HomeMy WebLinkAbout9929 - Property Tax Exchange for Annexed Areas11 r
RESOLUTION NO 9929
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF NEWPORT BEACH AUTHORIZING THE EXECUTION OF
Am A MASTER PROPERTY TAX TRANSFER AGREEMENT
.Iw BETWEEN THE COUNTY OF ORANGE AND THE CITY OF
NEWPORT BEACH TO PROVIDE FOR PROPERTY TAX
EXCHANGE IN AREAS ANNEXED BY THE CITY
WHEREAS, as a result of passage of Proposition 13 when
tax rates were abolished, the division of property taxes between
the City of Newport Beach and County of Orange became subject to
negotiation upon annexation; and
WHEREAS, the City and County have met and prepared an
agreement to provide for a property tax exchange in areas annexed
by the City; and
WHEREAS, said agreement provides for an equitable method
of dividing property taxes upon annexation; and
WHEREAS, the City Council finds that the execution of
said agreement between the City of Newport Beach and the County
of Orange is fair and equitable and in the best interest of the
City,
NOW, THEREFORE, BE IT RESOLVED by the City Council of
the City of Newport Beach that the Master Property Tax Transfer
Agreement above described is approved, and the Mayor and City
Clerk are hereby authorized and directed to execute the same on
behalf of the City of Newport Beach.
ADOPTED this zart, day of , 1980.
GITT CLERK OF THE CITY OP p1EWpM RGACA
111880
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MASTER PROPERTY TAX TRANSFER AGREEMENT
BETWEEN THE COUNTY OF ORANGE AND THE CITY OF
NEWPORT BEACH .
TO PROVIDE FOR PROPERTY TAX EXCHANGE
IN AREAS ANNEXED BY THE CITY
THIS AGREEMENT is entered into this 28th day of October
1980 , by and between the County of Orange, hereinafter "COUNTY ", and tr,
City of Newport Beach �, hereinafter "CITY ", as follows:
1. The purpose of this Agreement is to provide a uniform and pre-
dictable method of exchanging property tax revenues between CITY, COUNTY;
and certain special districts governed by the Board of 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 Taxation Code
unless otherwise indicated.)
2. This Agreement covers any completed-and effective annexations to
CITY filed with the State Board of Equalization between January 2, 1978,
and July 24, 1979, as well as those pending uncompleted and future annexe
tions subject to the tax reallocation provisions of section 99. Any,
annexations completed on or before July 24, 1979 which have heretofore
l 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 filed with the State Board of Equali-
23 zation between January 2, 1978 and 'January 1, 1979 and between January 2,
24 1979 and July 24, 1979 which were made effective on the tax rolls respec-
25 tively for fiscal years 1979 -80 and 3.980 -81 the redistribution of taxes•.•.
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1,26 will first be effected beginning with the proceeds of the fiscal 1980 -81
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® 28 For any annexations filed with the State Board of Equalization
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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 the 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.
S. The historic tax ratio between CITY and COUNTY shall be used as
a basis to redistribute property tax. revenues among the County general
fund, certain special districts and CITY.'
The historic CI^aY- COUNTY tax ratio is . 51937804992:.48062195008, It
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 with
section 97.5.
b. The total property tax allocation for CITY and the total
property tax allocation for the County general fund within CITY were
calculated. The above ratio represents the percentage of each to the
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 annexations
covered by this Agreement withouf regard to the year they take place
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 developed,,
substantially developed or undeveloped in accordance with the procedure
set forth in this paragraph.
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a. Annexations filed with the Local Agency Formation Commission
after the effective date of this Agreement:
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Prior to the filing of a resolution or petition for annexa-
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tion with the Local Agency Formation Commission, the property
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proposed for annexation shall be determined to be developed /substan-
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tially developed or undeveloped. as follows:
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(1) (a) If the property is residential in nature, is wholly
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subdivided and at least. 75 percent of the subdivided lots
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have existing residential structures on them, the property
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shall be deemed developed /substantially developed.
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(b) If the property is wholly residential in.nature, is
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wholly subdivided and less than 25 percent of the subdivided
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lots have existing residential structures on them; and there
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are no parks, park sites, school sites, or other public
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improvements or facilities on the property (excluding street=
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highways, utility lines), the property shall be deemed
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undeveloped.
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(c) If the entire property is being used for agricultural
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purposes, the property shall be deemed undeveloped.
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(d) If the property has no parks, park sites, school
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sites, oil exploration or production facilities, or other
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structures, improvements or facilities on it, whether public
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or private, it shall be deemed undeveloped.
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(2) If the property fails to fall into any of the categoric_ -
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defined in subparagraph a.(:1) above, then the property shall be
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deemed and treated developed /substantially developed or undeve-
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loped if the County Administrative Officer and the City Manager,
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or their designees, agree in writing.
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(3) If such written agreement is not reached within thirty
days following the City Manager's written request to the County
Administrative Officer and the annexation is under one hundred
acres, then the Local Agency Formation Commission shall de
whether or not the property is to be deemed and treated as deve- I
loped /substantially developed or undeveloped. Such determination
may be made by the Local Agency Formation Commission at the time
of its final determination regarding the annexation. In making
the above determination regarding the status of the property the
Local Agency Formation Commission shall consider the recommenda-
tions of both COUNTY and CITY, if any, and shall consider the
following factors if. applicable:
(a) The ratio of assessed value of improvements to
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 Ad
properties;
(e) Existing COUNTY and proposed CITY land use standards
for the property to be annexed and surrounding areas; and
(f) Any other factors it deems appropriate.
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 deve-
loped /substantially developed or undeveloped.
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(4) If spch written agreement is not reached within thirty
days following the City Manager "s request to the County Admini-
strative Officer and the annexation is one hundred acres or rwr=
such determination shall be trade by the Executive Officer of rt=
Local Agency Formation Commission on the basis of the same
matters required to be considered by the Commission. Such deter
mination shall be made prior to the filing of the resolution or
petition for annexation with the Commission.
b. Annexations completed or filed with the Local Agency Fr_,rmat,_t
Commission on or before the effective date of this Agreement.
Attached hereto, Exhibit A, is a list of any annexations
covered by this Agreement which have been completed or were filed
with the Local Agency Formation Commission on or before the effecti.
date 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), and
the proportions allocated pursuant to section 98(e), to the County genera
fund; certain special districts governed by the Board of Supervisors; and
'CITY.
a. If the area to be annexed is developed /substantially deve-
loped the amount allocated to the CITY and County general fund with
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 pur-
poses is determined as follows,. In each new tax rate area within
the area annexed the amount which would have been allocated to the
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County general fund under sections 97(a) and 98(e), assuming CITY is
entitled to a zero allocation, shall be divided between CITY and the
County general fund on the basis of the CITY- COUNTY 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
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CITY is entitled to a zero allocation, to any special district
governed by the Board of Supervisors which transferred complete ser-
vice responsibility to CITY as a result of the annexation, shall be
determined. Said amount shall be divided between CITY and the Coun
general fund on the basis of the historical CITY- COUNTY tax ratio.
In the event any special district governed by the Board of Supervi-
sors has transferred partial, but not complete, service responsibi-
lity to CITY the transfer to COUNTY and CITY from said district and
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 to the allocation to the County
general fund in the same geographical area in the fiscal year prior
to that in which 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
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1 amounts guaranteed to the County general fund in subparagraph 7b shall be
2I ignored in determining the amount of property tax revenue allocated in
311 the prior year for purposes of sections 97(a) and 98(e). Attached hereto.
411 Exhibit B, is an illustration of the calculations contained in paragraphs
5 7 and 8 as applied to a hypothetical annexation.
6 9. Annexations of one hundred acres or more %hich are developed/
7 substantially developed are excluded from this Agreement. The parties
8 shall negotiate a separate agreement for such annexations.
9 10. Annexations of one hundred acres or more which are undeveloped
10 are subject to this Agreement provided the parties may negotiate a sepa=
11 rate agreement for such annexations.
12 11. The parties shall take all actions necessary to effectuate this
13 Agreement, including the filing of resolutions pursuant to section 99(b)
14 agreeing to accept the exchange of property taxes provided for herein.
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o0; 15 12. The provisions of this Agreement will determine the adjustments,_
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4;W 16 pursuant to section 99, resulting from annexations to CITY. It is under -'
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18 ment, as provided by applicable statutes, in the event all or any portion
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19 of the annexed territory is subsequently included in another jurisdic- ?
20 tional change.
21 13. This Agreement shall commence the date last executed below and
22 continue in effect until terminated iii the following manner. Either
23 party may terminate this Agreement on at least six months' written notice
2411provided that this Agreement will continue to apply to any annexations
25 filed with the Local Agency Formation Commission prior to the date such
2 26 notice is given.
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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 district" 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:
Dated:
Signed and certified that a copy
of this document has been delivered
to the Chairman of the Board
JUNE ALEXANDER
Clerk of the Board of Supervisors
APPROVED AS TO FORM:
ADRIAN KUYPER; COUNTY COUNSEL
By N+�C `'�tA
Dated:
II DATED:
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COUNTY OF ORANGE, a political
subdivision of the State of
California
By
Chairman of its Board of
Supervisors
"COUNTY"
CITY OF
By.
"CITY"
Illustration of Property Tax'Redistribution Following a City Annexation
Exhibit B
Page 1 of 4
1. In fiscal year 1 the city exist§ entirely in tax rate area (TRA) 1 -001. 2 TRA's
(88 -001 and 88 -002) represent the unincorporated area adjacent to the city and
are classified as undeveloped under paragraph 6.
2. During fiscal year 1 an annexation is completed prior to January 1st so that it
is effective for the fiscal year 2 tax roll, creating TRA's 1 -002 and 1 -003 on
the fiscal year 2 tax roll. No other jurisdictional changes took place.
1 -001
�- 1 -002 - j - 1 -003
i
FUM11137
EIS -002
3. Growth in assessed value from fiscal year 1 to fiscal year 2 is 108 for the
geographic area represented by TRA 1 -002 and 108 for the balance of 88 -001.
Growth in assessed value from fiscal year 2 to fiscal year 3 is 1108 for TRA 1 -002.
4. The historical City- County ratio is .5 : ..5.
5. Pertinent calculations in fiscal year 1:
Rev. & Tax. Code Sec.
98(e) 97.5
factors amount
1 -001
City .16
County General Fund .16 N/A
All Special Districts .08
Schools .60
1.00
:: II
City .00 $ -0-
County General Fund .20 240
Special District A .05 60
Special District B (services not assumed) .10 120
Schools .65 780
1.00 $1,200
a. Special District A represents a Special District governed by the Board
of Supervisors whose service responsibilities are fully assumed by the
city due to the annexation.
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Exhibit B
Page 2 of 4
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b. The city did not' exist in TRA 88 -001 in
fiscal year
1 and therefore
has no factors or amounts allocated to
it.
6. A portion of TRA 88 -001 representing 25% of the
assessed value in year 1 will,
due to the city annexation, become TRA 1 -002 in
year 2. The
pertinent calcula-
tions for fiscal year 1 would be as follows:
98(e)
97.5
factors
amount
1 -002
ak
City
.00
$ -0-
ak
County General Fund
.20
60
Special District A
.05
15
Special District B
.10
30
Schools
.65
195
1.00
$ 300
Balance of 88 -001
City
.00
$ -0-
County General Fund
.20
180
Special District A
.05
45
Special District B
.10
90
Schools
.65
585
1.00
$900
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Exhibit B
Page 3 of 4
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Auditor - Controller
does sections
97, 97.5,
98
and 99 calculations
Fiscal
Year 1
Fiscal
Year 2
98(e)
97.5
98(e)
98(e) (3)
(4)
factor
amount
factors
amount
amount
Total
1 -002
1
City
.125
$ -0-
$ 41.25
$ 22.50
'JMkCounty General Fund
- Did not exist
.125
-0-
41.25
60.00
' pecial
District A
.00
-0-
-0-
-0-
Special
District B
.10
-0-
33.00
33.00
Schools
.65
-0-
214.50
214.50
1.00
$ -0-
$ 330.00
$330.00
88 -001
City
.00
$ -0-
.00
$ -0-
$ -0-
$ -0-
County General Fund
.20
240
.20
240
(42.00)
198.00
Special
District A
.05
60
.05
60
(10.50)
49.50
Special
District B
.10
120
.10
120
(21.00)
99.00
Schools
.65
780
.65
780
(136.50)
643.50
1.00
$1,200
1.00
$1,200
$(210.00)
$990.00
Footnotes
(1) Section 98(e) factors from the predecessor TRA are used for new TRA 1 -002. The
County General Fund factor of .20 plus the Special District A factor of .05 equal
.25 which is split between City and County General Fund in the historical ratio
of .5 . .5.
(2) The section 97(a) amount is the section 97.5 amount of the prior year. The
section 97.5 amount for 1 -002 was -0- in the prior year. The section 97.5 amount
for 88 -001 was the entire fiscal year 1 amount for that TRA.
(3) For 1 -002, because there was no prior year section 97.5 amount, the entire allo-
cation for all entities is made under section 98(e). For 88 -001, because the
assessed value has decreased, the amount calculated under section 98(e) is
negative and reduces the section 97(a) amount to arrive at the total.
The portion of 88- 001'which became 1 -002 was $300 in year 1 x 10% increase = $330
in year 2.
The portion of 88 -001 not annexed was $900 in year 1 x loo increase = $990 in
year 2. Compared to $1,200 of year 1 results in $(210) for year 2.
(4) In TRA 1 -002, City and County General Fund amounts after section 97(a) and
section 98(e) calculations were $41.25 each. Paragraph 7b provides the County
General Fund shall not receive less than the section 97.5 amount for the year
prior to the annexation (that is $60). Accordingly the City and County General
Fund amounts were adjusted.
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Exhibit B
Page 4 of 4
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Auditor- Cdntroller does
sections 97,
97.5,
98 and 99 calculations
Fiscal
Year 3
98(e) (1)
97(a) (2)
98ke)
(3)
factors
amount
amount
Total
1 -002
City
.125
$ 41.25
$ 45.38
$ 86.63
County
General Fund .125
41.25
45.37
86.62
Special
District A .00
-0-
-0-
-0-
Special
District B .10
33.00
36.30
69.30
Schools
.65
214.50
235.95
450.45
1.00
$330.00
$363.00
$693.00
Footnotes
(1) 98(e) factors from prior year are used.
(2) The 97(a) amount is the 97.5 amount of the prior year before
the paragraph 7b adjustment.
(3) Because County General Fund share under the historical ratio now exceeds
the amount guaranteed under paragraph 7b, no adjustment is necessary.
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