A buyer of a new $550,000 home in Manteca today can end up paying as much as $6,500 in taxes, bond payments, and community facility district fees for schools as well as park street light, and common landscape areas upkeep within their neighborhoods.
Based on that one might assume the city is swimming in money.
Take away the bond repayments as well as the schools and neighborhood CFD charges and you are left with a basic annual tax bill of one percent of assessed valuation. In the case of a new home selling for $550,000 that’s $5,500 a year in basic property tax.
But only a small portion goes to the city — roughly 15 percent or $775. Just over half goes to Manteca Unified, 22 percent to San Joaquin County and the rest is split between eight other agencies ranging from Delta College to the San Joaquin County Vector Control District.
It is against that backdrop the Manteca City Council earlier this month directed staff to explore expanding community facilities district charges for new projects that haven’t been processed as well as making sure growth fees designed to pay for everything from new public safety facilities, and community parks, to other government buildings and roads reflect what can legally be charged to new growth.
Determining metrics that can justify adding additional fee charges to a CFD is fairly straightforward,
The city could put in place requirements assuring 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 generate 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 a funding cap per home.
In the case of the 1,237 home Manteca Trails breaking ground to the west of the Meritage Homes project on West Woodward Avenue at McKinley Avenue 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.
Over the past decade or so deals the city has made to land everything from Big League Dreams to reduce general fund expenditures to land unique regional retailers like Bass Pro where more than 95 percent of its sales tax collected comes from non-Manteca consumers have been negated by a large degree by the need to backfill revenue shortfall from new housing.
Services that the city can legally incorporate into CFD charges are police and fire; park, road, and open space maintenance; and flood storm protection system maintenance.
Facilities they could include are parks, parkways and open space; flood/storm protection system; and public facilities with a useful live of more than years.
To contact Dennis Wyatt, email firstname.lastname@example.org