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The fight over LMD fees
Manteca makes assessment over Union Ranch objections
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The acronym LMD – which stands for landscape maintenance district – is just something that shows up on property tax bills for most of Manteca’s 6,983 homeowners that are impacted by the annual fees.

But those three letters frustrate and infuriate the less than 100 homeowners in the Union Ranch LMD.

LMDs have been in place in Manteca for decades to cover common landscaped areas with subdivisions. In recent years park maintenance and street lighting costs have been added. It was done to meet a city goal of having growth pay its way as much as possible and to provide new neighborhoods with their own parks.

Manteca leaders - the target of the homeowner’s fairly polite but strident ire – agree with Union Ranch residents that the city botched things up by not forcing the developers to build the park as they were contractually required to do so  in a timely manner. They also agree with residents that the city shouldn’t have collected fees to maintain the park during the past fiscal year when there was no park in place to maintain and agreed to refund part of those fees minus administrative overhead and a reserve fund. But that’s where the two sides part company.

On Tuesday, the council approved yearly assessments for all of the city’s 33 LMDs including Union Ranch. The Union Ranch assessment reflected only a partial year of the park being available to residents since it isn’t expected to be completed until early 2013. It also covers all other common landscaping plus a segment of the Tidewater Bikeway that runs through the subdivision.

The Union Ranch residents spent more than two hours at Tuesday’s meeting re-emphasizing points they have made at earlier meetings. Those points include:

• The Union Ranch LMD under Proposition 218 is unconstitutional.

The city’s response: Legal counsel has determined that the LMD - as well as all others in the city - do pass constitutional muster and do not have the flaws the Union Ranch residents point to in several instances where several LMDs elsewhere in California were ruled unconstitutional.

• That they receive no special benefits to justify the LMD.

The city’s response: The LMD maintains a neighborhood park that primarily will be used by neighborhood residents, street lighting that primarily benefits neighborhood residents, and common landscaping that enhances the value of the neighborhood.

• The  costs associated with the LMD are incorrect or inflated plus there is no maintenance history to base the Union Ranch charges on since the park isn’t even completed let alone being maintained.

The city’s response: The annual cost was used by gleaning information from a similar LMD that includes street lighting and bikeway maintenance  - the Tesoro LMD. Adjustments, if necessary, would be made in subsequent years if charges proves  too high.

• The election forming the district was unfair.

The city’s response: The election - as required by the developers’ agreement with the builders - was conducted as required by law. Since it is essentially a parcel tax each property owner regardless of parcel size has an equal assessment and an equal vote for each parcel they own within the LMD under state law. Since the developer held the majority of the parcels and was the only one that apparently voted “yes” the LMD was legally approved.

Some homeowners said they did not see a disclosure statement when they were buying their home regarding an LMD being formed. The document, though, must be signed before escrow can be completed. And those his who do remember seeing it noted that it incorrectly estimated the annual charge. In addition the ability to buy a home when assessed by a lender requires that they determine whether the buyer can handle all monthly housing costs including the mortgage, insurance, property taxes, special taxes such as Mello-Roos for schools, and LMD fees.

Several residents hinted at possible legal action but there is nothing indicating that will happen.

Builders delay action on policy proposal to avoid repeat of Union Ranch

It won’t, though, be the end of the LMD debate.

In the next month or so the council will review a proposed policy that basically requires the landscape maintenance district to be in place prior to the issuance of the first building permit. That means the developer has to set up the LMD and then cast all of their votes - one per lot - to approve the assessment mechanism. The LMD would then be in place before homes enter escrow.

At the same time they may require the park be constructed and ready to use before the issuance of a permit for the first production home that is not a model home.

That’s the recommendation of staff. Two other options the council could consider is requiring the park to be completed before the issuance of any house permit including the model homes. Another is to allow the builder to receive 10 percent of the building permits before the park must be completed.

And in cases where the park is in a future phase of a development, it still must be built first and a road to access it put in place from the portion where homes are initially being built.

The council postponed action on the proposal after the Building Industry Association of the Delta asked for more time to review it.