For the second consecutive year, the City Council voted to not enact an increase on assessments paid by owners of newer Ceres houses designed to help finance the costs of police, fire and parks department services extended to them.
Members cited the ongoing economic hardships caused by the restrictions of state government related to the pandemic as reason to keep the assessment the same as charged in the 2019-20 fiscal year. Some businesses are still shut down because of state restrictions.
Prior to the COVID-19 pandemic, the council routinely bumped up the rate of Community Facilities District assessment each year to keep up with inflation, not to exceed four percent annually.
Last week the Ceres City Council voted 3-1 to nix a proposed 1.722 percent increase this year. The increases would have added another $23,000, which have been factored into the budget for use in police, fire and parks.
When factoring in higher costs of doing business, the council’s move means less money for police and fire departments and parks crews.
Ceres has two CFDs. Both districts brought in $684,000 during the 2020-21 fiscal year, said City Manager Tom Westbrook. The increase would have added $5 extra in CFD #1 assessments and $15 in CFD #2.
Most cities have either Mello-Roos or Community Facilities Districts to help finance the added demands for city operations. A Mello-Roos is a special tax assessment district created in California to finance local infrastructure or services. The law permitted Mello-Roos districts to be formed to allow communities to raise money for local projects despite the restrictions of Proposition 13 property tax caps.
The tax is applied only to residents of the district that benefits from the project.
Vice Mayor Couper Condit asked Public Works Director Jeremy Damas if parks staff is keeping up with maintenance. When told that the city is not keeping up, Condit questioned the language of a report that read: “Staff recommends that the resolution be adopted with the new tax rate in order to continue to offer the appropriate level of service to the Districts.” He said the city currently cannot meet an adequate level of service and suggested that instead of raising taxes the cities should renegotiate the 25-year-old property tax sharing agreement with the county.
Councilman Bret Silveira motioned to approve the assessments at the same rate but Condit voted against the motion because he said he is fundamentally opposed to Mello-Roos districts which he said are a “go around to Prop. 13 for local governments to raise taxes, to raise revenue.”
Westbrook said it’s possible the cities and county will renegotiate the property tax sharing agreement which would only affect the share that cities get where future annexations take place.
Currently when land is annexed to a city, the county keeps 100 percent of the tax base and 70 percent of the tax increments after the property is developed and reassessed. Cities only get 30 percent of the new increment.
“I think that there’s some desire to change that 30/70 split to be a little bit more equitable for that land annexed,” Westbrook told the Courier.