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Home My WebLink About04 - Property Tax Transfer with Costa Mesa for Portions of the Bay Knolls CommunityCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 4 June 10, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Manager's Office Dave Kiff, Assistant City Manager 949/644 -3002 or dkiff @city.newport- beach.ca.us SUBJECT: Resolution 2003 - relating to a Property Tax Transfer with the City of Costa Mesa for Portions of the Bay Knolls Community ISSUE: Should the City of Newport Beach adopt a resolution agreeing to receive property taxes from 24 parcels that will be detached from the City of Costa Mesa and annexed to the City of Newport Beach? RECOMMENDATION: Adopt Resolution 2003 -_ agreeing to a property tax exchange for the City's pending annexation of certain parcels in the Bay Knolls neighborhood between Newport Beach and Costa Mesa. DISCUSSION: Backqround: State law (the Cortese- Knox - Hertzberg Local Government Reorganization Act of 2000 -- Government Code §56000 et seq.) governs the way cities, counties, and special districts address boundary issues like incorporations, annexations, detachments, changes in "spheres of influence ", mergers and consolidations, and combinations of these actions called "reorganizations." Readers can access the Act at www.leginfo.ca.gov. The Act describes the membership and role of the Local Agency Formation Commission (LAFCO) in each county. Orange County LAFCO, a seven - member body that meets monthly in Santa Ana, addresses boundary changes for our region. On September 26, 2000, the City Council adopted Resolution 2000 -81 directing City staff to process an annexation application for the Newport Coast, Santa Ana Heights, and the Bay Knolls community. The City filed its application to annex these territories on March 19, 2001. The Newport Coast portion of the City's annexation effort became effective January 1, 2002. The eastern Santa Ana Heights and Bay Knolls annexations take effect July 1, 2003. Property Tax Exchange Resolution June 10, 2003 Page 2 Proposed Resolution - Property Tax Exchange Agreements. One of the last steps before the Bay Knolls portion of the annexation can be completed is for the city councils of Newport Beach and Costa Mesa to adopt nearly - identical resolutions directing the transfer and allocation after annexation of the 1 % Basic Levy that all property owners pay. In most of Newport Beach, the city government itself receives about 17% of the 1 % Basic Levy paid by Newport Beach property owners, with the remaining 83% going to schools, community colleges, the County of Orange, and special districts. On October 28, 1980, the City and the County of Orange entered into a Master Property Tax Transfer Agreement (MPTTA) governing the exchange of the 1 % Basic Levy in future annexations. The MPTTA determines how the City and the County split that portion of the Levy that goes today to the County General Fund. The City and the County affirmed the MPTTA for Santa Ana Heights and Bay Knolls in August of 2002. The Bay Knolls annexation was unique in that it included two detachments -- where about 24 parcels once in Costa Mesa would be annexed to Newport Beach (see the dark green parcels on the a map described as Exhibit A on the following page). As such, State law requires both cities to adopt a resolution directing a share of the property taxes from these parcels to switch from Costa Mesa to Newport Beach. OC LAFCO asked both cities to adopt these resolutions prior to June 15, 2003. Costa Mesa plans to do so at a June Council meeting. We cannot yet determine the actual amount of property tax revenue that would transfer, but I estimate it to be roughly $12,250 (24 homes with an average Assessed Value of $300,000 per home generating $3,000 in annual property taxes, of which the City might get roughly 17 %). Committee Action: Not applicable Environmental Review: None required. Public Notice: This agenda item may be noticed according to the Ralph M. Brown Act (72 hours before the public meeting at which the City Council considers the item). Submitted by: lr \�' 6 Dave K' Assistant City Manager Attachments: Resolution 2003- J Property Tax Exchange Resolution June 10, 2003 Page 3 RESOLUTION NO. 2003- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH, CALIFORNIA, AGREEING TO A PROPERTY TAX TRANSFER WITH THE CITY OF COSTA MESA FOR THE BAY KNOLLS REORGANIZATION. THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH DOES HEREBY RESOLVE AS FOLLOWS: WHEREAS, the annexation of unincorporated county islands between Newport Beach and Costa Mesa will serve to promote logical, efficient, and cost effective delivery of public services; and WHEREAS, the County of Orange, the City of Costa Mesa and the City of Newport Beach recognize that these areas would be more efficiently served by either the City of Costa Mesa or the City of Newport Beach; and WHEREAS, as a part of the Bay Knolls Reorganization (RO01 -04), the City of Costa Mesa agreed to the detachment of two areas from the City of Costa Mesa, and annexation of the same areas to the City of Newport Beach; and WHEREAS, the two areas to be detached from the City of Costa Mesa, and annexed to the City of Newport Beach are identified as follows; Area 1: 2300 — 2337 La Linda Place Area 2: 379 — 395 (odd numbers) Santa Isabel, and 2399 Tustin Avenue J Property Tax Exchange Resolution June 10, 2003 Page 4 WHEREAS, it is appropriate to distribute the property tax revenues from the above - identified areas currently received by the City of Costa Mesa to the City of Newport Beach upon the effective date of the annexation. NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Newport Beach that on July 1, 2003, all property tax revenues going to the City of Costa Mesa and generated in the areas identified herein below shall be distributed to the City of Newport Beach. The two areas are identified as follows: Area 1: 2300 — 2337 La Linda Place Area 2: 379 — 395 (odd numbers) Santa Isabel, and 2399 Tustin Avenue ATTEST: LaVonne Harkless Newport Beach City Clerk Steve Bromberg Mayor of the City of Newport Beach APPROVED AS TO FORM: Robert Burnham City Attorney L/ Property Tax Exchange Resolution June 10, 2003 Page 5 STATE OF CALIFORNIA) COUNTY OF ORANGE ) ss. CITY OF NEWPORT BEACH I, LaVonne Harkless, City Clerk of the City of Newport Beach, hereby certifies that the above and foregoing Resolution No. 2003- — was duly and regularly passed and adopted by said City Council at a regular meeting thereof held on the 10`h day of June, 2003. IN WITNESS WHEREOF, I have hereby set my hand and affixed the Seal of the City of Newport Beach this _ day of 2003. LaVonne Harkless City Clerk of the City of Newport Beach EXHIBIT A BAY KNOLLS Proposed Annexation Area Detach from Costa Mesa City of Newport Beach (Existing) �- --City Boundary COUNCIL NO- N0. t C,GF� L O P F 2 '•r �.. `J �„ r9 e9.• Li9 Sr \� <zl LS q �{{� SPq :NGg L:M q sy9`q. s� • O'9F( �q gtiTi � 'O9 A w �9 qG P Lq J o 2e soo �fl WPVtt!