Buyers of homes in the 585-home Evans Estates neighborhood being developed south of Woodward Avenue will be less of a burden on the city’s general fund that most of the existing 73,000 Manteca residents.
That’s because they will live in the second Community Facilities District (CFD) in Manteca. As such they will not only be paying for landscape and sound wall maintenance but they also will cover the tab for maintenance their neighborhood park plus to power and replace street lights within Evans Estates.
It will eliminate creating a burden in excess of $100,000 annually on the city’s general fund that helps pay for municipal services such as police and fire protection, parks, library, and street maintenance among others.
It is part of a long standing council directive for staff to find ways to make sure growth pays for itself as much as possible.
In the case of residential growth, on a typical new home that sells for $375,000 Manteca will receive less than 15 percent of basic property taxes collected or less than $400. The rest of the money collected in basic property taxes each year before bond issues are factored in would bring the tax bill close to $4,000 for such a home. The rest of the taxes go to schools, the county and special districts.
If all of the existing 23,000 Manteca housing units paid $400 a year in municipal taxes, it would generate $9.2 million. It costs Manteca $18.4 million a year to run both the police and fire departments. That is why retail sales that generate sales tax as well as large commercial ventures that pay higher property taxes are critical to a city’s financial health. Manteca is no different than any other California city operating under the restraints of Proposition 13 when it comes to property taxes.
In reality, most existing housing units pay far less in taxes with an even smaller share going to the city. A home with an $180,000 assessment ends up paying basic property taxes of $1,800 a year with less than $200 going to the city. Many homes that people have lived in them for longer than 20 years have an even lower city tax bill than $200.
Critics of the formation of CFDs often advance conflicting arguments. They want new homes to pay their way but they then contend it is unfair that the city is making those impacted new homeowners pay for park upkeep and street lights that others living elsewhere don’t pay for separately and do so on top of existing taxes.
City Manager Karen McLaughlin noted that those existing parks within landscape maintenance districts have a higher level of upkeep than other neighborhood parks that aren’t in an LMD.
The City Council has the Evans Estates CFD before it Tuesday when they meet at 7 p.m. at the Civic Center, 1001 W. Center St. The matter simply involves a resolution about the intent to form a CFD.
But formation is essentially a foregone conclusion. Each parcel created has one vote. The city requires a CFD to be in place before a development exceeds a certain level. The developer as part of the approval process for a subdivision agrees to form a LMD or CFD. It is designed so that the developer will still hold onto the vast majority of parcels when the vote is finally taken. If the developer doesn’t follow through and vote for it, development essentially comes to a halt.
During the purchase agreement and escrow process, buyers are made aware that a LMD or CFD is being formed and what the estimated annual cost will be. Mortgage underwriters take that annual expense into account in determining whether a buyer has the income to qualify for a loan on the home.