HomeMy WebLinkAbout04/04/2011, B 3 - RESOLUTION TO ESTABLISH A PROPERTY TAX EXCHANGE AGREEMENT WITH THE COUNTY OF SAN LUIS OBISPO TO AD council MK" "yi,
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CITY OF SAN LU I S O B I S P O
FROM: Katie Lichtig, City Manager
Prepared By: Michael Codron, Assistant City Manager
SUBJECT: RESOLUTION TO ESTABLISH A PROPERTY TAX EXCHANGE
AGREEMENT WITH THE COUNTY OF SAN LUIS OBISPO TO ADDRESS
PROPERTY AND SALES TAX TRANSFERS IN THE ORCUTT AREA.
RECOMMENDATION
Adopt a resolution establishing a property tax exchange agreement with the County of San Luis
Obispo addressing property and sales tax transfers in the Orcutt Area, whereby the County will
transfer 34% of the future property tax increment for all property in the Orcutt Area to the City,
and the City will keep 100% of the sales tax generated in the Orcutt Area(Attachment 1, Vicinity
Map),
DISCUSSION
Summary
When the City annexes (or incorporates) County land, State law requires the City and County to
negotiate a transfer of the taxes paid in the annexation area. In 1996,the City and County adopted
a joint resolution, along with several other cities in the County, to establish a county-wide policy
regarding these tax exchanges (Attachment 2).
The joint resolution is based on two principles, (1) that the County should not "profit" from
annexations, nor should annexations result in a net fiscal loss to the County, and (2), that tax
exchange practices should not undermine good land use planning by discouraging cities from
pursuing logical and appropriate annexations.
With these principles in mind, City and County staff have negotiated an agreement that is
consistent with the countywide policy. Specifically, the resolution recommended for adoption
provides for the County to continue to receive all base (existing)property taxes, and two-thirds of
all future property tax increment. The City would receive 34% of the future property tax
increment, which is the same increment we receive for residential land in other recent annexation
areas annexed since the county-wide policy was adopted, including DeVaul Ranch (now known
as the Rancho Obispo and De Tolosa Ranch subdivisions) and the Margarita Area.
Background
Prior to 1998, tax exchange negotiations between the County and cities were very contentious,
with the County "holding most of the cards:" This is because the negotiation process would not
commence until after the annexation applications had gone through a lengthy and complex City
development review process. According to the State Revenue and Taxation Code (Section 99),
exchange negotiations must be concluded within 60 days or the annexation application would
terminate.
BM
I.
Orcutt Area Tax Exchange Agreement Page 2
Given this process, our city (like others) was under great pressure to agree to high County
expectations for sharing tax revenue. Such expectations were increasing across the state, with
counties demanding not only existing revenue, but major shares of future revenue, including
transient occupancy tax and sales tax.
Counties have a need for revenue to support services to residents, even city residents because as
cities grow, so grows the demand for county services (e.g. court and health care costs). As a
result, many cities and counties throughout California have become embroiled in very
contentious tax negotiations, to the detriment of everyone involved. And many cities, under
pressure, have agreed to various onerous requirements.
To address this situation in San Luis Obispo County, the Mayors of the cities in the County
commissioned extensive study of the added burdens created for our County by development
within the boundaries of cities. As a result, several cities in San Luis Obispo County entered into
a standardized tax exchange agreement with the County in 1996. The standard agreement is
based on two key principles: (1) that the County should not "profit"from annexations, nor
should annexations result in a net fiscal loss to the County; (2) that tax exchange practices
should not undermine good land use planning by discouraging cities from pursuing logical and
appropriate annexations. This agreement greatly reduces the uncertainty and conflict inherent in
the previous annexation process, especially relative to raw land.
Unique Features of the Orcutt Area Agreement
The standardized tax exchange agreement with the County provides for the County to receive
100% of the base property tax and 66% of the future property tax increment in the case of
residential annexations. In the case of annexations of commercial and open space land, the
County would normally keep 100% of the base property tax and 100% of the future property tax
increment, while the City would keep 100%of the future sales tax generated within the area.
In this case, the County has agreed to consider all of the land in the Orcutt Area as residential
land. This means that for the 2.75 acres of mixed-use land in the Orcutt Area, the City will be
able to keep 100% of the sales tax and will still receive 34% of the property tax increment. The
City will also receive 34% of the property tax increment for the open space lands associated with
the Righetti Ranch house complex at the corner of Tank Farm Road and Orcutt Road because it
is primarily residential in nature, as opposed to agriculture. The City is expected to receive fee
title to the Righeni Hill open space area, so no property taxes would be generated by this portion
of the open space area.
FISCAL IMPACT
The standardized tax exchange agreement with the County has been in effect since 1996. The
proposed annexation is consistent with the agreement. As a result, the fiscal impact of the current
annexation is discussed below in the larger context of the annexations that have occurred since
1996.
The standard agreement discusses four principal types of annexations, as identified in the
following table.
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Orcutt Area Tax Exchanee Agreement Page 3
Type of Annexation Tax Sharing Agreement
Raw Commercial or Industrial . County keeps 100% of base and 100% of future
Land property tax increment.
• City keeps 100% of future sales tax, business tax
and TOT
Residential Land • County keeps 100% of base and 66% of future
property tax increment_. City gets 34% of future
property tax increment.
Commercial and industrial areas • To be negotiated on a case by case basis.
that are substantially developed.
Agricultural land and open space. • County keeps 100% of base and 100% of future
property tax increment.
Annexations that have occurred since the agreement was adopted include the Froom Ranch,
DeVaul Ranch, and Madonna Gap annexation along Los Osos Valley Road, the Airport Area and
Margarita Area annexations, and other minor annexations in different parts of the City. The
agreement provides certainty with respect to the fiscal impact associated with the City's planning
efforts, and allows the City to plan land uses in the annexation areas with an understanding of the
fiscal impact associated with development and annexation. For instance, the fiscal analysis
associated with the Airport Area Specific Plan showed that annexation of the area would result in
an annual "net" (operating revenues less operating costs) of $450,000 upon annexation of the
area building to $750,000 upon build-out. Although there was no fiscal impact analysis of the
Froom Ranch or Madonna Gap annexations, these annexations support major retail development
and a substantial percentage of the City's total sales tax revenue that is used to support public
safety, street paving, parks and recreation and other benefits enjoyed by residents.
There was no fiscal impact analysis of the Orcutt Area Specific Plan annexation, however,
residential development is normally considered to have a negative fiscal impact. These impacts
vary from place to place based on the types of services provided by a city, household size, the
valuation of the construction and other factors. To a certain degree, the losses associated with
residential development are mitigated by the fact that San Luis Obispo is a full service City and
residents have opportunities to shop locally and contribute to our sales tax base.
When the joint City/County resolution was proposed in 1996, it was accompanied by a fiscal
analysis that made two conclusions (Attachment 3). First, that the loss of property tax to the
County through the agreement is recompensed many times over by sales tax. Second, for
residential properties the shift of some property tax to the County from the City is relatively
small and that other variables would be much more important to the community's decision to
move forward with a particular annexation (such as the creation of housing stock to help the City
achieve its Housing Element goals).
The other relevant analysis was prepared along with the City's General Plan. When the General
Plan was adopted, it was determined to have a neutral fiscal impact. In other words, future
expenditures associated with development of the land use plan are supported by future revenues.
Because development of the Orcutt Area with residential uses is consistent with the General
Plan, annexation of the Orcutt Area is expected to have a neutral fiscal impact.
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I '
Orcutt Area Tax Exchange Agreement Page 4
ALTERNATIVE
1. If the City Council has specific concerns with the rationale for the 1996 Agreement,
direct staff to re-open negotiations with the County with specific negotiating parameters.
This alternative is not recommended because the negotiating period for this annexation
will expire on April 16, 2011. In addition, County staff is not receptive to negotiating an
individual agreement with the City that is substantially different than the countywide
agreement.
2. Direct staff to work with the County, and other cities in the county, to update the
countywide annexation tax exchange policy before approving an exchange agreement for
the Orcutt Area. This alternative is not recommended because such an effort would
involve a substantial amount of time to accomplish and should be initiated outside of the
negotiations of any particular annexation. In addition, each annexation provides an
opportunity for City staff to discuss the fundamental principles of the 1996 Agreement
and policy with County staff. The underlying assumptions behind the tax exchange
agreement are still valid and staff does not believe changes to the policy are warranted at
this time.
ATTACHMENTS
1. Vicinity Map
2. Joint Resolution No. 01-96
3. Analysis of 1996 Tax Sharing Agreement
4. Resolution Approving a Tax Sharing Agreement for the Orcutt Area
G:\Staff\Codron\CAR\OrcuttExchange.DOC
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EACHMENTI
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J(..,J RESOLUTION NO. 01.96
A RESOLUTION OF THE CITIES
OF SAN LUIS OBISPO COUNTY ESTABLISHING
A COUNTYWIDE POLICY FOR PROPERTY
TAX EXCHANGE UPON ANNEXATION
WHEREAS, changing governmental fiscal relationships have required a modification to
the earlier approach to determining property tax exchange between cities and the County
upon annexation; and
WHEREAS, the extent and nature of this modification has been agreed upon through a
process of negotiation between the cities and the County based upon a shared goal of
producing a countywide tax exchange agreement that is fair to all parties; and
WHEREAS, a fair agreement is one that respects the following two principles: (1) that
the County should not "profit' from annexations, nor should annexations result in a net
fiscal loss to the County; (2) that tax exchange practices should not undermine good
land use planning by discouraging cities from pursuing logical and appropriate
annexations; and
WHEREAS, in order to provide objective data upon which to develop an equitable
agreement, the cities commissioned an independent fiscal study of the impact of
annexation and development of vacant lands around cities on County government; and
WHEREAS, the results of this study assisted in the development of a new countywide
tax exchange.agreement; and
WHEREAS, upon adoption of the agreement, the County and the cities will continue to
collaborate on related matters of shared importance, including: (a) following adoption by
the Board of Supervisors, reconsidering a countywide development impact fee program,
which may include appropriate city impact fees for county development occurring in the
unincorporated fringe of cities for which a clear City impact can be determined; and (b)
support existing policies which encourage urban-like development within the boundaries
of cities.
NOW, THEREFORE, BE IT RESOLVED by the City Councils of the Cities of San Luis
Obispo County:
1. For "raw land" annexations prezoned commercial or industrial, the County
retains the existing property tax base and all of the future property tax
increment.
2. For annexations prezoned residential, the County, retains the
existing property tax base and two-thirds (66%) of the future property tax
increment:
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Aftachffentl�
3. For commercial and industrial annexation areas already substantially
developed, tax exchange will be negotiated on a case-by-case basis
between the annexing city and the County to determine an appropriate
property tax-sharing arrangement, based upon the principle of fiscal
neutrality for the County.
4. For annexations prezoned agricultural, the County retains the' existing
property tax base and all of the future property tax increment.
5. The County and the cities agree to re-examine the above policies at five-
year intervals to assure that they remain appropriate and current for all
parties.
PASSED AND ADOPTED by the City Councils of the Cities of San Luis Obispo County
at a special joint meeting thereof held on the 25th day of April, 1996.
MAYOR OF ARROYO G ND
ATTEST:
a
CI CLEAK
MAYOR OF ATASCADERO
ATTEST: (Not adopted)
CITY CLERK
MAYOR OF GR VER BEACH
ATTEST:
r ,
CITY CLERK '
i
nt Z.
Resolution No. J01-96 Macage 3
MAYOR OF MORRO BA
ATTEST:
CITY CLER
MAYOR OF PASO ROBLES
ATTEST:
(Not participating)
CITY CLERK
MAYOR OF PISMO BEACH
ATTEST: (Not participating)
CITY CLERK
MAYO OF SAN LUIS OBISPO
ATTEST:
CLE
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ATTACHMENT_ 3
Crawford Multari & Starr
planning • economics • public policy _
r
June 10, 1996
Mayors of the Cities of San Luis Obispo County
c/o Allen Settle, Mayor
City of San Luis Obispo
P.O.Box 8100
San Luis Obispo, CA 93403-8100
Dear Mayors,
Earlier this year I prepared an analysis of the fiscal effects on the county related to annexations.
This analysis was eventually used in the negotiation of a tax:sharing agreement between at least
some of the cities and the county. It seems that there is some confusion.about the purpose of my
analysis and about the results. Perhaps this letter will help clarify the situation.
Our role in the tax sharing discussions. When representatives of the cities first engaged the
county's representatives regarding a standar ax sharing agreement for annexations, thF county's
initial suggestion was that they should retain adl property tax and should also receive a portion of
the saes tax, and perhaps even some of the TOT, as well. They argued that with the reductions
in property tax revenues going to counties anincreases in obligations, the county would
probably need that additional revenue just to "break even." I was contacted by Ken Hampian,
Bob Hunt and Rich Ramirez to analyze the actual effects of annexation on the county,to test
whether or not this assertion was valid. The county representatives agreed that some kind of
analysis of probable fiscal impacts would be valuable.
Our firm had recently developed a fiscal impact model for the county so that they could evaluate
different development proposals. We modified that model so that we could look at the fiscal
effects on the county if the development occurred in an annexation area(rather than in the
unincorporated territory). The advantage of basing the analysis on the county's model was that
we could use many of the assumptions the county had already found reasonable. In this kind of
analysis,consensus on assumptions is an important starting point.
Please keep in mind that I was not part of the negotiation team,but I did have the interesting
experience of sitting in on several of the discussions that took place among representatives of the
cities and the county.
Our assignment was to determine how much property tax the county would need in order to
"break even", that is, so that the revenues coming to the county equaled the costs of providing.
county services. We refered to that as"fiscal neutrality", that service costs would be just offset .
by revenues. We were asked to determine fiscal neutrality for the county,not for the cities.
641 Higuera St., Suite 202 San Luis Obispo. CA 93401 (805) 541.3848 Fax ,(805)_541 -7"
ATTACHMENT?
Mayors
Annexation and tax sharing
.r
page 2
Statewide perspective. The League of California Cities retained our firm earlier this year to
survey cities throughout the state regarding issues related to annexations. We received responses
from 154 cities; 78 (51%)reported that they had encountered problems with tax sharing
agreements. In many cases, the county position is situp y that 100%of all property tax must go
to a counries after annexation. Examples where this is the case include San Joaquin,
Sacramento and Shasta counties.
Forty-four(29%) of our respondents stated that their county's position was not only that 100% of
the property tax should be passe .to the county but that a share of sales tax, as well. We
interviewed representatives of many of these cities to learn more about what kinds of tax sharing
agreements had been worked out. An example of how extreme these negotiations can go is the
City of Sonora. In a recent annexation there, the tax s wring agreement called for 10 percent of
the property tax increment, 8 percent of the sales tax; 72 percent o_the TOT, and development
impact fees averaging about S 1,000 per unit to go to the County of Tuolumne!
The results of our analysis of San Luis Obispo County. We found that in order for the county
to"break even,"they would need to continue to get all the property tax for non-residential
annexations (commercial and industrial) and about 2/3 of the tax for residential annexations.
Here's another way of looking at this. On average, in the unincorporated area, the county
receives only about 22%of the property tax. Our analysis found that for the county to break
even, they would need to get 22% after-annexation for commercial and industrial annexations
and about 14%for residential annexations.. (More precisely, the actual percentage was 13.5% --
a bit less than 2/3 of 22%.)
This also means that after annexation, the city would receive no property tax for commercial and
industrial annexations and about 7.4%of the property tax for residential annexations.
The commercial situation. At first blush, it may seem imbalanced that the county receives all
the property tax in the case of commercial annexations. However,the city has kept all the sales
tax. The sales tax income simply overwhelms the property tax. Consider a hypothetical case of
a 100,000 square foot shopping center.. In the analysis we assumed an assessed value of$80 per .
square foot. This is probably high for most modern tilt-up construction,but let's use it for our
example. If the county received its fu1122% of the property tax,that equals about$17,600 in
property tax.The projected sales tax from a retail center of that size is about$175,000 per year,
almost exactly 10 times as much.
Let's consider how much property tax the city actually"gives away"in this hypothetical case.
First of all, it is important to keep in mm at since ERAF and other property tax"grabs"by the
_ Crawford Multari&Starr planning economics._ public policy_
B3-10
Mayors
Annexation and tax sharing -
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page 3 -
state, the county's position in terms of property tax has significantly eroded. Within the cities,
the county receives on average about 18%of the property tax and cities, on average,receive
about 16%. Thus, a city and the county share about 34% of the property tax. In unincorporated
areas, as noted above, the county gets only about 22%of the property tax. Thus, the amount that
the city and county can share after annexation, the amount they can actually negotiate over, is
only 22%. Thus, it is entirely unrealistic for cities to expect to continue to receive as much as
16% of the property tax after annexation.
But let's assume that the current ratio of county to city shares is maintained in splitting up that
22%. That would work out to about 10.3% for the city and about 11.7% for the county(16:18
10.3:11.7, approximately). If we assumed this was the baseline,how much did.the city lose by
giving the county all the property tax? It works out to about$8,000. Again,the sales tax.is
estimated at $175,000-- almost 22 times as much. Thus, from the perspective of an overall fiscal
strategy, the trade-off of a small amount of property tax for much greater sales tax not to
mention business license taxes and other revenues like TOT) seems reasonable.
Another interesting point about property tax is that Proposition 13 limits re-assessments to only
2%per year. If inflation is above 2%, then the property tax income, in constant dollars, actually
declines each year. Sales tax,however, generally keeps pace with inflation as prices for goods
rise. For example, if inflation runs at 4%,that$8,000 that the city gave up will be worth less
than$6;500 ten years later even with.the annual maximum increases allowed by Proposition 13.
Thus, given the two income sources,the sales tax is by far the larger and more likely to keep up
with inflation.
The industrial picture. Here again, the city position was to give up the entire property tax to
the county. While the sales tax benefit from the commercial case was easy to illustrate,what
income accrues to the city in the case of industrial? While not as generous as in the case of a
retail center, industrial areas still produce significant sales tax. The examination of virtually any
industrial area reveals that there is considerable retailing going on.
For example,we were recently retained to assist with the annexation of an already developed
area in the city of Patterson. The subject properties were considered to be"industrial." The total
property tax that the city and county could negotiate over amounted to about$2,400. However,
e sales tax generated among the various uses was over$30,000. Clearly,the city was not so
concerned with property tax as with getting the sales tax.
Other examples may help illustrate the point that"industrial" areas actually contain activities that
generate substantial sales tax-- not nearly so significant as a retail center,but generally much
more than property tax.
Crawford Multari&Starr _ planning__economics public.,policy
B3-11-°
. AT IACHMENT 3
Mayors
Annexation and tax sharing _
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page 4
Consider the"Airport Area"south of San Luis Obispo. This has been zoned"industrial"for
decades. A study performed by Angus McDonald found that the area generated approximately
$370,000 per year in sales tax. Keep in mind that this is an"industrial"district. Furthermore,
McDonald's report estimated that this area would generate a net revenue to the city(today,
without further development) of$570,000 per year without any property tax going to the city.
Another area presently in the City of San Luis Obispo is probably representative of the mix of
uses one might find in"industrial"districts. The area east of lower Higuera Street between Tank
Farm and Prado Roads includes Hind Performance, San Luis Sourdough,The Spice Hunter,JBL
Scientific and several other light industrial and"heavy"commercial land uses. In 1994-95 this
area generated over$160,000 in sales tax to San Luis Obispo. Interestingly,the amount of sales
tax produced by this area has been climbing throughout this decade, averaging an increase of
almost 15%per year, despite the recession.
The case of residential annexations. While one can easily demonstrate that commercial
annexations will be net revenue generators.for cities, and that this is also likely true for industrial
annexations --at least the way industrial areas actually are built out--one can not be so sanguine
about residential projects. The fiscal impacts of new residential growth is quite idiosyncratic
from place to place,varying with the amount and type of services provided by the city,
household size, the valuation of the units, local sales tax capture and other factors. .
However,with regard to the property tax, it should be kept in mind that the amount of money in
absolute dollars is quite small. Consider a hypothetical case of a single family house.
Fust of all, there is the question of the"base"before annexation. Tax sharing agreements
generally require that the existing base,that is, the amount the county presently receives in
property tax,continues to go to the county. It is just the increase, or increment,that is shared
after annexation. We assumed that to be true in our analysis. However, we also assumed that for
raw land, outside the city limits,with neither annexation nor entitlements,the value for property
tax purposes is generally quite low. Discussions with some local developers suggested that the
assessed value of this land for tax purposes (again,prior to annexation or any entitlement)would
probably by less than$20,000 per acre. Let's double that for argument's sake to $40,000 per
acre. Thus, at a post-annexation density of four units per acre,the"base" for property tax
purposes for each unit would be$10,000. The county receives about$22 in property tax on that.
Now,after annexation the land is subdivided and approved. A house is built and sold for
$150,000. The increment is$140,000. The total property tax from the increment is I%of that or
$1400. The city and county get to split 22% of that, or about$308. If we assume the current
average ratio of county-city shares (see above),the city would get$144 and the county$164.
Crawford Multari&Starr planning economics public policy
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ATTACHMENT 3- -
Mayors
Annexation and tax sharing
page 5
The newly proposed tax sharing agreement would change these amounts to$103 for the city and
$205 for the county. Thus,the city has given up $41 per house to the county.
In these difficult fiscal times, giving up any revenue is a problem. But one should keep in mind
e magnitu e of the issue at hand.
Conclusion. It is not my role to say whether the proposed agreement meets the needs of
individual cities. However, it appears to me that for any commercial annexation, and for most
industrial annexations that can be imagined,the loss of property tax is recompensed many times
over by sales tax(and perhaps other revenues as well). In the case of residential,there is a shift
of some property tax to the county from, at least, a theoretical baseline. However,the amount of
money involved is quite small; it seems other variables besides these small sums would be much
more important in a community's decision as to whether or not a particular annexation makes
sense.
I hope this is helpful. I would be pleased to attend one of your"Mayors' Group"meetings to
help answer questions and to discuss this interesting and difficult topic -- one that I can assure
you is being debated in many cities and counties throughout the state.
Thank you.
Sincerely,
6uz�CCG�7
Michael Multari
cc: Councilmembers and City Managers
Crawford Multari&Starr planning economics public policy
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AITACHME9 4
RESOLUTION NO. XXXX (2011 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY 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
WHEREAS, the City of San Luis Obispo, a charter city and political subdivision of the State
of California, wishes to move forward with the annexation of the Orcutt Area; and
WHEREAS, the 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, 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
resolutions to him 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 increments 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. 79 to the City of San Luis Obispo (Orcutt); and
WHEREAS, the negotiating party, to wit: Dan Buckshi, Assistant County Administrative
Officer and .Emily Jackson, Administrative Analyst, on behalf of the County and Michael
Codron, Assistant City Manager and Mary Bradley, Interim Finance Director/City Treasurer, on
behalf of the City of San Luis Obispo have negotiated the exchange of property tax revenue and
annual tax increments 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 increments be consummated.
NOW, THEREFORE BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Agreement: The City Council agrees to accept the following negotiated
exchange of base property tax revenues and annual tax increment.
R
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ATTACHMENT 4
Resolution No. (2011 Series)
Page 2
1. No base property tax revenue shall be transferred from the County of San Luis Obispo to .
the City of San Luis Obispo.
2. For the purposes of this exchange, all land within the annexation area will be considered
to be pre-zoned residential.
3. Annual tax increments shall be transferred from the County of San Luis Obispo to the
City of San Luis Obispo in fiscal year 2011-2012 and each fiscal year thereafter in the
amount of 34 percent of the increment remaining after transfers to the Educational
Revenue Augmentation Fund (ERAF).
4. If development of the open space area (44 percent or 100 acres) of the site is ever
pursued, it will be incumbent upon the City to notify the County of such development and
the County will reserve the right to renegotiate with the City regarding a revised formula
for the exchange of property tax increment in that area.
SECTION 2. Transmittal. 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.
Upon motion of , seconded by
and on the following vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this 5th day of April, 2011.
Mayor David F. Romero
ATTEST:
Elaina Cano, City Clerk
APPROVED AS TO FORM:
(_'., "stine Dietrick, City Attorney
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