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Home My WebLink AboutMINUTES - 10171995 - D3 r TO: BOARD OF SUPERVISORS Contra FROM: Finance Committee �►_ 's Costa October 17, 1995 �� Count DATE: J r'+ cciiir+� SUBJECT: PROPERTY TAX REVENUE SHARING FOR UNOCAL MODERNIZATION AND CROCKETT CO-GENERATION FACILITY SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. APPROVE a revised revenue sharing formula which doubles the share of County General Fund property tax increment, resulting from the new co-generation facility,to the Crockett Community from 21.5%to 43%. 2. APPROVE a revised revenue sharing formula which doubles the share of County General Fund property tax increment,resulting from the UNOCAL Reformulated Gasoline Project, to the Crockett and=Rodeo Community from 21.5%to 43%. BACKGROUND: On August 21,the Finance Committee met in Crockett to discuss economic development issues as well as ways and means of financing economic development in Crockett and Rodeo. One method, adopted by the Board in 1993, is to share increases in property taxes with the Community as a result of the construction of a new industrial plant. In that case, a new co-generation plant with a construction cost of nearly $200 million was built in Crockett and the Board agreed to allocate 21.5% of the County's General Fund share of property tax increment to the Community in addition to using additional revenues to support enhanced law enforcement services. On September 12,the Board approved the Finance Committee's proposal that the same formulation of 21.5% of general Fund property tax increment revenues, resulting from the UNOCAL Reformulated Gasoline Project,to be allocated to Rodeo and Crockett for the purpose of economic development activities. The UNOCAL modernization program is expected to cost nearly $100 million. During the September 12 Board meeting,the Supervisors requested figures on the estimated revenue to be shared in the Crockett and Rodeo area. CONTINUED ON ATTACHMENT: YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD CO MIE APPROVE 1,m /asp SIGNATURE(S : Tom Torlakson of mith ACTION OF BOARD ON - nr•tohpr 17, 1.995 APPROVED AS RECOMMENDED X OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS(ABSENT ------------- AND CORRECT COPY OF AN ACTION TAKEN AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED October 17, 1995 Contact: OF BOARD D PHIL BATCHELOR,CLERK OF THE CC: Community Development-Jim Kennedy E ORS AND COUNTY THEADMB ST D OF Crockett Chamber of Commerce TO Crockett Foundation County Administrator B Page 2 On September 18, the Finance Committee reviewed the property tax revenue estimates and took testimony from the President of the Crockett Chamber of Commerce. The Committee requested additional information for its next meeting. On October 2, the Committee was provided with the information presented below. 1. Construction Cost Estimates and Actual Assessed Value Increases In 1992,Energy National Inc. estimated that the cost to construct their co-generation facility would be$200 million. All parties negotiating tax sharing agreements used this estimate and assumed that property tax assessments would closely approximate construction costs. However, the Assessor's Office reports that the latest estimates from the company suggest an estimated completion cost of slightly over $180 million. Of that amount, the company and the Assessor are reviewing the extent to which some construction costs would not result in increased tax assessments. Typically,the type of construction costs not subject to property taxes are: 1. Costs incurred by the company not on the construction site; 2. administrative and public relations costs; 3. rework and redesign costs; 4. abnormal or unforeseen costs resulting from floods, fire, etc; and 5. construction reserves. Additionally, the Assessor's staff has indicated that since a substantial amount of the valuation is predicated on depreciating assets,the assessed value of the co-generation facility will decline each year. This means that property tax revenues will decline in subsequent years. 2. Police Services Share of Property Tax Revenue Attachment A includes the police services and community portions of property tax revenue from the co-generation facility. 3. UNOCAL Reformulated Gasoline Project Staff calculated revenue sharing figures based on the September 12 Board action, which appear in Attachment B. No actual values have been enrolled by the Assessor to date so these figures are estimates only. As of this writing,the amount of revenue available this year is not known. 4. Planning and Zonin Ig s Community Development staff is currently compiling a "cookbook" on downtown revitalization programs,and a list of financial resources available for economic development. This will be made available to the Crockett Foundation and Chamber of Commerce. Also, Community Development staff is following up on the small lot and height ordinances. On October 2,the Finance Committee determined that the actual revenue to be allocated to Crockett Community would be less than half originally estimated because: 1. The state shifted property tax revenue to the schools in 1992, 1993, and 1994 resulting in the County General Fund share of property taxes shrinking from 46.5%to 25.5%; and 2. the $200 million estimated increase in assessed value would be closer to $105 million in 1995-96 and $168 million in 1996-97. Page 3 Therefore,the Committee determined to recommend a doubling of the share of revenue going to the Crockett Community from the County General Fund from 21.5%to 43%. This revision will result in an additional $59,409 in revenues to the Crockett Community for a total of$118,818 in 1995-96, and a corresponding loss to the County General Fund. Additionally,the Committee recommended the same doubling of the share of revenue resulting from the UNOCAL project, which is estimated to provide an additional $44,600 and a total of$89,200 to the Community of Crockett, Rodeo and Tormey, and a corresponding loss to the County General Fund. The first full year of revenue sharing for the UNOCAL project will be 1996-97. The recommendations.would result in an estimated loss to the General Fund as presented below. Crockett Co-Generation Unocal Total 1995-96 $59,409 unknown $ 59,409 1996-97 $95,000 $44,600 $139,600 Attachment A Property Tax Revenue Calculation Crockett Co-Generation Plant 1992 1995 1996 Estimated Increase Assessed $200,000,000 $1055193,930 $168,193,930 Value Estimated Tax Revenue (1%) 250009000 1,08303 . 1,732,397 Assumed County General Fund 46.5% 25.5% 25.5% Share Estimated Percent of Revenue 21.5% 21.5% 21.5% to Crockett Estimated Amount of Revenue 2005000 595409 94,979 to Crockett Estimated Percent of Revenue 26.9% 26.9% 26.9% for Police Services in Crockett area Estimated Amount of Revenue 2505000 74,330 1185834 for Police Services Note: Tax and assessed valuation figures gleaned from Assessor's records. County General Fund share gleaned from Auditor's records for tax rate area 62001. v Attachment B Property Tax Revenue Calculation UNOCAL Reformulated Gasoline Project Original Revised' Estimated Increase in $100,000,000 $84001000 Assessed Value Estimated Revenue - 1% 1,000,000 840,000 County' General Fund Share 24.7% 24.7% Percent Share of Revenue 21.5% 21.5% to Crockett, Rodeo and Tormey Estimated Amount of Revenue 535100 441600 to Crockett, Rodeo and Tormey Requ' est to Speak Form ( THREE (3) MINUTE LIMIT) 1 Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: i'1 Phone: S 2 Address:9- t�--- 1 am speaking for myself_ V ization: (name of organisation) CHECK ONE- >( 1 wish to speak on Agenda Item #–L.2—> Date.--.L- 17-- My 7My comments will be: general for against . 1 wish to speak on the subject of . 1 do not wish to speak but leave these comments for the Board to consider. Request to Speak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: 7/. A) ZZ;ZIY�eL/,L Phone: Address: --L 1 am speaking for myself or organization: (name of arpnir &WO CHECK ONE- 1 wish to speak on Agenda Item # L3 Date: /0- l 5 My comments will be: general,�._against 1 wish to Weak on the subject of 1 do not wish to speak but leave these comments for the Board to consider: Request to Speak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: 1�2p &QAJ per; City. 1&44' P-'A�dre C i 1 am speaking for myself or organization-, (name of organiution) CHEC ONE: - __ 1 wish to Weak on Agenda Item # I DDate: �7 S My comments will be: general for agai st 1 wish to speak on the subject of 1 do not wish to speak but leave these comments for the Board to consider: Request to Speak Form . ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: &:Z/L PO/roRsa/y Phone: 7S7— /9-5-DAddress: 6 --Auf may; C�yck �" 1 am speaking for myself or organization: carr c-om&w ?-y (name of organization) CHECK ONE: I wish to speak on Agenda Item # L'3 Date.-!/0--/-7-7-5- My ate: /0-/7-7-5-My comments will be: genal A_foragainst . 1 wish to speak on the subject of 1 do not wish to speak but leave these comments for the Board to consider: Request to Speak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. L Name: ;AW, G L Via°,G / Phone: Address: /.:�/f ekr�'� 1 am speaking for myself or organization: Co'e,,1g7-7` colV aAJIT'3' Gum of orsa knflon) ,r�-p CHECK ONE: T'/o N 1 wish to speak on Agenda Item # j ate: My comments will be: general for against . 1 wish to speak on the saMect of A1C ��✓��rl ,SOVV6� 1 do not wish to v Weak but leave these comments for the Board to consider: P Request to S eak Form ( THREE (3) MINUTE LIMIT) Complete this form and place it in the box near the speakers' rostrum before addressing the Board. Name: /, &ZC)V 1! p.4 -' � Phone: Address: iGoa24 1 am speaking for myself or organization: (name of organization) CHECK ONE- 1 wish to speak on Agenda Item #,Z) 3_ Date: s' My comments will be: general —for against . 1 wish to speak on the subject of I do not wish to speak but leave these comments for the Board to consider: