likelihood water rate increases at least 20 percent were on the way even before a rate study being commissioned by the city is done.

Mayor Ben Cantu minced no words.

“What will appear to be a massive rate increase will be a massive rate increase because we are making up for decades of no rate increases,” Cantu said.

The potential for a minimum 20 percent minimal rate increase was based on:

*a rate hike of 18 percent a previous council adopted to implement in 2008 over a four-year period but then opted to not implement the phased in rate hikes.

*a $16.2 million water fund deficit projected when the fiscal year ends June 30.

*the need to pay for day-to-day maintenance and operation costs going forward.

*the replacement of aging pipelines and other system components over the coming years

*system improvements needed to accommodate growth including possibly the second phase of the Nick DeGroot South San Joaquin Surface Water Treatment Plant.

The $16.2 million deficit that has to be paid back as it is money owed to other accounts — that was borrowed to pay for water projects and operations — in its self is staggering.

If the city had 30,000 water users to spread that across, it would come to $540 per customer. That doesn’t factor in interest owed.

The need to get a rate increase in place to help stop the bleed is underscored by action the City Council took Tuesday.

They hired 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 on required rates and studies without paying for daily operations or paying back money. 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. 

The game plan is for an interim rate hike to be brought back to the council to address maintenance and operations as well as paying back the $16.2 million.

Meanwhile a thorough study of city needs will outlined in a water master plan being developed will involve expensive capital improvement projects such as well and pipeline replacement.

That will lead to a final rate hike that will be wedded to the interim rate hike.

Several council members Tuesday made it clear that it is still a long way from determining a rate but whatever it ends up being they would be in favor of phasing it in over multiple years to soften the financial blow to water users.

“Essentially we robbed Peter to pay Paul and we need paid Paul back,” Cantu said of the $16.2 million.

The practice started long before the current council. It also appears staff  that has long since departed municipal employment never made previous councils aware of what they were doing.
Staff indicated Tuesday that the bulk of the money was borrowed from growth fees to fund road projects that growth created the need for.

That may help explain why the city now has a funding shortfall for the McKinley Avenue interchanges as well as how promised projects such as traffic signals at Woodward Avenue and Main Street were budgeted and then dropped over the years.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com