Santa Rosa, Sonoma County moving closer on Roseland annexation deal

The committee charged with hammering out a cost-sharing deal between Santa Rosa and Sonoma County over how to divvy up the costs of annexing Roseland hasn’t met for nine months.

But behind the scenes, significant progress has been made on resolving a key tax-sharing dispute between the two sides, so much so that there is optimism a deal could be struck in the coming months, Mayor John Sawyer said Friday.

“There has been major movement,” Sawyer said. “The city and the county have moved closer and closer and closer, and now we are very close.”

Both the city and the county say they want the remaining 620 acres of the unincorporated Roseland neighborhood, as well as four other nearby smaller county islands in the southwest part of the city, to officially become part of Santa Rosa through the annexation process.

But before that can happen, the two sides must strike a long-term agreement over how to pay to bring roads, parks and government services in the areas up to city standards.

Supervisor Efren Carrillo, who represents Roseland, said he’s encouraged at the progress he and Sawyer have been making in private discussions and is hopeful a deal can be struck by the end of the year.

“The city and the county have been trying to achieve this for decades without any success, and this is the closest we’ve been,” Carrillo said.

Last fall, the city suggested the county contribute $41.5 million to the city over a decade to help it upgrade streets, buy land for future parks and subsidize the city’s higher cost of police and other services.

The county countered with an offer to shell out $13.5 million, highlighting a number of other ongoing investments in the southwest Santa Rosa area. They include the creation of a park in honor of 13-year-old Andy Lopez, who was killed by a sheriff’s deputy in 2013 in the adjacent unincorporated Moorland Avenue neighborhood. It also offered to continue various services to residents of the Roseland area.

The two sides were far apart, and it reminded some of the impasse that developed in 2008, when talks last fell apart.

Sawyer said he and Carrillo both realized they were going to have to talk face to face, drill down on the differences between the proposals and find a way to work it out.

One key sticking point has been over the sharing of property tax revenue. When unincorporated areas become part of the city, the property tax revenue that had been going to the county shifts to the city.

There’s an established formula used in most annexations to divide up that tax revenue, but Roseland is not a typical annexation. It’s a community of about 7,000 people that grew up on the rural outskirts of southwest Santa Rosa and became surrounded by the city as properties, often agricultural areas slated for development, became annexed.

For years Santa Rosa took the position that many in Roseland preferred to remain in the county, where taxes are lower and zoning rules - such as keeping livestock - are more lax.

But critics have long noted that having unincorporated pockets of the county inside the city is inefficient, causing confusion about which public safety agencies respond to what areas. Others argue it is unfair to Roseland residents, who feel like Santa Rosans but don’t enjoy all the benefits of living in the city, such as roads with sidewalks, or rights, such as the ability to vote in City Council races.

The city argued it should receive the same percentage of property tax revenue that other areas of the city receive, or 12 percent. The county originally resisted, proposing a quarter of a percent.

It was a difference of about $236,000 per year, or $2.4 million over 10 years - more if property values in the area increase.

While the county preferred to keep the bulk of the property tax revenue, it did agree to temporarily pay the city about half the level it requested, or about $408,000 per year in operating subsidies for a decade. Sawyer said county officials preferred the 10-year subsidy because it was temporary and because they worried a permanent tax-sharing agreement would set an unfavorable precedent.

Carrillo was instrumental in getting county staff to consider a tax-sharing agreement in exchange for lower operating subsidies to the city, Sawyer said. And just as importantly, the city agreed that instead of a set subsidy, it would adjust in some way based on need, Sawyer said.

The city also agreed to “sharpen its pencil” and take a closer look at the $1.3 million in startup costs it needed for things such as patrol cars, equipment, uniforms and training.

Sawyer said standing firm on the tax-sharing agreement while giving in on other areas might give the city confidence that it can serve Roseland residents long-term without reducing services to other areas of the city.

Carrillo said he, too, felt the framework was the best way to ensure costs were shared fairly and both sides had incentives to continue investing in the area.

Both men stressed that plenty of work remains and nothing is binding until the City Council and Board of Supervisors sign off. But they hope the joint committee can meet again next month, iron out the details and get an agreement in place by the end of the year.

“I think the time we have taken, although it feels like it’s being dragged out, has allowed us to get comfortable with compromise,” Sawyer said.