HomeMy WebLinkAbout0569.093~--.. ",.
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MoveJllber 4, 1993
HONORABLE CITY COUNCIL
Palo Alto, California
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JMIJIP7m UTJIop or 'leDID PBOPQTY TAl a.'PORTXORKQT
Members of the Council!
This report provides additional information on the Alternative
Method of Secured property Tax Apportionment --~Teeter Plan" -
deacribed in C'MR:546:9) {also in this packet) ~ The item was
deferred to the November 8, 1993 council aqenda due to a meeting
held between c:ties and santa Clara county on OCtober 26, 1993,
Based on information provided by the County~ staff has performed a
financial analys.is (Attachment 1) examining whether the City should
participate in the Teeter Plan~ Fro. a financia1 perspective l the
issue is the c~aratiye value of receivinq a one-time, up tront
buyout of secured delinquent tAxes versus the long-term 105S of
pena~ties on those delinquent taxes~ The data indicate that the
net caBh f'lOY to Palo Alto would be positive for the first 12
years. Given the recent trenc by.the state to shift property tax
fro. cities to schools, this tax source may decline even more over
tiJRe. COnsequently, there is SOll8 unquanti£iable benefit to
receiving an up front -buy outW from the County. Based upon this
analysis, staff believes that it is in the City's best interest to
elect to participate in the Teeter Plan~s alternate Rethod of tax
apportionment.
Respectfully submitted,
nCIIAEL FRANK
Senior Financial Analyst Director of Finance
Hanager
Attachment.
Related Etaff Reports: CMR:S46:93
CIIR:569:93
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Lon of ... n ..... Due to T •• liIr P .... (1) (2) ell
Gel. bue to Earty RelllliptoU.x" (If)
OM '""-"."..nt by COkinty (5)
0.," Due to In ...... Oq One Time hym.nt et)
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(1) Secured proporty brill: g:oltft~ of 5.9% per yeN
(2) Redtmptlone. ... 2 , "" of lot.I tax I.vy .a.r StnI ahlll
{3l In*"t and penllltlel.,..ke up 27,., of Mde.npllona
(04) FoIlowjno JIJIIr'II tax portion ot~pllonl.t 6% r.., orrwtum.
(51 Ona lime buyout ot j)oIt delirquencIH bXIIlling $45$,000.
(EI) 6% ...teot .. lum
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