The city of Sacramento has been the biggest loser when it comes to auto sales revenue.
Folsom, Roseville and Elk Grove each boast cash cow auto malls.
The city of Sacramento has a smattering of dealerships struggling to hold on in a tough economic climate.
Because localities where the cars are sold get to keep 1 percent of the sale, cities and counties have raced to build auto malls.
Over the years, the city of Sacramento has concocted various failed plans to recruit dealers. At the same time, Sacramento County has labored to keep its dealerships in the unincorporated corridors happy – and in place.
In 2007, the county agreed to pay Mike Daugherty Chevrolet $1 million over 10 years to stay put on Fulton Avenue.
This week, instead of undercutting each other, the city and county decided to join forces. In unanimous votes, the City Council on Tuesday and the Board of Supervisors on Wednesday agreed to share the successes of franchises – regardless of where the dealership is situated.
Under a sales tax revenue-sharing agreement, each jurisdiction will maintain its base of revenue, and then split 50-50 any revenue growth.
The current base sales revenue is about $3 million annually for the city, and $7.6 million annually for the county.
"By having this agreement, it allows us to really look beyond the boundaries of our city … to put these businesses in the right location," said Mayor Heather Fargo.
The deal puts to rest any concerns about Mel Rapton Honda's move from the unincorporated area to city turf at the site off Capital City Freeway formerly occupied by the Sacramento Trapshooting Club.
Now the question is: Where will this newfound cooperative spirit lead city and county officials?
Over the past decades, the city and county have contemplated merging, including a plan that failed at polls in 1990. While elected leaders aren't talking about the big "M" again, they suggested that additional cooperative agreements are around the bend.
Last week, City Manager Ray Kerridge and County Executive Terry Schutten expressed optimism that the sometimes troublesome sibling rivalry is over. "We see this as a historic moment. We're looking for other deals in the future," Kerridge said.
Schutten said the revenue-sharing deal allows the economic development departments of the two entities to steer an auto dealer to the best possible site.
"Partnering with cities is the wave of the future for the county," Schutten said. "It's really a partnership that has developed, and we hope to do that on a variety of issues."
Supervisor Jimmie Yee said that next agreement might come on garbage collection.
Currently, the county collects garbage from the unincorporated area and the city of Citrus Heights, sending it to a county landfill. Meanwhile, the city trucks its garbage to a Reno landfill.
Matt Mahood, president of the Sacramento Metropolitan Chamber of Commerce, said the two entities shouldn't stop at auto sales or garbage collection.
He said local government would be more efficient if police, planning, roads and other departments weren't duplicating efforts. "Given the current financial crisis facing the city and county, sales tax sharing agreements and ultimately functional consolidation is likely inevitable," Mahood said.
"You have separate police forces. Why not figure out a better way to do this? Both have planning departments. Why not have just one handle it?"
Mahood gave officials credit for dealing with one of the more contentious issues – competing auto mall proposals.
Over the past decade, the city has tried to lure dealerships away from unincorporated Sacramento County to create an auto complex with freeway access. Some of those attempts, such as a Natomas auto mall, were led by Yee, who at that time was a city councilman. Yee said this week's agreement is a "win-win" once the auto industry rebounds.
Former elected leaders, including former Mayor Anne Rudin and Supervisor Illa Collin, said the deal makes sense.
Rudin said dealers won't be able to play the city and county against each other.
The agreement achieves some of the goals state Sen. Darrell Steinberg, D-Sacramento, sought to achieve through state legislation. Arguing that the lure of sales tax dollars resulted in community needs being neglected, including housing, Steinberg spent years trying to craft a regional sales tax-sharing plan. It didn't pass.
Steinberg, the Senate pro tem-elect, said it will help "minimize the endless insidious competition over which side of the boundary the next auto mall will be located."
"It's a model for other jurisdictions to watch closely, " Steinberg said.
Yolo County Supervisor Mike McGowan opposed that plan but sees no problem with local agreement. He said he wouldn't rule out a similar deal between Yolo County and West Sacramento.
Call The Bee's Ed Fletcher, (916) 321-1269.
