View Mobile Site

Can 957 lots ready to go help ease municipal budget woes?

Text Size: Small Large Medium
Can 957 lots ready to go help ease municipal budget woes?

A construction crew works on a home site in Florsheim's new neighborhood on Heartsong Drive in southwest Manteca.

HIME ROMERO/The Bulletin


POSTED January 23, 2010 2:44 a.m.
There are 957 finished residential lots ready for homes to be built that could generate $633,000 annually to reduce municipal budget gaps.

How those lots could work to Manteca’s advantage when combined with other moves to prevent further erosion in municipal services paid for with general fund receipts depends on several things occurring.

•An average of 300 homes would need to be built in 2010, 2011, and 2012.

•Manteca would not add additional staffing to serve those additional residents.

And such a move could also take pressure off short-term sewer and water costs to put off the need for additional rate hikes in each of those enterprise accounts.

Municipal Finance Director Susan Mallory noted the city foresaw a drop-off in building and assumed no growth when projecting the sewer operation and maintenance costs and just a one percent gain in growth or 210 homes when setting up the water operations budget.

The possible scenarios to ease Manteca budget woes triggered by The Great Recession and the foreclosure meltdown were examined during a council subcommittee meeting with developers to determine if there is a way to get housing starts to pick up in a bid to put more people back to work.

Manteca now has a 15 percent unemployment rate with San Joaquin County’s jobless rate at 17.1 percent.

Calculations show that it costs the city $1,457.37 in general fund dollars to provide municipal services to existing property that is within a subdivision that have infrastructure in place but are not built out. The typical household generates $209.01 in property tax, $226.50 in vehicle license in lieu taxes, and $98.83 in sales tax revenue for total revenue of $534.34.

That would represent a net deficit per house of $923.03 based on how the city was operated before budget cuts where instituted.

Unlike new subdivisions that are on the perimeters of existing development and are being processed but haven’t broken ground, the 957 finished lots for all practical purposes are being served already as the streets and parks are in place that has to be maintained. Police and fire coverage is also partially based on geographic concerns involving response times. Both departments are already responding to the seven neighborhoods where the finished lots are located.

The scenario assumes no increase to city costs which may not be 100 percent practical. At some point it may trigger a need for an additional police officer as the lots – once all are completed – have the potential of adding 2,880 residents. Under the city’s projection, they would generate $46,893 in additional Measure M sales tax that could go toward covering almost half the salary of a police officer.

The calculations were used to discuss the pros and cons of various possible moves the city could do to move the job rich construction industry forward without hurting the city.

The possibilities are being explored due to the fact housing is the biggest private sector generator of jobs in Manteca from construction work with a trickledown effect to services and retail. It even increases expenditures in health care for the new residents.

New subdivisions breaking ground present an entirely different set of dynamics.

It is common for houses to cost cities more in expenses than revenue in California following passage of Proposition 13. Cities make up for it through retail sales and property taxes paid by large-scale employers or operations such as factories and distribution centers.

City Manager Steve Pinkerton compared Manteca with Pleasanton. The two cities have the same population yet each home there generates $1,300 in property tax compared to $400 in Manteca per home on average That is due to several factors. Pleasanton restricts home building and because of that prices are significantly higher than in Manteca.

At the same time Pleasanton has a number of office buildings that are big property taxpayers. Most of those who work in them do not live in Pleasanton. That allows Pleasanton to get the advantage of the lunch trade and shopping revenue taxes plus the business taxes without worrying about providing services to those people who leave town after work.

Some San Joaquin County regional planners have noted the county for close to 30 years has been the de facto affordable housing solution for high cost East Bay communities such as Pleasanton and Livermore.
Commenting is not available.

Commenting not available.

Please wait ...