Minutes after arguing a tax proposed by municipal staff on new homes to pay for police and fire was unfair, the Manteca City Council added a $2,500 per home charge to give elected leaders money to spend as they please.
The future buyers of the 356 homes in Woodward Park I and II planned for 116 acres between Pillsbury Road and the future extension of Atherton Drive in south Manteca will have a $7,500 bonus buck charge collapsed into the price of their homes at the council’s directive Tuesday night.
That compares to a $5,000 bonus buck charge that buyers of each of the 514 Sundance homes approved early in the meeting will have to ultimately cover.
Staff had negotiated a development agreement with Atherton Homes to put in place a community facilities district that would have required the future homeowners in Woodward Park I and II to cover the salary of one police officer and sixth tenths of a firefighter in perpetuity. The public safety coverage was based on the city’s goal of one police officer per 1,000 residents and sixth-tenths of a firefighter per 1,000 residents. The fee would have cost a homeowner $427 in the initial year with the possibility of annual increases capped at 3 percent per year.
That struck council members Mike Morowit and Rich Silverman as an unfair tax since only residents in the two new neighborhoods would be paying it.
Morowit rattled off a long list of taxes that buyers of new homes pay — Mello Roos taxes, property taxes, Measure G school bond taxes, and Measure M school bond taxes among others — plus extra sales taxes for public safety through Measure M and transportation through Measure K.
Morowit said he had a problem placing another tax on new homeowners especially given they would be the only one paying it. He also pointed out the Measure M public safety tax is supposed to take care of additional police and firefighters needed to serve growth.
“It’s just over taxation,” Morowit said.
Silverman agreed with Morowit. He added that he appreciated staff’s creative thinking but said the tax “didn’t just sit right” with him.
Silverman also worried about legal ramifications and the assumption the 356 future homeowners could believe that they should have better police service because they would be underwriting the salary of one officer.
He then suggested the developer possibly sweeten the amount of bonus bucks he would pay in exchange for sewer connection certainty. Bonus bucks — unlike other fees collected on new homes including the rejected community facilities district tax for police and fire — have no restrictions on how they can be spent by elected officials.
Councilman Vince Hernandez, noting that the developer was agreeing to pay the bonus bucks even though the city had suspended them from being collected through Dec. 31, 2016, made a motion to drop the police and fire property tax and approve the development agreement with the $5,000 bonus buck charge per home as negotiated.
His motion died for a lack of a second.
Morowit then suggested the council members try several numbers that might work in terms of increased bonus bucks. He tossed out $7,500 and noted “that could be the new standard.” Silverman seconded the motion and the rest of the council approved it.
That means the city ultimately will collect $2,670,000 in bonus bucks from Woodward Park I and Woodward Park II. While the city will collect the money from the developer when a building permit is issued, the $7,500 charge is ultimately passed on to the buyer.
Bonus bucks are being used to finance the $1.6 million Manteca Veterans Center now under construction on Moffat Boulevard.
The bonus bucks were ballyhooed in 1999 when they were adopted as a way to have growth provide amenities for all of Manteca to share. And they did to a degree. They paid to cover about 60 percent of the Union Road fire station’s cost, built the skate park, paid to install soccer lights at Woodward Park, and place traffic signals along the Tidewater Bikeway among other things.
But a large chunk of the money ended up covering multiple year general fund shortfalls as the city scrambled to find ways to broaden the retail base and bring in employers to fill private sector business parks that in turn pumped up property tax receipts. Property and sales tax account for the majority of the municipal general fund that pays for day-to-day services such as police, fire, parks, and streets.
Over $12.2 million in bonus bucks were used over multiple years to bridge general fund deficits.