Manteca’s water operation and maintenance fund is about to go dry.

It is what was projected to happen after municipal water rates were not increased for 15 years.

The money being borrowed will come from the city’s water capacity fee collected on growth.

The need for the $10 million loan was built into the water rate increase that finally went into effect last month.

It will cover ongoing operations, maintenance, and capital projects as well as meet ongoing reserve requirements.

The interfund loan, allowed under state law, will be paid back with 4 percent interest over a 10-year period starting with the 2026-2027 fiscal year.

The loan will not compromise the water capacity funds ability to meet operational or capital improvements.

The interfund loan will be before the City Council when they meet tonight at 6 p.m.

Expenditures entering the current fiscal year that ends in 27 days were budgeted at $20.6 million keep the system operating with only $13.2 million in revenue.

The deficit spending has effectively depleted the water maintenance and operations reserves.

Inflation for everything from wages, supplies, and the big operational item — PG&E power to run water wells — has effectively eaten away at the reserves after the city went without a rate increase for 15 years.

The annual water rate hikes approved over the next three years will eventually double the basic service charge from $17.15 a month where it was at for 15 years to $34.53 on July 1, 2028. The rate hike will allow a lot of pressing replacement work for aging pipelines to take place.

The basic rate each month is now at $21.24. Water use is on top of the basic charge.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com