FRESNO, Calif. — The Fresno City Council voted 6-1, with Councilmember Arias opposing, during a special meeting on Friday, December 13, to approve an updated property tax revenue-sharing agreement. The agreement increases the city’s share from 38% to 40%, with a larger increase in the Southeast region from 38% to 51%. The new agreement, which replaces the expired Memorandum of Understanding (MOU) from 2020, aims to stabilize future growth after four years of stalled negotiations.
Key Implications of the Property Tax Sharing Agreement
The absence of a valid MOU has hindered annexation of county land into the city, affecting much-needed housing development, revenue distribution, and maintenance responsibilities. This agreement provides clarity and creates a more sustainable framework for future development, especially for housing development, but its implications for the county remain uncertain as it risks losing revenue without clear gains.
Southeast Development Area (SEDA) and Housing Growth
Council President Perea emphasized that the new agreement does not authorize any specific developments, including those in the Southeast Development Area (SEDA), where Bonadelle Development Group has proposed new housing projects. Perea highlighted the significance of the agreement, stating, “If the agreement is approved next year, the city will see a property tax increase from 38% to 51% in the southeast region, and outside SEDA, the split will rise from 38% to 40%.”
Perea also mentioned that the agreement includes a successful negotiation on the sales tax adjustment, reducing the rate from 5.35% to 5%, which is projected to retain approximately $500,000 annually for the City of Fresno.
Economic Impact and Future Development Opportunities
City Manager Georgeanne White pointed out that the additional property tax revenue could generate several million dollars for every $100 million in annexed land. Areas outside SEDA would generate around 40% of property tax revenue. However, with the current agreement a She also highlighted that 199 single-family lots have been waiting for approval since May 2023 due to the lack of a tax-sharing agreement, delaying important development projects.
Addressing Fresno’s Housing Shortage and Population Growth
Critics of the agreement argue that the increased tax allocation could incentivize development in SEDA, which is crucial for Fresno’s efforts to accommodate the expected population growth of 250,000 people by 2050. With the city facing a housing shortage, Fresno is exploring expansion opportunities, particularly in areas like SEDA. The annexation agreement aligns with the draft SEDA Specific Plan, released in July 2023, which proposes converting land from open space and agriculture into urban neighborhoods, low- and medium-density housing, and mixed-use developments.
Community Concerns and Next Steps
Councilmember Arias expressed concern over the timing of the special meeting, pointing out that the public was only notified after business hours on Thursday, which limited opportunities for public participation. He questioned the urgency of finalizing the agreement without allowing for additional community input and raised concerns that, while the annexation might generate more revenue, it could also place additional burdens on the city. Specifically, City Manager White noted that areas within the county may require more services to comply with Fresno’s codes, potentially straining city resources.
Looking Ahead: County’s Vote on the Property Tax Agreement
The updated agreement will have significant financial implications for both the City of Fresno and Fresno County. The Fresno County Board of Supervisors is scheduled to vote on the agreement during a special meeting on Friday, December 20, at 3 PM.
To watch a recap, please follow this link as it becomes available.
Conclusion: Key Takeaways
- Fresno City Council’s new property tax agreement boosts the city’s share of tax revenue, particularly in the Southeast region.
- Southeast Development Area (SEDA) will see a significant shift in property tax distribution, potentially driving new housing and development projects.
- The agreement is expected to bring in millions of dollars in revenue for Fresno with SEDA, aiding future development efforts, though marginally more without SEDA.
- The Fresno County Board of Supervisors will vote on the agreement on December 20.
Stay updated with Fresno’s growth and development by following the ongoing discussions surrounding this property tax agreement.
