HomeMy WebLinkAboutNB 4 TAX NEW ANNEX'S 07-21-80DATE:
TO:
FROM:
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JULY 15, 1980
New Business
No. 4
7/21/80
Inter-Cam
HONORABLE MAYOR AND CITY COUNCIL
DAN BLANKENSHIP - CITY ADMINISTRATOR
TAX ALLOCATION ON NEW ANNEXATIONS
It appears that the League negotiating committee and the County's committee,
are close to conceptual agreement on the formula for an allocation of property
taxes upon annexation of .property. It is hoped that the proposal will be sub-
mitted to the League Business Meeting at its August meeting. It is therefore
appropriate to see if the Council will agree in concept with the proposal.
AB 2212 and AB 2376 basically provided that the City would receive all of the
special district property tax (whose services are replaced by the City), and
a pro rata share of the County's general property tax from the area being an-
nexed. That pro rata share is based upon the historical ratio between the City
and County property tax revenue within the City. It is somewhat doubtful that
the League will get such a bill passed against opposition by counties.
The proposed local compromise is that the special district property tax and
County general property tax be pooled and then divided in the historical ratio
between the City and County. This gives the City less than the formulas con-
tained in AB 2376 (AB2212is no longer on the same subject), but the proposed
compromise is fairer in that the City and County share equally on a percentage
basis the loss caused by Proposition 13. The proposal also deletes any transfer
for annexations under one acre in size and delays in some instances the time a
City receives its full share from undeveloped property so as to protect the County
present dollar amount of revenue from this area. As soon as the area developes,
the City will receive its full share.
RECOMMENDED ACTION
I recommend that the City Council support the proposed compromise agreement in
order to complete our annexations as it is reasonably fair. Property tax will
not be the revenue source supporting service to such new areas.
Res~9~ect fully submitted,
~DranT B1 anke'nshi p ~. ,
City Administrator ~'~'
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