Taylor Builders — developers of 760 single family lots in the long-approved Villa Ticino West neighborhood — needed a way to finance upfront what could be close to $40 million worth of infrastructure.
Their answer was special tax bonds authorized by the state that are repaid via community facilities district assessments.
In order to use the funding mechanism, the City of Manteca had to agree to it.
The bonds do not encumber the city or state. They are the responsibility of property owners within the CFD to pay off over 30 years.
The goal is to lower “upfront” new housing costs.
Homes in the seven neighborhoods being pursued by five builders will not have the cost of infrastructure associated with the onsite development — streets, water/storm/sewer mains, sidewalks, parks, streets, utility lines — collapsed into the sale price of
Taylor Builders — developers of 760 single family lots in the long-approved Villa Ticino West neighborhood — needed a way to finance upfront what could be close to $40 million worth of infrastructure.
Their answer was special tax bonds authorized by the state that are repaid via community facilities district assessments.
In order to use the funding mechanism, the City of Manteca had to agree to it.
The bonds do not encumber the city or state. They are the responsibility of property owners within the CFD to pay off over 30 years.
The goal is to lower “upfront” new housing costs.
Homes in the seven neighborhoods being pursued by five builders will not have the cost of infrastructure associated with the onsite development — streets, water/storm/sewer mains, sidewalks, parks, streets, utility lines — collapsed into the sale price of the home.
Instead, it is tagged on to the tax rolls for 30 years as a CFD assessment.
The current City Council, unlike previous councils, decided to address the perennial shortfall for funding police and fire staffing as well as future street maintenance by imposing a CFD for such needs on future development.
They did not have the power to do so on projects already approved.
But when projects such as Villa Ticino requested help with infrastructure costs via the state program aimed at helping bolster housing development, the council is taking the opportunity to require the imposing of a police-fire-street upkeep CFD in perpetuity in exchange for allowing the 30-year infrastructure CFD.
On Tuesday, the council approved the issuance of $11 million of the infrastructure bonds that indirectly will shore up future public safety frontline personnel staffing.
The Villa Ticino West project is on the southwest corner of Airport Way and Louise Avenue.
While the CFD for the infrastructure will eventually be paid off and the assessment end, the CFD for police, fire and streets, and the normal CFD for parks, common landscaping, street lights and sometimes storm system maintenance will all be costs that new homeowners — and future resale buyers — will be on the hook for in perpetuality.
As such, they will need to qualify for housing to cover not just the mortgage and basic taxes but the CFDs as well.
There are now 2,735 homes approved to be built in Manteca that have the potential to add up to 23 police and fire positions once the homes are built and the annual police/fire/street CFD assessments are collected by the city.
That tax — the exact amount is yet to be determined — is designed to bridge a funding shortfall between property and sales tax a new home generates to cover the need for added public safety personnel. It also will make sure street maintenance within the taxed subdivisions will essentially be self-funded.
Manteca is the only city in the region that is pursuing a police, fire, and street maintenance add-on tax for all development that it can encumber.
It is part of a three-pronged council strategy to ultimately have in place a permanent solution.
*Traditional property and sales tax — along with the Measure M public safety tax — will provide foundational funding for police and fire.
*A 20-year limited three-quarter cent sales tax known as Measure Q before the voters on Nov. 5.
*The police-fire-street tax CFD add-on is the long-term solution.
The 2,735 homes encumbered so far include Villa Ticino West, the 197-home Dutra project southeast of Airport Way and Woodward Avenue, the 870-home Lumina development in the southwest corner of the same intersection, the 738 home Hat Ranch project as well as the 173-home Indelicato neighborhood just approved on Airport Way immediately north of Del Webb at Woodbridge.
The 2,735 homes could be expected to add 10 more public safety related positions without the CFD. The add-on CFD public safety tax could generate funding for 13 more positions on top of the 10.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
