The City of Redding (“City”) submitted an application to the Shasta Local Agency Formation Commission (“Shasta LAFCO”) to annex approximately 63.96 acres of unincorporated territory in Shasta County (“County”) to the City. A map of the area to be annexed by the City is attached.
The proposed annexation area (the “Annexation”) is comprised of 22.78 currently developed acres referred to as the Campo Calle area, 37.83 acres of vacant land referred to as the Greenview area, 2.41 acres of a vacant parcel with relatively steep terrain referred to as the McCulloch area, and 0.94 acres of Placer Road.
As part of the annexation process, pursuant to Revenue and Taxation Code section 99, the County and the City negotiated the amount of property tax revenues to be exchanged between them. Also, the Auditor-Controller will work with the State Board of Equalization to establish a new Tax Rate Area (TRA) for the Annexation area prior to allocation and distribution of property tax revenue.
The proposed resolution provides for the following property tax sharing terms:
Base Year Tax Revenue:
• To the County, 100 percent of base year property tax revenue allocated to the County for Fiscal Year 2017-2018.
To the City, 0 percent of base year property tax revenue allocated to the County for Fiscal Year 2017-2018.
• To CSA # 1, 100 percent of the base year property tax revenue allocated to CSA #1 for Fiscal Year 2017-2018.
To the City, 0 percent of base year property tax revenue allocated to CSA # 1 for Fiscal Year 2017-2018.
• To the Shasta County Water Agency, 0 percent of the base year property tax revenue allocated to the Shasta County Water Agency commencing the first fiscal year following the date the new Tax Rate Area appears on the State Board of Equalization’s Tax Rate Area Chart.
To the City, 100 percent of the base year property tax revenue allocated to the Shasta County Water Agency commencing the first fiscal year following the date the new TRA appears on the State Board of Equalization’s Tax Rate Area Chart.
• To each Special District ((as defined in Revenue & Taxation Code Section 95(m)) affected by the Annexation, except the Shasta County Water Agency, 100 percent of the base year property tax revenue allocated to each Special District.
To the City, 0 percent of the base year property tax revenue allocated to all Special Districts affected by the Annexation.
Annual Property Tax Increment Revenue:
• To the County, 100 percent of the current annual property tax increment revenue allocated to the County of Shasta prior to the first fiscal year following the date the new TRA appears on the State Board of Equalization's Tax Rate Area Chart.
• To the County, 40 percent of future annual property tax increment revenue allocated to the County the first fiscal year following the date the new TRA appears on the State Board of Equalization's Tax Rate Area Chart. Said monies are to be designated for Shasta County adult and juvenile custodial operations.
• To the City, 60 percent of future annual property tax increment revenue allocated to the County commencing the first fiscal year following the date the new TRA appears on the State Board of Equalization's Tax Rate Area Chart
• To CSA # 1, 100 percent of the annual property tax increment revenue allocated to CSA # 1.
• To the Shasta County Water Agency, 0 percent of the annual property tax increment revenue allocated to the Shasta County Water agency commencing the first fiscal year following the date the new TRA appears on the State Board of Equalization's Tax Rate Area Chart.
To the City, 100 percent of the annual property tax increment revenue allocated to the Shasta County Water Agency commencing the first fiscal year following the date the new TRA appears on the State Board of Equalization's Tax Rate Area Chart.
• To each Special District affected by the Annexation, except the Shasta County Water Agency, 100 percent of the annual property tax increment revenue allocated to each Special District.
To the City, 0 percent of the annual property tax increment revenue allocated to all Special Districts, except for the Shasta County Water Agency, affected by the Annexation.
Detachments
Provided in the application submitted by the City, the Annexation would be detached from County Service Area #1- Fire Protection (CSA #1) and County Service Area #15 – Street Lighting.
Revenue & Taxation Code 99(b)(5) provides:
“In the event that a jurisdictional change would affect the service area or service responsibility of one or more special districts, the board of supervisors of the county or counties in which the districts are located shall, on behalf of the district or districts, negotiate any exchange of property tax revenues. Prior to entering into negotiation on behalf of a district for the exchange of property tax revenue, the board shall consult with the affected district. The consultation shall include, at a minimum, notification to each member and executive officer of the district board of the pending consultation and provision of adequate opportunity to comment on the negotiation.”
This statute provides the Shasta County Board of Supervisors with the discretion to determine, on behalf of special districts (including CSA's) any property tax exchange with the City as it relates to the annexation. As previously outlined, the resolution submitted for the Board’s approval provides that CSA #1 shall retain 100% of existing property tax revenues and 100% of all future growth property tax revenue.
Pursuant to an automatic aid agreement that currently exists between the County and the City, the City already provides a prearranged, automatic response to calls for service in the proposed area to be annexed by the City. This is in addition to response to calls for service provided by the Shasta County Fire Department in cooperation with CalFire. Therefore, fire protection services for the proposed area will not be affected.
The detachment of County Service Area #15 – Street Lighting would not affect current or future street lighting services.
Representatives from the City have indicated that a resolution with identical terms will also be submitted to the Redding City Council for approval.
The adoption of the proposed resolutions by the County and the City is a necessary step to complete the annexation process.