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HomeMy WebLinkAboutCC 3 EXCH. PROP TAX 11-03-80DATE: October 27, 1980  No. 3 11-3~80 TO: HONORABLE ~YOR AND CITY OOUNCIL FROM: DAN BLANKENSHIP, CI'l~f ADMINISTRATOR SUBJECT: Ai~PROVAL OF P~f)PER~Y ~ AT.~OCATION AGREFi~qT WITH OOUNTY Attached is the final draft of the property tax agreement worked out by the League's Committee and the County. It has been placed on the County's agenda for October 28th. We have sent the attached letter to the County Administrative Officer in order to resolve how our annexations fit in the two categories of developed and undeveloped which have separate formulas. RECC~LENDED AC~ICk~ Authorize the Mayor and City Clerk to execute the agreement with a list of our annexations attached with the development status as. mutually agreed upon. This has been an agonizing process, but the County of Orange is the first such agreement in a major urban area. :'City-County cooperation in Orange County is exceptional when measured against the entire State. Respectfully submitted, DAN BLANKENSHIP, ~,/ City Administrator DB:dmt attachment ! 2 6 8 9 11 14 18 19 2O 21 RESOLUTION NO. 80-119 A Resolution of the City Council of the City of Tustin, California, AGREEING TO ACCEPT THE EXCHANGE OF PROPERTY TAX REVENUES IN CONJUNCTION WITH ANNEXATIONS PURSUANT TO A MASTER AGREEMENT WHEREAS, Section 99 of the Revenue and Taxation Code requires resolutions of agreement by local agencies for the exchange of property tax revenue as a prerequisite to the issuance of a certificate of filing of an aunexation proposal; and WHEREAS, pursuant to Section 99{d) of the Revenue and Taxation Code, a county and any local agency may develop and adopt a Master Property Tax Transfer Agreen~ent; and WHEREAS, a Master Property Tax Transfer A~reement has been prepared and adopted by the Board of Supervisors of Orange County on October 28, 1980, and by the City Council of the City of Tustin on November 3, 1980; and WHEREAS, said Master Agreement covers any completed and effective annexations between January 2, 1978 and July 24, 1979, as well as those pending uncompleted and future annexations subject to the tax re-allocation provisions of Section 99 of the Revenue and Taxation Code, NOW THEREFORE BE IT RESOLVED that the City Council of the City of Tustin hereby agrees to accept the.negotiated exchange of property tax revenue pursuant to said agreement attached hereto and a part hereof. BE IT FURTHER RESOLVED that the City Clerk shall furnish a Certified Copy of this resolution to the C<>unty Auditor, Executive Officer of LAFC0 and the Clerk of the Bonr~ of Supervisors of Orange County in satisfaction of the requirements of Section 99(b) of the Revenue and Taxation Code~ PASSED AND ADOPTED at a regular meeting of the Tustin city Council held on the 3rd day of November, 1980. ATT]~ ST Mary ~[ Citv Clerk Donald J. Saltarelli Mayor SUPERVISOR. FIFTH DISTRICT THOlVL~S F. RILEY ORANGE COUNTY BOARD OF SUPERVISORS ORANGE COUNTY HALL Of ADMINISTRATION lO CIVIC CENTER pLAza, P.O. BOX 687, SANTA ANA,CALIFORNiA 92702 PHONE: 834-3S50 CAREA CODE 714) October 23, 1980 Honorable Donald J. Saltarelli Mayor, City of Tustin Main at Centennial Tustin, California 92680' Dear Don: It is my pleasure to inform you that the proposed agreement regarding the allocation of property tax in new municipal annexations has been drafted. This final draft agreement, worked out by representatives of the County and the Orange County Division of the League of Cities, has been placed on the agenda of the regular meeting of the Board of Supevvisors for October 28, 1980. The matter is on the Consent Calendar as item #61. I enclose a copy of the proposed agreement with its transmittal letter from Stan Oftelie, Chairman of the County Committee on Tax Allocation. Please contact my office if you have any questions or problems in connection v~ith this agreement. On my staff, Doreen Marshall has been working on this issue. Do not hesitate to appear at the Board meeting should you have comments or a position statement. This has been a difficult matter to resolve. The County is anxious to assist in processing the backlog of annexations as expeditiously as possible. Sincerely, lb[mas F. RSley Supervisor, F~fth ~istrict TFR:mbr Enclosure cc: Mr. Dan Blankenship Tustin City Administrator SUPERVISOR, FOURTH DISTRICT 1' . CHAIRHAN OFTHE SOARD OF SUPERVISORS lO CIVIC CENTER P~ZA, SANTA ANA. CALIFORNIA 92701 October 28, 1980 Honorable Board of Supervisors 10 Civic Center Plaza Santa Ana, CA 92701 SUBJECT: Property ~tx Allocation Involving Municipal Annexations SYNOPSIS:, A proposed agreement, drafted by representatives of the County and the Orange County Division of the League of California Cities, has been prepared. Honorable Board Members: In early September, the Board of Supervisors and the Steering ComMittee of the Orange County Division of the League of California Cities approved a conceptual agreement for allocating property tax revenue in new municipal annexations, and also directed the County Tax Allocation Committee and a companion, League-appointed committee, to prepare a final draft agreement. The County committee and a League-appointed committee of city managers have prepared a final agreement, which is submitted for Board approval. If ~pproved, this would be the first agreement of its kind for a major urban center in California. The final agreement before the Board differs from the conceptual agreement in three areas: - It is an agreement between the Board and individual city councils. All references to the [~range County Division of the League of California Cities have been dropped. - The agreement provides some categorical definitions of developed and undeveloped property. When an annexation does not fit a particular category, an appeal process to resolve disagreements is detailed. The Local Agency Formation Commission shall be the arbiter of differences between city officials and the County Administrative Office when disputes arise. Additionally, the agreement between the County and each city has provisions to deal with the backlog of annexations which have built up since the passage Honorable Board of Supervisors October 28, 1980 Page Two of Proposition 13 and AB B of 1978. If the Board of Supervisors approves this agreement, it will be forwarded to city councils throughout the County for individual actions. The signed agreements will then be returned to the Board of Supervisors for final .action. The final action by the Board will clear each city's backlog of anhexations as well as set a predictable formula to compute property tax revenues for future annexations.= The County's Tax Allocation Con~nittee, comprised of the Chairman's Office, the County Administrative Office and the~uditor-Controller,'aided by the -CoUnt~ Counsel' ~nd'~6afd'o~fices,"wili no~ continue to focus on the problem of tax allocation involving new annexations, to special districts. RECOMMENDED ACTION: 1. Approve the form and substance of the agreement. 2. Direct that copies of the agreement be forwarded to the city councils, of each of the County's 26 cities, then be returned to the Board for final action. 3. Direct that the agreement be fon./arded to the Local Agency Formation Co~ission for its concurrence in the process detailed in the agreement. Respectfully submitted, Start Oftelie, £haSrman County Committee on Tax Al.location sO:re / Attachment 8 11 19 21 2~ 24 o_ 26 ? 27 t.L~STER PROPERTY TAX TRANSFER AGREEMENT BETWEEN THE COUNTY OF O~ANGE ANqD TIlE CITY OF TO PROVIDE FOR PROPERTY TAX EXCHANGE IN AREAS ANNEXED BY THE CITY THIS AGREEmeNT is entered into this day of , 19 , by and between the County of Orange, hereinafter "COUNTY", and the City of , hereinafter "CITY", as follows: 1. The purpose of this Agreement is to provide a uniform and pre- dicta~le method of exchanging property tax revenues between CITY, COUNTY, and certain special distri~ts~governed by the Bo~r~ 9f Supervisors when CITY annexes an area previously unincorporated. This Agreement is entered into pursuant to section 99(d) of the Revenue and Taxation Code. (Hereafter statutory references are to the Revenue and ~axation code unless otherwise indicated.) 2. This Agreement covers any completed and effective annexations to CITY filed with the State B6ard of Equalization between January 2, ~978, and July 24, 1979, as well as those pending uncompleted and future annexa tions'subject to the tax reallocation provisions of se6tion 99. Any annexations completed on'or-before July 24, 1979 which have heretofore been assigned to an existing tax rate area by the State Board of.Equali- zation are excluded from this Agreement. 3. For any annexations to CITY ~iled with the State Board of Equali zation between January 2, 1978 and January 1, 1979 and between January 2, 1979 an~ July 24, 1979 which were made effective on the tax rolls respec- tively fo~ fiscal years 1979-80 and 1980-81 the redistribution of taxes-.. will first be effected beginning with the proceeds of the fiscal 1980'81 tax roll. For any annexations filed with the State Board of Equalization -1- 7 l0 12 18 2O 22 2~ after July 24, 1979 the redistribution of property tax revenues will beg~ in the fiscal year in which the tax roll is first changed to reflect the annexation, i.e., the fiscal year in which %he annexation is effective f¢ property tax purposes pursuant to Government Code Section 54902. 4. This agreement may be amended at any time by the mutual consent of the parties. Any such amendment will apply only to those annexations completed thereafter. 5. The historic tax ratio between CITY and COUNTY shall be used as ~ basi~ to redistribute property tax revenues ~ong the County general fund, ~ertain special districts and CITY. The historic CITY-COUNTY tax ratio is was arrived at in the following manner: a. The County Auditor-Controller has determined the 1979-80 property tax allocations to various jurisdictions in accordance wit] section 97.5. b. The total property tax allocation for CITY and the total property tax allocation for the County general fund within CITY wer~ 'C~'lculated. The above ratio represents the percentage of each to ti total'of the two. The above historic tax ratio shall remain constant through- out the term of this Agreement and is to be used for all annexation covered by this Agreement withouf regard to the year they take plac 6. For the purpose of determining the redistribution of property tax revenues in newly annexed areas pursuant to this Agreement, property contained 'in each proposed annexation shall be determined to be develope substantially developed or undeveloped'in accordance with the procedure set forth in this paragraph. -2- 91 19 21 24 ~ 26 27 a. Annexations filed with %P~. Local Agency Formation Commission after the effective date of this Agreement: Prior to the filing of. a resolution or petition for annexa- tion with the Local Agency Formation Commission, the property proposed for annexation shall be d~te~Lined to be developed~substan- tially developed or undeveloped as follows: (1) (a) If the property is residential in nature, is wholly subdivided and at least 75 percent of the subdivided lots have existing r~sidential structures on them., the property shall be deemed developed/substantially developed. (b) If the property is wholly residential in nature, i~ wholly subdivided and'less than 25 percent of the subdivided lots have existing residential struCtures on them; and there are no parks, park sites,-school sites, or other public improvements or facilities on the property (excluding street highways, uti.li~y lines), the property shall be deemed undeveloped. (C) If the entire property is being used for agricultura purposes, the property shall be deemed undeveloped. (d) If the property has no parks, park sites, school sites, oil exploration or production facilities, of=her structures, improvements'or facilities on it, whether public or private, it shall be deemed undeveloped. (2) If the property fails to fall into any of the categoriE defined in subparagraph a. (1) above, then the property shall be deemed and treated developed/substantially developed or undeve- loped if the County Administrative Officer and the City Manager, or their designees, agree in writing. -3- 9 ! (3) If such written agreement is not reached within thi 2 days following the city Manager's written request to the County 3 ....... Administrative Officer, then the Local Agency Formation Commis- 4 sion shall determine whether~br not the property is to be deemed 5 and treated as developed/substantially developed or undeveloped. 6 In making such determination, the Local Agency Formation Commis- 7 sion shall consider the recommendations of both COUNTY and CITY, if any, and shall consider the following factors if applicable: (a) The ratio of assessed value of improvements to !0 ' assessed value of land; (b) The density of population;- (c) The extent of commercial, residential and industrial development; (d') The extent of public facilities, improvements and properties~ ~ (e) Existing COUNTY and proposed CITY land use standard~ for the property to be annexed and surrounding'areas; and !8 .- - (f) Any other factors it deems appropriate. (4) In the case of annexations under one hundred acres such 20 determination may be ma~e by the Local Agency Formation Commis- sion at the time of its final determination regarding the annexation. CiTY and COUNTY'shall file resolutions with the Local Agency Formation Commission pursuant to section 99(b) agreeing to be bound by its determination whether the property is developed/substantially developed or undeveloped. In the - 11 ii g= 17 22 ~ 24 z 25 ; I ~ 28 / / / -4- case of annexations of one h~ndred acres or more such determi- nation may be made prior to the filing of the resolution or petition for annexation with the Commission. b. Annexations completed or filed with the Local Agenc~ Formatior Commission on or before the effective date of this Agreement Attached hereto', Exhibit A, is a li~t of any annexations covered by this Agreement which have been completed or were filed with the Local Agency Formation Commission on or before the effectiv ~ate of this Agreement, . Said annexations shall be treated as deve- loped/substantially developed or undeveloped as indicated in said exhibit. 7. In the case of annexations to CITY of unincorporated areas the following methods will be used to make the section 99 adjustments to the allocation of property tax revenues made pursuant to section 97(a), .~ 15 and the proportions allocated pursuant to section 98(e), to the County -. 16 ~ general fund; certain special districts governed by the Board of Super- o 17 visors; and CITY. a. If the area to be annexed is developed/substantially deve- _ 19 loped the amount allocated to the CITY and County general fund with 20 21 respect to each new tax rate area pursuant to section 97.5(a) in the first fiscal year in which the annexation is effective for tax 22 23 24 purposes is determihed as fotlow~. In each net.; tax rate area withi] the area annexed the amount which would have been allocated to the County general fund under sections 97(a) and 98(e), assuming CITY .~:' 25 ~ 26 ~ 28 / / / entitled to a zero allocation, shall be divided between CITY and th~ -5- 2 4 7 10 11 12 13 14 ].7 18 19 20 21 22 23 24 County general fund under sections 97(a) and 98(e), assuming C entitled to a zero allocation, shall be divided between CITY and the County general fund on the basis of the CITY-COU}:TY historical tax ratio. Additionally in each new.tax rate area the amount-which would have been allocated, pursuant to sections 97(a) and 98(e), assuming CITY is entitled to a zero allocation, to any special district governed by the Board of Supervisors which transferred. complete service responsibility to CITY as a result of the annexa- tion, shall be determined. Said amount shall be divided between CfTY and the County general fund on the basis of the historical CITY-COUNTY tax ratio. In the event any special district governed by the Board of Supervisors has transferred partial, but not com- plete, service responsibility to CITY the transfer to COUNTY and CITY from said district under this paragraph shall be as agreed by CITY and COUNTY ..... b. If the area to be annexed is undeveloped the amounts alloca ted to the CITY and County general fund shall be determined in the same manner as subparagraph "a" above, provided that the amount allocated to the County general fund in each new tax rate area pursuant to section 97.5(a) in the first fiscal year and each year thereafter shall be at least equal ':'o the allocation to the County general fund in the same geographical area in the fiscal year prioI to that in xvhich the annexation is effective for tax purposes. 8' The amounts allocated pursuant to paragraph 7 in the first fis- cal year shall form the basis for allocations in subsequent fiscal years as otherwise provided by sections 97, 97.5 and 98; provided that the / / -6- 4 5 6 7 10 12 ~"z 15 --go 17 18 20 23 ° 26 ~ ~ 27 amounts guaranteed to the County gen~91 fund in subparagraph 7b shall ignored in determining the amount of property tax revenue allocated £~ !the prior year for purposes of sections 97(a) and 98(e). Attac~ed hez Exhibit B, is an illustration of the c~lculations contained in ~aragr~ 7 and 8 as applied to a hypothetical annexation. 9. Annexations of one hundred acres.or more which are developed/ substantially developed are excluded from this Agreement. The parties shall negotiate a separate agreement for such annexations. 1~. Annexations of one hundred acres or more which are undevelop~ are subject to this Agreement provided the parties may negotiate a' se~ rate agreement for such annexations. 11. The parties shall take all actions necessary to effectuate t~ Agreement, including the filing of resolutions pursuant to section 99( agreeing to accept the exchange of property taxes provided for herein. 12. The provisions of this Agreement will determine the adjustme~ pursuant to section 99, resulting from annexations to CITY. It is und stood that any such determination will be subject to subsequent adjus~ men£,:as provided by applicable statutes, in the event'all or any port of the annexed territory is.subsequently included in another jurisdic- tional change. 13. This Agreement shall commence the date last execute~ below ar continue in effect~un~il termisated iK the following manner. Either party may terminate this Agreement on at least six months' written not provide'd that this Agreement will continue to apply to any annexation~ filed with the Local Agency Formation Commission prior to the date suc notice is given. / / -7- - 5 6 14. The terms "property tax revenues", "jurisdiction", and "juris- dictional change" as used herein shall have the same meaning as contained in section 95. The term "special d.istrict" shall have the same meaning as contained in sections 2215 and 2216.. IN WITNESS WHEREOF, the parties hereto have.executed this Agreement on the day and. year dated below: - 10 Dated: .]! Signed and certified that a copy -- of this document has been delivered 12 to the Chairman of the Board --13 --18 19 22 --23 COUNTY OF 9RANGE, a political subdivision of the State of California. ; 2.5 ~ 28I By chairman oM its Board of Supervisors "COUNTY" JUNE ALEXANDER Clerk 'of the Board of Supervisors APPROVED AS TO FO~4: ADRIAN--KUYPER, COUNTY COUNSEL By Dated DATED: ' CITY OF By "CITY" -8- Annexation No. 117 Annexation No. 124 EXHIBIT A Peters ~anyon Santa Ana Fwy-Myford Completed 9/6/79 undevel. Filed undevel. Annexation No. 97 Annexation No. 107 Annexation No. 109 Annexation NO. 110 AnnexationNo. 111 Annexation NO. 114 Annexation NO. 115 Annexation NO. 116 Annexation No. 118 Annexation NO. 119 Annexation No. 120 Annexation No. 121 AnnexationNo. 122 Annexation No. 123 Annexation No. 127 Main St. - Freeway Island 12/21/79 Browning/Mitchell/Red Hill Island 9/3/80 Sycamore/Walnut/Mitchell Island Filed San Juan - Green Valley Island 9/22/80 Nisson - "B" Street Island Filed T~ 10250 "B"Street Partial 12/4/78 warren - Newport Partial 1/15/79 Green Valley - Red Hill Partial 1/15/79 Newport - Sycamore Partial 1/15/79 Prospect - 17th St. 2/20/79 · "B" Street - McFadden Partial 6/4/79 Irvine Blvd. - Dean St. Pnsula Filed Tract Map 11050 Partial Filed San Juan - Red Hill Island Filed Holt - Hamala Filed developed developed developed developed developed developed developed developed developed developed developed developed developed developed developed MEMBER CITIES ANAHEIM BREA , BUENA PARK COSTA MESA CYPRESS FOUNTAIN VALLEY FULLERTON GARDEN GROVE HUN TING TON BEA CH IR VINE LAGUNA BEACH lA HABRA LA PALMA LOS ALAMITOS NEWPORT BEA CH ORANGE PLACENTIA BAN CLEMENTE SAN JUAN CAPISTRANO SANTA ANA SEAL BEACH STANTON TUS TI N VILLA PARK WESTMINSTER YORBA LINDA Orange County DMsion LEAGUE OF CALIFORNIA CITIES 118 WEST FIFTH STREET, SUITE 5, SANTA ANA, CALIFORNIA 92701 {714) 972-0077 September 22, 1980 Dan Blar~kenship City Manager Tustin City Hall Main at Centennial Tustin, CA 92680 Dear Dan: I want to express the deep gratitude of the Orange County Division to you for your very diligent and tireless efforts over the past year as a member of the Annexation Property Tax Transfer Committee. The issue of how to share property tax from annexing areas is one of the thorniest and most controversial issues to come between the County and our twenty- six cities in many years. You and the other members of the Committee are to be complimented for your honesty, integrity and ability in negotiating an excellent settlement. We are very proud to be the only major county in the State to have been able to successfully resolve this divisive issue. Many thanks for the long hours you spent representing all Orange County cities on our negotiating team. · Sincerely, Earl Roget President ER/lw cc: Mayor Don Saltarelli October 24, 1980 CITY COUNCIL Donald 3. Sa{tarelli, Mayor Richard B. Edgar, Mayor Pro-tern Ursula E. Kennedy James B. Sharp -- Ronald B. Hocs!erey Bob Thomas County A~ministrative Officer County of Ormnge Santa Ana, California Attention: Dick Kelly RE: PROPER~Y TAX ALrDCATICkN - TUg£IN ANNEXATIONS Dear Mr. Th~m~s: This letter is to nominate the City of Tustin annexations l~endin~ or needing a final pro~certy tax allocation for a determination of their developed or undevelo~c~d status prior to submitting an annexation agreement to the Board of Supervisors from our City. Not covered in this letter are the following island annexations which were completed in 1978 and which tJ]e Auditor's office has indicated have already been resolved by providing the City with a share of the property taxes: Island Annexation kb. 84 Island A~nnexation No. 106 Island Annexation No. 108 IslandAnnexation No. 112 Pasadena - Carlann Mitchell - Debusk Andrews - Estero Orange - Walnut Recorded 6/14/78 6/14/78 8/8/78 8/8/78 The following tw~ annexations (see attached data sheets) are clearly undevelo~d areas within anyone's definition: Annexation No. 117 Annexation NO. 124 Completed Peters Canyon 9/6/79 Santa Ana Fwy - Mi;ford Rd. Filed The following annexations(see attached data sheets) are clearly developed areas within our opinion: C~pleted Annexation No. 97 b~in St. - Freeway Island 12/21/79 Annexation No. 107 Browning/Mitchel/Red Hill Island 9/3/80' Annexation No. 109 Sycamore/Walnut/Mitchell Island Filed Annexation NO. ~10 San Juan - Green Valley Island 9/22/80 ~nexation NO. 111 Nisson - "B" Street Island Filed Annexation No. 114 T~ 10258 "B" Street Partial 12/4/78 Annexation No. 115 Warren - Newport Partial 1/15/79 Annexation No. 116 Green Valley - Red Hill Partial 1/15/79 Annexation ~. ]18 Newport - Sycamore Partial 1/15/79 City Center Centennial at Main ' Tustin, California 92680 (114) 544-8890 Bob Thomas October 24, 1980 page two of two Annexation No. 119 Annexation No. 120 Annexation No. Annexation No. 122 Annexation No. 123 Annexation No. 127 Prospect - 17th St. "B" Street - McFadden Irvine Blvd. - Dean St. Tract F~p 11056 San Juan - l~d Hill Holt - Hamala~ Partial Pnsula Partial Island C~pleted 2/20/79 6/4/79 Filed Filed Filed Filed Please review these with Dick Turher of LAFCO and see if you do not agree with the above characterizations. We are prepared to submit the m~del property tax agree.~-nt to our City Council as soon as ~ have received your answer. Let me know if ~9 can provide ~ou with any other information. Sincerely yours, D~N BI~\RiF~NSHIP, City A~i~inis trator DB:dmt enclosures cc: Richard Tun]er, LAFCO John Shade, Supervisor Riley's office 0 0 0 0 O' 0 I 0 H ,rd 0 I ~ - o 0~o 0,-~ ~-~ ~ I 0 0 o o ~ D ~ o ! :> o o I-4 u .-4 o o o 0 tll 0 0 0 ~ ~ I:~ Z Z Z ~:h CITY OF TUSTIN ANNEXATION IN. FORMATION RESOLUTIONS 80-10'8 and 80-114 ANNEXATION 124 Santa Ana Free- way-Myford Rd. 127 Holt-Hamada ISLAND ACRES No Island 494.06 No Island 3.84 DEVELOPMENT Completely nndeveloped Developed 5 dwellings STATUS To be filed 10-24-80 Filed with LAFCO