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HomeMy WebLinkAbout09/05/2000, C5 - AGREEMENTS WITH THE COUNTY OF SAN LUIS OBISPO CONCERNING PROPERTY-TAX REVENUES FROM TWO ANNEXATIONS LOCATED ON LOS OSOS VALLEY ROAD. j acEnba REpoRt I'C5 CITY OF SAN LU IS O B I S P O FROM: Arnold B. Jonas, Community Development Director O Prepared By: Peggy Mandeville, Associate Planner SUBJECT: AGREEMENTS WITH THE COUNTY OF SAN LUIS OBISPO CONCERNING PROPERTY-TAX REVENUES FROM TWO ANNEXATIONS LOCATED ON LOS OSOS VALLEY ROAD. CAO RECOMMENDATION Adopt resolutions accepting the negotiated exchange of property-tax revenues and annual property-tax increments for the two annexations as required as a prerequisite to any jurisdictional change by the Revenue and Tax Code Section 99. DISCUSSION At previous hearings, the City Council recommended to the Local Agency Formation Commission (LAFCo) that the following annexations be approved, and adopted zoning that will take effect upon annexation(vicinity map, Attachment#1): Informal Name City Apel.# Annexation Type Current Use Proposed Development DeVaul South 87-00 Residential Row crops Single/Multi-family Residential Froom Ranch 51-00 Commercial Cattle grazing Retail Commercial California law requires the City and the County to agree on division of the property taxes from the territory proposed for annexation, which otherwise would go to the County (Revenue and Taxation Code, Section 99). Staff has negotiated draft agreements for presentation to the City Council (Attachment #2). The agreements follow an overall City-County agreement for annexations, which was approved by both agencies in 1998. Under that agreement, for the nonresidential development, the County is to receive all property taxes from present and future development, which otherwise would go to the County; the City is to receive all sales taxes that the State returns to the jurisdiction within which the point of sale is located. For the residential development, no base property tax revenue is transferred from the County to the City, annual tax increment is transferred based on 12.54287% of the County's net (before the Education Revenue Augmentation Fund) consistent with the 2/3-1/3 split for residential uses, and after the City portion is transferred, all annual tax increment for the County Road Fund shall be transferred to the County General Fund(see Attachment 2 for specific wording in the resolutions). FISCAL IMPACT Several costs and revenues change as the City annexes properties. A fiscal study for the 1994 General Plan update concluded that the City could maintain fiscal health if it annexes land shown in the General Plan for residential, public, and other nonresidential uses. While the City would C54 Council Agenda Report—Tax Sharing Agreements for DeVaul and Froom Ranch Page 2 forego some property taxes it could otherwise receive with the annexation of the Froom Ranch property, the property has the potential to generate substantial sales tax. The property tax exchange for the DeVaul South property will provide revenue from the newly annexed area that will help pay for expected services (police and fire, and after development,water and sewer). ALTERNATIVES The City and the County must agree on a revenue division before the annexation can be completed. State law says that if the City and the County do not reach agreement within a 60-day period, the annexation process stops and would need to be re-initiated for the annexation to occur. Council may direct staff to pursue a different revenue-division formula, or may continue action for other reasons. Not approving the agreement within the interval set by State law would require re-filing the LAFCo applications and returning at a future meeting to resolve the matter. Departing from the previous agreement with the County would require re-negotiation of the approach to sharing revenues. Attachments: #1 -Vicinity map 42 - Draft resolutions approving tax-sharing agreements Pmandevi\CC\tax sharing CAR C5-2 Attachment 1 M�oN� DeVau os Froom o so fl s G 0 ^O 0� 3 �A AN NX 87-00 City Limit Line N Urban Reserve Line Attachment 2 RESOLUTION NO. (2000 Series) A RESOLUTION OF THE CITY COUNCIL OF SAN LUIS OBISPO ACCEPTING A NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUE AND ANNUAL TAX INCREMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF SAN LUIS OBISPO FOR THE DEVAUL SOUTH ANNEXATION (LAFCo Application#8-R-00) (City File No. ANNX 87-00) WHEREAS, in the case of a jurisdictional change other than a city incorporation or district formation which will alter the service area or responsibility of a local agency, Revenue and Taxation Code Section 99(a)(1) requires that the amount of property tax revenue to be exchanged, if any, and the amount of annual tax increment to be exchanged among the affected local agencies shall be determined by negotiation; and WHEREAS,when a city is involved, the negotiations are conducted between the City Council and the Board of Supervisors of the County; and WHEREAS, when a special district is involved,the negotiations are conducted by the Board of Supervisors of the County on behalf of the district or districts, unless od=vvise requested by said district or districts pursuant to Revenue and Taxation Code Section 99(b)(5); and WHEREAS, Revenue and Taxation Code Section 99(b)(6) requires that each local agency,upon completion of negotiations,adopt resolutions whereby said local agencies agree to accept the negotiated exchange of property tax revenues, if any, and annual tax increment and requires that each local agency transmit a copy of each such resolution to the Executive Officer of the Local Agency Formation Commission; and WHEREAS, no later than the date on which the certificate of completion of the jurisdictional change is recorded with the County Recorder, the Executive Officer shall notify the County Auditor of the exchange of property tax revenues by transmitting a copy of said resolution to the County Auditor, and the County Auditor shall thereafter make the appropriate adjustments as required by law; and WHEREAS,the negotiations have taken place concerning the transfer of property tax revenues and annual tax increment between the County of San Luis Obispo and the City of San Luis Obispo pursuant to Section 99(a)(1) for the jurisdictional change designated as Annexation No. 8-R-00 to the City of San Luis Obispo(DeVaul South Annexation); and WHEREAS,the negotiating parties,to wit: Jim Grant,Assistant Administrative Officer, County of San Luis Obispo, and Ken Hampian,Assistant City Administrative Officer, have negotiated the exchange of property tax revenue and annual tax increment between such entities as hereinafter set forth, and WHEREAS,it is in the public interest that such negotiated exchange of property tax revenues and annual tax increment be consummated. C5-4 Resolution No. (2000 Series) Page 2 NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: 1. That the recitals set forth above are true, correct, and valid. 2. That the City of San Luis Obispo agrees to accept the following negotiated exchange of base property tax revenues and annual tax increment: (a) No base property tax revenue shall be transferred from the County of San Luis Obispo to the City of San Luis Obispo. (b) Annual tax increment shall be transferred from the County to the City in an amount to determined by the County Auditor, based upon the following percentage agreed to by the negotiating parties: 12.54287% of the County's net, before the Education Revenue Augmentation Fund (ERAF). The tax increment shall be transferred from the County to the City in the fiscal year immediately following City notification to the County that it has approved the final map for the annexed properties and taken ownership of all open space areas. (c) After the City portion is transferred, all annual tax increment for the County Road Fund shall be transferred to the County General Fund. 3. Upon receipt of a certified copy of this resolution and a copy of the recorded certificate of completion,the County Auditor shall make the appropriate adjustments to property tax revenues and annual tax increments as set forth above. 4. That the City Clerk is authorized and directed to transmit a certified copy of the resolution to the Executive Officer of the San Luis Obispo Local Agency Formation Commission,who shall then distribute copies in the manner prescribed by law. On motion of , seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this_day of , 2000. C5-5 Resolution No. (2000 Series) Page 3 _.....�. .. Mayor Allen Settle ATTEST: Lee Price, City Clerk APPROVED: Jeffrey G. Jorgensen, City Attorney C5-6 RESOLUTION NO. (2000 Series) A RESOLUTION OF THE CITY COUNCIL OF SAN LUIS OBISPO ACCEPTING A NEGOTIATED EXCHANGE OF PROPERTY TAX REVENUE AND ANNUAL TAX INCREMENT BETWEEN THE COUNTY OF SAN LUIS OBISPO AND THE CITY OF SAN LUIS OBISPO FOR THE FROOM RANCH ANNEXATION (LAFCo Application #8-R-00) (City File No.ANNX 51-00) WHEREAS, in the case of a jurisdictional change other than a city incorporation or district formation which will alter the service area or responsibility of a local agency, Revenue and Taxation Code Section 99(a)(1)requires that the amount of property tax revenue to be exchanged, if any,and the amount of annual tax increment to be exchanged among the affected local agencies shall be determined by negotiation; and WHEREAS, when a city is involved,the negotiations are conducted between the City Council and the Board of Supervisors of the County; and WHEREAS, when a special district is involved,the negotiations are conducted by the Board of Supervisors of the County on behalf of the district or districts,unless otherwise requested by said district or districts pursuant to Revenue and Taxation Code Section 99(b)(5); and WHEREAS,Revenue and Taxation Code Section 99(b)(6)requires that each local agency,upon completion of negotiations, adopt resolutions whereby said local agencies agree to accept the negotiated exchange of property tax revenues, if any, and annual tax increment and requires that each local agency transmit a copy of each such resolution to the Executive Officer of the Local Agency Formation Commission; and WHEREAS, no later than the date on which the certificate of completion of the jurisdictional change is recorded with the County Recorder, the Executive Officer shall notify the County Auditor of the exchange of property tax revenues by transmitting a copy of said resolution to the County Auditor, and the County Auditor shall thereafter make the appropriate adjustments as required by law; and WHEREAS, the negotiations have taken place concerning the transfer of property tax revenues and annual tax increment between the County of San Luis Obispo and the City of San Luis Obispo pursuant to Section 99(a)(1) for the jurisdictional change designated as Annexation No. 8-R-00 to the City of San Luis Obispo (Froom Ranch Annexation); and WHEREAS,the negotiating parties,to wit: Jim Grant,Assistant Administrative Officer, County of San Luis Obispo, and Ken Hampian,Assistant City Administrative Officer,have negotiated the exchange of property tax revenue and annual tax increment between such entities as hereinafter set forth, and WHEREAS, it is in the public interest that such negotiated exchange of property tax revenues and annual tax increment be consummated. C5-7 Resolution No. (2000 Series) Page 2 NOW,THEREFORE,BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: 1. That the recitals set forth above are true, correct, and valid. 2. That the City of San Luis Obispo agrees to accept the following negotiated exchange of base property tax revenues and annual tax increment:. (a) No base property tax revenue shall be transferred from the County of San Luis Obispo to the City of San Luis Obispo. (b) No annual tax increment shall be transferred from the County of San Luis Obispo to the City of San Luis Obispo. 3. Upon receipt of a certified copy of this resolution and a copy of the recorded certificate of completion,the County Auditor shall make the appropriate adjustments to property tax revenues and annual tax increments as set forth above. 4. That the City Clerk is authorized and directed to transmit a certified copy of the resolution to the Executive Officer of the San Luis Obispo Local Agency Formation Commission,who shall then distribute copies in the manner prescribed by law. On motion of , seconded by .and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was passed and adopted this_day of ,2000. Mayor Allen Settle ATTEST: C5-8 Resolution No. (2000 Series) - Page 3 Lee Price, City Clerk APPROVED: Jeffrey G. Jorgensen, City Attorney C5-9