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Perhaps Manteca should just say no to bonus bucks

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POSTED May 16, 2013 1:06 a.m.

It was the white lie of the last decade.

Bonus bucks - paid by developers to guarantee sewer allocations over multiple years - were talked up to the community as a way for growth to pay for amenities that otherwise Manteca would not have.

For the most part that happened. Manteca got soccer lights for Woodward Park, about half the cost of the Union Road fire station covered, the skate park, Tidewater traffic signals, and even made sure at one time police officers didn’t have to foot the bill for buying dogs they used while on duty. The bonus bucks financed community Fourth of July fireworks and a fairly decent list of other things.

The promise was the money wouldn’t be used to cover reoccurring expenditures. But that is exactly what almost a third of the money went for as some $12.2 million in bonus bucks were used to bridge general fund deficits over multiple years.

There is little doubt without the $12.2 million public safety, park services, and other municipal functions would have been pared back even more as The Great Recession hit.

So how did elected leaders lose sight of the ball?

In a nutshell, they had no plan. And as Winston Churchill would point out, “He who fails to plan is planning to fail.”

And history is about to repeat itself.

Developers are again offering bonus bucks in return for sewer allocation certainty to build 356 single family homes over the next five years in southeast Manteca. It includes $1,068,000 to bolster police and fire services and $712,000 for one-time expenditures in the general fund.

Councilman Steve DeBrum  - apparently worried the city was going to set itself up to commit another white lie - earlier this month wanted to have the council come up with a plan on how to spend the money so there was real accountability with bonus bucks.

He was told that the council can’t bind future councils regarding what is essentially unrestricted money. Legal counsel confirmed that was the case.

Ok, that sounds reasonable. But what isn’t reasonable is this council not locking itself into what it specifically would do with the money if it was collected on  their watch. It’s called accountability.

When the next council is in place in December of 2014 they can revisit the bonus bucks expenditure plan, embrace it, tweak it or change it. That process can be repeated every two years.

There might be a case where the council is in a position to spend money and does so marrying it with another source for a project such as a library as well as future revenue. They would be committing future money of some type to make the project a reality. Sounds strangely like capital improvement projects that already occur over multiple years that happen to obligate future councils into making sure the debt is paid from the collection of future fees.

And let’s be honest about the eight-year stretch from 1999 to 2006. Then City Manager Bob Adams warned about the structured deficit. He actually foresaw what happened in Manteca starting in 2006 with the general fund meltdown. He understood sooner or later growth would slow. What he didn’t foresee was the severity of the housing bubble bust.

Go back and read Adams’  budget messages each year and it was clear what was happening. Elected leaders applied no brakes to city spending or monitoring employee contracts more carefully because the flow of bonus bucks coupled with growth created an illusion the city was awash in money.

It wasn’t.

If the council sidesteps the issue by not going on record on how to spend the bonus bucks even if it is revisited every two years, they will recreate one of the key ingredients for the perfect financial storm that slammed Manteca.

How the city would have spent money from 1999 to 2006 would have been much different without more than $30 million in bonus bucks. Perhaps they would have been lean and mean like they are now. Perhaps it would have set the stage for a sales tax increase. One thing is certain, there is $12.2 million that was spent balancing the budget that will never be used to build a library or another amenity.

But this city has a rich history of squirreling away money such as the home building tax that ballooned to over $1 million and then sat around  for years in accounts that was uncommitted. It was used - like the bonus bucks - to balance the budget.

That is not sound fiscal management. It is using one-time money to pump up levels of municipal service beyond what Manteca could afford.

Staff is right. The council can’t bind future councils.

But by not taking an official position on what they - our currently elected leaders - would do with the bonus bucks that will start flowing again - the stage is being set for more promises to be broken.

Elected leaders should do what one expects and take the lead. This council needs to make it clear what they would do with bonus bucks. If not, they should do us all a favor and refuse to accept them.



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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