Why I Would Vote Against the Proposed City Manager Salary and Staff Increases
Long Term Planning--Annexing Land
As a city, we have not consistently engaged in long-term strategic planning. From water, to revenue, to economic development. While our tactical focus must remain on immediate revenue generation and city reform, the council and city must also spare bandwidth for strategic planning--I aim to outline the proposed annexation of the Madrone Knoll/Meadowood as a phase I, and the area south of our current boundaries along highway 29 in later phases, focusing on boosting St. Helena's revenue base, enhancing public services, and fostering sustainable development. The annexation is expected to yield substantial financial benefits through increased property taxes, transient occupancy tax (TOT) from Meadowood Resort, and opportunities in tourism and agriculture. However, the plan also requires careful planning, collaboration with Napa County, LAFCo and significant upfront investment. For Phase I, Meadow Wood Resort & Madrone Knoll, a key advantage for this annexation is that both Meadowood Resort and Madrone Knoll previously signed agreements under Resolution #483, obligating them not to oppose annexation. This agreement provides a significant boost to the city's efforts and increases the likelihood of a successful annexation. Let's walk through the wireframe of what the annexation process entails, costs, headwinds, advantages, and timelines.
Key Objectives:
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Expand City Revenue Streams: Increase property tax base, capture TOT, and promote controlled commercial growth.
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Improve City Services: Extend public safety, infrastructure, and utilities to newly annexed areas.
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Foster Sustainable Economic Development: Balance growth with preservation of St. Helena’s character and environmental resources.
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Engage with Residents: Ensure broad community support and buy-in from annexed area residents through outreach and transparent governance.
Phase I Proposal to Annex Meadowood and Madrone Knoll
The City of St. Helena should propose the strategic annexation of the Meadowood Resort and Madrone Knoll areas. This annexation aims to significantly boost St. Helena’s revenue base, enhance public services, and foster sustainable economic growth, particularly through increased property taxes and Transient Occupancy Tax (TOT) revenues from Meadowood Resort. This proposal details the process, steps required, financial benefits, and infrastructure expansions necessary to make this annexation a success.
I. Objectives and Benefits of Annexation
1. Increase Revenue Base
The annexation of Meadowood and Madrone Knoll is expected to generate between $7.085 million and $7.385 million annually in combined property taxes, TOT, and sales tax. These revenues will provide the necessary funds for expanding city services, enhancing infrastructure, and ensuring long-term financial sustainability for St. Helena.
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Property Tax Revenue: $600,000 to $900,000 annually (after the 80/20 county/city split likely in any agreement). This would be the cities take home revenue.
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Transient Occupancy Tax (TOT): $6.11 million annually from Meadowood Resort.
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Sales Tax Revenue: $375,000 annually from visitor spending at local establishments.
2. Extend Public Services
The annexation will require extending vital city services, such as:
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Water and sewage systems. We already provide water, lowering our investment significantly.
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Public safety (police and fire services).
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Infrastructure improvements, including road maintenance and transportation services.
3. Promote Sustainable Development
This proposal will ensure that the annexed areas develop in line with St. Helena’s commitment to rural charm and sustainable growth. Zoning regulations will ensure low-density, eco-friendly development, with a focus on preserving agricultural lands and fostering tourism-driven economic activity.
4. Engage the Community
The city will prioritize engaging residents of the annexed areas through transparent communication, public meetings, and forming a Citizens' Advisory Board to ensure their concerns and voices are heard throughout the annexation process.
II. Legal and Procedural Framework for Annexation
Annexation in California is governed by the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, which outlines the necessary steps for changing city boundaries. The annexation of Meadowood and Madrone Knoll will require cooperation between St. Helena, Napa County, and the Local Agency Formation Commission (LAFCo). The following steps and requirements will guide the annexation process.
1. Pre-existing Water Agreements under Resolution #483
A significant advantage in this annexation effort is the pre-existing agreements under Resolution #483. From September 12, 1961, to July 28, 1964, property owners outside the city limits who sought water services were required to sign agreements not to oppose annexation. Meadowood Resort and Madrone Knoll both signed such agreements, making them legally bound to support and not oppose annexation.
This historical covenant means that these high-value properties are already aligned with the city’s growth plans, significantly reducing opposition during the LAFCo review process. This gives the city a major advantage in facilitating a smooth and expedited annexation process.
2. LAFCo Application Process
The Local Agency Formation Commission (LAFCo) plays a central role in overseeing the annexation process. St. Helena will need to submit a detailed application to LAFCo that includes:
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Maps and descriptions of the proposed annexed areas.
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Economic, social, and environmental impact studies.
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Service Plans, detailing how the city intends to provide essential public services to Meadowood and Madrone Knoll.
LAFCo’s review will focus on several key factors, including:
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The city's capacity to provide adequate services such as water, sewage, and public safety.
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Avoiding urban sprawl and preserving agricultural land.
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Conformity between city and county plans and the broader regional priorities.
3. Property Tax Agreement with Napa County
One of the most challenging steps in the annexation process will be negotiating a property tax exchange agreement with Napa County. This agreement determines how property taxes will be shared between the city and the county after the annexation is finalized.
The Cortese-Knox-Hertzberg Act requires this negotiation, which may involve discussions around the ratio of property tax sharing. In some cases, counties and cities agree to share taxes on an 80% county / 20% city basis, though other ratios are possible depending on the agreement.
St. Helena will need to work closely with Napa County to reach an equitable tax-sharing arrangement that allows the city to benefit from the property taxes generated in the annexed area while compensating the county for its loss of revenue.
4. Environmental Impact Report (EIR)
An Environmental Impact Report (EIR) is required to assess the potential environmental impacts of the annexation and any future developments. This report will evaluate:
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The effects of infrastructure expansion (water, sewer, roads) on the environment.
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The potential impact on local wildlife and ecosystems.
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How the development aligns with the city’s sustainability goals.
The city must ensure that the annexation adheres to state and local environmental regulations, mitigating any negative impacts associated with growth in the area.
III. Infrastructure Expansion
The annexation of Meadowood and Madrone Knoll will require significant infrastructure investments to ensure the new areas are fully integrated into St. Helena's service network. The estimated costs are as follows:
1. Water and Sewage Services
City water is already provided. Expanding sewer infrastructure to serve Meadowood Resort and Madrone Knoll is critical, particularly given the high density of luxury accommodations and estates in these areas.
Cost Estimate: $1.5 million to $5 million.
2. Public Safety Services
To provide adequate fire and police protection, St. Helena will need to expand its public safety services to cover the annexed areas. This includes hiring additional personnel, purchasing new equipment, and expanding fire and police stations if needed. The existing city footprint for Fire and Police could be deemed adequate with marginal increased costs--one of the benefits of leveraging the city's economy of scale.
Cost Estimate: $150 thousand to $2 million.
3. Roads and Transportation
Road improvements and public transit extensions will also be necessary to ensure easy access to and from Meadowood Resort and the surrounding areas. This includes widening roads, improving public transit links, and maintaining rural aesthetics in road design as determined.
Cost Estimate: $200,000 to $1 million.
4. Government Advocacy
The annexation of Meadowood into the city of St. Helena is a complex process that requires careful planning and compliance with Local Agency Formation Commission (LAFCo) regulations. Hiring a consultant with deep experience in LAFCo procedures and city annexations is crucial to ensure that the process is handled smoothly and efficiently. Such expertise will help navigate regulatory challenges, engage stakeholders effectively, and align the annexation with the long-term goals of the city council & ultimately increase our odds of success. This level of professional guidance is essential to safeguard St. Helena’s interests and ensure the annexation brings positive outcomes for both Meadowood and the city.
Cost Estimate: $50 thousand to $450 thousand
IV. Financial Analysis and Funding Options
1. Cost-Benefit Analysis
The estimated total cost for the annexation (administrative, legal, infrastructure) ranges from $2.43 million to $9.03 million. However, with annual revenue projections of $7.085 million to $7.385 million, the return on investment is expected within 14 months at worst.
This includes:
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Property Tax: $600,000 to $900,000 annually (after 80/20 split with the county).
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Transient Occupancy Tax (TOT): $6.11 million annually from Meadowood Resort.
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Sales Tax: $375,000 annually from tourism-related activities.
2. Funding Options
To finance the initial annexation costs, the city can explore a range of funding sources:
Grants: State and federal infrastructure grants can be pursued to support water, sewage, and transportation projects.
Development Impact Fees: Any future development in the annexed area should include impact fees to help cover infrastructure expansion costs.
Public-Private Partnerships: Collaboration with Meadowood Resort and other high-value businesses in the area to share costs for extending services and infrastructure.
City funded: Pass a balanced share the burden revenue plan and allocate 500k-2 million per year to fund the effort.
Or a combination of any of the listed items.
V. Community Engagement and Governance
1. Public Outreach and Consultation
Engaging with the residents of the annexed areas is crucial for securing broad support. The city will conduct a series of public meetings, informational campaigns, and surveys to address concerns about property taxes, service levels, and potential infrastructure changes.
One specific concern might be the integration of residents who currently use septic systems into the city’s sewer system. To alleviate these concerns, residents will be informed that integration with the sewer system will only be triggered for new developments or in the event of a septic system failure.
2. Citizens' Advisory Board
To ensure ongoing transparency and accountability, a Citizens' Advisory Board will be established, allowing residents of the annexed areas to have a direct voice in local decision-making. This will help address concerns about how tax revenues are spent and the quality of services provided.
VI. Sustainable Development Strategy
1. Zoning and Land Use
Strict zoning regulations will be applied to ensure that future development aligns with St. Helena’s commitment to sustainable growth. New developments in Meadowood and Madrone Knoll must prioritize:
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Agricultural preservation and support for local wineries.
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Low-density tourism-related businesses, such as boutique hotels and eco-friendly accommodations.
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Environmentally friendly practices, including water conservation and renewable energy use.
2. Support for Local Agriculture
The annexation will provide the opportunity to support local wineries and agricultural businesses through:
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Tax incentives for sustainable farming practices.
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Marketing campaigns to promote wine tourism, reinforcing the area’s status as a high-end destination for visitors.
VII. Timeline and Next Steps
The following steps outline the key milestones for the annexation of Meadowood and Madrone Knoll:
Preliminary Discussions and Planning (0-3 months):
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Conduct discussions with Napa County and LAFCo to outline the annexation process.
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Begin public outreach efforts to inform residents and stakeholders.
LAFCo Application Submission (3-6 months):
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Complete required studies (EIR, financial assessments).
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Submit formal annexation application to LAFCo.
Property Tax Negotiations with Napa County (6-9 months):
Finalize a tax-sharing agreement between St. Helena and Napa County.
LAFCo Review and Public Hearings (9-12 months):
LAFCo reviews the proposal and holds public hearings for community feedback.
Final Approval and Implementation (12-15 months):
Upon LAFCo approval, begin infrastructure expansions and integrate the annexed areas into the city's service network.
A Brighter Future
The annexation of Meadowood Resort and Madrone Knoll represents a strategic opportunity for St. Helena to enhance its revenue base, expand public services, and promote sustainable development. With the added benefit of pre-existing agreements under Resolution #483, which obligate these properties not to oppose annexation, the city is in a strong position to ensure the success of this annexation. The expected annual revenue of $7.085 million to $7.385 million provides a strong financial foundation for the city's future, making this annexation a key element in St. Helena’s long-term growth strategy.