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Approve an Appropriation Transfer Request of $233,000 in unanticipated property tax revenue in various County budget units to fund the increase in property tax prior year refund charges for FY2025/26 (4/5 vote required)
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
The Auditor-Controller’s Office recommends that the Board of Supervisors approve an Appropriation Transfer Request of $233,000 in unanticipated property tax revenue in various County budget units to fund the increase in property tax prior year refunds processed during FY2025/26 (4/5 vote required).
SUMMARY & DISCUSSION:
In 2023, the County implemented a new property tax administration system. As with many large-scale system transitions, the implementation resulted in temporary delays in processing certain property tax assessment changes and related transactions. Over the past year, County staff have continued to work through these transition-related challenges, and the system is now operating as intended.
As part of this recovery effort, the Assessor/Recorder’s Office completed a substantial backlog of property assessment updates related to ownership changes, parcel splits, exemptions, corrections, and other adjustments that affect taxable property values. Once these assessment updates were finalized, the Auditor-Controller’s Office was required to process the resulting property tax refunds owed to taxpayers whose assessments had been reduced or otherwise adjusted.
Under normal circumstances, these refund payments would have been processed incrementally over multiple fiscal years as assessment changes were completed. However, because many of the delayed assessment adjustments were resolved during FY2025/26, a significantly larger volume of prior-year property tax refunds was issued during the current fiscal year.
At the same time, secured property tax revenues have exceeded original budget projections. The additional revenue provides sufficient funding to absorb the increase in refund payments without creating a negative impact to the County’s General Fund.
Approval of this request will allow the County to properly account for the increased refund activity and ensure that taxpayers receive refunds owed to them in a timely manner.
FINANCIAL IMPACT:
The increase of $233,000 in property tax refund charges is offset by an increase in secured property tax revenue, creating no impact to the County General Fund as a result of this Appropriation Transfer Request.
ALTERNATIVES:
The Board could elect not to approve the Appropriation Transfer Request in the amount of $233,000 for the increase in property tax refund charges; however, this is not recommended as the property tax refunds are due and payable to the taxpayers.
OTHER AGENCY INVOLVEMENT:
None.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION