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FROM: Phil Batchelor, �^
County Administrator Costa
DATE: July 17, 1-984 ` OU "7
SUBJECT; Impact of AB 1849
SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION
RECOMMENDATION
The Board of Supervisors request the State Legislature to amend the
provisions included in AB 1849 restricting the use of the Special District
Augmentation Fund (SDAF) for the following reasons:
1. Unusual financial situations which existed in fiscal year
1978-1979 (first year under Proposition 13) affected the
distribution of property taxes and the allocations to the
SDAF for fiscal year 1979-1980 and each year thereafter in
an inequitable manner. The provisions of AB 1849 further
increase these inequities by treating independent special
districts differently than special districts governed by
the Board of Supervisors .
2. The requirement that allocations be made from the SDAF only
to the special districts which originally received "bailout"
ignores completely changing conditions and freezes into law
a public finance system .which is not responsive to changing
public service needs.
3. It was the intent of the Legislature in adopting AB 8 in
1979 that the Board of Supervisors should have discretion
in determining the appropriate allocation of funds necessary
to finance local public services provided by special
districts.
4. 'The SDAF allocation process under AB 8 allowed the Board
of Supervisors to address tax inequities whereby all
property owners are taxes at the same rate but receive
disparate services. Under the provisions bf AB 1849
governing bodies will not be .able to allocate financial
resources to appropriately deal with tax inequities.
5. The determination of priorities for funding appropriate
levels of local services should be determined by the
political process--not by formula. It is believed that it
is the intent of the State Legislature to continue this
process in accordance with the declared purpose of AB 8
when enacted.
CONTINUED ON ATTACHMENT: xx YES SIGNATURE:
XX RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD MITTEE
XX_APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON 7 APPROVED AS RECOMMENDED — OTHER
The Finance Committee is REQUESTED to work with _the County Administrator in solici.ting
support from the various groups in the County that would be affected by the impact .of
AB 1849.
VOTE OF SUPERVISORS
UNANIMOUS (ABSENT ) I HEREBY CERTIFY THAT THIS IS A TRUE
AYES: NOES: AND CORRECT COPY OF AN ACTION TAKEN
ABSENT: ABSTAIN: AND ENTERED ON THE MINUTES OF THE BOARD
OF SUPERVISORS ON THE DATE SHOWN.
CC: County Administrator ATTESTED /
County Auditor Controller J.R. OLSS�N, C UN Y CLERK
Finance Committee members AND EX OFFICIO CLERK OF THE BOARD
M382/7-83 BY -, DEPUTY
2.
BACKGROUND
History of Special District Augmentation Fund - The first year after passage
of Proposition 13 the Legislature provided "bail out" to counties, cities,
special districts and schools. With respect to special districts, the
Legislature gave some discretion to board of supervisors to allocate state
bail out funds to special districts in the county--within certain guidelines
which dealt with priority services and surplus reserves . The second year
after Proposition 13 the Legislature passed AB 8, the "long range local
government finance bill". AB 8, among other things, (1) eliminated for the
most. part direct state bail out to counties, cities and special districts;
(2) replaced those amounts by shifting .a somewhat equivalent share of local
property taxes from schools to counties, cities and special districts .
(statewide this shift amounted to approximately 35% of taxes for schools) ;
and (3) granted direct aid from the State to schools to replace local
property tax revenues shifted to counties, cities and special districts .
AB 8 provided that the portion of- the property tax shift from schools that
was linked to special district bail out would be deposited in the "Special
District Augmentation Fund" and allocated to special districts by the
boards of supervisors (or by city councils) . There was no State strings
attached to the allocation of such funds other than the funds be allocated
solely for the use of special districts . The Legislature in creating the
Special District Augmentation Fund concept recognized that bail out granted
to special districts in fiscal year 1978-1979 in many instances covered
unusual one time events and, therefore, provided the Board of Supervisors
with the flexibility needed to adjust for these special circumstances . For
example, one district may have had a very special need that year like the
need to build a new fire house and was granted bail out accordingly, while
another district may have had a surplus at the beginning of that year and
received no bail out.
Current Impact - The Board of Supervisors allocated $19 , 128, 863 in fiscal
year 1983-1984 from the Special District Augmentation Fund to special
districts. Fire Protection Districts--both county governed and independent--
received $12, 881, 426 or 67% of the total. The remainder was distributed to
police districts and service areas ($3, 697, 956) , County Library and library
service areas ($2, 131, 141) , flood control ($90, 000) , recreation and parks
$421, 437) , miscellaneous (.$6, 905) . The allocations were broadly made and
reflect the Board established priorities for fire and police service. Under
the provisions of AB 1849, the County Library, Library Service Area 10,
Library Service Area 12, County 'Service Area P-6, Flood Control Zone 7 and
Zone 9, and the Contra Costa Resource Conservation District will not be
eligible to continue to receive allocations from the Special District
Augmentation Fund; the total allocations made to these districts in fiscal
year 1983-1984 was $5, 465, 713. It is anticipated that approximately $6 .0
million will be needed by these agencies in fiscal year 1984-1985 to maintain
public services.
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