HomeMy WebLinkAboutMINUTES - 08011989 - 1.38 SEL 1-038
TO: B
G�
oard of Supervisors
IN
FROM: Phil Batchelor, County Administrator _=—
�;
DATE:
July 24, 1989 �`• = ��
ST'4 cous
SUBJECT: Legislation - AB 2372 (Hannigan)
Specific Request(s) or Recommendations(s) & Background & Justification
RECOMMENDATION:
Adopt a position of SUPPORT for AB 2372 by Assemblyman Hannigan which would nullify the
holding of the court in a Los Angeles County case and allow the County to retain the penalties and
interest on delinquent property taxes when they are paid.
BACKGROUND:
Contra Costa County has an arrangement with the cities and other taxing jurisdictions whereby the
County advances the other taxing jurisdictions, including the County General Fund, their share of
delinquent taxes. The plan is known to most local jurisdictions as the "Teeter" Plan after the
County's first County Administrator. As a result of our advancing other taxing jurisdictions their
share of delinquent taxes, we retain all interest and penalties in what is known as the Tax Loss
Reserve Fund. We use this fund to make the advances to other taxing jurisdictions and then credit
the property taxes, interest and penalties back to the Fund when they are paid. As long as we keep
our property tax delinquencies below 3% of the total, the County General Fund is allowed to
withdraw everything in the Tax Loss Reserve Fund which exceeds 3%. If our delinquencies exceed
three percent in any year,we must then build the Tax Loss Reserve Fund up to 4%and keep it at that
level until we have reduced our delinquency rate below 3%for three consecutive years. At that point
we can again remove any funds in the Tax Loss Reserve Fund which exceed 3%of the property taxes.
This system applies to the secured property tax roll and the supplemental roll.
Continued on attachment: yes Signature:
XRecommendation of County Administrator Recommendation of Board Committee
-T Approve Other:
Signature(s): (' /00� L4W4
Action of Board on:_ August 1 1989 Approved as Recommended �_ Other
Vote of Supervisors I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
_,_ Unanimous (Absent ) AND ENTERED ON THE MINUTES OF THE
Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN.
Absent: Abstain: AUG 1199
cc: County Administrator Attested
Auditor-Controller Phil Batchelor, Clerk of the Board
Assemblyman Hannigan of Supervisors and County Administrator
Dan Wall,CSAC
Les Spahnn, SRJ.Jackson,Barish &Associates
By , Deputy Clerk
CLVM:eh(ab2372bo)
t
A court in Los Angeles County has read the law after Proposition 13 as indicating that the County
is required to share the interest and penalties on the delinquent property taxes with all other taxing
jurisdictions. However, in Contra Costa County, since other taxing jurisdictions do not suffer any
loss from delinquent taxes it is difficult for them to argue that they are entitled to any of the interest
and penalties, regardless of what the courts say.
However,the"Teeter"plan does not apply to the unsecured property tax roll. The Auditor-Controller
indicates that the penalties and interest on the unsecured roll for the first ten months of the 1988-
89 fiscal year totaled$362,000 and is expected to total about$500,000 when all figures for the fiscal
year are in. Since the County generally receives only 25% of the total property taxes, The County
General Fund stands to be at risk for$375,000 a year if the cities were successful in recovering the
interest and penalties just on the unsecured roll.
The County has been asked by the County Supervisors'Association of California(CSAC)to support
AB 2372. Even the risk on the unsecured roll seems to be a significant enough risk for us to join
CSAC in supporting AB 2372. We understand that AB 2372 is simply trying to return the state of
the law to what nearly everyone understood the intent to have been all along.