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 Taxes

 

Recommendation

Approve resolution to (1) provide notice that the Agreement for Compensation to County of San Mateo for Collection of Special Taxes (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 that cover our costs.

 

Background

Currently, as a service to cities and special districts, the County collects certain special taxes through the countywide property tax bill. Special taxes are charges which do not require a direct benefit to the real property (e.g., libraries and parks).

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

According to California Code 50077(b), if the county on behalf of the city, or district collects special taxes, the county may deduct its reasonable costs incurred for the service before remittal of the balance to the city or special district. An analysis of the County’s cost to provide this service indicates that it costs $1.25 per transaction for special taxes.

 

During fiscal year 2001-02, San Mateo County processed 1,550 paper transactions and 16 corrections for special taxes. Data submitted in electronic format reduces processing time and expense; thus, a price break was incorporated in the updated fee structure to encourage electronic filings. Processing corrections requested after the preparation of the tax roll are the most labor intensive and costly. We recommend charging $25 per transaction for each correction submitted after the tax roll has been prepared to encourage special agencies and districts to review and verify data prior to submission.

Based on our cost analysis 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 $65,902, which would reduce the Controller’s Net County Cost.