A buyer of a new home in Manteca starting in 2017 will experience sticker shock when they start mandated city garbage services.
Based on a cost recovery study, existing ratepayers are subsidizing new homes to the tune of $420 each to start their service. That figure primarily reflects the cost of the city buying three Toters for a household — brown for garbage, blue for recyclables and green for yard waste. It also includes the cost of delivering the Toters to the home address.
That means for every 100 homes built the solid waste division shells out $42,000 to start a residential service. Manteca has added over 1,500 homes during the past five years. That translates into a $610,000 hit.
Houghton said it hasn’t been determined whether developers will be assessed the charge before the city issues an occupancy permit for a new home or if the home buyer will be billed for the start-up charge.
Charging for starting service is part of an overall plan to prevent the solid waste division from burning through all of its reserves by March 2018 under the existing rate structure.
The solid waste enterprise fund had a cash balance in reserve of $6 million in 2009. Rising costs and state mandates for things such as replacing refuse trucks with cleaner burning engines has pushed the reserve down to $2 million this year.
The monthly rate structure staff is recommending out of three alternatives would be phased over five years starting in 2017 until fully implemented in 2021.
It would take the 35-gallon Toter from $19.78 to $30.67 for a $10.85 per month increase.
It would take the 65-gallon Toter from $25.49 to $32.61 for a $7.12 per month increase
It would take the 95-gallon Toter from $30.02 to $34.33 for a $4.11 per month increase.
It would take senior low-income Toter service from $12.72 to $19.72 for a $7 per month increase.
It would take 1-yard commercial bins picked up once a week from $67.57 to $119.80.
It would take 2-yard commercial bins picked up once a week from $97.44 to $132.71.
It would take 3 yard commercial bins picked up once a week from $120.05 to $145.62
It would take 3 yard commercial bins picked up three times a week from $317.96 to $436.85.
It would take 4-yard commercial bins picked up once a week from $146.72 to $158.53.
It would take 4-yard commercial bins picked up three times a week from $388.31 to $475.58.
It would take 6-yard commercial bins picked up once a week from $196.06 down to $184.34.
It would take 6-yard commercial bins picked up three times a week from $529.42 to $553.03.
The rate alternative selected would give the city a 21 percent operating reserve for the solid waste enterprise fund by 2021. It has fallen below the current 25 percent and is projected to 19 percent or $2,138,804 by June 30, 2017.
The proposed rate hikes are following Proposition 218 restrictions. That means the rates charged cannot exceed the cost of providing the service. One segment of ratepayers such as commercial cannot subsidize another such as residential. The City Council is required to consider all protests.
Proposition 218 requires written notices of the proposed rate increase to be sent to all affected landowners and tenants.
Tuesday’s presentation to the council was the first step. Written notices are now being sent out. A public hearing notice will be published Nov, 25 with the protest hearing taking place Dec. 6. The second reading or adoption would be on Dec. 20.
Impacted ratepayers would be notified Jan. 18, 2017 with new rates going into effect Feb. 6, 2017.The first payments of the new rates takes place April 15, 2017.
To contact Dennis Wyatt, email email@example.com