The URL can be used to link to this page

Home My WebLink About03/18/1997, C-5 - CITY ACCEPTANCE OF AN AGREEMENT WITH THE COUNTY OF SAN LUIS OBISPO REGARDING THE PROPERTY TAX REVENUES AND ANNUAL TAX INCREMENT FOR THE ERNIE BALL ANNEXATION. ANNEXATION NO. 46; 151 SUBURBAN ROAD; GP/R/ANNX/ER 154-96. council j Agcn ba nEpont -s CITY OF SAN LUIS OBISPO FROM: Arnold B. Jonas, Community Development Director By: Whitney Mcllvaine, Associate Planner SUBJECT: City acceptance of an agreement with the County of San Luis Obispo regarding the property tax revenues and annual tax increment for the Ernie Ball Annexation. Annexation No. 46; 151 Suburban Road; GP/R/ANNX/ER 154-96. CAO RECOMMENDATION: Adopt a resolution accepting the negotiated exchange of property tax revenues and annual tax increment that is required as a prerequisite to any jurisdictional change, pursuant to the Revenue and Taxation Code Section 99. DISCUSSION Situation/Previous Review The proposed Ernie Ball Annexation area covers roughly 13.46 acres south of Suburban Road, as shown on the attached vicinity map. On April 1, 1997, the City Council is scheduled to review the annexation and prezoning request. Anticipating an earlier review by City Council, the County Board of Supervisors initiated the 30-day tax negotiating period on February 25'. Therefore, terms of tax exchange must be determined in advance of Council's action on the annexation. Action by the Board of Supervisors on the tax agreement is scheduled for March 11'. The tax exchange is contingent on approval of annexation by City Council and the Local Agency Formation Commission Preliminary Airport Area Tax Exchange Agreement According to the terms of the countywide tax exchange agreement, no base property tax revenue and no annual tax increment shall be transferred from the County of San Luis Obispo to the City of San Luis Obispo for "raw land annexations." With respect to areas already "substantially developed," tax exchange was to be negotiated on a case-by-case basis to assure "fiscal neutrality to the County." The primary reason for this provision was the County's reluctance to agree to passing through sales tax. In other words, the County felt that a pass-through of "only" the property tax might not be enough. Although the Ball Annexation is very small, the property is partly developed, and thus it falls into the "case-by-case" negotiation provision of the countywide agreement. City staff Property Tax Exchange: Ernie Balt Annexation Page 2 approached County staff with a proposal to treat the entire Airport Area, including the Ball Annexation, under the provisions of raw land annexation. The rationale for doing so was twofold: (1) Since the countywide agreement was adopted, the County has completed its SLO Area Plan fiscal analysis which shows that the best fiscal scenario for the County is the annexation of the Airport Area to the City - thus, the County should not discourage interim annexations in the area; and (2) That it would be extremely cumbersome and expensive to study and negotiate each annexation in the Airport Area on a case-by-case basis. The County staff has agreed to this concept (see attached letter), and on March 11* the Board of Supervisors will act on the Ball Annexation tax exchange as a "raw land" annexation. Eventually, the Board and the Council will need to adopt an amendment to the county-wide agreement to formalize the understanding for the rest of the Airport Area, whereby property tax is passed through to the County and sales tax, TOT, business, utility, and other taxes accrue to the City. ALTERNATIVES Continue and direct the staff to further negotiate with the County over desired terms of the property tax revenue distribution associated with the annexation. Attached: Draft Resolution Vicinity Map Tax Exchange Letter RESOLUTION NO. (1997 Series) A RESOLUTION OF THE CITY OF SAN LUIS OBISPO COUNCIL ACCEPTING 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 ANNEXATION /146 (151 SUBURBAN ROAD: ERNIE BALL ANNEXATION) (ANNX/GP/R/ER 154-96) WHEREAS, in the case of a jurisdictional change which will alter the service area or responsibility of a local agency, Revenue and Taxation Code Section 99(b) 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, 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 or 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 him and the County Auditor shall therefore 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.46 to the City of San Luis Obispo; and S-3 Annx #46 - Ernie Ball Tax Transfer Page 2 WHEREAS, the negotiating parties, to wit: Lee Williams, Deputy County Administrator, 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. 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 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 in the fiscal year 1998-99 and each fiscal year thereafter. 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: �5y Annx.#46.-.Emie Ball Tax Transfer Page.3 AYES: NOES: ABSENT-: the foregoing resolution was-passed and adopted this. __ day of ___ _. . , 1997: Mayor Allen Settle ATTEST: City Clerk Bonnie Gawf APPROVED AS TO FORM: tto ey f J ensen � 1 PTN. T. 31 S., S.BkJ-pg.92 .1 (10 ) / 44 V �25� 33 351; PARCEL 4 z. 5.02,AC N Q N_T_S_ /P o 6 v � s x a•�9 R 1719 J M 3 %p TAN- P i J7s.73, JJY.J f LINE 302 / 53� i y' is v 54 55 ° 53 6 2�1 4a ' �L 7.50aCa 7.40AC.A ; 7.40ACA 7.40AC, 7.04AC.i '»V.7.r , 6.19340 t• a 1 ?i Z y; 3 4 5 6 7 } t / 53 ° 14 c c• o e \7J ~ r 33 ° 1 ITJ � K r A o / ci % 1.2074 3 0 53 sa T. J2+".lJ �62 ] IT? c M q SLIBUAZAN tJr.• c m CITYJs.r jai: :m JJr.7.tm n n q ti .VXm L 2.24Ac. .�, ft i � 2.64C�o 2•"� O �\ ;i `' ..rc i ?;.;>.. .: .;:.:< :::::<.;:•:h ;.::::; 34 35 36 it 1b6 4C 7.29AC 7.29AC 4 U I a .06 a .7 4 C. B 2 1 57 av 07LLJ ] 1 z 7 PtA 31 i e. o . ; :.ta -Z. ri7.7• .. PM 1PM28-27 QJ:2".72 i. :OI up HOC.L ]�Ejr � PROCT SITE lul U 076-352-038,039 ��nnQn SITE LOCATION MAP A S S O C I A T E S Ernie Ball Guitars, Inc. Annexation Area 960819%site1oc.pm5 12/4/96 L'S•6 �i ,r ExcH�9�a�E F/�F County of San Luis Obispo COUNTY GOVERNMENT CENTER,RM.370■SAN LUIS OBISPO,CALIFORNIA 93408■(805)781-5011 OFFICE OF THE COUNTY ADMINISTRATOR February 27, 1997 Mr. Ken Hampian, Assistant City Administrative Officer City of San Luis Obispo 990 Palm Street San Luis Obispo, CA 93401-3249 Re: Property Tax Exchange Dear M ampian: As a result of our recent meetings, the Administrative Office will recommend to the Board of Supervisors that.they accept the City of San Luis Obispo's offer that the County retain all of the property tax base and increment for the Airport area annexation. In return, the City will receive all sales tax revenues after the effective date of the annexation. It is acknowledged that the recent agreement on a zero property tax exchange for the Ernie Ball annexation, should serve as a precedent for the entire San Luis Obispo County Airport area annexation. We are prepared to recommend this approach to the Board of Supervisors at the appropriate time after the annexation proposal is re-initiated. If you have any questions, please let me know. Sincerely, LEE WILLIAMS Deputy County Administrator c - Board of Supervisors Robert E. Hendrix, County Administrator John Dunn, City Administrative Officer (0� s'7