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Bonus bucks saved city’s bacon

Mayor, other critics say they drove up price of new homes

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Bonus bucks saved city’s bacon

Bonus bucks built the Manteca skate park.

Bulletin file photo/

POSTED February 11, 2012 1:33 a.m.

There was a time just six years ago that builders willingly paid up to $17,000 extra just to assure they could connect to the Manteca municipal sewer system when they got ready to build a home.

The known by its nickname of bonus bucks – was supposed to be that – money for “bonus” projects that the city couldn’t otherwise afford to provide its citizens. It was characterized in 1999 when it was adopted as “a way to have growth to enhance community amenities.” It has absolutely no strings attached unlike development fees attached to specific infrastructure needs tied directly to growth.

The last bonus buck was collected in March of 2010. That’s because the council at the time opted to put the collection of bonus bucks in abeyance until June 30, 2015. Up until March 2010, Manteca had collected $42 million in bonus bucks. The abeyance decision meant Manteca has given up more than $6 million so far with the possibility of forgoing $36 million once all development agreements in place in March 2010 are factored into the equation if the abeyance isn’t eventually lifted.

Manteca Mayor Willie Weatherford believes the entire concept of bonus bucks may need to be given another look when June 2015 rolls around given how the housing market has changed.

Weatherford initially in 1999 wasn’t enthusiastic about bonus bucks that were offered as a way for 13 developers to avoid suing each other while jockeying for limited sewer allocation each year. His concern then – and now – is the fact the additional cost that provides the city money to do with as it pleases simply drives up the cost of housing. Buyers, as the mayor noted, and not builders are who ultimately pay the bonus buck tab.

It is the same sentiment of other critics of what is essentially a housing surcharge passed on to buyers of new homes

Weatherford won’t have a say in the ultimate fate of bonus bucks unless the council revisits the issue before the abeyance expires. Weatherford plans to gavel his last meeting when his term ends in December of 2014 some seven months before the abeyance decision expires.

Some of the $41 million in bonus bucks collected over the years has paid for the skate park, traffic signals along the Tidewater, soccer field lights at Woodward Park, part of the cost of the Union Road fire station, and even annual aerial fireworks displays. It also included $8 million collected specifically for a public safety employee salary endowment fund. Ultimately the lion’s share of bonus bucks – over $16 million – has been used to cover general fund operating deficits. 

Essentially bonus bucks helped avoid even deeper cutbacks in municipal services covered by the general fund as the city worked to reduce costs and rework employee contracts to bring spending in line with revenues.

Manteca has $1.9 million in unrestricted bonus bucks left. Given the razor thin status of the general fund, that money has been set aside as a back-up emergency reserve.

Developers argued in March 2010 that if the bonus bucks were dropped, Manteca new home construction would continue to provide jobs as well as a growing economic base for the community.

That is essentially what happened. There were 957 finished lots that existed in March of 2010 when the collection of bonus bucks were suspended. Since then 640 of those lots have been built on to add 1,000 new residents on average in each of the past three years. That in turn has provided additional business for local retailers and service providers to help them weather the economic downturn.

The concept of bonus bucks came up 13 years ago when the 13 builders were jockeying for limited sewer allocation as the new housing market started to take off. The 13 builders agreed to pay the bonus bucks – they started at $2,200 back in 1999 – in exchange for sewer allocation certainty over multiple years. They were fearful that whoever didn’t come up with sewer allocations under the growth management ordinance that awards up to 3.9 percent in allocation on January first of each year based on the number of existing residential units might sue.

Back then the maximum allowed sewer connections that could be issued in one year was just over 600. This year, the maximum allowed is over 900.

Builders in March 2010 framed the issue of dropping the bonus bucks charge altogether as an issue of fairness.

There are at least three new projects going through the planning process today that are not encumbered with bonus bucks. That means developers either with finished lot or entitled lots who signed bonus buck agreements would have been at a $17,000 per home disadvantage if they weren’t currently in abeyance.

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