Councilman Gary Singh is advocating a four-point plan to fix Manteca.
It involves a little pain for existing residents. It requires buyers of new homes to shoulder their share of day-to-day city services. It involves any new annexations to have a much more reasonable property tax split with San Joaquin County. And once those are in place it assures landing Great Wolf and similar endeavors going forward will augment municipal revenue instead of simply going to plug the financial hole created over the last two to three decades.
*POINT NO. 1: Raising rates on sewer, water, and solid waste to reflect actual costs, capital needs going forward, and to repay $20.3 million “borrowed” from the streets accounts and other funds to keep rates artificially low for the past eight plus years.
Whether you like the current council or not, they deserve high marks so far for one thing: They were willing to dig into what is ailing Manteca and once the underlying financial issues are made clear are committed to fixing it so going forward the city can do a better job at delivering services and amenities.
This is not at overnight solution. It will also require the current council to not only acknowledge the numbers and the debt that must legally be repaid and put in place a rate structure to make all three accounts whole but they — and future councils — must resist the temptations to suspend scheduled rate hikes for political reasons.
You may not like it but we all need to pay the true cost of the services we use whether it is for water, flushing our toilets, or having our garbage hauled away and properly disposed of. It is the most black and white expense the city has.
And as the $20.3 million is paid back, the city will be able to use it for what it originally was collected to do — upgrade streets.
*POINT NO. 2: Imposing fees on growth to cover funding shortfalls for maintaining basic services that new housing cuts into. It would be done via community facility districts that are a requirement for developers to put in place prior to being granted final maps for the privilege of building homes.
The CFDs imposed on new subdivisions by the city currently covers the upkeep costs of neighborhood parks, street lights, and common landscaping. These CFD fees were imposed years ago because the property and sales taxes generated by the new homes did not cover the cost and were setting the stage for forcing a cutback in service levels elsewhere in the city particularly when it came to parks.
Prior to Proposition 13, California suffered proportionately higher property taxes such as Oregon has today as the amount of taxes levied every year increased to balance county and municipal budgets.
State law put in place after Proposition 13 passed empowered jurisdictions to impose CFDs to covering funding shortfalls for everything from police, fire, parks, upkeep of storm systems, and libraries to streets and more.
The city, based on a study done for Manteca Trails where a $69 annual fee was slapped on each home to cover shortfalls on a household basis for the proportionate cost of maintaining existing levels of police and fire services, knows each new home is digging a deeper financial challenge.
Singh believes adding fire services as a CFD charge is easily justified. He also thinks the argument is fairly sound for police. After that, he is hesitant about adding other fees out of concern of driving the cost of housing higher and higher.
Given some charges such as for the library operations and even the storm system upkeep may be more abstract even though they would legally be justified, Singh may have a point.
However he is missing a solid selling point that improves the long-range viability of neighborhoods by not putting them at the mercy of the city’s ability — or more correctly inability — to maintain neighborhood streets.
A per household CFD fee for streets placed in a specific account for the neighborhood it is collected in could assure that the recommended street maintenance — seal coating, chip and seal, and perhaps even overlays — are done in a timely manner.
The council could eschew such a CFD fee and go for the ultimate solution of assuring streets don’t deteriorate in 20 years or less and not worrying if the city has the funds to maintain them. They can do that by mandating new traditional single family home neighborhoods to employ street pavers as Ripon has required from time to time.
*POINT NO. 3: Requiring new annexations to have a property tax split regarding the county’s proportion of taxes collected that better reflects the city’s increased burden in providing services.
All property tax is capped. That means a piece of property in the rural area that is not part of the city and pays $2,000 a year in property taxes contributes no taxes to a city. When it is annexed the property still is assessed $2,000 a year. As part of annexation agreements the county agrees to give up a share of its cut of the pie so it can go to the city.
For years it has been split 80 percent county, 20 percent city.
That doesn’t create much of a problem when there is empty land or just one or two houses on it. But when that land is converted into 800 homes it creates a massive drain on the city that is providing significantly stepped up and costly services.
Former City Manager Tim Ogden decided it was a wrong that needed to be made right. And although the council at the time was skeptical he could get the county to budge, the county did. As a result the Griffin Park neighborhood moving forward came into the city with a 60-40 split.
Singh said any new annexation proposals such as the Hat Ranch and the Lumina project that want to build over 1,500 new homes need to be under similar deals.
If Singh and his colleagues can’t swing that and the city knows how much of a city’s burden an unfair split is to Manteca, perhaps a surcharge in some form on all development within the annexed land can be put in place to make the city whole going forward.
*POINT NO. 4: Allow the “big deals” that land whales in terms of tax revenue to augment and not supplant other general fund revenue sources.
Over the years the city has managed to secure a number of “big deals” that were designed to make growth provide dividends that would improve the quality of life for existing residences that in all honesty were brilliant. But thanks to the city’s absolute failure to make sure new homes were paying their fair share of maintaining day-to-day service levels the bonus revenue they generated backfilled finding shortfalls created by residential growth.
Bonus bucks — the voluntary fee developers committed to pay to assure sewer allocation certainty that the city could use as they pleased— had more than $11.9 million devoured to balance the general fund over the years to essentially subsidize new housing. The same was true for the Costco deal and to a lesser degree the Big League Dreams deal that was designed to avoid costs and “repay” back to the general fund the $29 million in RDA funds used to construct the facility through lease payments.
The biggest whale of them all — Great Wolf — has the ability over a 30-year period based on the analysis done when the deal was cut and adding in the increase to a 12 percent room tax afterwards, to generate up to $99 million in new room tax revenue to the city.
But unless the city puts in place the first three points of Singh’s plan, the majority of that money — and perhaps even all of it — would go to backfilling the shortfall in funding from growth to cover maintaining day-to-day municipal services.
Singh’s plan with a little patience and holding the course would make an increase in taxes unnecessary. It would also start delivering on a promise made by city leaders 21 years ago when bonus bucks were first put in place that growth would enhance the community in terms of amenities and services.
This column is the opinion of editor, Dennis Wyatt, and does not necessarily represent the opinions of The Bulletin or 209 Multimedia. He can be reached at email@example.com