Future owners of 369 homes moving toward construction may be among the first in Manteca to cover 100 percent of their household’s pro-rated share for the cost of police and fire protection.

The City Council on Tuesday will adopt a resolution of their intent to add two subdivisions to a community facilities district designed to augment public safety, street maintenance, and services.

The property owners involved — the developers that own the 177-lot Indelicato neighborhood being built on Airport Way north of Del Webb and the 192-home Dutra project on Peach Avenue — have already agreed to have the homes they are building included in the CFD.

That means all future homeowners in the two projects will pay an annual assessment to augment police and fire budgets as well as set aside funds to pay for street maintenance within their neighborhood. That is in addition to other CFD costs such as maintenance of common landscaping, street lighting, and park upkeep of a neighborhood park.

The annual assessment — yet to be established — when combined with more robust property tax split for annexed property the city negotiated with the county as well as the local sales tax and public safety tax the households are expected to generate, will cover each home’s proportionate cost of public safety.

Action taken by elected city officials in July of 2019 made it possible to require the annual assessments for public safety on new subdivisions submitted after that date or on existing approved projects developers are requesting changes before breaking ground.

There are several projects encumbered with the first neighborhood to actually pay the taxes being those that have bought homes since mid-2024 in the Villa Ticino West neighborhood southwest  of Airport Way and Louise Avenue.

Under state law a CFD special tax can fund police and fire services, recreation programs, libraries, street maintenance, parks and open space maintenance, as well as flood and storm maintenance.

Local agencies under the Mello-Roos Community Facilities Act of 1982 can form a CFD to fund construction of street improvements, water, sewer and storm drain improvements, parks, as well as libraries, schools, and public buildings.

Manteca Unified has CFDs that help pay for school facilities. The City of Lathrop has put in place CFDs in the Mossdale Landing section of the city that allowed developers to finance infrastructure such as water and sewer lines as well as streets.

River Islands at Lathrop has an all in compassing CFD that covers construction of streets, sidewalks, schools, parks, public safety facilities and even more as well as staff to oversee community recreation and social activities. The River Island CFD is capped at a set percentage of the assessed value of property. And like in all CFDs that involve new development. the developer goes from paying 100 percent of the assessment over time to a smaller portion as homes are built and sold. Then, after the last home or property has been sold, the developer no longer has an obligation.

In some of the Mossdale Landing CFDs the taxes were not capped. As a result when the values of homes plummeted during the Great Recession the CFD tax skyrocketed on each home in order to cover debt payment.  That pushed some homeowners into defaulting on home loans.

Manteca Unified CFDs — since they involve construction of specific facilities — are not only capped but they only encumber property once it is developed for 30 years.

CFDs set a maximum annual tax rate, may fund 100 percent of costs with the exception of landowner approved CFDs, and tax rates may run in perpetuity.

The Mello-Roos Act creating the ability of local governments to form CFDs was in response to the impact of Proposition 13 passed in 1978 that limited property tax hikes on property that doesn’t exchange hands to 2 percent a year.

Prior to passage of Proposition 13 cities, schools, and counties would set up a planned spending program, tally money they have coming in from various sources and whatever shortfall they had would jack up property taxes to cover it.

To contact Dennis Wyatt, email dwyatt@mantecabulletin.com