COUNCIL AGENDA AND AMERICAN CANYON FIRE PROTECTION DISTRICT BOARD JOINT STAFF REPORT
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1 CITY OF AMERICAN CANYON COUNCIL AGENDA AND AMERICAN CANYON FIRE PROTECTION DISTRICT BOARD JOINT STAFF REPORT Meeting Date: April 7, 2009 CONSENT ITEM: 6 SUBJECT: Consider a Resolution to adopt a Property Tax Revenue Sharing Agreement Regarding Adjustments In The Allocation Of Property And Sales Taxes As A Result Of The Annexation of Certain Parcels (Commonly Known As The Panattoni, Headwaters and Atkins Parcels) Currently In The Unincorporated Area Of Napa County To The City of American Canyon And The American Canyon Fire Protection District ( Tax Sharing Agreement ). SUBMITTED BY: William D. Ross, City Attorney BACKGROUND AND ISSUES: On July 3, 2008, the City of American Canyon ( City ) and Napa County ( County ) entered into County Agreement No. 7070/City Agreement No ( City/County Agreement ) relating to City s urban growth boundary and other matters of mutual interest in the South County area. The City/County Agreement, among other things, contemplates by means of annexation, inclusion of three parcels currently in the County unincorporated area (the Panattoni, Headwaters, and Atkins parcels, more specifically described in the legal descriptions attached as Exhibits A, B and C to the Tax Sharing Agreement and depicted in the City-County-Fire District Tax Sharing Agreement Map of Affected Parcels also attached to the City/County Agreement and attached to this Report), in the City s Sphere of Influence and within the City s Urban Limit Line, upon the satisfaction of specified conditions described in the City/County Agreement. Section 99 of the Revenue and Taxation Code requires that negotiations be entered into between the County, the City and the City of American Canyon Fire Protection District ( District ) regarding adjustments in the allocation of property taxes whenever a jurisdictional change involving annexations are proposed. Revenue and Taxation Code section 99(b)(6) provides that the Local Agency Formation Commission Executive Officer shall not issue a Certificate of Filing of a proposal for reorganization (here, the annexations) pursuant to Government Code section until the City and County included in the property tax revenue exchange negotiation present Resolutions adopted by each entity whereby each entity agrees to accept the exchange of property tax revenues.
2 Consistent with this authority, the City/County Agreement Part III.F requires the City and County to adopt a tax revenue sharing agreement as a precondition to County s support of City s annexation of the Panattoni, Headwaters and Atkins parcels, which the City and County, through their respective staff representatives, negotiated a proposed agreement regarding adjustments in the allocation of property taxes as a result of the contemplated annexations of the Panattoni, Headwaters and Atkins parcels to the City and District. The property tax exchange would take effect upon annexation of the parcels and is proposed as follows. The City shall be provided forty-seven and a half percent (47.5%) of the County share of the one percent (1%) property tax rate increment applicable to the annexed lands; and five percent (5%) of the County share shall be reallocated to the District. The remaining forty-seven and a half percent (47.5%) of the preexisting County share shall be retained by County. One hundred percent (100%) of the County s Structural Fire tax base and increment shall be transferred to the District upon annexation of the lands to the District. The City shall receive one hundred percent (100%) of the sales tax generated within any annexed area. The Tax Sharing Agreement applies only to the Panattoni, Headwaters and Atkins parcels, not any other property affected by the City/County Agreement. The City/County Agreement includes "poison pill" provisions, triggered by specific events that would require the "offending party" to return the property tax increment shared under the Tax Sharing Agreement to the other party. This payback would equal the following: a. All property tax revenues received for the four fiscal years prior to the fiscal year in which the violation occurred; and b. All such property tax revenues received for the fiscal year in which the violation occurred; and c. All such property tax revenues received in all future fiscal years following the fiscal year in which the violation occurred (Le. in perpetuity). The Tax Sharing Agreement will have to be executed by the County Board of Supervisors. FISCAL IMPACT: The adoption of the Tax Sharing Agreement will adjust the relative property tax revenue allocated to the City, County and District as described in this Report. ENVIRONMENTAL DETERMINATION: An environmental determination is not required at this time because this is further implementation of the City/County Agreement. The potential environmental impacts associated with the project have been evaluated in an Initial Study and Negative Declaration for the City/County Agreement. The Negative Declaration for the City/County Agreement was certified when the City approved the City/County Agreement on July 3, 2008.
3 ALTERNATIVES: There is no recommended alternative. STAFF RECOMMENDATIONS: The City Attorney recommends that City Council adopt the Resolution for approval of the Tax Sharing Agreement. 1. Attachments: Resolution Proposed Tax Sharing Agreement City-County-Fire District Tax Sharing Agreement Map of Affected Parcels 2. Copies to: Richard J. Ramirez, City Manager Barry Whitley, Finance Director Dorothy Roadman, City Clerk WaterTankProject.ResoNecessity.Feb3.09.DOC
4 JOINT RESOLUTION NO A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AMERICAN CANYON AND THE BOARD OF DIRECTORS OF THE AMERICAN CANYON FIRE PROTECTION DISTRICT TO ADOPT A PROPERTY TAX REVENUE SHARING AGREEMENT REGARDING ADJUSTMENTS IN THE ALLOCATION OF PROPERTY AND SALES TAXES AS A RESULT OF THE ANNEXATION OF CERTAIN PARCELS (COMMONLY KNOWN AS THE PANATTONI, HEADWATERS AND ATKINS PARCELS) CURRENTLY IN THE UNINCORPORATED AREA OF NAPA COUNTY TO THE CITY OF AMERICAN CANYON AND THE AMERICAN CANYON FIRE PROTECTION DISTRICT RESOLVED, by the City Council of the City of American Canyon ( City ) and the Board of Directors for the American Canyon Fire Protection District ( District ), that: WHEREAS, on July 3, 2008, the City and Napa County ( County ) entered into County Agreement No. 7070/City Agreement No ( City/County Agreement ) relating to City s urban growth boundary and other matters of mutual interest in the South County area; and, WHEREAS, the City/County Agreement, among other things, contemplates by means of a City Sphere of Influence update and annexation to be approved by the Local Agency Formation Commission, inclusion of three parcels currently in the County unincorporated area (the Panattoni, Headwaters, and Atkins parcels), into the City s Sphere of Influence and within the City s Urban Limit Line, upon the satisfaction of specified conditions described in the City/County Agreement; and, WHEREAS, Revenue and Taxation Code Section 99 requires that negotiations be entered into between the County, the City and the District regarding adjustments in the allocation of property taxes whenever a jurisdictional change involving annexations are proposed; and, WHEREAS, Revenue and Taxation Code section 99(b)(6) provides that the Local Agency Formation Commission Executive Officer shall not issue a Certificate of Filing of a proposal for reorganization pursuant to Government Code section until the City and County included in the property tax revenue exchange negotiation present Resolutions adopted by each entity whereby each entity agrees to accept the exchange of property tax revenues; and, WHEREAS, consistent with this authority, the City/County Agreement Part III.F requires the City and County to adopt a tax revenue sharing agreement as a precondition to County s support of City s annexation of the Panattoni, Headwaters and Atkins parcels, which the City and County, through their respective staff representatives, negotiated a proposed agreement regarding adjustments in the allocation of property
5 taxes as a result of the contemplated annexations of the Panattoni, Headwaters and Atkins parcels to the City and District ( Tax Sharing Agreement ). A true and correct copy of the proposed Tax Sharing Agreement is attached hereto. WHEREAS, an environmental determination is not required for the Tax Sharing Agreement because it is further implementation of the City/County Agreement. The potential environmental impacts associated with the project have been evaluated in an Initial Study and Negative Declaration for the City/County Agreement that was certified when the City approved the City/County Agreement on July 3, NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of American Canyon and the Board of Directors for the American Canyon Fire Protection District that the City Council of the City of American Canyon and the Board of Directors for the American Canyon Fire Protection District does hereby approve the Tax Sharing Agreement with the County of Napa: APPROVED AND ADOPTED at a regular joint meeting of the City Council of the City of American Canyon and the District Board of Directors of the American Canyon Fire Protection District held on the 7 th day of April 2009, by the following vote: AYES: NOES: ABSTAIN: ABSENT: Leon Garcia, Mayor ATTEST: APPROVED AS TO FORM: Dorothy Roadman, City Clerk William D. Ross, City Attorney AYES: NOES: ABSENT: ABSTAIN:
6 Leon Garcia, Chairman, Board of Directors ATTEST: Glen E. Week, District Clerk APPROVED AS TO FORM: William D. Ross, District Counsel
7 TOWER RD "Headwaters" "Panattoni" "Panattoni" "Atkins" GREEN ISLAND RD STATE HIGHWAY 29 ± City-County-Fire District Tax Sharing Agreement Map of Affected Parcels
8 Napa County Agreement No. City of American Canyon Agreement No. American Canyon Fire Protection District Agreement No. PROPERTY TAX REVENUE SHARING AGREEMENT REGARDING ADJUSTMENTS IN THE ALLOCATION OF PROPERTY AND SALES TAXES AS A RESULT OF THE ANNEXATION OF CERTAIN PARCELS (COMMONLY KNOWN AS THE PANATTONI, HEADWATERS AND ATKINS PARCELS) CURRENTLY IN THE UNINCORPORATED AREA OF NAPA COUNTY TO THE CITY OF AMERICAN CANYON AND THE AMERICAN CANYON FIRE PROTECTION DISTRICT This Agreement is made and entered into as of, 2009, by and between the County of Napa, a political subdivision of the state of California ("County"), the City of American Canyon, a municipal corporation ("City"), and the American Canyon Fire Protection District ( District ). WHEREAS, the District is a special district which was reorganized as a subsidiary district of the City as a part of the incorporation of the City of American Canyon effective July 1, 1992; and WHEREAS, on July 3, 2008, City and County entered into County Agreement No. 7070/City Agreement No (hereafter July 2008 Agreement ) relating to City s urban growth boundary and other matters of mutual interest in the South County area; and WHEREAS, the July 2008 Agreement contemplates inclusion of three parcels currently in the unincorporated area (the Panattoni, Headwaters, and Atkins parcels, as more particularly described below), in the City s Sphere of Influence and within the City s Urban Limit Line, upon the satisfaction of specified conditions described in the July 2008 Agreement; and WHEREAS, Part III.F of the July 2008 Agreement requires City and County to adopt a tax revenue sharing agreement as a precondition to County s support of City s annexation of the Panattoni, Headwaters and Atkins parcels; and WHEREAS, section 99 of the Revenue and Taxation Code provides that negotiations be entered into between the County, the City and the District regarding adjustments in the allocation of property taxes whenever a jurisdictional change involving annexations are proposed; and WHEREAS, Revenue and Taxation Code section 99(b)(6) provides that the LAFCO Executive Officer shall not issue a Certificate of Filing pursuant to section of the Government 1
9 Code until the City and County included in the property tax revenue exchange negotiation present Resolutions adopted by each entity whereby each entity agrees to accept the exchange of property tax revenues; and WHEREAS, pursuant to Part III.F of the July 2008 Agreement, City and County, through their respective staff representatives, negotiated a proposed agreement regarding adjustments in the allocation of property taxes as a result of the contemplated annexations of the Panattoni, Headwaters and Atkins parcels to the City and District; and WHEREAS, the parties will comply with the technical requirements of Revenue and Taxation Code section 99 and adopt the required resolutions whenever that section becomes applicable. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: PART I. AGREEMENT DEFINITIONS When used in this Agreement, the following words or phrases shall have the following meanings unless the context clearly indicates otherwise: Atkins Property shall mean that real property described by Assessor Parcel Number consisting of approximately acres as is more fully described in Exhibit C, attached hereto and incorporated herein by this reference. City shall mean the City of American Canyon. County shall mean the County of Napa. District shall mean the American Canyon Fire Protection District, a subsidiary district of the City of American Canyon. Headwaters Property shall mean that real property described by Assessor Parcel Number consisting of approximately acres as is more fully described in Exhibit B, attached hereto and incorporated herein by this reference. LAFCO shall mean the Napa County Local Agency Formation Commission. Panattoni Property shall mean that real property described by Assessor Parcel Numbers and , consisting of approximately acres and acres, respectively, as is more fully described in Exhibit A, attached hereto and incorporated herein by this reference. Sphere of Influence shall mean the LAFCO-approved plan for the probable physical boundary and service area of the City of American Canyon, as defined in Government Code section PART II. REVENUE TAX SHARING AGREEMENT 2
10 1. Property Taxes. In accordance with Revenue and Taxation Code section 99, the following property tax sharing agreement is hereby adopted to be effective upon the recordation of the LAFCO Executive Officer s Certificate of Completion of annexations of the Panattoni Property, the Headwaters Property, and the Atkins Property. The City shall be provided forty-seven and a half percent (47.5%) of the County share of the one percent (1%) property tax rate increment applicable to the annexed lands; and five percent (5%) of the County share shall be reallocated to the District. The remaining forty-seven and a half percent (47.5%) of the preexisting County share shall be retained by County. One hundred percent (100%) of the County s Structural Fire tax base and increment shall be transferred to the District upon annexation of the lands to the District. The City may request a proper accounting of any property tax distribution provided herein and the County shall make such a report in a timely manner. This Agreement and the revenue tax sharing formula stated above shall apply only to the Panattoni Property, the Headwaters Property, and the Atkins Property. The City s annexation of parcels within the voter-approved Urban Limit Line as described in the July 2008 Agreement, other than the Panattoni, Headwaters, and Atkins properties, shall not be subject to this Agreement. 2. Sales Tax. The City shall receive one hundred percent (100%) of the sales tax generated within any annexed area. 3. Effective Date of Agreement: The terms of this Agreement shall only become effective if and when the properties described herein are annexed to the City and District, upon recordation of the LAFCO Executive Officer s Certificate of Completion of annexations of those properties. If one of properties is annexed to the City and District prior to annexation of the remaining properties, this Agreement shall become effective with respect to the annexed property. 4. Compliance with Revenue and Taxation Code section 99. Whenever applicable, the parties will take the necessary steps required by section 99 of the Revenue and Taxation Code to implement this Agreement, including adoption of the requisite resolutions. 5. Warranty of Legal Authority. Each party warrants and covenants that it has the present legal authority to enter into this Agreement and to perform the acts required of it hereunder. If any party is found to lack the authority to perform the acts required of it hereunder or is prevented from performing the acts by a court of competent jurisdiction, this Agreement shall be void. 6. Assignment/Delegation. None of the parties hereto shall assign, or transfer any benefit or obligations of this Agreement without the prior written consent of the others, and no assignment shall be of any force or effect whatsoever unless and until the other parties shall have so consented. 3
11 7. Severability. In the event any provision of this Agreement is held to be invalid or unenforceable, the valid or enforceable portion thereof and the remaining provisions of this Agreement will remain in full force and effect. 8. Waiver. Any waiver (express or implied) by either party of any breach of this Agreement shall not constitute a waiver of any other or subsequent breach. 9. Notices. Whenever notice is to be given, it shall be in writing and delivered by personal, overnight express or courier service, with a written receipt, or sent by registered or certified mail in a sealed envelope, postage prepaid, return receipt requested and addressed as follows: City of American Canyon: City Manager 4381 Broadway Street, Suite 201 American Canyon, CA With copy to: City Attorney Law Offices of William Ross 520 South Grand Avenue, Suite 300 Los Angeles, CA County of Napa: Napa County Executive Officer 1195 Third Street, Suite 310 Napa, CA With copy to: Community Partnership Manager County of Napa 1195 Third Street, Suite 310 Napa, CA Napa County Auditor/Controller 1195 Third Street, Suite B-10 Napa, CA American Canyon Fire Protection District: Fire Chief 911 Donaldson Way East American Canyon, CA Changes may be made in addresses to where notices are to be delivered by giving notice pursuant to this provision. 4
12 10. Entire Agreement. This document is intended both as the final expression of the agreement between the parties hereto with respect to the included terms and as a complete and exclusive statement of the terms of the Agreement. This Agreement may be executed in counterparts, each of which shall constitute an original. 11. Amendment. This Agreement may only be amended in writing by an amendment authorized by the City Council, or the City Council acting as the governing body of the District, and the County Board of Supervisors. 12. Copy to Interested Persons. The Clerk of the Board shall immediately forward a copy of this Agreement to the Auditor-Controller for the County, the Clerks of the District and the City, and the Executive Officer of LAFCO. IN WITNESS WHEREOF, this Agreement was executed by the parties hereto as of the date first above written. 5
13 ATTEST: GLADYS I. COIL Napa Clerk of the Board of Supervisors By: COUNTY OF NAPA By: MARK LUCE, Chair of the Board APPROVED AS TO FORM: ROBERT WESTMEYER, County Counsel By: ATTEST: DOROTHY ROADMAN American Canyon City Clerk CITY OF AMERICAN CANYON By: By: LEON GARCIA, Mayor APPROVED AS TO FORM: WILLIAM D. ROSS, City Attorney AMERICAN CANYON FIRE PROTECTION DISTRICT By: By: LEON GARCIA Chairperson APPROVED AS TO FORM: WILLIAM D. ROSS, District Counsel By: ATTEST: MARTHA BANUELOS Secretary, Board of Directors By: 6
14 EXHIBIT A Legal Description of Panattoni Property 7
15 APN
16 EXHIBIT B Legal Description of Headwaters Property 9
17 EXHIBIT C Legal Description of Atkins Property APN
18 TOWER RD "Headwaters" "Panattoni" "Panattoni" "Atkins" GREEN ISLAND RD STATE HIGHWAY 29 ± City-County-Fire District Tax Sharing Agreement Map of Affected Parcels
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