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HomeMy WebLinkAboutMINUTES - 08132013 - C.86RECOMMENDATION(S): APPROVE AND AUTHORIZE the payment of interest to all of the County’s cities on monies previously classified as property tax administration fees upon the return of an executed release from each city relating to property tax administrative fees for 2006-07 through 2012-13; and DIRECT the Auditor-Controller to transfer interest in an appropriate amount to each city upon receipt of an executed release in the form attached. FISCAL IMPACT: In December 2012, the County reimbursed cities certain monies previously classified as property tax administration fees for fiscal years 2006-2007 through 2012-13. The County has agreed to settle the cities’ claims for interest at the Local Agency Interest Fund rate, in the approximate aggregate amount of $155,000. Monies have been identified and will be appropriated from the Tax Losses Reserve Fund. BACKGROUND: By statute, counties are responsible for the administration of local property APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 08/13/2013 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: Lisa Driscoll, County Finance Director (925) 335-1023 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: August 13, 2013 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stacey M. Boyd, Deputy cc: Robert Campbell, Auditor-Controller C. 86 To:Board of Supervisors From:David Twa, County Administrator Date:August 13, 2013 Contra Costa County Subject:Property Tax Administration Fees for FY 2006/07 through FY 2012/13 BACKGROUND: (CONT'D) taxes. Counties levy taxes, collect them, and distribute these revenues to the various cities, special districts, schools and other entities in the county. In order to partially recover county costs in administering the property tax system, a county is statutorily authorized to impose a property tax administration fee on certain taxing agencies within its borders. This fee is calculated as a percentage of the amount of property tax revenue allocated to that taxing agency. On November 19, 2012, in City of Alhambra v. County of Los Angeles [(November 19, 2012) S185457], the California Supreme Court ruled that Los Angeles County had misclassified monies as property tax revenue, which resulted in the county miscalculating the amount of the property tax administrative fees from these revenues that it was due. In December 2012, following the California Supreme Court decisions in Los Angeles v. City of Alhambra, Contra Costa County repaid the cities in this County for the portion of monies identified by the decision that had previously been classified as property tax administrative fees. In May 2013, the Board of Supervisors authorized the payment of interest on these monies to the County’s cities at the LAIF rate in exchange for a release of claims relating to the allocation of property tax administrative fees for 2006-07 through 2012-13. While no authority provides for interest on such misallocated funds, the Board of Supervisors took this action in recognition that the cities might have been able to earn interest on the monies if they had not been initially classified as property tax administrative fees. CONSEQUENCE OF NEGATIVE ACTION: Failure to take the recommended action might expose the County to litigation concerning claims for interest on the monies previously classified as property tax administrative fees. CHILDREN'S IMPACT STATEMENT: None. ATTACHMENTS Settlement Agreement and Release SETTLEMENT AGREEMENT AND RELEASE Parties approve this page: ________ ________ County City 1 SETTLEMENT AGREEMENT AND RELEASE This Settlement Agreement and Release (the “Settlement Agreement”) is made and entered into by and between the ___________, a municipal corporation (“City”) and the County of Contra Costa, a political subdivision of the State of California (“County”) and is effective as of the date of full execution by the parties as indicated below (“Effective Date”). RECITALS A. A dispute has arisen between the City and the County regarding the amount of property tax administration fees charged to the City beginning in fiscal year 2005-2006 and continuing through fiscal year 2012-2013 (the “Administrative Fee Dispute”). B. In light of the California Supreme Court’s ruling in City of Alhambra v. County of Los Angeles, Case No. S185457, the parties desire to enter into this Settlement Agreement in order to resolve the Administrative Fee Dispute and provide reimbursement to City for certain property tax administration fees in exchange for a complete release of any and all claims as hereinafter described. AGREEMENT 1.0 Release and Discharge 1.1 In consideration of the payment set forth in Section 2.0, City, for itself, its elected and appointed officers, employees, agents, administrators, successors and assigns, does hereby release, acquit and forever discharge the County, its elected and appointed officials, officers, employees, agents, administrators, successors and assigns, from and against any and all past, present or future claims, demands, obligations, actions, causes of action, subrogation rights, reimbursement rights, damages, costs, losses of services, expenses and compensation of any nature whatsoever, whether based on a tort, contract, or any other theory of recovery, which said parties now have, or which may hereafter accrue or otherwise be acquired or asserted on account of, or may in any way grow out of the Administrative Fee Dispute, including, without limitation, any and all known or unknown claims for damages, tax or fee refunds, interest, breach of contract, or any and all known or unknown claims for subrogation and/or reimbursement which have resulted or may result from the alleged acts or omissions of the County, its elected or appointed officials, officers, employees, agents, administrators, successors or assigns related to the Administrative Fee Dispute. This release shall be a fully binding and complete settlement between the parties. 1.2 It is understood and agreed to by the parties hereto that this settlement is not to be construed as an admission of liability on the part of County, by whom liability is expressly denied and that this Agreement is entered into solely to resolve the Administrative Fee Dispute and avoid the time and expense of litigation. SETTLEMENT AGREEMENT AND RELEASE Parties approve this page: ________ ________ County City 2 2.0 Payment In consideration of the release set forth above, the County agrees to pay to the City the total sum of _______________________ ($XXXXXXX), in the form of a County-issued warrant, within thirty (30) calendar days after the Effective Date of this Settlement Agreement. Said sum reflects all amounts set forth in Exhibit A, attached hereto, including all accrued interest. CONTRA COSTA COUNTY, CALIFORNIA Dated:____________________ ____________________________ DAVID TWA COUNTY ADMINISTRATOR CITY OF ______________________ Dated: ___________________ ________________________________ [NAME] [TITLE] ATTESTED: Dated: ___________________ ________________________________ [NAME] [TITLE] APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY Dated: ___________________ ______________________________ [NAME] [TITLE]