HomeMy WebLinkAboutCC RESO 2009-47RESOLUTION NO. 2009 — 47
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF NATIONAL CITY AUTHORIZING
THE CITY MANAGER TO EXECUTE A TOLLING AGREEMENT
WITH THE COUNTY OF SAN DIEGO PERTAINING TO
POTENTIAL LEGAL ACTION TO DETERMINE THE VALIDITY
OF THE COUNTY'S PROPERTY TAX ADMINISTRATION FEE
WHEREAS, effective July 1, 2004, Revenue and Taxation Code Section 97.68
reduced the Bradley -Burns Sales and Use Tax rate paid to cities and counties by %-cent, and
the' -cent is retained by the State of California to repay State -issued economic recovery bonds.
Section 97.68 provides that, in lieu of the 1%-cent sales tax, cities and counties receive property
taxes that otherwise would have been allocated to the county's Education Revenue
Augmentation Fund (ERAF) for the benefit of schools and, ultimately, the State which bears
institutional responsibility to fund public education. This revenue swap, known commonly as the
"Triple Flip", was adopted as a temporary measure to fund repayment of the economic recovery
bonds; and
WHEREAS, effective July 1, 2004, Revenue and Taxation Code Section 97.70
reduced the amount of vehicle license fees (VLF) paid to cities and counties from 2% to .065%
of a vehicle's assessed value. Section 97.70 provides that each city and county shall receive in -
lieu payments of property taxes equal to the lost VLF. This substitution is commonly known as
"the VLF Swap". The VLF Swap is a permanent feature of the state -local finance relationship, in
that it has no legislatively provided sunset date; and
WHEREAS, pursuant to Section 97.68 and 97.70, the County of San Diego has a
duty to annually allocate and distribute to cities within San Diego County the appropriate in -lieu
payments from property tax revenues to equal the revenue each city loses as a result of the
Triple Flip and the VLF Swap; and
WHEREAS, Revenue and Taxation Code Section 97.75 mandates that counties
may not charge for such services for the 2004/2005 and 2005/2006 fiscal years. Section 97.75
further mandates that although counties may charge a Property Tax Administration Fee
("PTAF") for such services beginning in the 2006/2007 fiscal year, "the fee, charge, or other levy
shall not exceed the actual cost of providing these services."; and
WHEREAS, a dispute has arisen between the County of San Diego and the cities
within San Diego County regarding the amount to be charged to the cities by the County for the
PTAF; and
WHEREAS, a lawsuit is pending over a similar issue between the County of Los
Angeles and various cities within Los Angeles County regarding the same subject matter. The
cities within San Diego County and the County of San Diego agree that the legal issues to be
determined in the Los Angeles County case could assist in resolving the dispute between the
County of San Diego and the cities of San Diego County; and
WHEREAS, legal counsel for the cities within San Diego County and the County
of San Diego believe it will be mutually beneficial to suspend the prosecution of a potential legal
action ("Legal Action") by the cities against the County in its entirety until there is a final
determination on the merits in the Los Angeles County case. A Tolling Agreement has been
proposed that would allow the parties to continue to discuss the dispute described above and
Resolution No. 2009 — 47
March 3, 2009
Page 2
independently determine whether the ultimate outcome of the Los Angeles County case could
lead to a resolution of the issues currently before the cities and the County of San Diego. The
effect of the Tolling Agreement would preclude the expiration of any applicable statutes of
limitation, and suspend the requirements for the filing of claims, while the cities and the County
continue to discuss this matter.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
National City hereby authorizes the City Manager to execute a Tolling Agreement with the
County of San Diego pertaining to potential legal action to determine the validity of the County's
Property Tax Administration Fee.
PASSED and ADOPTED this 3rd day of March, 2009.
ATTEST:
Mich. el R. Dalla, Cit Clerk
APPROVED AS TO FORM:
George H.iser, III
City Attorney
Ron Morrison, Mayor
Passed and adopted by the Council of the City of National City, California, on March 3,
2009 by the following vote, to -wit:
Ayes: Councilmembers Morrison, Parra, Sotelo-Solis, Van Deventer, Zarate.
Nays: None.
Absent: None.
Abstain: None.
AUTHENTICATED BY: RON MORRISON
Mayor of the City of National City, California
iy � ai
C rk of the City of ational
City City, California
By:
Deputy
I HEREBY CERTIFY that the above and foregoing is a full, true and correct copy of
RESOLUTION NO. 2009-47 of the City of National City, California, passed and adopted
by the Council of said City on March 3, 2009.
City Clerk of the City of National City, California
By:
Deputy