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New homes may pay tax for police, fire

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POSTED March 6, 2014 1:58 a.m.

Future community facilities districts for new neighborhoods built in Manteca could tax those that buy homes for the cost of police and fire services among with other municipal amenities.

It was one of the possibilities municipal staff outlined as the City Council approved formation of Manteca’s first residential community facilities district (CFD) on Tuesday night. The owners of future homes in the 274-lot Pillsbury Estates being built by Meritage Home just to the west of the Hat Mansion at the end of Pillsbury Road will shell out at least $320 a year to cover park maintenance, common landscaping and street light operations and amenities within the subdivision. The CFD tax could increase automatically each year by 3 percent.

Unlike landscape maintenance districts (LMD) that have been used by Manteca for years to cover sound wall and landscaping maintenance, a CFD is much more flexible. The city could assess taxes for a wide array of municipal services normally covered by property taxes such as police and fire services and street maintenance. 

The city, though, can’t automatically add services to be covered to a CFD once it is formed. It would require a two thirds vote of impacted homeowners to add additional services that would in return require an even higher CFD tax per home. That is impossible to do with LMDs

Buyers of homes — either directly from the builder or down the road in the resale market — are made aware of the existence of CFD taxes and other tax obligations in their escrow documents.

That means a home that sells for $300,000 in Pillsbury Estates would be subject to a $3,000 a year property tax bill of which the city receives a portion, a $320 CFD tax, and Mello-Roos taxes for school construction.

Meritage Homes, which still holds all 93 lots, cast all of the votes. Future home owners did not get a say in approving the CFD. Even so, if they do not like the CFD they simply have the option of not buying in the Pillsbury Estates neighborhood.

It is part of an ongoing municipal strategy to reduce the general fund burden paying for the additional cost of serving residential growth.

The council Tuesday also approved two additional public hearings for CFD elections on April 15. One is for the 536-lot Oleander Estates being built southwest of Main Street and Woodward Avenue. The special tax for the 2014-15 fiscal year would be $184 per lot.  The other is the 93-lot Blossom Grove Estates being built southeast of Union Road and Woodward Avenue. The CFD tax is $670 a year.

The more homes that the costs are spread over especially when it comes to the big ticket item of park maintenance the lower the tax.


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