Item Coversheet

REPORT TO SHASTA COUNTY BOARD OF SUPERVISORS


BOARD MEETING DATE:  October  10, 2017
CATEGORY:  Regular - General Government-5.

SUBJECT:

Approval of Lump Sum Property Tax Neutrality Agreement for PG&E's Land Conservation Commitment

DEPARTMENT: Administrative Office

Supervisorial District No. :  All

DEPARTMENT CONTACT:  Laura Sumner, Administrative Analyst, (530) 225-3757

STAFF REPORT APPROVED BY:  Laura Sumner, Administrative Analyst

Vote Required?

Simple Majority Vote
General Fund Impact?

General Fund Impact 

RECOMMENDATION

Adopt a resolution which:  (1) Repeals Resolution No. 2015-125; and (2) authorizes the County Executive Officer to sign agreements to approve the County's receipt of lump sum payments from the Stewardship Council as compensation for tax revenue lost for conveyed land from Pacific Gas & Electric (PG&E) to a non-profit or other entity that is exempt from paying property taxes.

SUMMARY

N/A

DISCUSSION

The Pacific Forest and Watershed Lands (“Stewardship Council”) is a nonprofit organization, which was formed as a result of a PG&E Settlement Agreement with the California Public Utilities Commission (CPUC) in 2003 and the Stipulation Resolving Issues Regarding the Land Conservation Commitment.  The Stewardship Council is charged with implementing PG&E’s Land Conservation Commitment.

 

As part of the PG&E Settlement Agreement and Stipulation in 2003, a Land Conservation Commitment was established to permanently protect approximately 140,000 acres of PG&E watershed lands.  Located across 22 counties, the lands encompass almost 1,000 parcels.  The Watershed Lands stretch from Shasta County in the north to Kern County in the south, from the Sierra Nevada and Cascade ranges to the Eel River watershed in Mendocino County.  For planning purposes, the parcels were grouped into 47 planning units. 

 

Protecting the watershed lands will be accomplished through (1) PG&E’s grant of conservation easements to one or more public agencies or qualified conservation organizations so as to protect the natural habitat of fish, wildlife, and plants, the preservation of open space, outdoor recreation by the general public, sustainable forestry, agricultural uses, and historic values (collectively the Beneficial Public Values); and in some cases (2) PG&E’s donation of the watershed lands in fee to one or more public entities or qualified conservation organizations, whose ownership would be consistent with these conservation objectives.

 

In accordance with PG&E's Settlement Agreement, certain lands owned by PG&E are being donated to public agencies or qualified organizations for the protection of the lands.  This transfer of lands has the potential for  property tax implications.  The current total estimated tax neutrality lump sum amount for Shasta County is approximately $2 million for 23,386 acres, which would be paid following the closure of each applicable land donation if the lump sum funding agreement is approved by the Board of Supervisors.

 

On October 13, 2015, the Shasta County Board of Supervisors passed Resolution No. 2015-125 authorizing the County Executive Officer to execute funding agreements with the Stewardship Council to implement tax neutrality payments in annual installments in lieu of property taxes.  The Stewardship Council has requested that the Board of Supervisors reconsider its October 2015 resolution electing to receive the tax neutrality payments in annual installments and instead consider receiving lump sum payments following the closure of each applicable land transaction in Shasta County. 

 

To date, no other county has officially chosen the annual payment option, which has reduced the feasibility of this option for the Stewardship Council.  With such limited participation among counties in the annual payment option, it would be difficult to create an investment account whereby annual payments to Shasta County would be assured.  


ALTERNATIVES

The Board could choose not to adopt the resolution or the agreement with the Stewardship Council for a lump sum funding option and maintain the annual installment payments in lieu of property taxes.  This is not recommended as the Stewardship Council does not believe this is a feasible option as it would be difficult to create an investment account whereby annual payments are assured. 

OTHER AGENCY INVOLVEMENT

The Auditor has reviewed this recommendation.  County Counsel has reviewed the resolution and funding agreement and approved it as to form.  Risk Management has approved the funding agreement. 

FINANCING

There is General Fund impact with the recommendation.  Currently, the lands held by PG&E are assessed by the Board of Equalization because they are held by a utility company.  At the time of transfer, the lands will be appraised by the Shasta County Assessor-Recorder.  There may be a difference between how the lands are appraised between the Board of Equalization and the Assessor-Recorder.

ATTACHMENTS:
DescriptionUpload DateDescription
Resolution 2015-1259/29/2017Resolution 2015-125
Tax Neutrality Template Exhibit A to Resolution10/2/2017Tax Neutrality Template Exhibit A to Resolution
Stewardship Council Resolution10/5/2017Stewardship Council Resolution