COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Assessor-County Clerk-Recorder

DATE:

April 18, 2005

BOARD MEETING DATE:

May 3, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Warren Slocum, Assessor-County Clerk-Recorder

SUBJECT:

Agreement to Participate in State-County Property Tax Administration Grant Program for FY 2004-05

RECOMMENDATION:

Adopt a resolution authorizing the execution of an agreement with the California Department of Finance to continue participation in the State-County Property Tax Administration Grant Program (AB 589) in the amount of $2,220,001 for assessment activities during fiscal year 2004-05.

VISION ALIGNMENT:

Commitment: Responsive, effective, and collaborative government

Goal(s): Government decisions based on careful consideration of future impact, rather than temporary relief or immediate gain.

Performance Measure(s):

Measure

FY 2003-04 Actual

FY 2004-05 Projected

Increase in total assessed value (rounded to nearest million)

$20.105 billion

$13.345 billion

BACKGROUND:

Since 1995, the State-County Property Tax Administration Loan Program (Rev. & Tax. Code §95.31) has reimbursed some county costs if revenue goals were met.

For FY 1995-96 to FY 2001-02, our allocated $2,220,001 annual loans rewarded enrollments exceeding $10 billion and related revenue increases of $100M. These funds enabled us to: (1) implement new systems for assessment and geographic data (GIS); (2) greatly reduce processing backlogs; (3) succeed in major litigation and set statewide standards for airline and biotechnology industries; (4) meet professional education mandates; and (5) support the Assessment Appeals Board, County Counsel, and other Fiscal Departments. We have no residual loan debt.

In 2001, the Loan Program’s rich fiscal yield motivated the creation of the State-County Property Tax Administration Grant Program (Rev. & Tax. Code 95.35; AB 589; Chapter 521, Stats. 2001), authorizing annual grants in the same amounts through FY 2006-07. Funds are distributed at the end of the fiscal year, on condition of meeting performance goals during the prior year.

For FY 2002-03, the transitional year, our grant reflected performance through January 2003. Our FY 2003-04 grant reflected that full fiscal year. We now desire to accept the FY 2004-05 grant of $2,220,001, for performance that full year.

DISCUSSION:

Performance improvements continue as we further integrate systems and personnel.

As the grant agreement details, the bottom line performance measure is the total change in assessed value. Success equals a revenue increase equal to or higher than the grant amount. The assessor may not use grant funds to supplant base level county funding, and must maintain base staffing and use funds only for specified tax administration purposes. Funds remaining after annual goals are met may be rolled over for use in the following fiscal year.

By board of supervisors’ resolution, a county may opt into the program each year, for the assigned amount and performance goals or on terms renegotiated in the event of a calamity affecting at least one percent of assessable parcels. After poor performance in one year, the state may withhold funds or lower the grant in the next.

As required, our expenditure plan reflects consultation with the Tax Collector and Controller. The plan provides: $200,000 equally shared by the Fiscal departments for the Supplemental Property Improvement Project; $100,000 to County Counsel for litigation support; $335,000 to Information Services for systems, GIS and database support; and $72,000 to the Assessment Appeals Board for administration.

This agreement has been reviewed and approved by County Counsel, Fiscal Departments, and the Department of Finance. Pursuant to statute, the DOF will execute the agreement only after it has been executed by this Honorable Board.

FISCAL IMPACT:

There is no Net County Cost. As in prior program years, we expect these funds will generate increases in property tax revenues.