Bonus bucks won’t be collected for another 28 months — if ever again.
The Manteca City Council Tuesday unanimously agreed to continue the process of implementing a rollback of unrestricted development agreement fees that run as high as $19,600 down to $5,000 per home.
At the same time steps will be taken to extend the non-collection period for the negotiated fees that started back in 2010 for another 18 months when the moratorium on paying them ends on June 30, 2015.
The action came after City Manager Karen McLaughlin answered queries about who agreed to pay what was at one time a universal fee home builders had to embrace to assure sewer allocation certainty during the hot housing market of the last decade.
Of the current active builders only four are under contract to pay the fees – Raymus Homes, Atherton Homes, Del Webb, and Woodside Homes that purchased a pre-existing project that had the development agreement negotiated by Atherton Homes. Most have not been paying the fees since 2010 when they were placed in abeyance although Raymus Homes paid more than $600,000 in advance of breaking ground during years that they did not build homes as they honored their agreement.
Meanwhile, four other developers now building or getting ready to break ground declined to agree to pay the unrestricted fees in addition to growth-related fees when they realized there was no danger of them not securing sewer allocation under Manteca’s 3.9 percent growth cap.
After being asked by Councilman Steve DeBrum, McLaughlin said those who are contracted to pay the bonus bucks could — after the moratorium on collecting them ends — opt to walk away from their contract and could continue to build as long as they adhered to conditions tied to the subdivision map. In essence, whether bonus bucks are ever paid again is in the hands of developers and not the city.
Mayor Willie Weatherford, who brought up his original misgivings about bonus bucks when they were adopted years ago at the development community’s insistence, noted the developers aren’t the ones who ultimately are paying the bonus bucks bill. Instead, it is the buyers of homes that have the bonus buck fee whether it is $5,000 or $19,000 collapsed into the selling price of the home that is then financed over 30 years.
Weatherford implied the city could do citizens a better service by not partaking in bonus bucks noting in this case government was making spending decisions that weren’t keeping government as lean and efficient as possible.
That point was backed up in the fact $12.8 million of the $41.2 million in bonus bucks collected over the past 11 years went to cover general fund shortfalls. Ironically, that is $2 million less than the structured deficit the city had to whittle down when the Great Recession hit. The 30 percent reduction in city personnel and the rollbacks of actual and negotiated compensation for municipal employees would have had to been done years ago during the booming economy. In other words, under Weatherford’s analysis, the city wasn’t lean and efficient because they could tap into stockpiled bonus bucks to avoid making hard decisions.
Mayoral hopeful Ben Cantu took a different tact chiding the council for forgoing $6.9 million that could be used for a long list of civic needs out of fear developers might go elsewhere if bonus bucks were collected starting July 1, 2015.
While Cantu conceded growth is needed including new homes, he said developers “shouldn’t profit” at the expense of Manteca residents.
Cantu rattled off a long list of what the city could do if it collected $6.9 million in bonus bucks. The list included sidewalks for the 500 blocks of Lincoln, Acacia and Poplar streets, storefront improvement funding for downtown, adding a plan checker at city hall to speed up building permit processing, widening the 100 block of East Louise, widening the railroad crossing on Louise Avenue between Union Road and Airport Way, hiring more gang officers for Manteca Police and repairing deteriorating streets among other things.
He asked the council to reconsider their bonus bucks actions.
Councilman Steve DeBrum, who is facing Cantu in the Nov. 4 election to become Manteca’s next mayor, said he would have preferred the council to have addressed the possibility of extending the period of not collecting bonus bucks until a time closer to the actual expiration to better assess the situation.