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Manteca council voting Tuesday to formally not accept $6.9M

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POSTED September 1, 2014 12:24 a.m.

A decision to forgo $6.9 million in bonus bucks through Dec. 31, 2016 plus reduce the development agreement fees to $5,000 after that is back before the Manteca City Council for ratification on Tuesday.

In doing so, it will set in motion full-scale public hearings before the Planning Commission and City Council on the decision and its impact on the city right in the middle of the current council and mayoral campaign. The election is Nov. 4.

The council two weeks ago extended a 2010 decision to not collect bonus bucks through June 30, 2015 for an additional 18 months until Dec. 31, 2016.

The matter was brought to the council for action after elected leaders instructed staff on June 17 to bring the matter of extending the bonus bucks free period back within 60 days to the council.

City Manager Karen McLaughlin noted the Aug. 19 meeting  was two days beyond the 60-day mark but added “it was the closest staff could get” to the council directive.

The directive came during approval of a development agreement for Raymus Homes’ Oleander Estates at the June 17 meeting. Prior council action in 2013 when the council approved $5,000 development agreement fees for Atherton Homes’ Woodward I and II subdivisions indicated elected leaders were open to rolling all development agreement fees back to $5,000 per home once the suspension of the fees ended.

While no builder is currently paying bonus bucks, only two local builders currently building homes would be on the hook for them whenever they got back into effect — Raymus Homes and Atherton Homes.

What the council

will consider Tuesday

Three other current builders and at least one moving toward ground breaking declined to agree to pay the city bonus bucks for sewer allocation guarantees. That’s because under the city’s 29-year-old 3.9 percent growth cap and how it allows unused allocations to rollover into future years, there is no danger of the city maxing out sewer allocation unless 3,000 homes are built in  the next several years. That’s because in addition to the 900 or so homes now authorized to be built in a  year  under Ordinance 800, more than 2,500 sewer allocations have rolled over and are available to builders at any time.

In essence, even the point system designed to encourage better designed neighborhoods is mute since it only comes into play when developers jockey for available sewer allocations, In  short, the growth cap is essentially worthless in terms of capping growth or making sure those that do get sewer allocations build beyond minimum standards.

And legally builders with development agreements might be able to simply opt not to pay the bonus bucks. In doing so they’d lose their ironclad guarantee of sewer allocations but given the oversupply of hook-ups available it wouldn’t stop them from securing sewer access.

Based on direction from the council and advice from  legal council on Tuesday when elected leaders meet at 7 p.m. at the Civic Center, 1001 W. Center St., they will be asked — based on  their directive — to

*reduce the per unit development agreement fee to $5,000 per unit with credit provided for development agreement fees paid to date.

uextend the development agreement fee waiver though Dec. 31, 2016 for an extension of 18 months.

uextend the life of the development agreements and the relative life of tentative subdivision maps by 18 months.

uprocess the development agreement amendments to be considered by the Planning Commission and the City Council.

urequire individual developers to pay the city’s application fee for development agreement amendments to the tune of $1,391 per development agreement.

The 18-month extension based on 466 building permits being issued means the city would lose $6.9 million in bonus bucks if current fees are kept in place and $3.2 million if they are lowered to $5,000 per unit. Some fees in place currently go as high as $19,000 per home.

The bonus bucks are discretionary in that the council can use them for any purpose.

What bonus bucks

have paid for in Manteca

Bonus bucks in the past have paid to help build two new fire stations, develop portions of Woodward Park, hire six additional police officers, paid part of the tab for aerial fireworks on the Fourth of July and covered $12.8 million in general fund shortfalls due to municipal services being expanded to accommodate the needs of new residents.

The council’s vote in 2010 to hold the fees collected in exchange for sewer allocation certainty in abeyance was in response to the collapsing housing market that made building new homes unprofitable.

As such developers, who had more than $40 million in infrastructure stranded in the ground for 965 lots were ready to build new homes could not keep construction workers employed.

It also meant the city didn’t have growth it needed to help keep the general fund and enterprise accounts from retracting even more and in turn forcing municipal, layoffs beyond wage and benefit concession.

The City Council on a 4-0 vote — with Councilman Steve DeBrum absent — directed staff to bring back the extension for a final vote at this Tuesday.

Council members last meeting expressed concern the continued collection of the fees could hurt the housing recovery.

Just  three months ago council members seemed eager to return to the collection of bonus bucks.

In response to an early May council query on what city staff could spend proposed bonus bucks being offered by Atherton Homes in exchange for assuring sewer allocations and water for 356 homes they’d like to build over the next five years in southeast Manteca, the following comments were made:

uFire Chief Kirk Waters said he would buy a water tender to fight grass fires plus purchase a new fire engine.

uMark Hall of the Parks & Recreation Department said he would build new picnic shelters for Lincoln and Northgate parks and toss in a new restroom facility at Northgate.

uPolice chief Nick Obligacion said he would purchase new patrol units and pay for additional officer training.

There was no concern at the time from anyone on the council about having Atherton Homes pay $1.8 million would prompt the builder to go elsewhere due to a “soft housing market.”

The bonus bucks are collected on top of growth fees. Manteca collected almost $41.2 million over 11 years before they were suspended 39 months ago.

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3 comments
HereYaGo: 1 month, 2 weeks ago

This City had their employees take HUGE CUTS with the last contract. To me this says "FU City employees we want to give our money to the developers" Complete non-sense!! They would not be giving this 6.9 MILLION to pad the City employees' pockets but to hire new employees to sustain the growth.

Of course DeBrum will show his opposition because he knows the four other puppets will vote for it ...

This City Council needs new blood ... To every tax paying citizen in Manteca ... go to the polls this Novembner and VOTE OUT the sitting council ... There is enough in the election to do this!


JimHilson: 1 month, 2 weeks ago

"and covered $12.8 million in general fund shortfalls due to municipal services being expanded to accommodate the needs of new residents."
This is exactly why the fees are in place. If you don't collect them from the developer up front you can't expand your municipal services because you won't have the money. It doesn't matter if it is a water theme park or a house or an industrial complex. They all put a strain on the infrastructure that will require expansion and that takes money.
Get the developers out of your pockets and do what is good for the city and the surrounding area.


cmj: 1 month, 2 weeks ago

Very poorly run city. Don't come begging for money from the residents in new taxes while you give up money from these corporations.




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