There appears to be a desire among the current Manteca City Council to assess fees on new construction going forward to bridge the funding gap for day-to-day municipal services that growth creates.
The council Tuesday directed staff to place an item on the April 6 agenda to discuss making community facilities districts (CFD) more robust to cover shortfalls in funding for municipal services that growth creates.
That would mean that the city could put in place requirements that assures new homes as well as commercial and business park projects generate enough taxes to cover maintaining service levels.
By focusing on service levels, the city would not be funding an expansion per se of police and fire services. Instead they would be assuring the current staffing level of police and firefighters would be maintained per 1,000 residents.
The fee for doing so is determined in a straight forward manner. A study is done that determines how much property tax each new home will create that goes to the city plus the anticipated sales tax that household would pay that would end up in municipal coffers.
The current police and fire expenditures spread over existing homes would determine a cost per household. Taxes generated by new homes that are built would be subtracted from that figure to determine funding cap per home.
In the case of the 1,237 home Manteca Trails breaking ground to the west of the Meritage Homes project a study last year determined that gap was a $69 shortfall to simply maintain current police and fire staffing on a per 1,000 residents basis.
At build-out without factoring in automatic adjustments for inflation, the Manteca Trails fee would generate $85,353. That is roughly half the cost of a police officer including retirement and benefits.
It may not sound like much given it is 1,237 homes, but it would reduce the financial bleed the city has going forward caused by literally thousands and thousands of homes having been built that aren’t paying their full share.
It is not a cure all as much as it is a way to prevent growth from continuing to deteriorate service levels while the city works on new revenue sources whether it is from tourism dollars via Great Wolf and the family entertainment zone or a citywide tax initiative of some type.
Under the Mello-Roos Community Facilities Act of 1982 the CFD can also be used for streets, storm drains, and library services and such. The CFD approach is already used to pay for neighborhood park and street lighting upkeep as well and to keep common landscaping areas maintained.
The council ended up voting 3 to 1 with Mayor Ben Cantu dissenting and Councilman Jose Nuño absent to approve a “master” CFD for the Meritage Homes project that puts in a based cap of $318 to cover the maintenance of common landscaping, street lights, and parks in the 655 home neighborhood.
The council was not willing to simply reject the CFD and instruct gap funding for police and fire services be added after being advised the terms presented to them were exactly what the city asked the developer to address.
Councilman Gary Singh expressed concern rejecting the CFD under those circumstances and asking the developer to add police and fire services could prompt Meritage Homes to sue. That’s because without a CFD in place — a condition the developer agreed to — Meritage could not start building homes.
“In good conscience I don’t feel like compounding the problem anymore,” Cantu said in voting against the Meritage Home project and later in the meeting a 49-home infill subdivision across from Sierra High.
There was no opposition on the council to the idea of expand future CFDs in a bid to reduce or eliminate shortfalls in funding municipal services that future growth will create.
Councilman Dave Breitenbucher, as an example, made it clear that growth should be required to keep the city whole for service demands they create such as for police and fire.
It is in stark contrast to how a previous council dismissed outright in less than a minute a similar proposal eight years ago by then City Manager Karen McLaughlin for elected officials to consider expanding the CFDs to help cover police and fire services, street maintenance, and upkeep of the storm water system.
Since then Manteca has added more than 3,200 more homes that have compounded the funding problems for day-to-say services as Cantu pointed out.
“If we build homes anywhere in the community it’s not paying for itself,” Cantu added.
It’s an observation that no one on staff dismissed as not being accurate.
That prompted Cantu to say he’d like to see the staff research how much growth is not covering its fair share of the cost of day-to-day municipal services that rely on the general fund. The mayor indicated the numbers such a study would produce would provide the council and community with the scope of the problem. As such, the information generated would help the city put in place solutions.
The Meritage Homes project is south of Woodward Avenue at its intersection with McKinley Avenue.
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