MEETING DATE: 11/23/2021
DEPARTMENT: COUNTY ADMINISTRATION OFFICE
DEPT HEAD/DIRECTOR: Ray Espinosa
AGENDA ITEM PREPARER: Dulce Alonso
SBC DEPT FILE NUMBER: 119
SUBJECT:
COUNTY ADMINISTRATION OFFICE - R. ESPINOSA
Adopt Resolution to approve Master Tax Agreement for commercial and industrial annexation with the City of Hollister
SBC FILE NUMBER: 119
RESOLUTION: 2021-159
AGENDA SECTION:
REGULAR AGENDA
BACKGROUND/SUMMARY:
Revenue and Taxation (R&T) Code §99 provides the state law that governs the processing of the tax exchange agreements for annexations. The R&T Code allows a Master Agreement to be used by the jurisdictions or for a separate tax agreement negotiated by the City and County.
The previous Tax Sharing Agreement between the City and County expired on December 31, 2019, where the previous tax-sharing agreement included both residential and commercial. In December 2019, the Board of Supervisors approved a new master tax agreement that sets forth how property tax shall be divided between the jurisdictions in the event of a property annexation to the City of Hollister. The December 2019 Master Tax Agreement (MTA) did not pertain to commercial annexations. The County and the City have never had a master tax agreement specifically for commercial and industrial annexations. On May 19, 2020, the Board of Supervisors directed staff to work with the board's ad hoc committee to negotiate an MTA for commercial and industrial annexations with the City of Hollister. The County and the City do not enter into a Commercial and industrial annexation master tax agreement or conduct a specific contract for each annexation.
The proposed negotiated agreement exchange terms for commercial and industrial agreement for tax transfer upon annexation include:
- Twenty years, with a 30-day written mutual termination notice.
- Allocations and payments the City to receive 70%, and the County 30% "post- Educational Revenue Augmentation Fund (ERAF)."
- Mixed-use projects are subject to the terms and conditions agreement unless both parties mutually agree to specific terms for a project.
- City to distribute to the County its share of sales taxes in the annexed areas each year within 60 days of receipt.
The exact fiscal impact is unknown and depends upon the number and timing of annexations. The agreement intends to allow for the orderly development of the community while not fiscally damaging either the City or County.
RESOLUTION OR ORDINANCE NEEDED FOR THIS ITEM:
Yes
CONTRACT NEEDED FOR THIS ITEM:
Yes
CONTRACT AND RFP HISTORY:
Not applicable
LAST CONTRACT AMOUNT OR N/A:
N/A
STATE IF THIS IS A NEW CONTRACT/ HOW MANY PAST AMENDED CONTRACTS/ OR N/A:
N/A
STRATEGIC PLAN GOALS:
BUDGETED:
No
Budget Adjustment Needed: No
Unfunded Mandate (Is this a mandate not funded by the State): No