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HomeMy WebLinkAboutAgenda Statement 1981/08/11 Item 9COUNCIL AGENDA STATEMENT Item 9 . Meeting Date g/11/81 ITEM TITLE: Resolution ~a S~.C- Amending Section 6 of Resolution No. 8579 of the Joint Fire Protection Agreement between the h1ontomery Fire Protection District and the City of Chula Vista SUBMITTED BY: Assistant City Manager \ (4/5ths Vote: Yes No X ) Director of Public Safety On April 12, 1977, the City entered into an agreement with the P~iontgomery Fire Protection District which provided fora system of automatic response for fire suppression between the Montgomery Fire District and the City. Section 6 of the agreement provides that the City will pay to the District an amount equal to the District's property tax revenue for all District territory annexed to the City subsequent to March 1, 1977. GJith the passage of Proposition 13, separate tax rates for all taxing jurisdictions were eliminated. It is therefore necessary to amend the agreement and establish a new formula or some mechanism to be used in calculating the payments contemplated and owed under the terms of the agree- ment. It is our RECOMMENDATION: That Council adopt resolution authorizing amending language of Section 6 of the Joint Fire Protection Agreement. BOARDS/COMMISSIONS RECOMMENDATION: N.A. DISCUSSION The basic purpose of the fire protection agreement is to provide a system of automatic response for fire suppression between the Montgomery Fire District and the City. It was based on the premise that the fire station closest to the location requiring fire service could provide that service with the quickest response time and these responses should be provided regardless of the jurisdictional boundaries. Section 6 of the agreement provided that the City of Chula Vista "agrees to pay to the Montgomery Fire Protection District an amount equivalent to the District's property tax rate applied against all District properties annexed to the City subsequent to March 1, 1977 and within the effective terms of this agreement wherein the District has the continued obligation of first response." The agreement recognized that when specified portions of the Montgomery District are annexed by Chula Vista, P"ontgomery would continue to provide first-in response, even though they would lose property tax revenues after the annexation. It was the intent of Section 6 of the agreement to mitigate this inequity by providing that Chula Vista would pay Montgomery an amount equal to the lost property tax revenue by reason of the annexation. At the present time two annexations occurred subsequent to Parch 1, 1977 but before Proposition 13, and several other annexations have occurred or will occur since Proposition 13. Various formulas, wherein the City would continue to pay the District the equivalent tax dollars that Montgomery would have received out of the $4.00 per hundred County-wide levy had the property not annexed to the City,were attempted. After discussions with members of the County Auditor's Department, it was determined that any attempt to base payment on future jurisdictional tax allocation factors would not be realistic and, further, due to the tax distribution agreement entered into by the City and the County of San Diego, use of the tax allocation formula could result in the City paying the District more money than the City might receive in property tax revenue. It also would be impossible to determine precisely what the District would have received in property tax revenue in Form A-113 (Rev. 11/79) continued f• - Page 2 Item 9._ P~zeeting Date 8/11/81 any given year after the property is annexed. In view of these difficulties and in order to arrive at the most simple basis of payment by the City, it has been administratively agreed by the City and District to return to the District, on an annual basis in payment for the automatic response services provided, 85% of all property taxes received by the City from each parcel of land annexed but continuing to receive first-in response from the ~",ontgomery Fire Protection District. Payments would be made for services rendered in the preceding fiscal year on or before September 1 of the following fiscal year. The County Auditor would be requested to furnish on an annual basis the amount of property taxes returned to the City on each parcel of land annexed after h"arch 1, 1977. Similar to the current agreement, the City would be required to make the full 85% pay- ment for the first five years following annexation of a particular piece of property and, beginning the sixth year following annexation, the payment derived from the 85% factor will be reduced by 20% for each succeeding year and, at the end of the tenth year of the date of annexation or the expiration of the agreement, whichever occurs first, no further payment would be made on that property. FINANCIAL IMPACT The City received $4,306 in property taxes on properties that require payment for FY 1980-81. 85% of that figure is $3,660.10, which under the terms of the proposed agreement would be paid to the P~ontgamery Fire Protection District. For the current fiscal year (1981-82), additional properties will be subject to the reimbursement formula but the amount cannot be ascertained until near the end of this fiscal year. 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