Inter-Departmental Correspondence

Controller’s Office



May 24, 2010


June 8, 2010







Honorable Board of Supervisors


Kanchan Charan, Deputy Controller


Request for Authorization for the Controller to Execute Agreements with Special Districts, School Districts and Cities to Compensate the County for its Collection of Special Taxes, Special Assessments, and other Special Charges



Adopt a resolution authorizing the Controller, or the Controller’s designee, to execute agreements with cities, school districts, and special districts for the purpose of compensating the County for the collection of special taxes, special assessments, and other special charges.



As a service to school districts, cities and special districts, the County currently collects certain special taxes, special assessments, and other special charges 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). 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.). Other special charges include storm water and other fees that are "property related fees" under Prop 218.


In exchange for collecting such special taxes, special assessments, and other special charges, the County is compensated pursuant to agreements with each of the affected cities, school districts, and special districts. Such agreements were initially entered into in 1980 and the compensation schedules were subsequently amended in 2003 and 2009. In 2009, the cities, school districts, and special districts were informed that further amendments to the agreements would be forthcoming in 2010 so that, among other things, the County’s compensation rate would automatically adjust depending on changes to the County’s internal service charge rate. Such modifications will obviate the need for further amendments to the agreements’ compensation schedules each year.



On May 11, 2010, this Board approved the modifications to the existing compensation schedules in order to better reflect the County’s costs in collecting the above-referenced charges. Although the County had previously adjusted its compensation schedules in 1980, in 2003, and most recently in 2009, the modifications proposed in May 2010 provided for the automatic adjustment of the County’s fees based on the annual revision, if any, to the County’s Labor Service Charge rate announced by the County Manager’s Office in connection with the County’s budgeting process. Further, historically the County’s transaction charges were substantially decreased (i.e., from $1.35 per transaction per parcel to $0.33 per transaction per parcel) if the fees to be paid exceeded 5% of the total charges to be collected. The compensation schedules approved by this Board in May 2010 simplified the compensation schedules by simply limiting maximum collection fees to 5% of the charges collected without adjustment to the underlying per parcel rate.


For the 2010-11 tax year, the County anticipates collecting special taxes, special assessments, and other special charges for 49 taxing entities pursuant to

55 agreements. Because these agreements automatically renew each year, some of the agreements will result in revenue to the County in excess of $100,000, over the course of their term which would typically require Board approval and execution.


For the purposes of administrative efficiency, the Controller is requesting authority from the Board to execute all of the agreements in substantially the form submitted herewith.


The County Counsel’s office has reviewed and approved the resolution and agreements as to form.


The proposed agreements contribute to the Shared Vision 2025 outcome of a Collaborative Community by allowing the County to more efficiently ensure that it is recovering an adequate amount of its collection costs each year without the need to further amend its existing agreements with cities, school districts, and special districts.


Performance Measure(s):


FY 2009-10

FY 2010-11

Net County Cost as a Percentage of Program Total Requirements



Certain administrative costs allocable to the operating divisions are accounted in the Administration Division. The performance measure above would be positive if those costs are taken in to account. The centralized accounting of such costs best meets the needs of the Department management and the County Manager’s Office.


Using the new rates, we estimate a revenue increase of approximately $101,343 pursuant to the updated agreements which would reduce the Controller’s Net County Cost.