HomeMy WebLinkAbout2009 CON SD County - Property Tax Administration FeeDocument No. 09-D0096A-1
2/18/09 (2B)
COPY
TOLLING AGREEMENT
This TOLLING AGREEMENT (the Agreement) is made and entered into by and among
the Cities of Carlsbad, Chula Vista, Coronado, Del Mar, El Cajon, Encinitas, Escondido,
Imperial Beach, La Mesa, Lemon Grove, National City, Oceanside, Poway, San Diego, San
Marcos, Santee, Solana Beach and Vista (Cities), and County of San Diego (County), to be
effective as of February 15, 2009 (the Effective Date).
RECITALS
Effective July 1, 2004, Revenue & Taxation Code ("R & T") section 97.68 reduced the
Bradley -Burns Sales and Use Tax rate paid to cities and counties by 1/4-cent, and the 1/4-cent is
retained by the State of California to repay State -issued recovery bonds. Section 97.68 provides
that, in lieu of the 1/4-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 constitutional 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.
Effective July 1, 2004, Revenue & Taxation Code section 97.70 reduced the amount of
vehicle license fees (VLF) paid to cities and counties from 2% to 0.65% 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 state -local finance relationship in that it has no
legislatively provided sunset date.
Pursuant to Sections 97.68 and 97.70, County 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.
Revenue & 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."
Cities believe that beginning in or about fiscal year 2008/2009 and continuing into
subsequent fiscal years, County will charge Cities fees in excess of those permitted by Revenue
& Taxation Code section 97.75. In particular, Cities believe that County will charge Cities more
than the actual, incremental costs associated with County's administration of the in -lieu
payments for the VLF Swap and Triple Flip. Instead, Cities believe County will charge each City
a share of PTAF based on the increased distribution of property tax proceeds due to the Triple
Flip and the VLF Swap rather than each City's proportionate share of the actual, incremental cost
to administer the Triple Flip and VLF Swap. Cities believe the PTAF that the County intends to
charge to each City and to be retained by the County is far in excess of that permitted by Revenue
& Taxation Code section 97.75.
The Cities and County are aware of a legal action over a similar issue between various
cities and the County of Los Angeles regarding the same subject matter. (City of Alhambra, et. al
v. County of Los Angeles, et. al, Los Angeles Superior Court No. BS 116375). A copy of the
"First Amended Petition for Writ of Mandate and Related Relief' is attached to this Tolling
Agreement as Attachment "1" (referred to herein as "Los Angeles County case"). The Cities and
County agree that the legal issues that are to be determined in the Los Angeles Case could assist
the parties to this agreement in fully and finally settling the current dispute between the parties in
San Diego County.
The Cities and County believe it will be mutually beneficial to stay 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 Case. Therefore, a Tolling Agreement
would allow the parties to continue to discuss the dispute described above and independently
determine whether the ultimate outcome of the Los Angeles Case could lead to a resolution of
the issues currently before the Cities and County.
Therefore, Cities and County, for and in consideration of the promises, covenants, and
considerations herein expressed and based upon the Recitals herein, agree as follows:
1. The parties agree that the running of any statute of limitations, or other limitations
period with respect to the Legal Action shall be tolled and suspended from the Effective Date of
this Agreement through and including the expiration date (as defined in Paragraph 3 below)
(hereinafter the "Tolling Period"). The parties further agree that any applicable time period set
forth in any state or local statute for the Cities to file a claim or pursue any other administrative
remedy prior to filing the Legal Action shall be tolled during the Tolling Period.
2. County agrees that, during the Tolling Period, Cities need not file any claim or
administrative or judicial action to challenge the fees or charges referenced in the Recitals above.
The parties agree that this Agreement shall not in any manner prevent, or impede, or be construed
as preventing or impeding, City or County from conducting other and further investigation of any
claims during the Tolling Period.
3. Unless extended by mutual written agreement by the parties, this Agreement shall
expire at close of business sixty (60) days following the date either party gives notice of
termination of this Tolling Agreement in writing, or by forty (40) days following the notice of
ruling at the trial court level in the Los Angeles Case received in writing by the parties,
whichever shall first occur, or by such earlier date as the parties may mutually agree to in writing.
(the "Expiration Date). The parties agree that any notice of ruling at the trial court level in the
Los Angeles Case received by the County shall be immediately forwarded to a City designated by
the other Cities to receive service. The designated City shall immediately forward to the County
the notice of ruling at the trial court level it receives from the Los Angeles Case. Service on any
City designated to receive service on behalf of all Cities shall be considered appropriate notice
2
for the purposes of this paragraph. If the Expiration Date falls on a date when the party receiving
notice is not open for business, the Expiration Date shall be the next day the party receiving the
notice is open for business.
4. The parties agree that this Agreement shall not in any manner revive any claims or
causes of action that were barred prior to the effective date of this Agreement by any statute of
limitations or other limitations period. The parties agree further that the applicable statutes of
limitations and other limitations periods tolled and suspended by this Agreement shall resume
running again on the Expiration Date.
5. This Agreement is not intended, and shall not be construed, as an admission by
either party that the other party has valid claims or defenses.
6. This Agreement shall be interpreted, construed, and enforced in accordance with
the laws of the State of California.
7. The parties agree to preserve all documents, records, and other evidence or
potential evidence within their care, custody, possession or control, that relate in any way to any
claims.
8. Each party warrants that it has carefully reviewed, and understands, every part of
this Agreement, that such party has entered into this Agreement voluntarily, and that such party
has not made any promises, representations, or inducements other than those contained herein.
9. Each party signing this Agreement represents and warrants that it has the authority
to do so and that the signature which appears below binds such party, and its respective officers,
agents, and attorneys to the terms of this Agreement.
10. This Agreement constitutes the entire agreement between the parties with respect
to the subject matter hereof, and any prior oral or written statements concerning this subject are
merged herein for all purposes and have no further force or effect.
11. This Agreement may be amended only by written agreement of the parties.
12. All notices, requests, demands, and other communications required or permitted
under this Agreement shall be in writing (including telex, telecopy and telegraphic communications)
and shall be (as elected by the person giving such notice) hand delivered by messenger or courier
service, telecommunicated with electronic confirmation or mailed by United States mail (postage
prepaid), registered or certified, return receipt requested, addressed as follows:
CITIES: COUNTY:
(See Attachment "2")' John Sansone, County Counsel
1600 Pacific Highway, Rm. 355
3
13. This Agreement may be executed in one or more counterparts, and each such
counterpart upon execution and delivery shall be deemed a complete original.
DATED: 11 it 09
DATED:
DATED:
By:
CITY OF CARLSBAD
44_-1--,
City j anager
sty C erk
By\c±7— P. Por o-e_ .
Ronald Ball -Nit pi c, q
City Attorney
CITY OF CHULA VISTA
DATED: By:
City Manager
DATED: By:
Donna Norris
City Clerk
DATED: B y:
Bart Miesfeld
City Attorney
CITY OF CORONADO
DATED: By:
Mark Ochenduszko
City Manager
DATED: By:
Linda Hascup,
City Clerk
DATED: By:
Morgan L. Foley
City Attorney
4
San Diego, CA 92101
13. This Agreement may be executed in one or more counterparts, and each such
counterpart upon execution and delivery shall be deemed a complete original.
CITY OF CARLSBAD
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Ronald Ball
City Attorney
DATED: 'id-/Oef
DATED: Z/zeJoc,
DATED: 2 / . ¢/0
CITY OF HULA VISTA
Donna Norris
City Clerk
art Mies d
City Attrne
CITY OF CORONADO
DATED: By:
Mark Ochenduszko
City Manager
DATED: By:
Linda Hascup,
City Clerk
DATED: By:
4
13. This Agreement may be executed in one or more counterparts, and each such
counterpart upon execution and delivery shall be deemed a complete original.
CITY OF CARLSBAD
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Ronald Ball
City Attorney
CITY OF CHULA VISTA
DATED: By:
City Manager
DATED: By:
Donna Norris
City Clerk
DATED: By:
Bart Miesfeld
City Attorney
CITY OF CORONA 1.0
DATED: T/lM I O 1 By:
DATED: 1 3 /o �(
l
DATED: 1,0 • Vtv-1
�
By:
Bv:
Mark SI nduszko
City M : ger
1k .*'4Nt'OY
Linda Hascup,
ity Clerk
4
CITY OF DEL MAR
DATED: By:
Karen Brust
City Manager
DATED: By:
Mercedes Martin
City Clerk
DATED: By:
Kimberly Johnson
City Attorney
DATED: 3• t t •
CITY OF EL CAJON
By:
Kathi Henry
DATED: _ By:
DATED: t 1 • I/141-G14 1' By:
City anager
Kae Rutledg
.City Clerk
M.rga L. Fole
ity • orney
CITY OF ENCINITAS
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Glenn Sabine
City Attorney
5
DATED:
DATED:
V--/ -.09
CITY OF ESCONDIDO
By:
By:
DATED: 4 " / - oq By:
DATED:
CityManager
City Attorney
CITY OF IMPERIAL BEACH
By;
Gary Brown
City Manager
DATED: By:
Jacqueline Hald
City Clerk
DATED: By:
James P. Lough
City Attorney
CITY OF LA MESA
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Glenn Sabine
City Attorney
6
CITY OF ESCONDIDO
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Jeffrey R. Epp
City Attorney
DATED: Li ! 4 (a?
DATED:
DATED: lib Al
DATED:
CITY OF IMPERIAL BEACH
By;
Gary Broz4n
City Manager
es P. Lou
Attorney
By:
City Manager
DATED: By:
City Clerk
DATED: By:
Glenn Sabine
City Attorney
6
CITY OF ESCONDIDO
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Jeffrey R. Epp
City Attorney
CITY OF IMPERIAL BEACH
DATED: By;
Gary Brown
City Manager
DATED: By:
Jacqueline Hald
City Clerk
DATED:
DATED: 14
DATED: A -
DATED:
By:
James P. Lough
City Attorney
lS , Zoact By:
By:
6
City Manager
Glenn Sabine
City Attorney
DATED:
DATED:
DATED:
By:
CITY OF LEMON GROVE
By:
Graham Mitchell
City Manager
By:)(
Susan Garcia
ty Clerk
s P. Loug
Attorney
CIT NATIONAL CITY
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
George Eiser III
City Attorney
CITY OF OCEANSIDE
DATED: By:
Peter Weiss
City Manager
DATED: By:
Barbara Riegel Wayne
City Clerk
DATED: By:
John P. Mullen
City Attorney
7
CITY OF LEMON GROVE
DATED: By:
Graham Mitchell
City Manager
DATED: By:
Susan Garcia
City Clerk
DATED: By:
James P. Lough
City Attorney
DATED:
DATED: .S — 41— o9
DATED: 3 y G I
CITY OF NATIO? AL CITY
By:
By:
By:
L
City Mana:e
City Clerk
14111
George Eiser III
City Attorney
CITY OF OCEANSIDE
DATED: By:
Peter Weiss
City Manager
DATED: By:
Barbara Riegel Wayne
City Clerk
DATED: By:
John P. Mullen
City Attorney
7
CITY OF LEMON GROVE
DATED: By:
Graham Mitchell
City Manager
DATED: By:
Susan Garcia
City Clerk
DATED: By:
James P. Lough
City Attorney
CITY OF NATIONAL CITY
DATED: By:
Chris Zapata
City Manager
DATED: By:
Michael R. Dalla
City Clerk
DATED: By:
George Eiser III
City Attorney
DATED: 11— i -0 i
CITY OF OCEANSIDE
By:
DATED: 14" 7-0 9 By:
DATED:
By.
7
Peter Weiss
J� P. Mullen
rty Attorney
DATED: ` 7/7v 5
DATED: '9— / — O /
DATED: _ " U 9
CITY OF POWAY
By:
Rod Gould
ity Manage
A. Troyan, MMC
ty Clerk
�By: c� C.
Lisa A. Foster
City Attorney
CITY OF SAN DIEGO
DATED: By:
Jerry Sanders
Mayor
DATED: By:
Elizabeth Maland
City Clerk
DATED: By:
Jan Goldsmith
City Attorney
CITY OF SAN MARCOS
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Helen Holmes Peak
City Attorney
8
CITY OF POWAY
DATED: By:
Rod Gould
City Manager
DATED: By:
Diane Shea,
City Clerk
DATED: By:
Lisa A. Foster
City Attorney
DATED: �ZZ D
CITY OF SAN DIEGO
By 4,„/
erry Sanders
Mayor
DATED: By:
DATED: 4
CITY OF SAN MARCOS
DATED: _ By:
City Manager
DATED: By:
City Clerk
DATED: By:
Helen Holmes Peak
City Attorney
8
CITY OF POWAY
DATED: By:
Rod Gould
City Manager
DATED: By:
Diane Shea,
City Clerk
DATED: By:
Lisa A. Foster
City Attorney
CITY OF SAN DIEGO
DATED: By:
Jerry Sanders
Mayor
DATED: By:
Elizabeth Maland
City Clerk
DATED: By:
Jan Goldsmith
City, ttorney
CITY
DATED: By:
DATED: o214-12 ID? By:
DATED: By:
8
City Manager
'ty l rk
Helen Holmes Peak
City Attorney
DATED:
DATED:
- 4'1'7
CITY OF SANTEE
By:
Bv:
DATED: W 01 o 1 By:
City ClerkAN:a-1r'1/1
Shawn Hagerty
City Attorney
CITY OF SOLANA BEACH
DATED: By:
David Ott
City Manager
DATED: By:
Angela Ivey
City Clerk
DATED: By:
Johanna Canlas
City Attorney
CITY OF VISTA
DATED: By:
Rita Geldert
City Manager
DATED: By:
Marci Kilian
City Clerk
DATED: By:
Darold Pieper
City Attorney
9
City Manager
DATED: By:
City Clerk
DATED: By:
Shawn Hagerty
City Attorney
CITY OF
DATED: By:
DATED: By:
DATED:
Cit
Angela Ivey
City Clerk
hanna Canlas
ity Attorney
CITY OF VISTA
DATED: By:
Rita Geldert
City Manager
DATED: By:
Marci Kilian
City Clerk
DATED: By:
Darold Pieper
City Attorney
1
COUNTY OF SAN DIEGO
DATED: By:
John Sansone
9
CITY OF SANTEE
DATED: By:
City Manager
DATED: By:
City Clerk
DATED: By:
Shawn Hagerty
City Attorney
CITY OF SOLANA BEACH
DATED: By:
David Ott
City Manager
DATED: By:
Angela Ivey
City Clerk
DATED: By:
Johanna Canlas
City Attorney
CITY OF VISTA
DATED: .2/2 4110 9 By:
DATED: ez/Z4f/ b 4
By:
DATED: aA2 If/0 `l' By:
9
iie-e_ie,a0
Rit Geldert
City Manager
CUte__;___
Marci Kilian
City CI
Darold Pi
City Attorney
DATED:
COUNTY OF S N DIE
By:
son
Counsel
G:\Word Documents\AGREEMENTS\Tolling Agreement -SD COUNTY2-9-09.doc
RESOLUTION 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 1/4-cent, and
the 1/4-cent is retained by the State of California to repay State -issued economic recovery bonds.
Section 97.68 provides that, in lieu of the 1/4-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.
Ron Morrison, Mayor
ATTEST:
//
MichelR. Dalla, Cit Clerk
APPROVED AS TO FORM:
George H. iser, III
City Attorney
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
City Clerk of the City of Kational 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
ti
City of National City, California
CITY COUNCIL AGENDA STATEMENT
"'kw MEETING DATE March 3, 2009 AGENDA ITEM NO.
12
ITEM TITLE 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
PREPARED BY
EXPLANATION
George H. Eiser, III I' A DEPARTMENT City Attorney
(Ext. 4221)
Please see attached memorandum.
Environmental Review ' N/A
Financial Statement
N/A
Approved By:
Finance Director
Account No.
STAFF RECOMMENDATION
Adopt resolution.
BOARD / COMMISSION RECOMMENDATION
N/A
ATTACHMENTS ( Listed Below) Resolution No.
Memorandum
Resolution
Tolling Agreement
A-200 (9/99)
Mayor
Ron Morrison
Council Members
Frank Parra
Alejandra Sotelo-Solis
Jess Van Deventer
Rosalie Zarate
•§ CALIFORNIA --
N\TI.ON _L CIi
INCORPORATED
Office of the City Attorney
TO: City Clerk
FROM: City Attorney
SUBJECT: Tolling Agreement; Property Tax Administration Fce
City Attorney
George H. Eiser, III
Senior Assistant City Attorney
Claudia Gacitua Silva
Senior Assistant City Attorney
Jodi L. Doucette
Risk Manager
Ashley K. Fenton
DATE: May 12, 2009
Attached hereto is a copy of the Tolling Agreement pertaining to the County's Property Tax
Administration Fee, which has been executed on behalf of all 18 Cities in the County. The
Agreement was approved at the March 3, 2009 City Council meeting, pursuant to Resolution No.
2009-47.
air
GEORGE H. EISER, III
City Attorney
GHE/gmo
Attachment
1243 National City Boulevard; National City, California 91950-4301
Tel,: (619) 336.4220 Fax: (619) 336.4327