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Council’s respect for state constitution has cost city $10M

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POSTED July 25, 2012 12:14 a.m.

Does the Manteca City Council ignore the California Constitution?

It’s a charge that more than a few angry homeowners impacted by the botched up Union Ranch Landscape Maintenance District (LMD) have leveled. They point to language in Proposition 218 in an attempt to make their case. The voter approved initiative covers part - but not all - of the mechanisms involved in forming, operating and implementing fees for a LMD. The California Landscape and Lighting Act that precedes Proposition 218 governs much of how an LMD is put together and how fees are assessed.

The record shows that the council does indeed respect and follow the California Constitution. They respect it so much that on Oct. 1, 2001 a city ordinance went into effect that was unanimously supported by the council in office at the time that ended up costing Manteca’s general fund close to $10 million so far. One can make an argument that the revenue reduction imposed by the elected council help set the stage for structured deficits that the city is now working itself from under.

On the council at the time were current members John Harris and Willie Weatherford as well as then Mayor Carlon Perry and council members Denise Giordano and Dave Macedo.

The city in the 1980s had imposed a monthly $2.35 per residential customer and a higher tax that varied on businesses. The tax was in place before Proposition 218 passed in 1996. That proposition restricted how local taxes could be imposed requiring a vote of impacted property owners before a tax could be imposed as well as a vote before assessments could be increased. The courts have backed up the need to require a vote to impose an LMD but also have kept intact rules in how cities can make changes in annual assessments for the operation of LMDs.

The city utility tax was a different animal. After citizen Malma Nicholson brought it to the council’s attention that the legality of such a tax was being challenged in other municipalities in the aftermath of Proposition 218’s passage, the city sought a legal opinion.

Legal counsel said it was murky territory and offered an explanation with two options: keep the tax intact until it is legally challenged by someone in Manteca paying the tax or put it on the ballot to have voter re-affirm the tax and therefore remove all possible doubt.

The council took a third avenue. As Harris noted at the time, the council wasn’t comfortable with having anything on the books that was a good chance contrary to the California Constitution and changes to that document adopted by the voters.

So on Oct. 1, 2001 they officially repealed the tax. They went a step further and refunded three years of taxes to those that it had been collected from. The annual loss in revenue was roughly $690,000.

The tax had originally been imposed to pay for storm drain improvements needed to eliminate what had been habitual flooding in several neighborhoods as well as downtown. It was also put in place to cover ongoing maintenance and operational costs of the citywide storm system.

The city still has not found a dedicated source of revenue to cover those expenses plus capital replacement needs as pumps wear out. As a result, that critical need is vying for what has been shrinking general fund dollars over the past five years.

There is no debate that the city flubbed up by not enforcing a contractual requirement with the developer who purchased the subdivision to put the park in place. Their lawyers contended that the language in the development agreement that was negotiated by Atherton Homes from whom they bought the project didn’t require them to put the park in per se but simply collect the fees.

The developers also didn’t do what the agreement called for in setting up a LMD formation vote in a timely manner.

The city - instead of engaging in a drawn out legal battle that would have further delayed the park being developed - opted to do the work itself. That is when the problems started multiplying. The park is just now going in yet Manteca collected fees from Union Ranch homeowners to maintain the park over the course of the last year.

Part of that money is in the process of being refunded.

Allegations that the vote establishing the LMD is a blatant violation of the California Constitution is simply not true.

Under state rules governing the formation of LMDs, owners of each individual parcels - regardless of whether there was a home on it or how many square feet it consists of - have one vote.

The developer held the vast majority of the parcels when the vote took place. The developer was not coerced into voting for the LMD formation. They agreed to it when they bought the paper subdivision that included the development agreement. Language in that document is explicitly clear that the developer had agreed to establish a LMD which means it must contractually cast its votes to do so.

There are other issues such as special benefit and such. But it is clear that the vote forming the LMD and the fees per se are not in violation of Proposition 218.

And it is also clear that the council takes the California Constitution and approved voter initiatives seriously to the tune of almost $10 million in lost general fund revenue.



This column is the opinion of managing 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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