Mountain House is on its way to incorporation as a new city.
On Wednesday the Mountain House Community Services District Board of Directors voted unanimously to make its application to the San Joaquin Local Agency Formation Commission, the government body that will set the boundaries for the new city and evaluate the plans for the transition from a county-governed district to a self-governing municipality.
Following a staff report from CSD Principal Planner Rochelle Henson, the board, with little discussion, unanimously approved the application to LAFCo. Henson’s report summarized the discussions that have been ongoing since 2015, when the board first formed its ad-hoc committee to evaluate the feasibility of becoming a city.
Henson’s report noted that the original plan when the county formed the CSD in 1996 was for Mountain House to eventually become San JoaquinCounty’s eighth city. Mountain House eventually will become a city of about 44,000, with buildout expected in 2040.
A feasibility study, conducted by Berkson Associates and approved by the CSD Board in October, anticipates that in 2023 the city would have a budget of nearly $35.4 million in revenue and $30 million in spending. By 2032 the city would have about $46.5 million in revenue and a spending plan of about $42.9 million
Henson said afterward that she expects to file the incorporation application within the next month, and it could take up to 2 years for LAFCo to review the application and bring it up for consideration of approval.
The only questions that the board had on Wednesday were regarding tax revenue.
Board member Bernice King Tingle asked about how property taxes would be allocated. CSD General Manager Steven Pinkerton said that it will be one of the main issues that the LAFCo process will address.
“The amount of taxes are fixed, but it becomes a question of, as we take on obligations that the county currently takes on we’ll be asking for some of the property taxes they now collect,” Pinkerton said.
“That will probably consume more time than anything else in this incorporation discussion. We’ll have to do another phase of this comprehensive financial analysis that we’ve already done. We’ll have to do one in concert with the county. There’s some fairly prescribed rules on that, but there’s still going to be room for some give-and-take and some interpretation.”
Board member Harry Dhillon asked if the same process will apply to sales taxes. Pinkerton said that sales tax revenue isn’t as flexible as property tax revenue, in terms of how much will go to the city.
“Any sales tax generated in Mountain House now goes to the county. Once we become a city 100% of the sales tax the county would normally get would come to us. The vast majority of sales tax actually goes to the state, not to the county, and that doesn’t change.”
The board finished sorting out incorporation issues at its Dec. 9, 2020 meeting, where board members agreed that the new sphere of influence will be the existing planning area, and the city limits will be the same as the CSD boundaries.
The board also agreed that the new city will have a five-member city council, with an elected mayor and four at-large council members.
While the municipal government will provide services like public works, utilities, parks and recreation, and police and fire protection, the community services district will also remain in place as a subsidiary district that will enforce the community’s master restrictions, which are the rules governing uses of private property, such as landscaping, use of signs, home businesses and rentals.
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