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HomeMy WebLinkAboutAgenda Statement 1985/06/25 Item 15 COUNCIL AGENDA STATEMENT Item 15 Meeting Date 6/25/85 ITEM TITLE: Resolution /2c2 $ proving Negotiated Property Tax Exchange and Other Agreements Relating to Montgomery Reorganization SUBMITTED BY: Director of Financeo' °l REVIEWED BY: City Manager (4/5ths Vote: Yes No x ) The proposed Montgomery reorganization has been filed with the Local Agency Formation Commission (LAFCO) and is to be placed on the ballot for November, 1985. State law requires the negotiation of any exchange of property tax revenues occasioned by jurisdictional changes between the effected County and City. RECOMMENDATION: Adopt resolution approving the property tax exchange. BOARDS/COMMISSIONS RECOMMENDATION: Not applicable. DISCUSSION: Negotiations have been held for several weeks with County staff members regarding the property tax agreement for the proposed Montgomery reorganization. The attached resolution contains the terms and conditions of the agreement resulting from the negotiations between the City and the County. The main feature of the agreement is the application of the Master Property Tax Agreement to the apportionment of property tax revenues. This means that the City of Chula Vista will receive 41% of the combined County and detaching special district's share of the base property tax revenue, with the exclusion of the County library district. This would produce $601 ,263 in property tax revenue to the City for application to operating and capital improvement expenses if Montgomery becomes a part of the City of Chula Vista. The balance of the pooled base property tax revenue will be transferred to the County general fund. This division of the property tax between the City and the County will also apply to the annual property tax increment. Another main point of the agreement is that if the voters approve the proposed annexation, then the effective date of the reorganization will be prior to December 31 , 1935. This will enable the City to begin receiving in fiscal year 1936-87 property tax revenues associated with the Montgomery reorganization. The City will contract with the County to provide some services through June 30, 1936. The City' s goal is to begin providing full service to the reorganized area as of July 1 , 1986. The County also agrees, subsequent to annexation, that as long as it is receiving Community Development Block Grant entitlement funds based on the demography in Montgomery, the County will allocate these funds to eligible projects within Montgomery. It is also agreed that any CDBG projects funded prior to annexation and under construction will be completed by the County. Page 2, Item 15 Meeting Date 6/25/85 The City agrees not to establish a redevelopment project area within Montgomery for at least four years after the effective date of the reorganization. If there is ever a desire to create such a project area, it probably would take at least this long to educate the community about the purpose of the redevelopment process, develop the leadership necessary to support such a district, and go through the procedural steps required to create such a district. It was concluded that it would not hamper the City s ability to address the needs in the Montgomery area by deferring any redevelopment district for this period of time. The negotiated property tax exchange agreement was approved by the San Diego County Board of Supervisors on June 18, 1985. The LAFCO hearing is scheduled for July 1 , 1985. FISCAL IMPACT: Under the terms of the proposed agreement, the City will receive 41% of the base property tax revenues and 41% of the annual property tax increment. In the initial year this produces $601 ,263 in base property tax revenues for the City of Chula Vista. WPC 0276G by tho City Chula Vista, fCa;i; r.;a Dated -373'