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Home My WebLink About0546.093;J GJ, , - • • . . . :;. ... : 8 October 21~ 1993 HONORABLE CIT¥ COUNCIL Palo Alto, California ALTERJ'!A'TlVE HE'l'JIOD OP SECURED PROPERTY TAJ< APPOI!TIO!!HlE!: Members of the council: ~t in Brief This report recommends that the City participate in the "Teeter Plan r " a new property tax apportionment method offered by Santa Clara County. The Teeter Plan ~ould allow the City to receive loa percent of its property tax revenu~ during the fiscal year in which it was collected. The County vould ke~p all futYre delinquent tax revenue from delinquent tax bills, including interest and penalties. Discussion The santa Clara county Board of supervisors recently voted to change the county's I:lethod of tax .apportionment to the "Teeter Plan,· as outlined in t~o memorandums from the County Director of Finance to the City Manager (Exhibit A) and the County Board of Supervisors (Exhibit B). The C~unty changed to this alternative tax apportionment method, because legislation related to the shift in property ta){es to schools in fiscal year 1993-94 allows the County to receive a one-time windfall of $7.4 million under this metbod. The County may ~lso experience an inc~ease in future year revenues from the cOllection of delinquent tax penalties and inteI"est~ cities in the County have been given the option of deciding whether taxes should be apportioned under the existing tax apporti onment. method or the Teet er Plan. Presently, Palo Alto receives property tax amounts actually collected during the year. CMR:546:93 revenue based on the Tax revenue that is • unpaid at the end or the year can be received up to five years after the time it ~as originally due~ As a ccnsequence# it ~ecomas very difficult to project the receipt of this property tax revenue during subsequent years. Receipts of prior year secured property taxe.s amount to approximately $180, OOO~ This represents about t....,o percent cf total property taxes. A portion of these receipts are made up of i~~~rest and penalties. It is this component that the city ~ould no longer receive under the Teeter Plan. Due. to the complex apP'Jrtiol".ltIent of property taxes # the County has been unable to provid.e detailed information for detennininq the eX2;ct breakdown of the-delinquent property taxe.s and penalties.. It is staff's opinion given available inforMation that thE! change to the Teeter Plan would not negatively impact the City financially. If the city chooses to participate in the Teeter Plan tax apportionment method# a ene-time distribution ot' dE!linquent secured property taxes as of June 30, 1993 would be made. The estimated amount of this distribution for Palo Alto is $458,940~ Thereafter, 100 percent of secured property tax revenue would be received each year, whether or not the county was able to collect the taxes, Delinquent taxes would be due to the County, which would retain interest and penalties on the delinquent bills as revenu.e~ In subscribing to this plan, the City would know ~ith certainty the a~ount of secured property tax revenue for the coming year as soon as property values were assessed~ Additionally, because the Teeter Plan is applicable to all property tax levies and assessments, the need to monitor tax delinquencies is eli:minated~ As a consequence, the City's standing in the financial m~rkets is improved and its ability to sell and administer bonds is strengthened~ In view of the sGall percentage of total property tax revenue that are delinquent (2%)# ~he predictability of property tax receipts, the 'beneficial impact on bond administration# and the one time windfall of $458,940 from the purchase of past delinquencies, staff ~lieves tbat the change to the Teeter Plan ~ould be beneficia~ to the city. Recommendation Staff recommends that Council approve the attached resolution which permits the County to allocate secured property taxes based on the Teeter Plan. CKR:546~91 2 • t • \ , 1 , ~' ! ", ./ ,::. . ,i .". o Respectfully 5ubmitted~ 'M;J~s~"-- MICHAEL FRANK Senior Financial Analyst CAROL Actinq nance Director ~ B OJNY istan city Manager Attachments: A B C 9/22/93 letter from County Direct0r of Financ~ 9/22/93 memo to the Board of Supervisors Resolution CMR:546:9J 3 -"-----" • ~ounty of santa Qua [)t'f)';VfmenlolFUl<lnCe (";otHt,IIIt>T-fi"a<;tlf('r O[\'L"inn C()\Jru~' GuV('rrulwru eCI)Ie-r, C4ls< \,'in,,!: 711 \\'(~ Iinloi.:)! $lr't"'l'1 s.~nJ.~,Ci.ll'.r...tmt..l~l::'j In l"nt'l),",~)£1·,?541 September 22, 1993 June Fleming, City Manager City of Palo Alto P. O. Box 10250 Palo Alto, CA 94043 ATTACfllENT A SUBJECT: Alternative Method of Tax Apportionment (Teeter Plan) Dear Ms. Fleming: \ \ On August 19, 1993 I attended the monthly City Fmsnee Di,ectors meeting and discussed An Altemative Method of Tax Apportionmenl (Teeter Plan) wtlich the County was considering. The altemative method is apprH;alJle 10 an property tax lellies and assessments made by the COUnty on behalf of public districts except those for wtlich the County Treasury is not tlJe legal depository and which do not agree by resolution to participate in such an alternative meihod. Th9 purpose 01 this lell ... is to inform those entities that r am recommending to the Board of Superlisors the Countj adopt An Alternative Method of Tax Apportionment pursuant to Revenue and Taxation COde Sections 4701 (at seq.) The Board of Supervisors wilJ be considering my recommendation at ifs regularly scheduled board meeting 00 Tuesday, September 28, 1993. I have enclosed with this lett ... a copy of my board transmittal and resolu1ion wI1ich wi~ provide you with some background information 00 the Teeter Plan and give you some Information on how the plan will operate. Assuming the Board of Supervisors adopls the resolution to implement tr.e Teeter Plan. 1 am asking each pubfic district, for which the COUnty Treasury is not the legal depos~ory (other than Mello-Roos districts), and cities to decide ~ they want to participate in the Teeter Plan tax apportiooment metihOd. The estimated amount 01 one time delinquant secured property taxes which would be distributed to your entity is $ 458,940. This amount does not include any delinquent special assessments, W applIcable, nor adjustments for Meno-RDOS. These amounts are currently being determined for each entity. Entrues would be paid 95% of the dennqusnt amount \\;ith 5% being transferred 10 the Tax losses Reserve Fund. I would antcipate the fonowing secured prope.'1y tax distnbution schedule: o As soon as the financing process has been completed for !he buy out of the June 30, 1993 deflnquenl secured property taxes, the cash will be distributed to an entrues. r am e.pecting mis to take from 60 to 90 days Board uf Supt'1'visors:-:\lid'l"wl \'1. II. ~ 111.1. l(O(' L, 'I'>;WI1 fll ,n,;t" to', 'ks. 11. III [JJ[I. 11'11 II~lILJ'tV .\i{ ",t'lln,' Counly Execurh"r', S.,lly n l!l'(';J • o before the financing will be complete, The apponionment of the current secured property taxes win be dIstr:buted based on the attached apportionment schedule, I would expect entities to receive approximately 55% of their ClJrrent secured property taxes by January 21 s~ and would receive 100% of their current secured taxes by June 6th. The apportionment of Meno-Roos taxes would also foRow the attached sched<Jle, but would only be for the actLJai taxes conected, Thera would be no char.ge ., the distnOution of unsecured taxes. II your entity would like to partlcipate In the Teeler Plan tax apportionment method, the County will need to nave your city council or boarti adOpt a resolution agreeing to so participate. The County will need your resolution no later than October 29, 1993. If your entity decides not to join in the Teeter Plan concept, we woutd also appreciate knowing that as soon as possible. If you have any questi0n5 on the Teeter Plan or need any aooItionaJ information, please feel free to give me or Rich Atkinsoo a call at (408J 299·2541. Sincerely, rv//J .. LWN., PW~ Wilrram L ParsOns Director of FIf\alIC9 Attachments ce: Emily Harrison, Finance Director • -.~ . " r, County of Santa t.iara Dt'p.."l11m, .. nr 0( Fln,,"'mce r.);I11I'ol/{-r-TI'(";:lSur( 'f Divi<;ion COUn1)' Gow"rflmCn1 Cenlel, E..aSI' wm.!: 7., \\\'<;/ Hr:'.kUrl;.t ~'('t"l 5.lr..o'l."",",CillliomiaQc;lln , ___ OHI:!99·O!$-I.I September 22, 1993 TO: FROM: Board of Supervisors William L Parsons Diiector of Flnan....""8 ATIACIf4ENT 8 o Prepared bY:~~ Rich AtkinSO(! • SUBJECT: Resolution to Adopt An Allernatve Method of Tax Apportionment (feeter Plan) RECOMMENOE;O ACTION Approve the attached Resolutioll authorizing the Oirector of Finance to adopt an Alternative Metr-.od of Tax Apportionment (feeter Plan) pursui! to ReverlUe & Taxation Code Section 4701. REASONS FOR RECOMMENDATION A,~D BACKGROUND 1) BackgroYill! An AIIematve Metr.od of Tax Apportionmsrlt has been permitted by ReverlUe & Taxaton Code Section 4701 (et seq.) since 1949. Under this method of apportiorunen~ sometimes referred to as the 'Teeter Plan" (referencing the author of the concept), it allows the Au<frtor-Controner to apportion 100% of the secured lax ron rnc1uClf19 the supplemental rol~ to the various taxing entities, including the County, if certain conditions are met Some taxes would be apportioned before collection of the tax by the Tax eonector. At ~s inception, it was characterized as a means to simpnly toe tax anoca~on process. However, the primary focus has now changed due to the shift in county property tax revenue 10 the scl1ool~"as required by the State's FY 1993- 94 budget By adop~ng fue Teeter Plan concept counties, cities, schools, and special cflSlricls would have the opportunity to recognize significant one time property tax revenues in FY 1993-94. Under new legislation (S8 742) d a county adopts fue Teeter fJcloard ~ SU~f.!iOrs: \IK'll,lt'1 \1. J fonda, zoe Lo~,s.:r!:ll. Helll (".1)1 "~,l!t"S, rll >(1 [I',m I()!I. n;;tr~W _,wKe-rm,1 Counry E:u'cutl~~: S;llly It Ht't-Q ". ------~---'- ,'-> .. --.. -----:. Plan by October 15, 1993 the amount of windfall delinquent properej taxes anocated to non basic aid schools can be offset against the county's required property tax shift to schools. rn order tc realize this benefit the County woul d have to take some risks involving the I \.-/"dIstribution formufa of the nsw sales tax and there are some potential problems involving bankruptcies. Only!ilie srr;an counties have impler:'\ented the Teete' Plan since it's passage in 1949. However due to the revenue potential that can now be (earrzed. most major counties are now evaluating the Tester Plan. 2) How the Plan Qpera~ Normally, taxing agencies receh'e a proportionate share of tax receipts at the time the property tax money is actually COlliecled. Under the provisions of the Teeter Plan, taxing agencies would receive It,e full amount 01 the tax levy as if t'1ere were no der.ncuencies. The difference between the tax levy and the actclal collections is paia by the County In return, the County receives all fL1ure delinquent tax payments, induding pena~ies (10% in the inmaJ yea') and ;nterest (16% per annum aHer the inmaJ year) on dennquent secured property taxes. A county could adopt the Teeter Plan concept for only one year in order t'J lake advantage of the one ~me revenue winCfall, and then go back to tt-Ie current method of tax ailocatlor.... If a county chooses this approach, it is our benel the administrative impact of d "aling with a dual tax aOocation process would be significant until aIT of the Teeter Plan delinquencies were satisfied. If the Countt adopts the Tester Plan concep~ the County would distribute an der.nquent secured taxes as 01 June 30, 1993, which totals approximately $74.8 milfion. The law requires in the initial plan year the first 5% of the total dennquencies be deposited into a Tax Losses Reserve Fund (TLRF), and the remainder to be distributed to e"'.ilies using the prior year ABB lactors. It is expected the County WOUld need to do an internal borrowing from the commingled inveslm ent poel L'1 order to make the initial distrrbution cf definquencies. This approach is consistent with mo"t other oountJes methodology. All counties going onto t~e Teeter Plan will have to estabr.sh and maintain a nRF. The funding requ irement for the TlRF is 50% 01 the outstanding dennquent amount It is currently estimated the size of L'le TlRF for Santa Clara County would be approximately $37.4 million. Once the TlRF is fur-y funded, the County wotlid receive all definquent collections. would recommend the Couniy use part of the one time revenue received from this process to fully fund the TLRF. By funding the TL"!F now, the County would be preserving the future years revenue flow received from the deflnquency process. This approach is consistent with the ether counties we h ave contacted who are planning on Implementing the Teeter Plan. It should be noted ~ in future years the amount 01 the der"''luent ron grows, the TlRF would have to be increased by 50% of that growth. I ~ 'I 1 I , . '. ., • 1) Benefrts to lhe County I beffeve the primary considerations for the County in mO'ir1g forward with the Teeter Pfan arE' as fo!Jows: • o There is a one time revenUE! windfall to CltJ taxing jurisdictions in the distribution of the deflnquencies. The Counly's share of the in~ial dennquency distribution is estimated at a net of $13 million. The total COunty share is estimated at $15 ml1non, but approximately $2 million was accrued at June 30th and included in FY 1992·93 revenue. o There is new legislation (SB 742) which allows counties, which implement the Teeter Plan this year, to offset the amounts distributed to schools against the County General Fund propenty tax shift amount I wO'.Jld estimate the COunty will be able to reduce the propenty tax shift te schoels for FY 1993·94 by approximatoly $28 mUlien. - o Tl1e one time revenue impact from implementing the Teeter Plan for the General Fund is computed as fonows: Total delinouendos to be allocated (Schedule A) Genera) Fund sh:'fe of definquencies less: FY 1992-93 accrual Net additiOnal revenue to General Fund Propenty taxes not shifted to schools (SB742) Total avalable revenue Less: Net reserve fund requi(eme.nt (Schedule B) Total one time revenue av.,lable alter fully ~Jnding the TLRF. S 7485Q_QQQ $ 15,114,386 2.00Q.OOQ $ 13,114,386 $ 27,954.llQQ $ 41.068,386 33,682,500 H38588$ This one time revenue estimate is calculated based on !he assumption an of the cities and the water district agree to the Teete, Plan concept To the extent that any of tf10se entities decides ncrt to join in the Teeter Plan concept. the reserve fund requirement would be decreased and Coonly's one time revenue would i(lcrease. Earller analysis estimated the one time revenue to be $15.7 million. This amount was reduced because of a decision to recommend thai der.nquent special assessments be included in the plan whictl increases the TlRF requirement and ttlerefore reduces the net one time revenue by $4 milnon but increases ongoing revenues. The one time --~-----" -- -, ; ........ -revenue was also reduced for delinquencies ap?Ortioned to basic aid school districts since there is no ERAF transfer to such districts to offset. Attached are various schedules whicl1 detajlthe different Teeter Plan calculations. a Scheclule A shows the calculalion cI the de,nquent amount to be distnbuted. o Schedule 8 show. the calculation of the TLRF requirements. ., Th~ incnaese in future years revenue flow to the County from penalties and interest on de:inqlJent taxes, less the net cost of money borrowed, is estimated to be $3.1 mimon per year and is computed es fonows: (This revenue estimate does net 18k" into account any growth in the size of the de,nquent roll) E..<timated annual collections from definquent penalties and Interest (Redemptions Only) Estimated cost of borrowing related to funding of $ 6,450,OCXl der.nquencies -$74.8 miilion @ 4.5% $ 3,366,000 Less: estimated earnings on the TlRF $37.4 million @ 3.95% (pool earnings rale) 1 479 000 Nat cost c< -botro>'(ing , Estimated gross r3Yenue le3s; Current revenue from redemptions Nat ongoing revenue increase 4,562,000 J~..ool 3 .... 062,000 This Increase though coutd be partially or luny offset by Increased TlRF requlrements as the dennquent ron changes, The change in the de~nquent roR over the past 4 years has had significa'1l ftuctuaf""s ranging from a $2.4 mill,,,,, inctease at July 1, 1990, to a $16.2 milijon increase al July 1, 1991, a $13.9 million inctsase at July 1,1992, arod a $5 million increase al July 1, 1993. The change in the delinquent roil is very much influenced by the state of the economy. 3) Risk Factors Implementation of the Teeter Plan is not without risk 10 the County. The risk factors are: a A major consideration is the amount of any den"'luencies which are the subjecI of bankruptcy proceecfll19s. Until recenlly, the conventional assumption was thai an taxes ultimately are coHected, even if some are only collected upon a tax .ale. Fedenal bank{uptcy law supported this :: ~_"" __ "'''''''''''ll]ll_,,,, 11' I il -.~--- \ thinkin~:;t providing "protection" for prope¥tax liens by ,eactivating the flens, thus enforcing fun collection of taxes and penalties through a Tax Collectors sale. However, a recent 9th Circuit Court ru1ing gives protection instead to the debtor by retaining property tax liens within the automatic stay. Thus, propeny tax may 'escape" collection lor an periods in which the bankruptcy protection is 1n force. Although t'le above risks are present concerning bankruptcy proceedings, so far oUr bankrup'~ies w;1h Redemption charges Mve a relatively high distribution priority. To ddte, there has only been one bankruptcy case in which the lax charge was affected by a ruUng of the Bankruptcy Court Based on the court's order, the en~re tax charge was transferred to lhe Unsecured Tax Roll. In all other bankruptcy cases, the CO'.Jnty has received fuR payment of the lax charge; however, the accumulated penaJtjes are often adjusted downward IJr eliminated entirely. Unfortunately we are unable to Identify all Secured or Redemption charges upon which a claim for ban!<ruplcy has been filed. Ine bani<r'Jptcy prOvisions are beir,g further evaluated by County Counsel. Th. County does not, however assume tn e full risk t"at assessments will Os reduced t/',fough appeal, etc. The Teeter Pian aUows the loss to be spread to aR taxing agencies. o How will tit(> CouI'\Y finance the initial allocation 01 delinquencies and t'1e ongoing allocation G\L'19 current taxes. We are in contact with bond counser to investigate yarious finan~ing alternati ..... es. We have contacted other counties to see what type of financing they are planning. Most of the counties are planning a formal i ... ~terna1 borrOWing from the commingled treasury pool. Sacramento County has already signed a loan agreement with their treasury poel 10 borr{)w the money. However bond counsel is requiring a comprehensive validation of both the "authority to sell" and "authority to borrow' issues. Although most ccunties are looking at doing an internal borrowing it should be noted that an oU'.side borrowing may be poSSible, but with a likely taxable debt service and certain vafldation actions required. a Another issue is the impact of the Teeter Pla~ on the dIstribution cf the new ha~ cent sales tax to the County and cities. The law states the allocation is to be based on the relative share 01 the cities and county's oontnbution to the Educational Revenue Augmentation Fund (ERAF). If !his contribution is de!ermined alter the offsel 10 schools from the Teeter Plan method, the County share of sales taxes would be reduced by $3.6 millioo. This reduction wDuld be an Dngoing IoS5 of revenue to the County. It is our understanding is Ilia! rt was not the legislative inlent 10 have the Teeter Plan monies impact the sales tax dislnoution formula. Corrective legislation will be required. a . . A i~ -The County can elect to implement the Teeter Plan concept without specific approval from the cities or school districts. Preliminary discussions wfth the vanous cities resuJled in a mixed reaction tc the concept It is our plan to give each entity (cities and Sant::l ,=,1~ ... .,;1 Valfey Water District) to whom the County distributes property taxes and the entity's bank account is outside the County Treasury tha option of participating in the Teeter Plan concept If the County does adopt the Teeter Plan concept, ft has been suggested OU' plen should have a validation hearing by the court A validation ae",," would be of sigmficant benefit in the evem of future litigation in,'Olving the Teeter PI"" concept We wiil pursue this concept with bond counsel. Theis is the risk of enter.ng into rong term debt obligations where the return to the County (18% per annum) COUld be reduced by legislative action. ~QUENCE OF NEGATIVE ACTION If the attached Resolutivn is not aOcpted by October 15, 1993, the County w;~ not be able to implement the Alternate MeL~od 01 Tax Apportionment for Fiscal Year t993-94, and the County would lose approximately $7.3 miilion in additional one time revenue nat of thP. TLRF tonding. STEPS FO\,!.Q':J1 NG AI 'PROV" '- ) 1. Notify the cr.ies and water district and give them the opportunfty to participate in the Teeter P1a ... concept. :2. Continue to work with bond counsel to st-ucture the documents relative to an internal borrowing. 3. Prepare an Appropriation ModificaVon (F85) based on the Dutcome of t~a fonO'.ving elJents: • After n is known which ciitie3 and ff the water district are interested In participating in the Teeter Plan. • After tr;9 November sales tax erection results are known. Attachments :2: 1 • --_ . .,-. '\.- /' /. , .. " 0 County of Santa Clara Analysis of Delinquent Taxes Schedule A Total Delinquencies Est Adj. Moved to Unsecured Roll Sub Total Amount to be transfere<! to TI..RF (5%) Amount to be Apportioned , $ 75,650,000 ____ J600,ooo) 74,850,000 (3,742,500) . • Hit' ~ 0 County of Santa Clara Teeter Plan Reserve Analysis Schedule B ... Delinquent Amount to be Allocated $ ___ n. 74.850~QCJQ. Reserve 50% of Delinquent Amount Transleted to TLRF (5% of Delinquent Amount) Remaining Amount to be Funded , 37.425.000 (3,742,5001 33 .S82.5QQ. o o RESOLUTTON OF THE BOARD OF SUPERVISORS OF TJiL COl.1Nn" OF SANTA C.I.J\R}\ ELECTING TUB ALTE.HNATI1J"'E METHOD OF OTSTRIBU'1'lON OF PROPERTY TAX LEVIES AIW ASSESSMENTS WHEREAS ... Chapter 3 (commencing with Section 47'01) of Part B of Division 1 of the California Revenue and Taxation Code (hereinafter called -the Law·) authorizes a county to elect by resolution to adopt an alternativ~ method of distribution of prope~ty tax levies and assessments on the secored roll maje by a county on its behalf or as the tax-levying and tax-collecting agency for other political subdivisions; and WHERE.A.S, upon election, the alternative I7let.hod is applicable to all property tax levi~s and assessments made by the County on beh~lf of. public district~ except those for which the County treasucy is not the legal depositary and which do not agree by resolution to participate in such an alternative methnd; and WHEREAS. the Law requires that t;1e County establish a tax lo~ses reserve fund which shall be used exclusively to cover los~es which may occur in the amount of tax liens as a result of special sales of tlx-defaulted property; ~nd WHEREAS. thlt",BO:lLq of Supervisors of the County of Santa Clara desires to impleme~t the al ternative method authorizeo b}'· the Law. NOW~ THEREFORE. BE IT RESOLVED by the Boa rd of Superviso[;s of the County of Santa Clara that the Board hereby elect~, pursuant to Section 4702 of the ~evenue and Taxation Code, to place into effect in the County the alternative method of distribution of property tax levies authorized by the Law for the 1993/1994 fiscal year and for all following years unless and until discontinued pursuant to the provisions Qi the Law. BE IT FURTHER RESOLVED, that the B'Jard of Supervisors of the County of Santa Clara elects I pursuant to Section 4702.5 of the Revenue and Taxation Coue. tu extend the procedures provided by t~e Law to assessments that are entered on the secured tax roll for the current year. -1- -----_. Resolution Electing Alt. Method of Dist. of prop. Ta~ Levies & Assmts. September, 1993 Page Two • / RIdE BE IT FUP.T'H.F.R RESOLVED I by the Soard of SIJpervisors of the County af Santa Clara that the County shall establish and maintain a tax losses reserve fund in accordance with the p~ovisions of Section 4703 of the Revenue and Ta~ation Code. BE IT FURTHER RE50LVED~ that the Audito~-Controller and Treasurer shall comply with the provisions of the Law necessary to carry out the purpose and intent of this Resolution. BE IT-FURTHER RESOLVED,. by the Eoard of Supervisors of the County of Santa Clara that this alternative method of distribution shall not be ~pplicable; pursuant to Section 4715. to tax levies on behalf of any public district for which t~e County treasury is not the legal depositary unless agreed to by a resolution of the governing board of such public district and this Board of Supervisors, in accordance with Section 4702 for the fiscal year in which the alternative method is to apply to such district. This Resolution ~hall ~e deemed the agreement of this Board of Supervisors to the app!i~ation of property tax and assessment levies pursuant to the l~~ for each and every public district which (a) is not a community facilities district under tho;.:! Melle-Roos Community Facilities Act of 1982, as amended from time to time. cc an asse~sment district organized under a law which provides for judicial foreclosure as a remedy. and (b) pursuant to Section 4715 of the Law, agrees that the Law shall have application. and upon the adoption of a resolution of the Qoverning board of ~ach such ~ub]ic district. there shall be deemed to be the agreement thereto on behalf of this Board of Supervisors. BE IT FURTHER RESOLVEO~ by the Board of Su~e[viso~s of the County of-Santa Clara that the Director of Finance is authorized and directed to seek the approval of the cities in the County to the implementation of the alternative method authorized by the Law. BE IT FURTHER RESOLVED, by the Board of Supervisors of the County of Santa Clara that the Director of Finance is authorized -2- -. " Resolution Electing Alt. Method cf Dist. of Prop. Tax Levies & Assmts. September-. 1993 page Three .. o and ~ir~cted to review alternative financing methods far the funding of the alternate procedure authori~ed by the law, including the tax lesses reserve fund reguired p~(suant to Revenue and Taxation Code s€ction 4703, and any operational system changes that may be required. The Director shall report his findings and recommendations regarding such funding to this Board within 90 days. l?ASSED AND ADOPTED by the Santa Cla.r3 County Board of Supervisors, State of Califo["nia~ on ________ by the following vote: AYES: supervisors DIRTOON GONZALES HONDA LOFGREN McKENNA NOES: Super-visors ABSENT: Supervisors ~ ATTEST: Phyllis A. Perez. Clerk Board of Supervisors APPROVED AS TO FORI"! AND LEGALlr.l: tu~:1IA. KEVIN O. ALLMAND Deputy County Counsel KDA:smw:TL3/30S:63-6S -3- RON GONZALES, Cbairperson BDard of Supervisors .. ,._,-'--- .... ~ o ATIACII£NT C ,......., RBSOLUTICN NO. RESOLUTION OF THB COUNCIL OF THE CITY OF PALO ALTO APPROVl,NG THE PARTICIPATION OF THE CITY OF PALO ALTO IN THE AlTERNATPIB METHOD OF SECURED PROPERTY TAX APPORTIONMENT AlITHORIZED UNDER THE RE'VENUE AND TAXATION CODE AND PROMULGATED BY THE COUNTY OF SANTA CLARA WHEREAS, under Section 47G1 of the Revenue and Taxation Code of the State of California, a county may apportion one hundred percent of the secured tax roll to various taxing entities, including the county, under an alternative method of tax apportion ment; and WHERBAS, the counties are permi tted to offset the amounts to be distributed to the schools as required under the State~s FY 1993-94 u~dget, and under Senate Bill 742. such offset will result in a one-time revenue windfall of all delinquent property taxes to all taxing jurisdictions in the county; and WHEREAS. it may be in the best interests of all taxing jurisdictions in the County of Santa Clara. including the City of Palo ~to, to agree to participate in the alternative method of tax revenue allocation authorized under the california Revenue and Taxation Code; and WHEREAS. the Count:r-of Santa Clara has adopted a -Resolution of the Board of Supervisors of the County of Santa Clara electing the Aiternative Method of Distribution of property Tax Levies and Assessments· to authorize the alternative method of d1atribution of property tax levies; and WHEREAS, the City is required. by resolution, to agree to participate in tllis tax apportiomnent trlethod adopted by the Santa Clara County Board of Supervisors; NOW, THEREFORE. t.he Counc:U of the City of Palo Alto does RBSOLVE as follows: SECTI.QN 1. The Council hereby approves the participation of the City of Palo Alto in the alternative method of secured property tax apportionw.ent authorized under the Revenue and Taxation Code of the StatE of california and promulgated by the County of Santa Clara. 1 • SBCTIQN 2. The Council finds that the action hereby approved does not constitute a project under the California Environmental Quality Act. INTROOUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: APPROVED: City Clerk Mayor APPROVED AS TO FORM: City Manager Senior Asst. City Attorney Director of Finance 2