Smart “loans” — such as for Happy Daze RV and the Ripon Terrazza commercial center on Ripon Road — are helping the City of Ripon to wean off its dependency on sales tax connected to the sale of fuel at the city’s three truck stops near Jack Tone Road.

Ripon currently is still owed $1,082,00 in economic incentive funding advanced to make the two projects pencil out for developers. The debt is being repaid through the capture of increased sales tax.

Ripon leaders, in adopting the 2026-2027 municipal spending plan on Tuesday, made it clear the city will need to continue looking at ways to increase sales tax in view of the state’s targeted elimination of the sale of new vehicles powered by fossil fuel by 2035.

The city is already dealing with a four year trend of revenues increasing 4 percent annually and expenses decreasing 7.1 percent annually,

The expense side is being driven by persistent inflation, increased unfunded CalPERS retirement liability, employee health insurance premiums, and rising fuel costs among other things.

That said, the city’s budget is balanced for the current fiscal year and all debt obligations are being met.

“We do a good job of monitoring our nickel and dimes but (other) forces are at work,” Mayor Gary Barton noted on Tuesday alluding to health care and pension costs going up.

Barton added “the continued move to electric vehicles, which is impacting sales tax at our primary source at truck stops, (means) we may have some challenges in front of us.”

During the fourth quarter of 2025, zero-emission vehicle sales statewide numbered 79,066 to account for 18.9 percent of all new car sales, according to the California Energy Commission.

There are now 2.5 million EVs on the road in California.

That clearly will be detrimental to the Ripon general fund in the long-run as it covers the cost of day-to-day municipal operations such as police, parks, and streets upkeep.

Sales tax is the general fund’s biggest revenue source at 22 percent with the sales tax collected on gas and diesel fuel accounting for the lion’s share.

Economic investments by the city in the Ripon Terrazza commercial center and Happy Daze RV is helping reduce Ripon’s dependence on sales tax on fuel.

Ten years ago, 63 percent of the city’s sales tax came from truck stop fuel sales as well as those at Ripon’s gas stations. Today, it is down to 40 percent.

City sales tax receipts after reaching a record $4.5 million in 2021-2022 dropped to $4.04 million. Sales tax receipts are now in excess of $4 million and expected to grow 3.7 percent this year.

City Administrator Kevin Werner agreed with Barton that “the trends are pretty clear” when it came to revenue and expenses.

Werner noted that the city is not in a perilous situation at the moment but instead characterized it as a “difficult position” that needed to be closely monitored over the coming year to two years.

Economic incentive effort

is doing as it was expected

The effectiveness of the $1.3 million economic inventive that was part of the effort that landed Happy Daze RV with its 40,000-square-foot facility and 20 service bays can be seen in how rapidly the new source of sales tax has been paying the city back.

The dealership was under construction for most of 2022.

The outstanding balance on the loan is $712,000.

That means over three full years and two partial years in 2022 and this year, the dealership generated $588,000 in sales tax that was used to repay the city.

At the current rate, the debt will be paid off in three to four years with the city then getting its full share of sales tax unencumbered by the loan pay off for a gain of $150,000 plus a year.

Keep in mind without the economic incentive, Ripon likely wouldn’t have landed the RV dealership with its ability to generate significant sales tax from its after sale service, maintenance , and accessory sales.

The remaining owed the city in the Ripon Terrazza debt is $370,000.

It should be noted nearly a quarter of a century ago — as the result of what was at the time an overwhelming community pushback — the city basically blocked big box development when Walmart was exploring building a store on Jack Tone Road near River Road.

That means Ripon is bleeding sales tax when local residents opt to purchase goods at Walmarts in Modesto or Manteca just as the city does when they buy goods at Costco or Home Depot/Lowe’s in those two cities instead of at local merchants.

Street light challenge

Ripon in the next couple of years will also have to decide whether to ask single family homeowners for an increase in the $42 annual street light assessment that has been the same since 2025, or siphon money from the streets fund as the city currently does to fund a $95,485 annual shortfall in five landscape maintenance district costs in the city.

Tapping the street funds comes at a cost.

It means Ripon has less money available for street-related work and repairs.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com