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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 kv 1 2 3 4 5 6 ® 7 8 9 10 it 12 13 14 15 a, ilOV �yW 16 �W ox: 00 17 V 18 19 20 21 22 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•.•. n 1,26 will first be effected beginning with the proceeds of the fiscal 1980 -81 N 0 27 tax roll. LL ® 28 For any annexations filed with the State Board of Equalization -1- I 2 -3 4 5 6 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. -2- ' I 2 a. Annexations filed with the Local Agency Formation Commission after the effective date of this Agreement: 3 Prior to the filing of a resolution or petition for annexa- 4 tion with the Local Agency Formation Commission, the property 5 proposed for annexation shall be determined to be developed /substan- 6 tially developed or undeveloped. as follows: \®7 (1) (a) If the property is residential in nature, is wholly 8 subdivided and at least. 75 percent of the subdivided lots 9 have existing residential structures on them, the property 10 shall be deemed developed /substantially developed. 11 (b) If the property is wholly residential in.nature, is 12 wholly subdivided and less than 25 percent of the subdivided 13 lots have existing residential structures on them; and there 14 are no parks, park sites, school sites, or other public o -; 15 improvements or facilities on the property (excluding street= WOy 16 highways, utility lines), the property shall be deemed t 2 oze �g 17 undeveloped. 18 (c) If the entire property is being used for agricultural 19 purposes, the property shall be deemed undeveloped. 20 (d) If the property has no parks, park sites, school 21 sites, oil exploration or production facilities, or other 22 structures, improvements or facilities on it, whether public 23 or private, it shall be deemed undeveloped. 24 (2) If the property fails to fall into any of the categoric_ - 25 defined in subparagraph a.(:1) above, then the property shall be 2 26 deemed and treated developed /substantially developed or undeve- N N 0 27 loped if the County Administrative Officer and the City Manager, 4 ® 28 or their designees, agree in writing. -3- 1 2 3 4 5 6 7 8 9''. 10i 11 12 13 14 W, W �. o i 15 �o WOW W- W 16 u O=ff og 17 W 18 19 20 21 22 23 24 25 N_ 26 N N 27 4 M IJ / (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. -4- 1 2 3 4 5. 6 7 8 9 10 11 12 13 14 W, Wti 0 z I 15 D0 W 0 y 4�W 16 0,U Oda 000 17 U 18 19 20 21 22 23 24 25 26 N 0 27 4 `]- (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 ..5- 1. 2 3 41 5 6 7 8 9 10 11 12 13 14 W.. 15 WOy 16 � W V O Vf Ode Oo 17 W 18 19i 20 21 22 23 24 25 N_ 26 N O 27 LL 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 i 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 / / -6•- 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. J, W o0; 15 12. The provisions of this Agreement will determine the adjustments,_ o° 4;W 16 pursuant to section 99, resulting from annexations to CITY. It is under -' 4 f Z 0�0 17 stood that any such determination will be subject to subsequent adjust - f 18 ment, as provided by applicable statutes, in the event all or any portion 4 i 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. N _ N 27 / LL ® 28 / -.7- 1 2 3 4 5 6 AOL 7 8 .9 10 .11 12 13 14 W f 0 z z -15 W 16 CFO Oz. "0 17 W Il 19 20 21 22 23 24 25 26 N N 0 27 4 ® 28 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: -8- 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. M Exhibit B Page 2 of 4 M 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 M Exhibit B Page 3 of 4 ` 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. - - - - Exhibit B Page 4 of 4 _ 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. 12