Yuba City continues to explore sales tax revenue measure; Council approves action for Sohal Ranch, Newkom Ranch subdivisions

Oct. 18—The Yuba City City Council received an update on Tuesday regarding its plans to pursue a possible sales tax revenue measure for the November 2024 election.

The council appointed Vice Mayor Shon Harris and Councilmember Marc Boomgaarden to the city's Revenue Ad Hoc Committee in December. Since its inception, the group has reviewed a variety of items including the city's five-year fiscal outlook, public safety priorities, the city's road conditions, and creating a Citizen Ad Hoc Committee to provide input to the Revenue Ad Hoc.

Upon review of these items, it was determined that the city's projected revenue was insufficient to maintain fiscal sustainability, address public safety priorities and improve the city's poor road conditions.

In March, the city council awarded a contract to Smart Marketing — which is owned by long-time political consultant Crystal Martin — to develop a possible sales tax revenue measure. City staff has worked with Martin over the past few months to identify revenue needs within the city along with ways to improve and maintain levels of public safety services, City Manager Diana Langley said.

During Langley's presentation on Tuesday, Martin was quoted as saying, "To have a successful revenue measure, Yuba City must present a carefully crafted solution to a clearly articulated problem."

In their current state, Yuba City roads need approximately $150 million in deferred maintenance. Meanwhile, the city's annual road repair budget sits at a measly $1.5 million. In order to keep the roads in their current condition, Yuba City would need $11.5 million per year to address maintenance. To improve them, the city needs $18.5 million per year, Public Works Director Ben Moody said previously.

According to the 2022/23 Sutter County Grand Jury report, an investigation into the city's budget showed that there is no part of the budget that could be trimmed to achieve necessary funding for road maintenance or improvements.

"A couple of council meetings ago, city council received the grand jury report, provided a response to the grand jury, of which, one of the items would be that city council would consider a revenue measure not only for roads, but for public safety as well," Langley said.

For the city's police and fire departments, Langley previously told the Appeal that, in general terms, both departments have equipment, facility and personnel needs. As part of the $52.5 million General Fund budget, the police department makes up $20 million of the budget and the city's fire department makes up $13 million.

The Yuba City Fire Department has been able to address some of its personnel and equipment needs through the Staffing For Adequate Fire and Emergency Response (SAFR) grant including a new ladder truck at Fire Station 3 and an additional staff member, who has been "invaluable" to the department's ability to address fire emergencies, Langley said.

SAFR grant funds are slated to end in the 2024/25 fiscal year, but additional personnel have been hired for permanent positions, Langley said. The city would need approximately $538,000 to continue funding for these hires.

Yuba City Fire Station 1 has also identified needs for a building replacement and additional engine company in response to the high call volume in its service area. The station's aging facility was not built to withstand an additional engine company, meaning that in order to adequately staff the station, a new building must be constructed. This translates to around $20 million for a replacement building and $2 million per year to fund another engine company, Langley said.

"What's key about this, as we pursue a revenue measure, if you look at a fire engine, the lease time is about three years. If we were to order it today, we wouldn't receive it until 2027. When we look at a building replacement, it takes time to hire consultants, to bid, and then construct. Even if we were to start that project today, you're likely three years out. As much as we're having this conversation in 2023, what we're really talking about is what's going to happen in 2026 or 2027," she said.

Yuba City Fire's budget is also experiencing a net loss of over $446,000 per year as it provides services to County Service Area-G. When the city took over fire operations from the Walton Fire Protection District — an area which is larger than both the city limits and its sphere of influence — Yuba City agreed to provide fire service to this area, which costs approximately $1.3 million per year. However, Sutter County reimburses the city $928,000 per year for its services.

In addition to Yuba City's fire safety needs, city staff have discussed the possibility of city police taking control of the Walton service area, also known as Beat 6, in preparation for the city's projected growth.

This coverage area sprawls south of Franklin Road to Bogue Road. Despite this area being incorporated into Yuba City, it remains under the jurisdiction of the Sutter County Sheriff's Office. Per a longstanding master tax exchange agreement between Yuba City and Sutter County, Yuba City Police will provide service for this area once it passes a population threshold.

Langley said that this area has yet to meet the population requirement, and additional development is needed to surpass it. However, city staff has proposed staffing another coverage area to transition services from Sutter County to Yuba City, which would cost $1.5 million per year plus $431,000 for equipment and vehicles.

Boomgaarden believes that the city must be forward-thinking when addressing its public safety needs.

"As we approach this as a Revenue Ad Hoc Committee, we're not talking about a crisis that exists today. What we're doing is looking out to the future and saying we don't want to be in a crisis mode. We want to be responsible and put things in place ahead of time, so that we don't end up chasing something," Boomgaarden said.

The total additional funding needed to address Yuba City's roads and public safety needs is over $171.6 million plus $23 million per year to maintain services and infrastructure. According to Langley, a potential city-wide 1% tax measure would generate $15 million per year in revenue. In comparison, a 0.25% tax would bring in $3.75 million annually and 0.5% would generate $7.5 million.

Yuba City's exploration of a tax measure comes shortly after the failure of Sutter County's Measure A in 2022, which would have helped fund public services provided by the county. Measure A saw 51.61% of voters voting against and 48.39% of voters voting for. Since then, the county has had to navigate through budgeting issues within its sheriff's department and other county services. In response, the Sutter County Board of Supervisors recently approved a request to explore a future specific sales tax measure.

Sutter County Administrator Steve Smith previously told the Appeal a "regional approach to benefit all citizens" would be desired should both the city and county pursue separate revenue measures.

"Rural residents do most of their shopping in the cities and would pay an additional sales tax but would not benefit from a city specific tax measure. An agreement between jurisdictions on how to divide a county-wide measure before an election would help clarify for voters where the funds would be spent. The process should be transparent," Smith said.

Likewise, Langley said that in regards to a city-wide tax measure, there is a strong desire to support Sutter County services that directly affect the safety of Yuba City residents. This would include relieving the Sutter County Sheriff's Office of costs associated with servicing Beat 6; providing additional prosecutors and competitive pay for the Sutter County District Attorney's Office; addressing needs within the Sutter County Jail; and addressing county-wide homeless response efforts.

Harris clarified that city officials want to avoid competing ballot measures with Sutter County. Boomgaarden also recommended that the city continue to explore partnering with the county to ensure that there's no overlap between both initiatives.

"We do not think it would be a good idea to have competing or overlapping initiatives simply because if the county, for example, decided to do 1% county-wide and then we do 1% city-wide, we're going to have voters in the city that have two revenue measures potentially bumping up 2%. That's going to either turn people away or confuse them or both," Harris said.

Based on data from the November 2022 general election, cities that placed a general tax on the ballot had an 82% success rate while those that ran a specific tax measure had a 52% success rate. Because of this, Shaw advocated for classifying the 2024 revenue measure as a general tax.

"Trying to work with the county — and that's all we really want to do, working together for our community — we need to go out and do a city general sales tax. That's tough for me to say as I was hardcore for specific (sales tax). Go for a general sales tax measure, and at the same time, the county should focus on the unincorporated areas of Sutter County," Shaw said. "We know the numbers that they projected they would get for Measure A. We know we're talking about helping each other, but at the end of the day, we'll be able to sit in a room and tell people that the city and the county are trying to take care of our community as a whole. We want you to support their measure, and they should be telling people to support ours. That way the whole community wins."

Continued developments

The Yuba City City Council unanimously approved a development agreement for the Sohal Ranch subdivision along with an infrastructure development plan for Bogue Road in preparation for the Newkom Ranch subdivisions.

Sohal Ranch is a 41-acre property located at the southeast corner of Lincoln Road and George Washington Boulevard that will feature 179 single-family homes along with a 2.6-acre neighborhood park.

An application for the subdivision was submitted to the city in April 2022. In September this year, the Yuba City Planning Commission approved a tentative subdivision map, Deputy Director of Development Services Doug Libby said.

This neighborhood will include approximately four dwelling units per acre, which is typical of low-density residential developments in Yuba City, Libby said. Developers will also construct a 0.11-acre sewer lift station as well as right-of-way dedications and half street improvements for both George Washington Boulevard and Lincoln Road.

Per the development agreement, Sohal Ranch was approved for a 15-year term with a possible five-year extension in exchange for the dedication of parkland and payment of an additional per parcel fee for future neighborhood parks. Developers would also pay an additional development impact fee of $3,200 per dwelling unit.

Sohal Ranch will be located in a rural area that has been settled within Yuba City's sphere of influence since the 1980s, Libby said. In return, the city will use this money to reimburse the developer for the value of the parkland and street improvements. If these costs exceed the amount of development impact fees, the developer will be reimbursed for those excess costs, the city said.

Newkom Ranch is 221-acre stretch of land that was annexed within the city in 2022. Located east of Highway 99 between Bogue and Stewart roads, the Newkom Ranch development will have a full range of land uses upon full build-out, including 423 single-family residences, 220 multi-family residences, 230,000 square feet of commercial space, and 108,000 square feet of office space, as well as parks and open space.

The city approved a tentative development plan for the subdivisions in January 2020. Initial development will require construction improvements for Bogue Road from Highway 99 to Railroad Avenue.

City staff have found that Bogue Road is in need of infrastructure to carry out its future developments. A substantial portion of these development fees are eligible for city reimbursement, officials said. Infrastructure needs include improved roadway segments, a 16-inch water main, a sewer main and storm drainage.

The total project cost is estimated at $13 million. With limited development impact fee funds available, the city would need to utilize a majority of available funds, utilize portions of existing and future road fund allocations, then wait until development occurs, to begin recovering those costs.

City staff recommended amending Newkom Ranch's existing development agreement to establish specific terms and conditions associated with funding, developer obligations and timelines. According to officials, initiating this amendment will allow the city and developers to move forward with construction along Bogue Road in partnership with the subdivisions.