COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Controller’s Office

 

DATE:

3/20/2003

BOARD MEETING DATE:

3/25/2003

 

TO:

Honorable Board of Supervisors

FROM:

Tom Huening, Controller

SUBJECT:

Update of Fees for Collection of Special Assessments

 

Recommendation

Approve resolution to (1) provide notice that the Agreement for Compensation to County of San Mateo for Collection of Special Assessment Charges (the “Agreement”) with cities and special districts will not be automatically renewed for the next fiscal year, and (2) approve a request to modify the compensation schedule set forth in the Agreement to rates comparable with other counties.

 

Background

Currently, as a service to cities and special districts, the County collects certain special assessment charges through the countywide property tax bill. Special Assessments are charges against real properties that receive a direct benefit as a result of an improvement (e.g., lighting or sewer services, etc.).

In 1980, the Board of Supervisors established the following schedule of charges for this service:

    (a) $.30 per transaction if input data is in electronic format

    (b) $.50 per transaction if input data is in paper format

    (c) $4.50 per transaction for each change after the taxroll has been prepared.

San Mateo County has not raised rates in the past 23 years.

 

Discussion

Fifty-eight California counties were sent questionnaires on the handling of special assessment charges; twenty-four counties responded to our request. The results of the survey indicate there are two methods used for calculating fees:

 

(a)

Transaction basis: fees are based on the number of transactions submitted (as discussed above).

 

(b)

Percentage basis: fees are based on a percentage of the total assessment charges processed.

Of the twenty-four (24) responding counties, there were seven (7) comparable counties who charge fees on a per transaction basis. The other seventeen (17) counties were not comparable for the following reasons:

    • Eight (8) counties use the percentage basis to calculate special assessment fees. (Solano, Shasta, Orange, Santa Clara, Santa Cruz, Sonoma, Calvaras and Mendocino)

    • Seven (7) counties charge on a per transaction basis, but either their rates had not been reviewed or updated within the past ten years and/or they were charging other additional fees that San Mateo County does not charge. (El Dorado, Riverside, Merced, Tulare, San Diego, Santa Barbara, and Los Angeles)

    • One (1) county charges a flat rate of $50 for the first 100 transactions and $.50 for each transaction thereafter. (Napa)

    • One (1) county does not charge fees at all. (Ventura)

Among the comparable counties, the average fee is $1.74 per transaction for paper filings and $1.28 per transaction for electronic filings. See supplemental for further detail.

We also found that seven (7) counties charge fees per transaction for changes made after the tax roll has been prepared. The fees ranged from $10 - $25 per change. The average fee charged per transaction, for each change after the tax roll has been prepared is $18.57.

During fiscal year 2001-02, San Mateo County processed 1,210 paper transactions and 278 corrections for special assessment charges. Per discussion with other counties, requiring data to be submitted in electronic format reduced processing time and expense; thus, a price break was incorporated in the updated fee structure to encourage electronic filings. Many counties chose their rate for corrections to ensure special agencies and districts are careful to review and verify data prior to submission. Furthermore corrections are the most labor intensive and costly part of this process. Therefore, we recommend charging $25 per transaction for each correction submitted after the tax roll has been prepared.

Based on the results of the survey, we recommend San Mateo County modify the compensation schedule in the Agreement as follows:

    $1.25 per transaction if submitted in electronic format (diskette, CD, magnetic tape, or electronic mail), unless fees collected are 5%, or more of total charges in which case the rate will remain at $.30 per transaction.

    $1.75 per transaction if submitted in hardcopy. Beginning fiscal year 2004-05, all transactions from cities and special districts will be required to be submitted in electronic format.

    $25 per transaction for each correction after the tax roll has been prepared.

    Any city or special district whose fees amount to $10.00 or less will be waived due to its immaterial fiscal impact.

Per the terms of the current agreement, unless either party notifies the other of a proposed modification within ninety (90) days of the close of the fiscal year, the contract will automatically renew under the current compensation schedule; therefore, action must be taken before March 30, 2003.

 

Vision Alignment

This resolution supports the Vision 2010 Commitment that says, government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain.

 

Fiscal Impact

Using the new rates, we estimate a revenue increase of approximately $195,110, which would reduce the Controller’s Net County Cost.