Santa Rosa, Sonoma County forge deal on funding annexation of Roseland

Santa Rosa and Sonoma County struck a historic financing deal Wednesday that paves the way for Roseland and four smaller county islands to officially become incorporated into the city.

The cost-sharing agreement, which took more than two years to hammer out and had proven a stumbling block to past annexation efforts, was hailed as “momentous” by Mayor John Sawyer.

“It’s a very important decision to make and one that we did not come to lightly,” Sawyer said. “We were able to work out an agreement that fit for both the county and city in the long term.”

Though it still needs approvals by the City Council and Board of Supervisors, the unanimous vote of a joint subcommittee and congratulatory tone of Wednesday’s meeting suggest the agreement will stick and the annexation of 714 acres of property in the city’s southwest area will move forward.

Members of the committee and staff of both organizations clapped and shook hands after the vote and praised the hard work and creativity needed to reach the deal.

“This is an important milestone,” said Supervisor Efren Carrillo, who grew up in the heavily Latino Roseland neighborhood and represents the area on the board. “I’m hopeful that we’ve reached common ground.”

He noted that the board that will decide whether the city can complete the annexation, the Local Area Formation Commission, requires agencies proposing annexations to demonstrate they have a sustainable plan to fund services to the area, and that the deal accomplished that.

The board of supervisors plans to vote on the agreement Nov. 1 and the City Council will take it up on Nov. 29. Then the city will have to formally apply to LAFCO to annex the areas, a process that will take months.

A previous annexation push stalled in 2008 when the two sides couldn’t agree on the funding of new services to the area, particularly public safety.

But the 2013 shooting death of 13-year-old Andy Lopez by a sheriff’s deputy in the similarly underserved, unincorporated neighborhood of Moorland gave renewed urgency to annexation, Supervisor Shirlee Zane said.

“We all kind of came together and said, ‘Boy, it’s really time to do this. We’ve been talking about it for so many years,’ ” Zane said. “Out of that tragedy came an opportunity for hopefulness and for change in a community that is beloved.”

Sawyer and Carrillo met privately over the last several months to negotiate the agreement, and Councilwoman Julie Combs said the deal represented a legacy for both men.

Sawyer hinted at significant progress in the negotiations back in August, saying a breakthrough had been reached over how the city and county would share property tax revenue.

Wednesday’s meeting provided the details on four different types of payments the county will make to the city. They are:

$790,000 in one-time costs to help the city begin providing services to the area. These include the purchase of police cars and uniforms and an assessment of the stormwater system in the area. The city had asked for $1.3 million.

$500,000 per year for 10 years to help the city offset the $3.6 million annual increase in operating costs expected from the annexation. The figure will be reassessed annually. The city had asked for $805,700.

$660,000 per year for 10 years to help the city upgrade streets. The city had asked for $18.5 million.

$226,400 annual payment to the city in perpetuity, adjusted annually based on the property tax base, to provide a long-term revenue stream to the city. The county had previously offered minimal tax sharing.

The property tax sharing agreement proved the thorniest obstacle in the negotiations for several reasons. The county didn’t want to set a precedent of giving up a larger share of property taxes out of a concern that the city would demand the same in future annexations.

But the city felt strongly that it needed a type of funding that didn’t go away after a decade. Property tax would accomplish that, and it could increase over time if the city makes the right investments in the area, Santa Rosa’s chief financial officer, Debbi Lauchner, explained.

“If we make our investments in a smart manner, then we would see our assessed values in the area grow,” Lauchner said.

To make sure the arrangement wasn’t precedent setting, the city and county struck a side revenue sharing deal specific to the Roseland annexation.

And to ensure future payments are accurately adjusted to reflect the growing property tax base of the area, the two sides agreed to peg the annual increases to the tax base of the Roseland School District, which largely overlaps the annexation areas.

When Santa Rosa started the annexation negotiation, then-mayor Scott Bartley said the city’s goal was to bring the infrastructure and services in Roseland up to the same level as the rest of the city without reducing service levels to the rest of the city to pay for it.

Sawyer said the millions of dollars that the city agreed to forego during negotiations resulted largely from “getting realistic about what the true needs were now.”

That doesn’t mean that the city is backing away from its long-term commitment to bring the roads and parks and other services up to same level as the rest of the city, Lauchner said.

“It’s just going to take us a little longer,” she said.