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Weaning Manteca general fund off its addiction to bonus bucks

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POSTED June 2, 2014 12:03 a.m.

What does $12.3 million buy?

In Manteca’s case, it bought time — or more accurately — it allowed the city to live beyond its means.

Manteca used $12.3 million in bonus bucks to balance the budget for the good part of a decade.

Bonus bucks is shorthand for development agreement funds paid in exchange for a developer receiving contractual rights to secure sewer allocation certainty for home building.

Most cities don’t charge such a fee. Manteca can for two reasons: There is a huge housing demand and the city has a 3.9 percent annual cap on issuing residential sewer connections.

Who exactly came up with the bonus bucks concept is a point of debate. But there is no question that the three primary movers at the time were developer Mike Atherton and his partners, former Manteca Public Works Director turned private sector development consultant Ron Chiek and former City Manager Bob Adams.

Bonus bucks were created in a perfect storm. There were 13 developers all pushing for annual sewer allocation that were more than triple than what was allowed under city ordinances. Some players started threatening lawsuits because they came to the table late.

A solution was devised to award multiple-year allocations to projects and to discard the first-come, first served system that also had point ratings for those who opted to go the development agreement route.  But in doing so, they had to give the city something in return.

That something was bonus bucks. Unlike other fees collected on growth, there was no legal restriction on what the money could be used on for the benefit of the community.

Over the years bonus bucks have paid for aerial fireworks on the Fourth of July, the skate park, Tidewater Bike Path traffic signals, part of the cost of building the Union Road fire station, lights for soccer fields at Woodward Park, and several smaller projects.

That was keeping with the general consensus of elected officials back in the late 1990s when bonus bucks were put in place. The implied intent was that the bonus bucks money should go toward one-time expenditures that were amenities for the entire community to enjoy and not ongoing expenses. It also was supposed to demonstrate that growth benefits all of Manteca.

Bonus bucks, though, at one point became an easy out to avoid making hard decisions.

When structured budget deficits started forming, the council was convinced by staff to make a one-time transfer of funds to keep the general fund that pays for day-to-day municipal operations such as police and fire protection from going into the red.

But then everyone was hooked. Instead of reeling in pay increases and staff expansion to keep expenditures in line with general fund revenue, the city started taking more and more hits off of bonus bucks. Growth was in essence subsidizing the city.

It continued until the party was over when home building slowed down in 2006.

When the bonus bucks binge ended for propping up the general fund, Manteca had blown through $12.3 million.

The good thing is the city sobered up under City Manager Steve Pinkerton in conjunction with a citizens’ panel, the council, and city employees that recognized the party was over and that the crash could be disastrous unless steps were taken to curtail spending.

Now it looks as though the city is going clean with bonus bucks.

It has committed $1 million to pay for construction of the Moffat Boulevard Community Center that will do double duty as the Veterans of Foreign Wars post at Moffat Boulevard and Spreckels Avenue/Industrial Avenue.

Even so, it’s usually true that once a binge spender always a binge spender unless there is intervention and something put in place to keep folks on the straight and narrow.

It is why the city under the direction of elected leaders needs to develop a list of potential bonus bucks projects.

Much has been made about not encumbering future councils without a specific project in place.  It didn’t work real well as $12.3 million can attest.

What is needed is a wish list, if you will. It could be projects that bonus bucks could be married with other money to complete or it could be something funded 100 percent with bonus bucks.

It would create a public expectation that bonus bucks will be used for listed projects or other similar one-time amenities and not for day-to-day government operations.

An annual updating of the list at a council meeting would keep the light shining on bonus bucks to avoid mainlining the money into the general fund when the urge comes to take the easy way out and not keep a rein on ongoing spending.

Bonus bucks represent a unique opportunity for Manteca.

They should not be squandered again.



This column is the opinion of executive editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA.  He can be contacted at dwyatt@mantecabulletin.com or 209.249.3519.

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