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MINUTES - 05132008 - D.1 (2)
TO: BOARD OF SUPERVISORS CONTRA orOM: John Cullen, County Administrator " "- ';, COSTA Steve Ybarra, County Auditor-Controller 5 COUNTY DATE: MAY 13, 2008 n coLn� SUBJECT: PROPERTY TAX ADMINISTRATIVE COST RECOVERY SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: 1. CONTINUE to conduct the public hearing, previously fixed for April 8, 2008 at 9:30 a.m., on implementation of the property tax cost recovery provisions of Revenue and Taxation Code section 95.3. 2. ADOPT the report of the Auditor-Controller filed on February 26, 2008, of the 2006-2007 fiscal year property tax-related costs of the Assessor, Tax Collector, Auditor, and Assessment Appeals Board, including the proposed charges against each local jurisdiction excepting school entities, for the local jurisdiction's proportionate share of such administrative costs. 3. ADOPT Resolution No. 2008/217 regarding the implementation of the property tax administrative cost recovery provisions of Revenue and Taxation Code section 95.3 for fiscal year 2007-2008. FISCAL IMPACT: The fiscal year 2006-2007 net cost of property tax administration was $14,896,420. This Weounts to approximately .74% of all 2006-2007 property taxes levied countywide. This cost allocated to each taxing entity in the County based on net revenues of each entity as a rcentage of total revenues. School districts, community college districts, and the County Office of Education are exempt from cost recovery. As a result, the County absorbs the schools' share, which this year amounts to $5,272,558. The net recovery to the County is $6,919,959. BACKGROUND: In 1997, the Board adopted Resolution 97/129 which provides procedures for property tax administrative cost recovery. The recommended actions are necessary for implementation of Resolution 97/129 for the current fiscal year. On April 8, 22008 the Board fixed a hearing on CONTINUED ON ATTACHMENT: X YES SIGNATURE: J RECOMMENDATION OF COUNTY ADMINISTRATOR_RECOMMENDATION OF BOAF= MffrME APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON APPROVED AS RECOMMENDED_OTHER VOTE OF SUPERVISORS 1 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. 1intact: Lisa Driscoll 5-1023 ; County Administrator ATTESTED Auditor-Controller JOHN CULLEN,CLERK OF: County Counsel—R.Hooley THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR BY _,DEPUTY Page Two (2) May 13, 2008 Implementation of the property tax cost recovery provisions of Revenue and Taxation Code Section 95.3. On April 8, 2008 the Board opened the hearing and heard comments in opposition of the fee from a representative of the City of Concord and a Walnut Creek resident. The Board considered the comments and asked the County Administrator to host:a meeting with the Auditor-Controller and cities to discuss the history of the fee and formula. By a unanimous vote, the Board continued the hearing to May 13, 2008 at:9:30. The Auditor-Controller is utilizing guidelines developed after the legislation passed, that was developed in consultation with the League of California Cities. Cities are now objecting to the inclusion of property tax in lieu of Sales Tax and Vehicle License Fees in the calculation o`the fee. As directed, the County Administrator and Auditor-Controller held a meeting with cities. There was exchange of information and discussion on the views of the cities and county on implementation requirements. The County and cities remain at odds over the interpretation of guidelines for implementation of SB 1096/Revenue and Taxation Code 95.3. Conclusion Staff strongly suggests that the Board of Supervisors adopt the Auditor-Controller's 2006-07 fiscal year property tax-related costs of the Assessor, Tax collector, Auditor, and Assessment Appeals Board, report; and Resolution 2008/217 regarding the implementation of the property tax administrative cost recovery provisions of Revenue and Taxation Code section 95.3 for fiscal year 2007-08. This is the last month that this action can be implemented for fiscal year 2007-08. THE BOARD OF SUPERVISORS OF CONTRA COSTA COUNTY,CALIFORNIA AND • THE AUDITOR-CONTROLLER OF CONTRA COSTA COUNTY,CALIFORNIA Adopted this Resolution on May 13,2008,by the following vote: AYES: NOES: ABSENT: ABSTAIN: and the Auditor-Controller by his following signature. SUBJECT:Findings and Determination ) Concerning the Implementation of the Property ) Tax Administrative Cost Recovery Pro- ) RESOLUTION NO.2008/217 visions of Revenue and Taxation Code ) section 95.3 ) A public hearing having been held during the Board of Supervisors'meeting of April 8 and May 13,2008,on implementation of the property tax cost recovery provisions of Revenue and Taxation Code section 95.3,as provided in Board of Supervisors' Resolution No.97/129,the Board of Supervisors,and the Auditor-Controller,hereby makes the following findings and determination. A. Property Tax Administrative Cost Recovery 1. On February 26,2008,the Auditor-Controller filed with the Clerk of the Board of Supervisors a report of the 2006-2007 fiscal year property tax-related costs of the Assessor,Tax Collector,Auditor and Assessment Appeals Board,including the applicable administrative overhead costs permitted by federal circular A-87 standards,proportionally attributable to each local jurisdiction and Educational Revenue Augmentation Fund(ERAF)in Contra Costa County, in the ratio of property tax revenue received by each local jurisdiction and ERAF divided by the total property tax revenue received by all local jurisdictions and ERAFs in the county for the current fiscal year. The report included proposed charges against each local jurisdiction excepting school entities,for the local jurisdiction's proportionate share of such administrative costs. 2. On April 8 and May 13,2008 at the Board of Supervisors'meeting,a public hearing was held on the Auditor-Controller's report,notice of which was given as required by law and by Board of Supervisors'Resolution 97/129. 3. The report of the Auditor-Controller filed on February 26,2008,is hereby adopted, and the Board of Supervisors and the Auditor-Controller find that amounts expressed in said report do not exceed the actual amount of 2006-2007 fiscal year property tax administrative costs proportionally attributable to local jurisdictions. 4. The additional revenue received by Contra Costa County on account of its 2006-2007 fiscal year property tax administrative costs pursuant to Revenue and Taxation Code section 95.3 shall be used only to fund the actual costs of assessing,collecting and allocating property taxes. An equivalent amount of the revenues budgeted to finance assessing,collecting and allocating property taxes in fiscal year 2007-2008 may be reallocated to finance other county services. In the event that the actual 2007-2008 costs Tor assessing,collecting and allocating property taxes • RESOLUTION NO.2008/217 1 plus allowable overhead costs are less than the amounts determined in the February 26,2008 report by the Auditor-Controller,the difference shall be proportionally allocated to the respective local jurisdictions which paid property tax administration charges. B. FINDINGS AND DETERMINATION 1. The amounts expressed in the Auditor-Controller's report of February 26,2008 are correct. 2. Notice as required by law was given of the public hearing. 3. Written objections were received at the public hearing on the Auditor-Controller's report of February 26,2008. The objections are overruled on the ground that the Auditor Controller's report of February 26,2008 properly includes property tax revenues resulting from the application of Revenue&Taxation Code§§97.68 and 97.70 in the calculation of administrative costs under Revenue and Taxation Code§95.3. 4. The grounds stated herein to support findings are not exclusive and any findings may be supported on any lawful ground,whether or not expressed herein. 5. If any finding herein is held invalid,such invalidity shall not affect findings which can be given effect without the invalid provision,and to this end,the invalid finding is severable. So found and determined Steph n J.Ybai • Contra Costa County Auditor-Controller 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: John Cullen,Clerk of the Board of Supervisors And County Administrator By Deputy ORIG.DEPT:County Counsel cc:Auditor-Controller County Administrator RESOLUTION NO.2008/217 2 051 (3/02 , -A, OFFICE OF THE CLERK OF THE BOARD OF SUPERVISORS CONTRA COSTA COUNTY Administration Building 651 Pine Street, 1st Floor f Martinez, CA 94553 Date: May 13, 2008 To: County Supervisors From: Jane Pennington Subject: Property Tax Admin Costs Correspondence from Cities Attached please find the following correspondence received by the Clerk of the Board: city Date of Letter' Antioch Aril 2, 2008 Brentwood March 25, 2008 Clayton 1 of 2 Aril 10, 2008 Clayton 2 of 2 Aril 22, 2008 Concord March 31, 2008 Danville Aril 1, 2008 EI Cerrito Aril 3, 2008 Martinez 1 of 2 Aril 2, 2008 Martinez 2 of 2 May 8, 2008 Oakley March 27, 2008 Orinda 1 of 2 May 9, 2008 Orinda 2 of 2 May 12, 2008 PittsburgAril 7, 2008 San Pablo Aril 8, 2008 7� I .� .•k R r?�E IF �! �C� ,fF tFy�� � �� � h 4! �,1 � IM1 : a xr }^�: �• "fix r>'_, c'4- '.,,,}do-s� �' �i°7 A_E Fr. * 2, ae Y l Awe mt {'1k I 0 l , �Y:1.. _� Sia �w.l f �f d ; Y v F d ✓i t r.. 3�' X, ly•i+ y wA.i ca !_ # ��'Y -' �� ..'f vyb l`r�,�'it',�5� � ��� Nr; k��l-?` �"x 3�x �v: 1 R>r�: t•y'��� { III III I I 1 J � � �xj� ��+�,4't�dy c+�e `"d � r' .§.•.,� 4 ••���+�,i y ,',y��� e � � I ' 4 { •a- Z-A w'�s�y J ,F I 7 ` i �. Lf a n A i ' J' f. ��' h f:�.,• �� :.i.. � ,,fes � Y fih 1 i a' � ras g M1" F' - wr S I >F k' �• 'M# a xl ,., y,:-._ �1 r,•..�r'�.'r,lyys ,r. - ,4� t � Fl C� tt a I '�� y ;!�",F... � ,{;¢�;'* ��,,� Ate'' �''r'Y�'x � r��, u,��a "• '� ''t� r��� � �R•€`< t� �f S`.. � •a, '�?y�.:*__ C�i. 'r Ma I•i r .ri I ,8d r.4+e £,#y. i$ tt >�� �, � '� ��� �, �' del �'�•� _ ter.'_ y 4 b � � YSe9��"-i.�t7 �' t r-w #, ♦ +�-�: � F OF ANT/pC OFFICE OF CITY MANAGER :a �h CALIFORNk April 2, 2008 tiNK u 3 2008 BOARD Contra Costa County CLcRKCONTRAOCOSTA CO.SUPERVISO,aS Board of Supervisors 651 Pine Street Martinez, CA 94553 Re: Property'Tax Administration Fee Dear Chair Glover and Members of the Board: On behalf of the City of Antioch,I want to urge the Board to modify the proposed procedure for the Determination of Property Tax Administrative Cost Recovery for 2007/08. As you have heard in communication from other cities, the County's proposed methodology is inconsistent with the opinion of the State Controller's Office as to how Administrative Cost Recovery should be levied. The current method results in a significant increase in property tax administration cost, not just for Antioch,but for all cities in the county and throughout the state. I hope that the Board of Supervisors will do the right thing and direct the County Auditor Controller and the County Administrator to collect the 2007/08 Property Tax Administrative Cost Recovery fees consistent with the opinion and advice provided by the State Controller's Office and not in the current manner being proposed. ,7ely, JIM J L City Manager cc: John Cullen, Contra Costa County Administrator Mayor and City Council of the City of Antioch P.O. Box 5007 Antioch, CA 94531-5007 (925) 779-7011 FAX(925) 779-7003 �` a ��r �,.��}"�Ir�c'._�. ��"_h*`� x „S, ,•��*sc"',��s. �`3 ' .. F , �,rY' _- !! r F F �p,, �y 1 r� ."d Yp' �P 4r t ti '� ,� . •rg �M+r ; 4{'�fl Sy� +� ., ,.�,r � - .�; - � '�S r s�`:�� +�,z. ♦a Y�y`, x. v Y � .z � �� t?k�� �' ,Yi�'� �: fir' '" .�:`� � ��"'�r+ ''^�,•xe"��,. � r, + r- F 3q y�y 3 ���+'r�'- "" '� � ^3� fat ki s�+) t.a �7��.'`�. a•e.'`; a „s ;fS�'DT 3!^ p�'Y S '7• y ✓ .,WSb 1'�� _ � ai` ' I/r ' '� �' '£"�;ryy�S ��'�' a4�+;i•� 1 : �" �i-"�i(^ d +bx�-'fq,�` �'�`A �"e�� £ _y, :e��+ .R._ c Af. t kms' � ��Fx a f= t` t '� .. 5 � � Y✓� r�"at i rs:- a.: � �� 1� TSF P�� + ����,.��x� �t.r,rp �- < t`3.. .' �t`�•d,� sf{' �, r� y '�2 a 1'_ �,_t � 4fi ��, r P,y��T '�r t y� .ufi�`y- � . a� • _:J'" J 4 1 i t a i- ��:: r w+"��'. dr fie.. �• - - 3�'�'' `� F'tk;11R:i r� I Av` a ?.:u .:. atiky.fr 1.. TOW -JgMr .._Tc r e �y sa• -__'X•{. }+ny% ! lu`"zs"f x�F fi a� 4ty y' +k�sra ,"z rs- yy n� Jr .tilma�7z 3,:4 FV ' 'A: 41 jj�� ,meq is tl J e' r +t • - MAR 2 6 2008 I THE CI.'eTY OF B E NTWOOD H4461TAGE • VISION OPPORTUNITY MAILING ADDRESS: g,�.. OFFICE OF THE MAYOR City Hall 708 Third Street Brentwood,CA 94513 Phone:925-516-5400 March 25, 2008 Fax:925-516-5401 www.ci.brentwood.ca.us CITY ADMINISTRATION Contra Costa County Board of Supervisors 708 Third Street Phone:925-516-5440 651 Pine Street Fax:925-516.5441 Martinez,CA 94553-1229 COMMUNITY DEVELOPMENT Dear Chair Glover and Members of the Board: 104 Oak Street Phone:925-516-5405 In fiscal year 2006-07, counties throughout the State (includin&Contra Costa County) Fax:925-516-5407 began including Sales and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section 97.70) adjustment amounts FINANCE&INFORMATION in their computation of property tax administration cost shares. This inclusion has led SYSTEMS to significant increases in property tax administration costs for cities throughout the 708 Third street State. The City of Brentwood has been hit exceptionally hard by this change, having Phone:925-516-5460 Fax:925-516-5401 endured a massive 63% increase in fiscal year 2006-07. While City staff did not agree with the County's interpretation that the Sales and Use PARKS AND RECREATION Tax and Vehicle License Fee adjustment amounts should be included in the calculation 730 Third Street Phone:925-516-5444 for administration charges, staff was aware that the State Controller's Office (SCO) Fax:925-516-5445 had been asked to weigh in on the issue and elected to wait for their opinion before formally protesting the County's interpretation. POLICE 9100 Brentwood Boulevard The SCO legal office offered their opinion in I letter dated January 7, 2008. In this Phone:925-634-6911 letter, Jeffrey V. Brownfield, Chief of the Division of Audits for the State Controller's 24 Hr.Dispatch:925-778-2441 Office stated "As the counties' assessors and treasurer-tax collectors incur no Fax:925-809-7799 additional costs in implementing Revenue and Taxation code sections 97.68 and 97.70, SCO legal counsel opined that Sales and Use Tax and Vehicle License Fee adjustment PUBLIC WORKS amounts cannot be added to Revenue and Taxation Code section 96.1 and section 100 Operations Division computed property tax shares in order to determine administrative cost shares. 2201 Elkins Way Statutes clearly state that no amount should be charged for administrative services Phone:925-516-6000 that exceeds the actual cost of providing such services. Legal counsel further opined Fax: 925-516-6001 that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be based on actual costs and the actual Engineering Division costs relating to each type of charge might differ from one another." 120 Oak Street Phone:925-516-5420 Staff recently received Contra Costa County's proposed 2007/08 Property Tax Fax:925-516-5421 Administrative Cost Recovery fees and was extremely disappointed that the recommendations of the SCO have not been followed. The revenues collected for Sales and Use Tax and Vehicle License Fee adjustments have once again been included in the calculation of net revenue per jurisdiction. In direct contrast to what the 6C3, �E SCO opined, this net revenue, inclusive of the additional adjustments, is then used to calculate the property tax administration charges. In addition, no separate documentation for Sales and Use Tax and Vehicle License Fee charges was offered as recommended by the SCO. We are therefore formally protesting the Determination of Property Tax Administrative Cost Recovery for 2007/08 as scheduled to be heard at a public hearing by the Contra Costa County Board of Supervisors at your meeting scheduled for April 8,2008. Sincerely, Robert Taylor Mayor Cc: City Council Members John Cullen,Chief Administrative Officer City Council Fouttded.l rporatta1964 ✓ GREGORY J.MANNING,MAYOR JULIE K.PIERCE,ViCEMAYOR COMMUNITY DAVID T.SHUEY DEVELOPMENT (925)673-7340 6000 HERITAGE TRAIL • CLAYTON,CALIFORNIA 94517-1250 - HANK STRATFORD ENGINEERING (925)672-9700 TELEPHONP (925) 673-7300 FAx(925)672-4917 WILLIAM R.WALCUTT April 10,2008p - Contra Costa County Board of Supervisors ' APR 1 1 2008 c/o Clerk of the Board---- - CLERK BOAk - :'.', % SORS 651 Pine Street CON-FACI .1':A CO. Martinez, CA 94553 RE: City of Clayton's protest of Contra Costa County's proposed Property Tax Administrative Cost Recovery Plan for FY 2007-2008 as inconsistent with Section 97.75 of the California Revenue and Taxation Code. Please see the attached letters that were mailed to each of the Supervisors on April 2, 2008. If you have any questions please do not hesitate to contact me. Thank you, tom./ aci J. Jacks n City Clerk �C�-- eLAS bbD CITY OF, CL.A.Y T ON hawded I857. h1mrlyralt.1 1944 YG,, comwwl V Sit"M DEVELOPMENT 1Wi)673-7340 6000 VIERHACC56-AL - CLAYTON, CM.1ff]RN- 1,X 94517-1250 K.,I I nkn LWr-1WFTX1Nr- (9?5)V22-9700 \X;.%Lr1j I i I ELLPH UNF (9 5)673-73110 1A X (925) 672-491 April 2, 2008 PPR 1 Honorable John Gioia 11780 San Pablo Ave., Suite D CLEF',;,BOARD U: T "N Is El Cerrito, CA 94530 Re: Protestation of CouPtpProperty Tax Administrative Cost Recovery Formula Dear Honorablehin ioia: XXh in Fiscal Year 2006-07, counties throughout the State of California (including Contra Costa County) began including Sales and Use Tax (Section 97.68 of the California Revenue and Taxation Code) and Vehicle License Fee (Section 97.70 of the California Revenue and Taxation Code) state-reimbursement amounts in their computation of property tax administration cost formulas. Arising in part from State Budget deficits in 2004 and the State of California's solution to issue Economic Recovery Bonds while creating the "Triple Flip' diversion of local sales and use tax apportionments, corresponding state legislation gave clear instruction to counties on implementation of this new Program: "Notwithstanding any other provision of law, for the 2004-95 and 2005-06 fiscal years, a county shall not impose a fee, charge, or other levy on a city, nor reduce a city's allocation of ad valorem property tax revenue, in reimbursement for the services performed by the county under Sections 97.66 and 97,70, For the 2006-07 fiscal year and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services, but the fee, charge, or other levy shall not exceed the actual cost of providing these services."lemphasis added) In direct contradiction with enabling legislation, Contra Costa County commenced the inclusion of these "redistributed state property taxes" to cities in the County based on a cost recovery methodology that vastly exceeded any documented cost of actually providing the service. This erroneous interpretation of legislation led to a significant one year increase in our City's property tax administration fee for last fiscal year (06-07) amounting to a 98.6% single year increase for our small City. Ml other cities in Contra Costa County (and throughout the state) experienced similar jumps in extraordinary expense (see 2-Year History Table, Attachment. 1). Letter to County Board o` Supervisors Re: Property Tax Administration Fees April 2, 2006 Page 3 of 3 The Clayton City Council therefore took action at its April 1, 2008 meeting to formally protest the draft Determination of Property Tax Administrative Cost Recovery for 2007 O8, as scheduled to be heard at a public hearing by the Board of Supervisors-on April 8. 2008. We respectfully request the Board to remand the proposal to County staff with clear directive to calculate the property tax administrative cost recovery fees for FY 2007-08 in compliance with Section 97.75 of Califomia Revenue and Taxation Code and the January 2008 opinion of the State Controller's Office. In addition, the correct application of the law shall also retroactively apply to similar fees imposed on the City of Clayton by the County in FY 2006-07, and rebated accordingly. Sinc ely, GI(Ls9 ry J. Manning Mayor Attachment: 1. 2-Year History of County Property T ax Administration Fees 11 pg.) * PROPERTY TAX ADMINISTRATION FEES CONTRA COSTA COUNTY ;Z-YEAR HISTORY i. 0. 06-07 PERCENT TOWN FEE TRIPLE FLIP/ FEE IN INCREASE YEAR ANTIOCH $ 11,939 $ 10,143,193 $ 153,125 $ 75,186 96.5 BRENTWOOD $ 58,054 $ 4,557,107 $ 94,550 $ 36,496 62.9% CLAYTON $ 5,980 $ 842,077 $ 11,875 $ 5,895 98.6 CONCORD $ 86,728 $ 15,809,700 $ 207,117 $ 120,389 139.0% DANVILLE $ 55,571 $ 4,104,900 $ 130,751 $ 25,180 45.3 EL CERRITO $ 41,142 $ 2,396,520 $ 55,362 $ 14,220 34.69vo HERCULES $ 8,513 $ 2,028,627 $ 23,560 $ 15,047 176.8% LA FA YETTE $ 24,096 $ 2,339,826 $ 39,717 $ 15,621 64.8 MARTINEZ $ 53,507 $ 3,588,408 $ 74,654 $ 21,147 39.5%' MORA GA $ 11,806 $ 1,353,005 $ 21,016 $ 9 210 78.0 OAKLEY $ 12,456 $ 2,581,874 $ 33,187 $ 20,731 166.4% ORI NDA $ 25,962 $ 1,506,006 $ 34,438 $ 8,476 32.6% PINOLE $ 12,993 $ 2,163,084 $ 29,159 $ 16,166 124.4 PITTSBURG $ 16,026 $ 6,643,269 $ 70,365 $ 54,339 339.1 PLEASANT HIL $ 16,037 $ 4,172,998 $ 48,269 $ 32,232 201.0% RICHMOND $196,327 $ 10,118,076 $ 243,560 $ 47,233 24.1 SAN PABLO $ 449 $ 2,662,345 $ 21,996 $ 21,547 4800.0510 SAN RAMON $ 87,081 $ 5,649,097 $ 125,236 $ 38,155 43.8510 WALNUT CRK. $ 82,611 $ 9,560,407 $ 149,574 $ 60,963 81.19/0 TOTALS $ 873,278 $ 92,220,519 $1,517,511 $ 644,233 73.80/6 Prepared by: City of Clayton Data Source:Contra Costa County Date:June 12,2007 CITY OF' ' CLAY-79GIT torimd<d J65?...Jvnyowtd 1964 J.V ULVLLOPWFN7 (925)6'3_7340 6000 HERITAGr TR km - Ci-A11'ONj'1A1.1FnRN.A 94517-1250 Lw.lNktltltir. (925)67-2-9700TF:.i.y.Pt4oN).(925)673-7300 1AX(925) 67/2-4917 April 2, 2008 Honorable Gayle B. Uilkema 651 Pine Street, Room 108A Martinez, CA 94553 Re: Protestation of Count y Tax Administrative Cost Recovery Formula .County, �)r pert Dear Honorable,XGaB. U�irlemya: In Fiscal Year 2006-07, counties throughout the State of California (including Contra Costa County) began including Sales and Use Tax (Section 97.68 of the California Revenue and Taxation Code) and Vehicle License Fee (Section 97.70 of the California Revenue and Taxation Code) stale-reimbursement amounts in their computation of property tax administration cost formulas. Arising in part from State Budget deficits in 2004 and the State of California's solution to issue Economic Recovery Bonds while creating the "Triple Flip" diversion of local sales and use tax apportionments, corresponding state legislation gave clear instruction to counties on implementation of this new Program: "Notwithstanding any other provision of law, for the 2004-05 and 2005-06 fiscal years, a county shall not impose a fee, charge, or other levy on a city, nor reduce a city's allocation of ad valorem property tax revenue, in reimbursement for the services performed by the county under Sections 97.68 and 97.70. For the 2006-07 fiscal year and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services, but the fee, charge, or other levy shall not exceed the actual cost of Providing these services."jemDhasis added] In direct contradiction with enabling legislation, Contra Costa County commenced the inclusion of these "redistributed state property taxes" to cities in the County based on a cost recovery methodology that vastly exceeded any documented cost of actually providing the service. This erroneous interpretation of legislation led to a significant one year increase in our City's property tax administration fee for last fiscal year (06-9,n-, amounting to a 98.6% single year increase for our small City. All other cities in Contra Costa County (and throughout the state) experienced similar jumps in extraordinary expense (see 2-Year History Table, Attachment 1). T I T T 0 F 1rC.L�'ITT 0 X Fonsdid 1857....kzroyfio rated 196,; Wuzoltv J. M.VG7 K. Al,)vp COMMUNIT s:.-,,-v Di%':LOPMY.W'-, oD-340 6000 HER11AGI: - C'LkYTON.C40.1.�ORNJA 945P-1251) KwK SaAlmaD EmaLFxi-ir, (975) 1ELr.i,iioN)- (925) 673-7300 FA!k (925) 672-4917 VVwt,mR Wm :t, April 2, 2008 Mary Piepho 309 Diablo Road Danville, CA 94526 Re: Protestation of County Prop-erty Tax Administrative Cost Recovery Formula 7 Dear Honorable Marryfi-epbl"_, In Fiscal Year 2006-07, counties throughout the State of California (including Contra Costa County) began including Sales and Use Tax (Section 97.68 of the California Revenue and Taxation Code) and Vehicle License Fee (Section 97.70 of the California Revenue and Taxation Code) state-reimbursernent amounts in their computation of property tax administration cost formulas. Arising in part from State Budget deficits in 2004 and the State of California's solution to issue Economic Recovery Bonds while creating the "Triple Flip" diversion of local sales and use tax apportionments, corresponding state legislation gave clear instruction to counties on implementation of this new Program: "Notwithstanding any other provision of law, for the 2004-05 and 2005-06 fiscal years, a county shall not impose a fee, charge, or other levy on a city, nor reduce a city's allocation of ad valorem property tax revenue, in reimbursement for the services performed by the county under Sections 97.68 and 97.70. For the 2006-07 fiscal year and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services, but the fee, charge, or other levy shall not exceed theactualcost of providing these services."[emphasis added] In airect contradiction with enabling legislation, Contra Costa County commenced the inclusion of these "redistributed state property taxes" to cities in the County based on a cost recovery methodology that vastly exceeded any bocurnented cost of actually providing the service. This erroneous interpretation of legislation led to a significant one year increase in our City's property tax administration fee for last fiscal year (06-07) .-amounting to a 98.6% single year increase for our small City. All other cities in Contra Costa County (and throughout the state) experienced similar jumps in extraordinary expense (see 2-Year History Table, Attachment 1). CITY OY-,,CLATTOIT Founded 1837...Incorftrated/964 GREGORY i MAN NING,A; AP commumiT DAV,.?k*.srell DFVT.101+ L\'1 (925)673.-340MNIL STRATraRD 6000 HLRITACL "I RAIL - CLAYTnN.CALIFORNIA 94517-1250 FhG1NF1_R1?44; G'29700 FEI-EPITON7(925) 673-7300 FAX (925) 672-4917 W11 1I.-Al K.'WALCUT7 April 2, 2008 Honorable Susan A. Bonilla 2151 Salvio Streeet, Suite R Concord, CA 94521 Re: Protestation of County P perty Tax Administrative Cost Recovery Formula Dear Honorable Sus `nilla: In Fiscal Year 2006-07, counties throughout the State of California (including Contra Costa County) began including Sales and Use Tax (Section 97.68 of the California Revenue and Taxation Code) and Vehicle License Fee- (Section 97.70 of the California Revenue and Taxation Code) state-reimbursement amounts in their computation of property tax administration cost formulas. Arising in part from State Budget deficits in 2004 and the State of California's solution to issue Economic Recovery Bonds while creating the "Triple Flip" diversion of local sales and use tax apportionments, corresponding state legislation gave clear instruction to counties on implementation of this new Program: "Notwithstanding any other provision of law, for the 2004-05 and 2005-06 fiscal years, a county shall not impose a fee, charge, or other levy on a city, nor reduce a city's allocation of ad valorem property tax revenue, in reimbursement for the services performed by the county under Sections 97.68 and 97.70, For the 2006-07 fiscal year and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services, but the fee, change, or other levy shall not exceed the actual cost of providing these services."JernphaSIS added] In direct contradiction with enabling legislation, Contra Costa County commenced the inclusion of these "redistributed state property taxes" to cities in the County based on a cost recovery methodology that vastly exceeded any documented cost of actually providing the service. This erroneous interpretation of legislation led to a significant one year increase in our City's property tax administration fee for last fiscal year (06-07) amounting to a 198.6% single year increase for our small City. All other cities in Contra Costa County (and throughout the state) experienced similar jumps in extraordinary expense (see 2-Year History Table., Attadhment I). CITY' 01 '. 0LAYTOIN hainded 1857.•.Mcorpratrd 1964 G. Jull, 1.plukc !'w,Af yo Cnsim xi i y D In 1.S c.1.1 D Tvrf opm-.\1 0.-1-7340 6000HFR1TArt.T0.A1L - CLAVTO-q, CA1.FFOJtN11 94517-125.0 t'Ap— F.N(;"1.1 Kine !1:2S.!672-9700 TELYTHONE(925)O73-7300 FAX (925)672-49t7 W I..-I,( April 2, 2008 Honorable Federal D. Glover 315 E. Leland Road Pittsburg, CA 94565 Re: Protestation of County Prop tax ;5p ,dmlinistrative Cost Recovery Form ula Dear Honorable Fede r, In Fiscal Year 2006-07, counties throughout the State of California (including Contra Costa County) began including Sales and Use Tax (Section 97.68 of the California Revenue and Taxation Code) and Vehicle License Fee (Section 97.70 of the California Revenue and Taxation Code) state-reimbursement amounts in their computation of property tax administration cost formulas. Arising in part from State Budget deficits in 2004 and the State of California's solution to issue Economic Recovery Bonds while creating the 'Triple Flip" diversion of local sales and use, tax apportionments, corresponding state legislation gave clear instruction to counties on implementation of this new Program: . "Notwithstanding any other_provision of law, for the 2004-05 and 2005-06 fiscal years, a county shall not impose a fee, charge, or other levy on a city, nor reduce a city's allocation of ad valorem property tax revenue, in reimbursement for the services performed by the county under Sections 97.68 and 97.70. For the 2006-07 fiscal year and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services, but the fee, charge, or other levy shall not exceed the actual cost of providing these services."JeMPhaSIS added] I In direct contradiction with enabling legislation, Contra Costa County commenced the inclusion of these "redistributed state property taxes" to cities in the County based on a cost recovery methodology that vastly exceeded any documented cost of actually providing the service. This erroneous interpretation of legislation, led to a significant one year increase in our City's property tax administration fee for last fiscal year (06-07) amounting to a 98.6% single year increase for our small City. All other cities in Contra Costa County (and throughout the state) experienced similar jumps in extraordinary expense (see 2-Year History Table, Attachment 1). } v' City Council Founded 1WO.,,, corporate 11964 GREGORY J.MANNING,MAYOR q DAVID T SHUEY,VICE MAYOR j. COMMUNITY PrMR A.LAURENCE DEVELOPMENT (925)673-7340 6000 HERITAGE TRAIL • CLAYTON, CALIFORNIA 94517-1250 JuLIE K.PIERCE ENGINEERING (925)672-9700 TELEPHONE(925) 673-7300 FAx(925) 672-4917 WIWAM R.WALCUTT April 22, 2008 RE _IVSD =�2, 1) Clerk of the Board of Supervisors CLERK BOARD OF SUPERVISORS Contra Costa County CONTRA COSTA Ern R 651 Pine Street Martinez, CA 94553 Re: Claim for Overcharge of Property Tax Administration Fee Dear Clerk of the Board of Supervisors: This claim is submitted on behalf of claimant City of Clayton ("Clayton") for the recovery of sums Clayton has been overcharged by the County for the administration of the property tax system. Notices regarding this claim should be sent to: J. Daniel Adams, City Attorney City of Clayton 924 Main Street P. O. Box 110 Martinez, CA 94553 (925) 228-3596 (fax) In fiscal year 2006/2007 and proposed for 2007/2008, the County of Contra Costa has charged and proposes to charge Clayton property tax. administration fees in an amount in excess of that permitted by Revenue and Taxation Code Section 97.75. Specifically, the Office of the Contra Costa County Treasurer-Tax Collector has included in its calculation of Clayton's property tax administration charges the ad valorem property taxes Clayton received in lieu of the local Bradley Burns Sales and Use Tax and the Vehicle License Fee pursuant to Rev. & Tax. Code Sections 97.68 and 97.70 (aka, the "Triple Flip"). Section 97.75 states no amount should be charged for administrative services for the Triple Flip in excess of the actual cost of providing the services. By including the Triple Flip funds in its calculation of Clayton's administrative cost share instead of calculating the actual incremental service costs to administer the Triple Flip, the County has overcharged Clayton and violated applicable state law. Clayton is informed and believes that the Office of the Contra Costa County Treasurer-Tax Collector, currently held by William J. Pollacek, is responsible for the i Clerk of the Board of Supervisors Contra Costa County April 22, 2008 Page 2 overcharges. For the 2006/2007 fiscal year, Clayton estimates the overcharge to be no less than $ 5,895.00. Proposed for the 2007/2008 fiscal year, Clayton estimates the overcharge to be no less than $ 9206.00. Clayton believes that until the Contra Costa County Treasurer-Tax Collector complies with the mandate of Section 97.75, Clayton will continue to suffer future, annual damages in similar amounts. Any suit to recover such funds would be an unlimited civil case. As the City Attorney of Clayton, I am authorized to make this claim on the Citv's behalf. I declare under penalty of perjury under the; laws of the State of California that all the information I have provided is true and correct to the best of my information and belief. /Very 'lar I Da iel Adams City Attorney 7DA:lac cc: Gary A. Napper, City Manager City Council Clayton/Gen Con esp Ltr CoBd Sup Qverchg Pty Tax 080422 'CITY OF CONCORD CITY COUNCIL 1950 Parkside DriY William D.Shinn, Ma rn Conmxl,California 94619-2578 Helen M.Allen.Vice Mavor Fax: (9`15) 798•(1636 ,)i�il'i', Gov S.Bjerke ��l`iilll;j i Latina M.Hoffineister Mark A.Peterson OFFICE OF THE CMMANAGER Mary Rae Lehman,City Clerk TThomas).Wending,CitvTreasurer Telephone: (945) 671-3150 one Edward R.James,Interim Cite Manager March 31, 2008 . Chair Federal Glover i APR u 3 2008 Board Of Supervisors _'BOARD OF SUPERVISORS County of Contra Costa CONTRA COSTA CO. 651 Pine Street Martinez, Ca 94553-1229 Re: Property Tax Administration Fee Dear Chair Glover and Members of the Board: Upon review of the documentation provided in support of the Public Hearing to be held on April 8, 2008, addressing the Property Tax Administration Fee,the City of Concord has determined that it must protest the methods used in the calculation of this fee. As you are aware, there has been a change in the transmission of a portion of Sales Tax (the"triple- flip") and Motor Vehicle in-Lieu (VLF) Tax to local agencies. Under prior programs these amounts were transmitted directly from the State to both the counties and the cities. Currently these funds are transferred from the State to the cities via the counties. The change in procedure and additional work is minor,yet based upon your staff report we estimate that our Property Tax Administration Fee has increased 136%. In other words, we calculate that the increase to the City of Concord is approximately $157,000 raising the proposed charge to the City of Concord to $272,450. The City of Concord understands, supports and makes use of the concept of cost recovery. However, underlying the use of cost recovery is a basic assumption and understanding that the cost recovered represents the full costs incurred—no more,no less. The increase you propose for the City of Concord alone would more than pay for a year's services of a full time accountant—clearly an overstatement of cost. Restating the full property tax administration program to charge the agencies receiving the "triple-flip" and the VLF in- Lieu, flies in the face of logic,reasonableness and the law governing this procedure for these programs (Revenue and Taxation Code Section 97.75), which states that". . . For the 2006-07 fiscal year, and each fiscal year thereafter, a county may impose a fee, charge, or other levy on a city for these services [calculation of the "triple-flip" and the VLF in-Lieu], but the fee, charge, or other levy shall not exceed the actual cost of providing these services. " (Emphasis added.) �L 0 e-mail: citvinfoOci.concord.cams 0 mrbsilr: www.cityotconcord.org Chair Federal Glover March 31,2008 Page 2 The State Controller has agreed with this opinion in stating"that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be based on actual costs and actual costs relating to each type of charge might differ from one another." In light of the law,the opinion of the State Controller's Office, and generally accepted accounting pririciples with regard to cost recovery, we in the City of Concord respectfully request that, at the Property Tax Administrative Fee Public Hearing on April 8, 2008, the Board of Supervisors direct staff to recalculate the portion of the fee attributed to the "triple-flip" and the VLF in-Lieu so that its imposition is in compliance with State law. Thank you for your consideration. Respectfully, Edward R.Jame Interim City Manager "Small Town Atmosphere Outstanding Quality of Life" ANVE SLE Celsbrating 150 Y��S April 1, 2008 ANK u �f 2UUii Contra Costa County Board of Supervisors cL��RK BOARD OF SUPERVISGRS 651 Pine Street CONTRA COSTA CO. Martinez, CA 94553-1229 Re: Determination of Property Tax Administrative Costs for 2007-08 Chair Glover and Members of the Board of Supervisors: In 2006-07, Contra Costa County began including Sales and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section 97.70) adjustment amounts in the computation of property tax administration costs charged to cities. This resulted in a 45% increase in property tax administration costs to the Town of Danville. In 2007-08, these costs are proposed to increase even further. In January, 2008, as a result of a request for clarification on this matter, Jeffrey V. Brownfield, Chief of the Division of Audits for the State Controller's Office issued a letter stating that: "As the counties' assessors and treasurer-tax collectors incur no additional costs.in implementing Revenue and Taxation code sections 97.68 and 97.70, SCO legal counsel opined that Sales and Use Tax and Vehicle License Fee adjustment amounts cannot be added to Revenue and Taxation Code section 96.1 and section 100 computed property tax -,hares in order to determine administrative cost shares. Statutes clearly state that no amount should be charged for administrative services that exceeds the actual cost of providing such services. Legal counsel further opined that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be based on actual costs and the actual costs relating to each type of charge might differ from one another." Despite the opinion of the State Controller's Office, Contra Costa County's proposed 2007-08 Property Tax Administrative Cost Recovery fees continue to include Sales and Use Tax and Vehicle License Fee adjustments as part of the total fee calculation. For C ° D0101 f ,l/ 510 LA GONDA WAY, DANVILLE, CALIFORNIA 94526 Administration Building Engineering&Planning Transportation Maintenance Police Parks and Recreation (925)314-3388 (925)314-3330 (925)314-3310 (925)314-3310 (925)314-3450 (925)314-3410 (925)314-3400 Contra Costa County Board of Supervisors April 1, 2008 Page 2 Danville, this fee assessment methodology results in an overcharge of approximately $43,000 for 2007-08. Pursuant to the SCO's opinion, no separate documentation has been provided for Sales and Use Tax and Vehicle License Fee charges, to identify actual County costs incurred in assessing these fees. Danville has been notified that the Board of Supervisors will be considering these charges at a public hearing scheduled for April 8, 2008. We are hereby requesting that Contra Costa County abide by the opinion of the State Controller's Office in determining the Property Tax Administrative Cost Recovery fees to be charged for 2007-08. Sincerely, TO DA Z Can a e e Mayor cc: Town Council c;;, .fit{,U�•� y"t E '- A APR 0 8, ?008 Mary Dodge, CPA THE C,,y ❑F —�. Finance Director/City Treasurer E L C E R R 1 T© c�t�r,Qoa �D 0 iG:r e ons 10940 San Pablo Avenue EI Cerrito, CA 94530 (510) 215-4312 FAX (510) 215-4319 Email: mdodge@ci.el-cerrito.ca.us Website: www.el-cerrito.org April 3, 2008 Contra Costa County Board of Supervisors 651 Pine Street Martinez, CA 94553-1229 Dear Chair Glover and Members of the Board, This letter is intended to be a formal protest of the Determination of Property Tax Administrative Cost Recovery for 2007-08. It is with disappointment that staff has become aware of the continued inclusion of the Vehicle License Fee and Sales and Use Tax amounts passed through to cities in the calculation of net revenue per jurisdiction. After concerns were raised by Cities in regards to the 2006-07 calculation and the State Controllers Office Division of Audits issued an opinion stating that those revenues cannot be added to property tax to determine administrative cost shares, it was anticipated that a separate basis and calculation that reflected the actual cost of providing such services would be presented. As I am sure you are aware, this matter is scheduled to be discussed at a public hearing in your Chambers on Tuesday, April 8, 2008. I hope that when I am in attendance a discussion by the Board of Supervisors will be heard that recommends revision of the proposed calculation to one that provides a separate calculation for Vehicle License Fees and Sales and Use Tax. Sincerely, / Mary Dodge Finance Director/City Treasurer 3 S3 prq�-- 6s Z, �Nq 44 SW in k ,fie sk W W: I ftl; af, Jj -44 City of Martinez �. � 525 Henrietta Street, Martinez, CA 94553-2394 (925)372-3505 FAX(925)229-5012 April 2, 2008ECE!, APR 0 4 7.008 CLERK BOARD OF SUFL=RViSORS Honorable Federal Glover, Chair and CONTRA COSTA CO. Members of the Board of Supervisors 651 Pine Street— Rm. 106 Martinez, CA 94553 Dear Federal: In fiscal year 2006-07, counties throughout California (including Contra Costa County) began including Sales and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section 97.70) adjustment amounts in their computation of property tax administration cost shares. This inclusion has led to significant increases in property tax administration costs for cities throughout the State. This action has significantly impacted the City of Martinez, having suffered an increase of 41 .5% in administration charges in fiscal year 2006-07. Our administration charges soared from $51,705 in 2005-06 to $73,174 in 2006-07. The State Controller's Office issued an opinion on this matter in a letter dated January 7, 2008. In this letter, Jeffrey V. Brownfield, Chief of the Division of Audits for the State Controller's Office stated "As the counties' assessors and treasurer-tax collectors incur no additional costs in implementing Revenue and Taxation code sections 97.68 and 97.70, SCO legal counsel opined that Sales and Use Tax and Vehicle License Fee adjustment amounts cannot be added to Revenue and Taxation Code section 96.1 and section 100 computed property tax shares in order to determine administrative cost shares. Statutes clearly state that no amount should be charged for administrative services that exceeds the actual cost of providing such services. Legal counsel further opined that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be based on actual costs and the actual costs relating to each type of charge might differ from one another." Staff recently received Contra Costa County's proposed 2007-08 Property Tax Administrative Cost Recovery fees and was extremely disappointed to find that the recommendations of the SCO have not been followed. The revenues collected for 1 ROB SCHRODER, MAYOR Honorable Federal Glover, Chair and Members of the Board of Supervisors April 2, 2008 Page 2 Sales and Use Tax and Vehicle License Fee adjustments have once again been included in the calculation of net revenue per jurisdiction, directly contradicting the legal opinion of the SCO. In addition, no separate documentation for Sales and Use Tax and Vehicle License Fee charges was offered as recommended by the SCO. The City of Martinez is therefore formally protesting the Determination of Property Tax Administrative Cost Recovery for 2007-08 as schE:duled to be heard at a public hearing by the Contra Costa County Board of Supervisors at your meeting scheduled for April 8, 2008. Si re Rob Schroder Mayor Cc: City Council Members John Cullen, Chief Administrative Officer ROB SCHRODER, MAYOR City of Martinez 525 Henrietta Street, Martinez, CA 94553-2394 (925)372-3505 FAX(925)229-5012 May 8, 2008 - RE MAY 1 2 NMI Clerk of the Board of Supervisors Contra Costa County CLERK BOARD OF sUPcF;✓;sons 651 Pine Street CONTRA COSTA CC), Martinez, CA 94553 Re: Claim for Overcharge of Property Tax Administration Fee Dear Clerk of the Board of Supervisors: This claim is submitted on behalf of claimant City of Martinez ("Martinez") for the recovery of sums Martinez has been overcharged by the County for the administration of the property tax system. Notices regarding this claim should be sent to: Jeffrey A. Walter, City Attorney 670 W.Napa Street, Suite F Sonoma, CA 95476 (707) 996-9693 (fax) In fiscal year 2006/2007 and proposed for 2007/2008, the County of Contra Costa has charged and proposes to charge Martinez property tax administration fees in an amount in excess of that permitted by Revenue and Taxation Code Section 97.75. Specifically, the Office of the Contra Costa County Auditor-Controller has included in its calculation of Martinez' property tax administration charges the ad valorem property taxes Martinez received in lieu of the local Bradley Burns Sales and Use Tax and the Vehicle License Fee pursuant to Revenue and Taxation Code Sections 97.68 and Y7.70 (the"Triple Flip"). Section 97.75 states no amount should be charged for aciministrative services for the Triple Flip in excess of the actual cost of providing the services. By including the Triple Flip funds in its calculation of Martinez' administrative cost share instead of calculating the actual incremental service costs to administer the Triple Flip, the County has overcharged Martinez and violated applicable State law. Martinez is informed and believes that the Office of the Contra Costa County Auditor- Controller is responsible for the overcharges. For the 2006/2007 fiscal year,Martinez estimates the overcharge to be $15,843, and for the 2007/2008 fiscal year, Martinez estimates the overcharge to be $34,241. Martinez believes that until the Contra Costa County Auditor-Controller complies with the mandate of Section 97.75, Martinez will continue to suffer future, annual damages in similar amounts. Any suit to recover such funds would be an unlimited civil case. CU 00 GAOj 2450 _CDYTe6_;F �. DONALD A. BLUBAUGH, CITY MANAGER Clerk of the Board of Supervisors May 8, 2008 Page 2 As the City Manager of Martinez, I am authorized to make this claim on the City's behalf. I declare under penalty of perjury under the laws of the State of California that all the information I have provided is true and correct to the best of my information and belief. Sincerely, onald Blubaugh City Manager DAB:elm cc: Jeffrey A. Walter, City Attorney Martinez City Council DONALD A. BLUBAUGH, CITY MANAGER Cr r - LJI Ako�KLEY dP— 11 FAN TIANS MARS 1 EA in the HRI of du DEITA 3231 Main Street GLEFil" Oakley,CA 94561 925 625 7000 tel 925 625 9859 fax www.ci.oakley.ca.us OFFICE OF THE MAYOR MAYOR Bruce Connelley March 27, 2008 VICE MAYOR Carol Rios COUNCILMEMBERS Pat Anderson Contra Costa County Board of Super-visors Brad Nix 651 Pine Street Kevin Rornick Martinez, CA 94553-1229 Dear Chair Glover and Members of the Board: In fiscal year 2006-07, counties throughout the State (including Contra Costa County) began including Sales and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section 97.70) adjustment amounts in their computation of property tax administration cost shares. This inclusion has led to significant increases in property tax administration costs for cities throughout the State. As a result of this change, the City of Oakley's charge was 142% higher in fiscal year 2006-07 than it would have been without it. While City staff did not agree with the County's interpretation that the Sales and Use Tax and Vehicle License Fee adjustment amounts should be included in the calculation for administration charges, staff was aware that the State Controller's Office (SCO) had been asked to weigh in on the issue and elected to wait for their opinion before formally protesting the County's interpretation. The SCO legal office offered their opinion in a letter dated January 7, 2008. hn this letter, Jeffirey V. Brownfield, 'Cluefl of the Division u.'Audits E�Or Lilic, State Controller's Office stated "As the counties' assessors and treasurer-tax collectors incur no additional costs in implementing Revenue and Taxation code sections 97.68 and 97.70, SCO legal counsel opined that Sales and Use Tax and Vehicle License Fee adjustment amounts cannot be added to Revenue and Taxation Code section 96.1 and section 100 computed property tax shares in order to determine administrative cost shares. Statutes clearly state that no amount should be charged for administrative services that exceeds the actual cost of providing such services. Legal counsel further opined that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be based on actual costs and the actual costs relating to each type of charge might differ from one another." Staff recently received Contra Costa County's proposed 2007/08 Property Tax Administrative Cost Recovery fees and were disappointed that the 3�5 &7C recommendations of the SCO have not been followed. The revenues collected for Sales and Use Tax and Vehicle License Fee adjustments have once again been included the calculation of net revenue per jurisdiction. In a direct contrast to what the SCO opined, this net revenue, inclusive of the additional adjustments, is then used to calculate the property tax administration charges. In addition, no separate documentation for Sales and Use Tax and Vehicle License Fee charges was offered as recommended by the SCO. We are therefore formally protesting the Determination of Property Tax Administrative Cost Recovery for 2007/08 as scheduled to be heard at a public hearing by the Contra Costa County Board of Supervisors at your meeting scheduled for April 8, 2008. Sincerely, Bruce Connelley Mayor Cc: City Council Members John Cullen, Chief Administrative Officer P.t I. _)ox 2000 22 onndcl uan11,1 rxirido coliFornio • 94563 May 9, 2008 ECEIV E Clerk of the Board of Supervisors Contra Costa County M:AYI 2 �008 651 Pine Street 1 Martinez, CA 94553 CLERK BOARD OF sur=RViSORs CONTRA CO STA CO. Re: Claim for Overcharge for Property Tax Administration Fee Dear Clerk of the Board of Supervisors: This claim is submitted on behalf of claimant City of Orinda ("Orinda") for the recovery of sums that Orinda has been overcharged by Contra Costa County.("County") for the administration of the property tax system. Notices regarding this claim should be sent to: Osa Wolff, City Attorney City of Orinda P.O. Box 2000 Orinda, CA 94563 (925) 254-2068 (fax) In fiscal year 2007/2008, the County has proposed charging the City of Orinda property tax administration fees in an amount in excess of that permitted by Revenue and.Taxation Code Section 97.75. Specifically, the Office of the Contra Costa County Auditor-Controller has proposed including in its calculation of Orinda's property tax administration charges the ad valorem property taxes Orinda receives in lieu of the local Bradley Burns Sales and Use Tax and the Vehicle License Fee pursuant to Rev. &Tax. Code Sections 97.68 and 97.70 (aka,the "triple flip" and "VLF Swap", respectively). Section 97.75 states that for fiscal years 2006-07 and thereafter, the County may charge a fee for the services mandated by Sections 97.68 and 97.70, but that the fee shall not exceed the actual cost of providing the services. By including the triple flip and VLF swap funds in its calculation of Orinda's administrative cost share instead of calculating the actual incremental service costs to administer the triple flip, the County will overcharge Orinda and violate applicable state law. Orinda is informed and believes that the Office of the Contra Costa County Auditor-Controller, currently held by Stephen Ybarra, is responsible for the proposed overcharge. For the 2007/2008 fiscal year, Orinda estimates the currently proposed administrative fees would result in an overcharge of no less than $11,000. Orinda believes that until the Contra Costa County Auditor- Controller and Board of Supervisors complies with the mandate of Section 97.75, Orinda will continue to suffer future, annual damages in similar amounts. Any suit to recover such funds would be an unlimited civil case. t nhg�C (_.040, ae�) 0C t7jz), General Information Administration Planning Parks Recreation Police Public Works As the City Manager of Orinda, I am authorized to make this claim on the City's behalf. I declare under penalty of perjury under the laws of the State of California that all the information I have provided is true and correct to the best of my information and belief. Very y ours, �t . Keeter Cianager cc: City Council Osa Wolff,City Attorney ® • iJ.:.` .,. .i'_ '�G _.�' Ill: I,,,_LY • _I.1;.�, ° :� �'.it 1 .. ` _' i_)t!3 S &1—irkLA Honorable Chairman and County Sulier visors � MAY I � c/o Clerk of the Boai-d of Supervisors ,. :. =�'r BOARD OF_,UPcr ..' ,n- Contra Costa County: "' CONTRA COsTH co. 651 Pine Street Martinez, CA 9435 REGARDING: Iteni DJ CONTI.NUEEt H EARINCM frons kpi-U h. ::111111, on implementation of the property tax cost recovery provisions of Revenue and Taxation Cade §95.3 Dear Chairman Glover and Supervisor. On behalf of the Contra Costa County Public Manavers C.Sociatior (PMA?, 1 ani writing to express our disagrect-neni vvith the County': implementaticir. (-,I'CA TZovenue and Taxation Ccite §9�.5 rega:-ding the calculation and allocation of the adniinistratve casts L-sctc;iatcxl �.vith property tax adrainisti-ation by the Couniy lur its cities. \Many 7epre,tient"atlyCs ii,or .. the cities hri Contra Costa C.' .'Jnty in:t wilts Auditor-'- unrl'':1fler �itC}lhell YUatra ail(l C OLl.rtt�_' Adrninl-•tra*err John 11:111111 on Anrii 3Q, ?�0!, 2e; ':4GiI:;T1`Yt .,WWpoints on the Couv v s mast and hrorascd chart�lt-S .;thrn lgh thr TI"Iectt,l�Y v;:'s zl r1i.;c cresiure. it concluded with the clues' rvpresarli.cativeC ; II] 1.[t :l:'_ dts.,!Trt-.,.,mtnt 11'i':.II i0 v. '',•'llwTa's arl.ci Mr. CuiieWs intetpret.a.tion of the applicubie (--ode L)lmng the referenced tile.-ting. .1a. Yha-zr t.rC'.'Tiltcl'tflc sill::-:ioecs v-'ilii ii Triple,Flip (Sales and Use Tas). EP-Af III, and the `1I1 lr: .i;lci:tio .. Mr. Ykivr-a's '-i.in.d- olit asked and ansivered tilt question "V1y tlic no-Lease" a.. 11-dt,n;'s "Miv the Increase' One of the most frequentiv asked oije frons is if the '.'T0 r.• :L Tax rJrn1n:5ti"0:i:lii l'--e is a result c:f additional calculation costs being added c; t1ic :;:gait., and tip:; ansv -c-r -i 'na. "l'lec Property TaxAdminisirativc i,ee for ce.ts incurred h,, rTltru tosLa Count; qualiz-ng collectins,. and allocating p•,-ciP;:r _, tart rc°v::litic:; may not exceed the :i'.tual and reasonable I.,osts i.nei.in-ed by the county in r;_.I Irining Tile c olwwl. IlTi, 1-Ne cilias than 1.he cost of Proccssi)Ig the SUT 'Tripic Fi:!j? art, 1-he .1T Si4vp IA [Emphasis added]. cc ,. �5, o&0 5 uE, G4d iii:ail.'l .iif ti•... ;i•li(iJ i%1', i::!'�Yl.r.•.d General Information AdminlstrnGan Pionnir.g Pnrt: ie: a:.,an Pr(iu: is Work: Revenue and Taxation Code §97.75 stipulates, in part, Lhat -'l 1.-the 21106/0"' fiscal gear amd each fiscal year thereafter, a county may impose a fee. charge -:,r other lt;vy on a city for those services; but the fee, charge, or other let!), shall tupt rpt cecd the actual cast of'prov;ding thave services." Clearly, by the Auditor-Controller's own the tees being unposed exceed-the actual cost of providing the additional sen!ice. ,ahi(:h. is contrary to the governnsc-ntal purpose of a recovery "fee''. It stands to reason, therefore that, the imposed fees constitute an unlawful tax by the County against its nineteen cities in he approximate amount Of S l .:5 million for FY 2006-2007 and planned for FY 2007-2008. Cities in Contra Costa County have filed claims, and mare will be filing claims, -,with thee_ County for the recovery of sums that have been overcharged :for tha administration of the •pmpert:y tales. At its meeting on .May 8`". the Public Managers Association t:•as united in ;eekinr a successful resolution of this dispute Nviih the County to avoid liti.tltion, and N7,;d expect going for-,vard that the County will apply the fie to on/- cover Inose actual costs (15KPcncte;d to provide this ac dil.ioual property tax adininistratior, service. Thank you for your attention to c ur,strcm r R Ily; ,t t S. Kee;ter y Managcr, Citt••of Orinda Chair, Public Managers Association cc: jolirt Cullen, County Administrator. Contra Costa Cc+ur ry Stephen Ybarra, Auditor 1 Ckor►troher. Centra Costa Cot;nt.y Contra Costa County Public Managcrs rissociration M:,c:r7j-14C;R :BOS letrer - ILL U-5 rAA V4DZQZ40-D1 MEW" r ft C1-0.7 . .1 Ltc- rro, J Z7 APR 0 2008 65 Civic Avcnue • Pittsburg, Cafiforriia )456� M. LERK BOARD OF 0"JPERVISORS CONTRA COSTA CO. QFPCE )FTHE MAYOR FOR IMMEDIATE TRA1tilS'-`v111'TAL April 7, 2008 Contra Costa County Board of Super-visors 651 Fine Street Martinez, CA 94553-1229 Dear Chair Glover and Members of the Board: In FY 2006-07, counties throughout the State Co-atra Costa CLC,unti-) began including 'Sales, and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section Y7.70) adjustment ZMC-LoUnts in their cornptit�LtiOri Of property tax administration cost shares. This- inci-O.sion. has led to significant increases in property tax administration. costs for cities through(,,)-Lit the 'State. - The City of Pittsburg has been hit exceptionally hard by this change, having end fired a. massive 375% increase in FY t2006-07- 7 - -: �Vhile Cy staff did not agree with the Cow-Ltv'i; ntcr.pretadbn that the ' ales and Use Tax and Vehicle License'Fee adFLI-stment amounts ,ihouid be included in the ca.IcLllation for administration charges, staff w@s aiv-are that the State Controller's Office (SC10.) had beoi asked to -,veigh in on the issue and elected U.) for their opinion. l3ef;.,)re. Iformally protesting the County's interpretation. The SCO legal office offered their opinion in a letter dated -TEirivary 7, 2008. in this letter, Jeffrey V. BroNvi-dield, Chiei: of the Division of Avr,its f(:)r the State Corttrollers Office stated hnplemenfi?ij; Rewinu mid Toxtu*ion :c&L, 17.C�,_; 1z)1e, 911.70. 5,C(.'- leg.-J ecl2tll,4!1 npificd that Sales wid Use -Fr,:t and VeIncle T-iccm;e Tt!.:.ad pis tni!eYtt am.ounts catincr 1 e a,'iod to T'.ez)e?iue and Taxation bode Fechm-z 96-i a-!rk-cc ic?z 17 :c ;nare,+in order :o del.ermi-ne iwiminisrrat.ve cost Shai-cs Siat.af clearlil 4,late 'hfl! ame-not, 411VIjhl UP' ` a e c.1 -r+�Tedfiw- adintiiiI'stratizic te7-z72ce5 thn, nrceed.c v7cacaiai' C(751 Legal vouriseilt.47-,he9- olpmed that counties mrzttst mait;fair and Usrl'ax atid V617icle Licens^ Fee charg-S. ,16 fe^,, must I-le based cni actual CV.Stc. Q714 the aCtUal COSM TCIatbl-.CO type Ctf char..�e mih,,.- I n one fmothcr-" C, 1-0? Contra Costa County Board of Supevisors April 7,2008 Page 2 Staff recently received Contra Costa County's -proposed FY 2007/08 I'rroperty Tax Adrnn-List-rative Cost Recovary fees and 1,verz extremely disappointed tYtat the recommendations of the SCO have not been followed. The revenues collected for Sales and Use Tax and Vehicle License Fee adjustments Have once again been included the calculation of net revenue per jurisdiction. In a direct contrast to what the SCO opined, this net .revenue, inclusive of the additional adjustmentts, is thea used to calculate the property tax administration charges. In addition, no separate documentation for Sales and Use Tax and Vehicle T icense Fee charges was offered its recommended by the SCO_ We are therefore formally protesting the Determination of Property 'Tax Acinmrustaative Cost Recovery for FY 2007/08 as scheduled to be heard at a public hearing by the Contra Costa County Board of Supervisors at your meeting schedufed. for 'Tuesday, A pri18, 2008. Sincerely, Will cas-ey Mayor cc: City Council Meiners John Cullen, Chief Adtnirustrative Officer CITY OF SAN PABLO ®coo One Alvarado Square 13831 San Pablo Avenue San Pablo, CA 94806 www.ci.san-pablo.ca.us F f Phone 510.215.3000 • Fax 510.620.0204 Office of the Mayor tt� April 8, 2008 APR 1 4 2009 CLE Fiv,131.57,;J irk .�i j[> hil'iSO{iS Contra Costa County Board of Supervisors 651 Pine Street Martinez,CA 94553-1229 Dear Chair Glover and Members of the Board: In fiscal year 2006-07, counties throughout the State (including Contra Costa County) began including Sales and Use Tax (Revenue and Taxation Code section 97.68) and Vehicle License Fee (Revenue and Taxation Code section 97.70) adjustment amounts in their computation of property tax administration cost shares. This inclusion has led to significant increases in property tax administration costs for cities throughout the State. The City of San Pablo has been hit exceptionally hard by this change, having endured a massive 63% increase in fiscal year 2006-07. While City staff did not agree with the County's interpretation that the Sales and Use Tax and Vehicle License Fee adjustment amounts should be included in the calculation for administration charges, staff was aware that the State Controller's Office (SCO) had been asked to weigh in on the issue and elected to wait for their opinion before formally protesting the County's interpretation. The SCO legal office offered their opinion in a letter dated January 7, 2008. In this letter, Jeffrey V. Brownfield, Chief of the Division of Audits for the State Controller's Office stated "As the counties' assessors and treasurer-tax collectors incur no additional costs in implementing Revenue and Taxation code sections 97.68 and 97.70, SCO legal counsel opined that Sales and Use Tax and Vehicle License Fee adjustment amounts cannot be added to Revenue and Taxation Code section 96.1 and section 100 computed property tax shares in order to determine administrative cost shares. Statutes clearly state that no amount should be charged for administrative services that exceeds the actual cost of providing such services. Legal counsel further opined that counties must maintain separate documentation for Sales and Use Tax and Vehicle License Fee charges, as fees must be } Contra Costa County Board of Supervisors Page 2 April 8,2008 based on-actual costs and the actual costs relating to each type of charge might differ from one another." Staff recently received Contra Costa County's proposed 2007/08 Property Tax Administrative Cost Recovery fees and were extremely disappointed that the recommendations of the SCO have not been followed. The revenues collected for Sales and Use Tax and Vehicle License Fee adjustments have once again been included the calculation of net revenue per jurisdiction. In a direct contrast to what the SCO opined, this net revenue, inclusive of the additional adjustments, is then used to calculate the property tax administration charges. In addition, no separate documentation for Sales and Use Tax and Vehicle License Fee charges was offered as recommended by the SCO. We are therefore formally protesting the Determination of Property Tax Administrative Cost Recovery for 2007/08 as scheduled to be heard at a public hearing by the Contra Costa County Board of Supervisors at your meeting scheduled for April 8, 2008. Sincerely, hI�4& Sharon J. Brown Mayor