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Home My WebLink AboutMINUTES - 05182004 - C55 L`ad j CONTRA TO: BEARD OF SUPERVISORS COSTA 4 COUNTY _uv .m i•i y.. kms`. FROM: John Sweeten, County Administrator DATE; May 18, 2004 � SUBJECT, Grand Jury Report No. 0403 — City Redevelopment Takes $10 Million dollars Annually from Contra Costa County Fire district SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUNDAND JUSTIFICATION RECOMMENDATION{S)Q RECEIVE the Grand Jury Report No. 0403 entitled "City Redevelopment Takes $10 Million Dollars Annually from Contra Costa County Fire District" and REFER it to the County Administrator's Office for response. CONTINUED ON ATTACHMENT. —YES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR—RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER t SIGNATURE(S)., - ACTION OF BOARD N r f APPROVED AS RE"OMME D "y OTPER r t VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A UNANIMOUS(ABSENT ..,) TRUE AND CORRECT COPY OF AN AYES: NOES. ACTION TAKEN AND ENTERED ABSENT: ABSTAIN. ON MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE SHOWN, Contact:Julie E=nea,Sr.Deputy CAOb 'If f d ATTESTED P ,;,�,k ' JOHN SWEi= ,N,CLIrIiK OF z THE BOARD ° SUPERVISORS` AND COUNTY ADMINISTRATOR cc: CAO , 3 A ( BY ��4 i) y'Sda#/` DEPUTY Grand Jury 725 Court Street Contra P.O.Box 911 Costa Martinez, CA 94553-0091 County RECEIVED May 10, 2004 MAY 1 0 2004 CLERK BOARD o�SUPERVISORS Board of Supervisors CONTRACOS1'ACO. 651 Pine Street Martinez, CA 94553 Dear Supervisors Attached is a copy of Grand Jury Report No. 0403; "City Redevelopment Takes $10 Million Dollars Annually from Contra Costa County Fire District"prepared by the 2003-2004 Contra Costa Grand Jury. In accordance with California Penal Code Section 933.05, this report is being provided to you at least two working days before it is released publicly. Section 933.5(a)of the California Government Code requires that(the responding person or entity shall report one of the following actions) in respect to each finding: (1) "The respondent agrees with the finding." ( ) "The respondent disagrees with the finding." (3) "The respondent partially disagrees with the finding." In the cases of both(2) and (3) above, the respondent shall specify the portion of the finding that is disputed, and shall include an explanation of the reasons therefor, In addition, Section 933.05(b)requires that the respondent reply to each recommendation by stating one of the following actions: 1. The recommendation has been implemented, with a summary describing the implemented action. 2. The recommendation has not yet been implemented, but will be implemented in the future, with a time frame for implementation. 3. The recommendation requires further analysis. This response should explain the scope and parameters of the analysis or study, and a time frame for the*natter to be prepared for discussion. This time frame shall not exceed six months from the date of the publication of the Grand Jury Report. Beard of Supervisors May 10, 2€304 Page 2 4, The recommendation will not be implemented because it is not warranted or is not reasonable, with an explanation thereof .Please be reminded that Section 933.05 specifies that no officer, agency, department or governing body of a public agency shall disclose any contents of the report prior to its public release. Please insure that your response to the above noted Grand Jury report includes the mandated items, We will expect your response, using the form described by the quoted Government Code, no later than August 9, 2004. Sincerely, A. W. RONAT, Foreman 2003-2004 Contra Costa County Civil Grand Jury cc: John Sweeten, County Administrator A REPORT'`BY THE 2003-04 CON'T'RA COSTA COUNTY GRAND JURY 725 Court Street Martinez, California 94553 Report No. 0403 "CITY REDEVELOPMENT TAKES $10 MILLION DOLLARS ANNUALLY FROM. CONTRA COSTA COUNTY FIRE DISTRICT" APPROVED BY THE GRAND JURY: Date: 01-11el' ARTHUR W. RONAT GRAND JURY FOREMAN ACCEPTED FOR FILIN=G: Date: t - � RICHARD S. FLIER JUDGE OF THE SUPERIOR.COURT CONTRA COSTA COUNTY GRAND JURY REPORT NO. 0403 "City Redevelopment'Takes $10 Million Dollars Annually from Contra Costa County Fire District" TO: Keith Richter, Fire Chief Contra Costa County Fire Protection District Contra Costa County Board of Supervisors BACKGROUND The stated goals of redevelopment are to eliminate blight,promote economic development and provide affordable housing. In 1952, California voters adopted Article XVI, Section 16, of the California Constitution, which provides for"tax increment financing" T his financing method is the key mechanism for implementing redevelopment law. Base year property tax value is established with the introduction of a redevelopment area.. Schools, special districts, etc. continue to receive property taxes based on this set valuation. With the tax base set, increases in value of property over time within a redevelopment area, increase the property taxes. These additional taxes, or tax increments, flow directly to the Redevelopment Agency (RDA), and are used to repay the principal and interest or,the debt incurred to finance the redevelopment project. "Today, 52 years later, sixteen of the nineteen cities in Contra Costa County have redevelopment agencies. California State Law allows a city council to create a redevelopment agency within its boundaries. Once created, among its extraordinary powers is the use of all increase in property tax revenues (tax increment) generated in its designated area. One of the special districts directly effected by redevelopment is the Contra Costa County Fire Protection District (Fire District). The board of directors of the Contra Costa County Fire Protection District is the Contra.Costa County Board of Supervisors. The Fire District covers approximately 300 square miles and serves 9 cities within the County and a large portion of the County's unincorporated area. It is an agency with 30 fire stations and approximately 400 employees. FINDINGS 1. An RDA is a separate legal entity with its own revenue, budget, staff and power to issue debt and condemn property. 2. Once an RDA is established, nearly the entire increase in property tax revenues goes directly to the RDA and not to the usual service agencies, such as schools, community colleges, libraries, fire departments,water and flood control districts,parks, etc. 1 3. Any increases in property taxes, as a result of increased property valuation within the RDA boundary, are not allocated to the taxing agencies until the RISA goes out of existence. 4. An RDA cannot go out of existence as long as it has debt. To date, none has gone out of existence in Contra Costa County. 5. The Fire District gets approximately 90%, of its revenue from property tax as stated in its Budget Presentation FY 2003-04 dated June 9, 2003. Total revenue budget for Fire District FY 2€103-04 is $74,666,532.00. 6. This year the Fire District is losing property tax dollars to eight(8) separate city redevelopment agencies. The agencies are as follows: Property Taxes allocated Amount lost to Percentage Property Location, to the Fire District city RDAs Lost to RISA Pittsburg $7,575,391..31 $4,648,363.88 61.4% San Pablo 2,298,199.25 1,650,476.19 71.8 Concord 12,633,383.30 1,473,439.91 11,7 Antioch 11,208,677.23 871,807.90 7.8 Clayton 3,969,405.69 521,072.04 26.5 Pleasant Hill 4,447,958.13 442,198.69 9.9 Walnut Creep 12,009,496.36 288,913.40 2.4 Lafayette 5,190,782.89 204,800.42 3.9 Total $57,337,562.53 $10,101,072.41 17.6% Thus, in the fiscal year 2003-2004, the Fire District is losing $10,101,072.41,which is 17.6% of the $57.3 million property taxes allocated to the Lire District from within the municipal RDAs boundary. 7. To date, the Fire District has not been included in any redevelopment agency project, although it does receive an RDA pass-through that in fiscal year 2003-2004 amounted to approximately$1.16 million dollars A pass-through is a small portion of the tax increment revenue from an RDA project that goes to a special district, either by agreement or by law. 2 8. The City of Pittsburg's RDA tames over$4.6 million dollars (61.4%) away from the Fire District. The City of San Pablo has the Fire District's busiest single engine fire company and it takes a bigger percentage (71.8%), or over$1.6 million of tax dollars from the Fire District. 9. The Fire District is aware that it has lost ten million dollars to the city redevelopment agencies. This amount would be sufficient to staff six operating fire companies. 10. The Fire District has repeatedly requested to be included in redevelopment project planning. The RDA frequently requires added services from the Fire District because the RDA projects often result in taller buildings and denser population concentrations. CONCLUSION I. Redevelopment agencies take allocated property tax dollars away from.the Fire District, which could use these tax dollars for the services it renders to the public. 2. Any increase in assessed valuation and added property tax dollars in a redevelopment area are lost to the Fire District for as long as the RDA exists, usually 25 to 40 years. 3, Citizens paying property taxes are unaware of the dollars that go directly to the RDAs bypassing the Fire District they believe they are funding. RECOMMENDATIONS MENDATIONS The 2003-2004 Contra Costa County Grand Jury recommends that. 1. When presenting its annual budget to the County Board of Supervisors,the Fire District specifically list losses to each RDA which affect its revenue. Just as an employee's paycheck reports gross earnings, deductions, and net revenue, so should the Fire District budget reflect the deductions to its property tax income due to the RDAs. 2. Should the Fire District became aware that an RDA intends to extend its life through increase of additional bonds, the Fire District prepare a financial analysis of the tax revenue impact such lengthening of the time would have on the Fire District's revenues. 3. This financial analysis be shade available to the public and the press. 4. The Fire District be vigilant when a new RDA area is proposed and speak out to defend its source of revenue or seek to be included in the RDA project. 5. The Fire District inform the public in as many ways as possible how much money is being diverted and what it could provide in additional services if hose dollars were not lost to the RDAs. 3 6. The.Fire District keep an accumulative record of the dollars last annually to better inform both the public, the municipal RDAs and the Board of Supervisors of the vast amount of money that is being lost over time to RDAs. i. The Fire District coordinate its public information efforts with other service agencies similarly impacted by the existence of RDAs. 4