Salida MAC Newsletter - November 2012

The October Salida MAC meeting is now viewable online by clicking this link – thanks to Salida MAC Councilmember, Brad Johnson and local Salida Public Radio Station 104.9 FM or read the summarized meeting content below. ~ Katherine Borges, Editor

Fire Department Report

The October Salida MAC meeting opened with a report by Modesto Regional Fire Authority Deputy Chief Dale Skiles who reported that the fire department's call volume is average right now, but with the coming rainy season, it should lessen. He encouraged fire safety for the coming holidays and asked residents to call 552-3600 with any questions.

No Sheriff or CHP report this month.

Salida Sanitary Report

Salida Sanitary Boardmember, Brad Johnson, reported that the sanitary district had a presentation about solar power by a solar contractor. Salida Sanitary is exploring solar to save on energy costs. Mr. Johnson extended an invitation to attend Salida Sanitary's board meetings which are held on the second Thursday of the month at 6 p.m. The meeting location is held at Salida Sanitary's headquarters. Visit http://www.salidasanitary.net/ for more information.

SAPFFA – Salida Area Public Facilities Finance Agency (Mello Roos) Report

Director of Planning Facilities Support for Modesto City Schools, Becky Meredith shared that she administers several Mello Roos districts including the one for Salida known as Salida Area Public Facilities Finance Agency (SAPFFA). Ms. Meredith brought a map of the SAPFFA area which was formed in 1988 and said that anything built before 1988 was not in the Mello Roos district. SAPFFA was formed by the Salida Union School District, Salida Sanitary District, the Salida Fire District, and the Modesto High School District and although Stanislaus County is not a voting member of SAPFFA, the county was an integral part in the formation of SAPFFA and many county projects have been paid for from SAPFFA. The SAPFFA Board of Trustees is made up of two members from the Salida Sanitary District, one member each from the Salida Fire District, Salida Union School District and the Modesto High School District. The board meets in June and December to adopt the budget and authorize the paying of bills. Meeting notices are posted at the Salida Library, the school districts and in the Modesto Bee.

The Mello Roos district is a state law that goes back to 1982, Senator Mello and Assemblyman Roos crafted this law to allow taxes to be levied on new development to pay for certain designated public improvements like capital facilities such as schools, streets, and sewer lines. Land is annexed to a Mello Roos district by residential developers prior to the homes being built as a way to finance required infrastructure because by doing so, it can be financed at tax exempt rates.

Director of Planning Facilities Support for Modesto City Schools,
Becky Meredith explains Mello Roos taxes.

Ms. Meredith then went over handouts including a SAPFFA press release. Mello Roos laws state that public facilities to be financed have to have a use of five years or longer. SAPFFA has paid for over thirty separate projects that have been built since 1988 for a total cost of approximately $50 million dollars. SAPFFA does not own nor operate any of these improvements. Only projects listed and approved for in 1988 can be paid for by SAPFFA. The bonds will be paid off on September 1, 2030.

The last project paid for by SAPFFA was in 2005 in which the Modesto High School District received funds for the land purchase for Gregori High School. Stanislaus County also received $7.6 million for a variety of improvements such as park sites, storm drains, and roads. The most recent improvement which occurred around 2005 was the Broadway Avenue and Salida Boulevard intersection improvements.

There are 2,817 properties that pay the Salida Mello Roos district tax. In November 2011, the SAPFFA finance committee refinanced the existing SAPFFA Mello Roos debt. The estimated annual savings per property is $120. The actual savings range was $168-$187 annually per property ($140 savings on average). It is possible that the debt can go down again.

The difference between the Mello Roos tax and your regular property tax is that the property tax is based on the value of your home whereas the Mello Roos tax is not based on the value of your home. It is a tax established when the districts formed and they figure out exactly what they want the Mello Roos district to build and pay for, they figure out how much it will cost and the cost to finance it, then they spread the cost over all the properties that are in those boundaries.

During the Q&A, a question was asked how they know how much projects will cost? Ms. Meredith replied that engineers project the cost and inflation is factored in for the proposed cost of the project. She gave an example that the entire project for Gregori High School was not paid for by SAPFFA, only the land was purchased by SAPFFA. It was purchased from the Van Koynenburg Trust and a few other land owners for $8.94 million. The land purchase not only includes the school site but also some right-of-way purchases and school buses.

The next question asked was how much Mello Roos taxes were collected every year? Ms. Meredith replied that it changes every year, but that the current tax roll to be collected for 2012-2013 is $2.5 million. That was followed by a question of how much debt was left and her reply was about $30 million dollars. The attendee also asked if there was a pre-payment penalty if the Mello Roos bonds were paid off early and Ms. Meredith replied in the affirmative. She said that typically, bonds cannot be called prior to ten years once they've been issued. The earliest the SAPFFA bonds could be refinanced or pre-paid is in ten years from now since they were just refinanced in 2011. The new interest rate range is between 3-5%; the people who hold the bonds longer receive the higher interest rate.

Another Salida resident asked a question about a Mello Roos meeting they had attended approximately eight years ago where they were told that their Mello Roos tax obligation could be shortened by six years. Ms. Meredith replied that she was likely the person who told them that at the meeting, but that she would have said they had great hopes to eliminate the tax earlier than 2030 and retire the bonds early via refinancing. Last year, the SAPFFA board was faced with the decision as to whether to retire the bonds early or lower the tax and give relief to the taxpayers through a reduced rate. The SAPFFA board decided to go with “giving relief today”. Another attendee asked why this wasn't put to a vote of the people? Ms. Meredith replied that the officials elected to the various boards were the ones who made the decision, and the decision is made by those elected officials and not put to a vote of the people.

Ms. Meredith also shared that Village I in pays more taxes than Salida does because there are three Mello Roos districts in Village I and Salida only has one. The City of Modesto has two of the Mello Roos districts in Village I and the schools have one. The third Mello Roos district in Village I is for operations and is going on in perpetuity and collects money every year via property taxes.

The next question was whether Mello Roos taxes become delinquent when a home is foreclosed on? Ms. Meredith replied that delinquency rates have actually gone down because the banks who own the home then pay the taxes. The delinquency rate on uncollected Mello Roos taxes was just a little over 1%.

The next question posed was whether Salidan's taxes would change by the annexation of Salida by the City of Modesto or the incorporation of Salida as a city? Ms. Meredith replied that in either scenario, this debt does not go away, it stays the same. The attendee followed that with a question as to if Salida were annexed, would Salidans have to pay taxes to the City of Modesto on top of Mello Roos. Ms. Meredith replied that she could not answer that, that's a question for the Mayor of Modesto. At this point, Supervisor Terry Withrow answered this question saying that the, “Mello Roos taxes are not an additional tax. If the Mello Roos taxes hadn't existed, all of your houses in the Mello Roos district would have cost more, which means your loans would have been more.”

The next question posed by a Salidan was whether there would be additional projects added to Salida's Mello Roos district and Ms. Meredith responded that, “No, all projects authorized in 1988 have been completed. There can be no additional projects.”

The next to last question was, “Why does the Mello Roos increase by 2% per year?” Ms. Meredith said that in the formation documents, the Mello Roos was allowed to increase by 2% per year to make up for those things like inflation. If a project isn't built yet, then the cost is estimated. But since Salida's projects are all done, and with the bonds being refinanced, there will be no further 2% increases for Salidans' Mello Roos. The taxes will stay at a level tax until 2030 unless the bonds are refinanced again. The last question was, “How much does it cost to administer our Mello Roos tax?” and the answer was $15,000 for staff time of the three officers and an additional cost for a special tax consultant, Goodwin Consulting. This cost has gone down because the projects are all done.

Link for more information and financial data on SAPFFA

Salida Annexation Issue Update and Supervisor District 3 Report

Councilmember Brad Johnson opened with a "straw poll" asking attendees to raise their hands if they were in favor of Salida being annexed by the City of Modesto and two people raised their hands. He then asked how many were opposed and the majority of attendees raised their hands (between 40-50 people). An attendee asked that next time, Councilmember Johnson should also ask for a show of hands for those who are undecided. Councilmember Katherine Borges shared that Modesto Mayor Garrad Marsh would be hosting a Town Hall Meeting on Saturday, November 3 from 10 am to noon at the Senior Citizens Center at 211 Bodem, Modesto.

Supervisor Terry Withrow shares a map and
the history of the Salida Community Plan.

Supervisor Terry Withrow reported that the Goodwin Consulting cost-sharing feasibility study contracted by the City of Modesto and Stanislaus County would not be returned until mid-December. The sixty days for the return of the study didn't start until Goodwin received all the information from the city and county. Supervisor Withrow said that if the city and county are able to come to a tax-sharing agreement, then they'll come to Salida and ask what Salida wants to do. He asked for patience until they obtain the information from the study. Supervisor Withrow then shared a map and the history of 'Salida Now' which the Stanislaus County Board of Supervisors passed in 2007. He said that Measure E, also passed that year which prevents additional houses being built without a vote of the people. He then shared more of the background of the Salida Community Plan which called for 5,000 new homes to be built, which in turn, could provide the funds for Salida to become incorporated. But the economy collapsed and “...the model on which the plan was based on said it would collapse if the price of houses dropped 15%.” He said, “That as it stands right now, this is Salida's plan, this is Salida's future. This development will someday happen. The people who own this land have 20 years to make this thing happen.”

Supervisor Withrow reiterated, “You guys elected me, hired me basically, you're my bosses. And what I think you've hired me to do is get information for you. You guys don't have time to do that. That's why I'm there. I go down to the county and I work on all this stuff and I come back with all the facts and present it to you. And then I'll give you suggestions as to what I think is the best way to go because its all about getting the lifestyle here in Salida better, and improve services. You tell me what you want to do and I work to make that happen.”

An attendee mentioned that the land Costco and Kaiser are were annexed by Modesto, what's to stop Modesto from continuing to annex more land from Salida? Supervisor Withrow replied that it was his fear that Modesto will pick Salida apart until Salida ends up being the biggest county pocket in the county.

Supervisor Withrow suggested that if the annexation goes through, that Salida have its own planning commission to control its growth. This has been done across the state in cities which have planning commissions specifically for an area. That way, an area can be represented, but it still ultimately goes to a city council still. He said if it goes that far, he wants, “Salida to have its own planning commission to control its own destiny, as far as growth, development and zoning.”

A Salida resident asked Supervisor Withrow if while we are waiting for the Goodwin study results were we at risk of LAFCO annexing away more land from Salida? The Supervisor replied that no, because there are two other county supervisors who serve on the board of LAFCO and since Salida is Supervisor Withrow's district, they will go with what he wants which is what the people want.

The next resident proposed the formation of a steering committee to investigate the potential for Salida to incorporate and asked the Supervisor if he would support that? He replied in the affirmative. He said that incorporation has been studied, will be looked at, and will be presented. Another attendee asked who would present this information, and Supervisor Withrow responded that he would and possibly elected members of Salida Fire and Salida MAC. This was followed by a question for the Supervisor as to whether the planning commission for Salida could still be formed even if Salida stays county and Supervisor Withrow responded that it was possible.

Link to view the Salida Community Plan

Salida MAC Council Discussion

Councilmember Brad Johnson brought up that annexation to Modesto would mean that Salidans would have a utility tax in addition to their Mello Roos and other existing property taxes.

Salida MAC Council Chairman Thomas Reeves brought up that since the December meeting falls on Christmas Day would any councilmembers be opposed to canceling it. All agreed to cancel it and Chairman Reeves said that he could always call an emergency meeting if need be.

Councilmember Ana Rocha San-Nicholas requested a presentation by LAFCO. The board agreed to invite LAFCO to the next meeting.

Councilmember Katherine Borges reported on the City-County Liaison Meeting she attended on October 8 because the Salida Annexation was on the agenda. She shared that the first part of the meeting was about the incorporation of county islands within Modesto and how any unincorporated county islands (including Salida) that are annexed into the city have to be voted upon by Modesto residents via a Measure M vote which extends sewer service to those areas. During the part regarding the Salida Annexation, she relayed that Modesto Mayor Garrad Marsh wants to do an Advisory Vote on the annexation and is asking for 60% of Salida's registered voters would have to vote no before he would agree to stop the annexation process whereas with a binding petition, only 51% would have to sign the petition to stop the annexation. An advisory vote is non-binding so technically, Modesto could choose to proceed with the annexation irregardless.

NEXT MEETING: Tuesday, November 27, 2012 at 7 p.m. At the Nick W. Blom Salida Regional Library Community Room, 4835 Sisk Road, Salida.

FEATURED SPEAKER: LAFCO Director, Marjorie Blom will present “LAFCO 101”

Salida MAC meetings are broadcast on government cable channel 19 in Salida and channel 7 in Modesto on Saturdays at 11 am.

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