COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Controller

DATE:

June 6, 2011

BOARD MEETING DATE:

June 21, 2011

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Tom Huening, Controller

SUBJECT:

Modification of Compensation Schedule and Approval of Revenue Agreement with the San Mateo Community College District

RECOMMENDATION:

Adopt a Resolution authorizing:

A) Modification of the compensation schedules set forth in the County’s agreements for compensation for the collection of special assessments, special taxes, and special charges to be levied on more than 200,000 parcels; and

B) The Controller or his designee to execute a revenue agreement with the San Mateo County Community College District for the collection of special taxes for the term of FY 2010-11 through FY 2013-14 at a rate of $85,000 per year.

BACKGROUND:

As a service to cities, school districts, and special districts, the County collects certain special assessments, special taxes, and special 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., street sidewalks, street lights, etc.). “Special taxes” are charges which do not require a direct benefit to the real property (e.g., libraries and parks). “Special Charges” are property-related fees which are neither special assessments nor special taxes.

In exchange for collecting such special assessments, taxes, and charges, the County is compensated pursuant to agreements with each of the affected taxing entities, school districts, and special districts. The current compensation schedules for the County’s collection of special assessments, taxes, and charges were approved by the Board on May 11, 2010. The compensation schedules in each form of agreement are identical, and state in relevant part that the County shall be compensated for its collection of special assessments, taxes, and charges as follows:

$1.35 per parcel for each [special assessment/special tax/special charge] to be collected, if submitted in electronic format (diskette, CD, magnetic tape, or electronic mail), unless the aggregate amount of the fees to be paid pursuant to this subsection (a) exceeds 5% of total [special assessments/special taxes/special charges] collected by the County on behalf of [Name of City, School District, or Special District] pursuant to this Agreement, in which case [Name of City, School District, or Special District] agrees that, as payment pursuant to this subsection, it will pay the County an amount equal to 5% of such total [special assessments/special taxes/special charges] collected by the County. The parties further agree that the “per parcel” fee set forth above shall be subject to a percentage increase or decrease each fiscal year in accordance with the annual change in the County Labor Service Charge rate announced by the County Manager’s Office in connection with the County’s budgeting process.

DISCUSSION:

In connection with the County’s collection of special assessments, taxes, and charges in FY 2010/2011, concern was raised that the collection fees for entities with countywide assessments, taxes, or charges were excessive notwithstanding their limitation to 5% of the amounts collected. For example, the San Mateo County Community College District (the “College District”) expressed concern that its fees for the County’s collection of its special taxes would total nearly $285,000 under the current formula.

In light of this concern, the Controller’s office recommends that the County modify its collection schedule to provide that, for any special assessment, tax, or charge to be levied on more than 200,000 parcels in a fiscal year, the aggregate fees to be paid shall be $85,000. As this provision currently only affects the fees imposed for the collection of the College District’s special taxes for FY 2010-11 through FY 2013-14, only that agreement is presented for approval and execution.

Approval of this Resolution contributes to the Shared Vision 2025 outcome of a Collaborative Community by ensuring that taxing agencies are paying an equitable amount in collection costs each year.

County Counsel has reviewed and approved the Resolution and proposed agreement with the College District as to form.

Performance Measure(s):

Measure

FY 2010-11
Target

FY 2011-12
Target

Net County Cost as a percentage of Program Total Requirements

-24%

-24%

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

FISCAL IMPACT:

In FY 2010-11, the Controller’s Office will collect $85,000 in fees for the collection of special taxes for the San Mateo County Community College District.