Fresno city and county leaders arrived at a long-awaited truce on the tax-sharing deal late Friday afternoon, showing that they can find agreement on some topics — at least on the direction of new development.
Fresno County supervisors gave the official green light to the new agreement in a special meeting, with Supervisor Nathan Magsig, representing Clovis and mountain communities, as the lone vote in opposition.
Supervisors acknowledged it wasn’t a perfect deal with the city, telling the nearly two dozen residents of the southeast development area, or SEDA, who showed up in protest to “keep pushing back on the city” to get their questions answered.
“I believe that this agreement provides for the long-term stability that we have had in the past, versus our one-off agreements. Lack of an agreement has sent development to neighboring counties, as well as the jobs and revenue that go with that development,” said Supervisor Brian Pacheco, who co-led negotiations with the city alongside Supervisor Buddy Mendes and Paul Nerland, county administrative officer.
Business leaders praised an end of an era of uncertainty and risk for developers.
“Without a tax-sharing agreement in place, we risk delays in deterrence to investment, creating confusion for new companies coming in and sometimes halting projects altogether,” said Will Oliver, head of the Fresno County Economic Development Corporation.
Magsig reiterated the county’s original concern with the last agreement, that they felt the county subsidized services for city residents, instead of the city paying its fair share.
“So where I’m kind of hard-pressed, I’m recognizing that revenues that we get from the city are going to be diminished, and the city is asking us to continue to deliver the same level of service — meaning we’re going to have to give more of a subsidy to the city of Fresno” he added.
Data from Economic Planning Systems, a city consultant, found that, under the expired agreement, the city only received 32% of revenue generated from new development, but paid for over 62% of services provided to those new communities.
But the county disputes those claims: Their own consultants at Finance DTA produced their own study, finding essentially the opposite to be true.
The agreement represents a sea change in city development policy, shifting financial incentives towards growth in the city’s southeast development area, called SEDA, with nominal changes to incentives to annex areas west of 99, formerly the city’s top growth priority.
Land annexed in SEDA would generate 51% of property tax revenue to the city, and 49% to the county — a change from the previous agreement, which sent 38% to the city, and 62% to the county.
Undeveloped land annexed outside of SEDA would generate 40% of property tax revenue for the city, and 60% to the county.
Under the new tax-sharing agreement, the city also has a strong financial disincentive to annex county islands, with the city receiving just 30% of property tax revenue, if annexed.
The agreement also improves the city’s share of sales tax revenue, resulting in about $500,000 per year, according to Councilmember Tyler Maxwell. It also includes a provision that requires the city to discuss whether they’ll drop litigation against Fresno County’s General Plan in 90 days.
And it begins a process of city annexation of county intersections in the Fresno metropolitan area, with the intent of upgrading them to the city’s higher safety standards. The first two to be annexed, under the agreement, are Belmont/Minnewawa and Clinton/Millbrook Avenues.
Pacheco made a jab at Fresno City Councilmember Miguel Arias, who questioned why those particular intersections were chosen, of the more than 10 that exist throughout the city, at the city council meeting on Dec. 13.
“We would gladly let the city acquire all of the intersections at this time, because they will eventually end up with them over time anyway. If the councilman really wants to have them all, I’m sure we can modify the agreement and give him what he wants,” he said.
Rural residents urge rejection of annexing southeast development area
Nearly two dozen residents from the rural southeast development area, slated for a 45,000 home mega-development, showed up to urge county leaders to reconsider the deal.
“The tax-sharing agreement is a direct attack against farmland and food production,” said David Ramming, a small farmer and resident of SEDA, and former USDA plant breeder.
His wife, Helen Remming, continued: “Losing our farm is not as big of a concern as losing the 9,000 acres of prime agricultural land with the best sandy soil in the country and in the world.”
Pacheco noted that he felt the tax-sharing agreement helps protect farmland on the west side, while allowing the city and county to move forward on a plan, SEDA, that has been underway for over two decades.
“SEDA will have a high infrastructure cost, as was stated — but this agreement will help offset some of those costs,” he added.
Planners have estimated that the likely costs to build out infrastructure of SEDA are well over a billion dollars, while the increased property tax revenue will go back into the city’s general fund to pay for city services, according to Fresno City Manager Georgeanne White at a Dec. 13 meeting.
Other residents asked whether they’ll get a say or vote in the local annexation process, and, if they have to annex, whether they’ll have to get on city water or sewer — and, who will pay for the development.
The city is working on a rural lifestyle agreement similar to one Clovis has in place, according to Bernard Jimenez, the county’s development director.
“It allows them to essentially maintain that lifestyle until they are ready to go through an entitlement process,” he said.
Whether rural residential residents outside of Fresno city limits, that get annexed into the city, have to connect to city water and sewer remains to be seen — but they [the city] have committed to delaying a timeline for implementation, Jimenez added.
On who chooses annexation, Jimenez said that it depends on how the boundaries are drawn, noting that residents recently rejected an annexation into Fresno, west of the 99, on the November ballot.
A mega-development plan like SEDA does not get annexed at once, but rather, in a series of smaller, incremental annexations.
Jose Leon Barraza, former economic development director for Fresno County, and head of the Southeast Fresno Community and Economic Development Association, spoke out in opposition — citing the need for the city to pay more attention to infill areas that already have infrastructure.
Some residents remained skeptical, especially with the price tag of infrastructure in SEDA still unknown by the public. Fresnoland has been requesting this information from the city since the fall of 2023.
“I’ve been chasing this pig since 2007 and the only thing that the city has done, because they can’t make this project float on its own merits, is to spend all their efforts trying to figure out a strategy to make it more palatable for the public,” said Mike Matthew, a SEDA resident.
Magsig told them to take their concerns back to the city.
“I would encourage you, if you turn around and look at all your neighbors right behind you, you all need to continue to speak with one voice,” Magsig urged. “The city of Fresno still has an environmental impact document they need to complete.”
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