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Approve the FY2012/13 Property Tax Administration Fee to recover the cost to administer the property tax system to cities and local agencies in accordance with the Revenue and Taxation Code Section 95.3(f)
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Published Notice Required? Yes ____ No _X _
Public Hearing Required? Yes ____ No _X _
DEPARTMENTAL RECOMMENDATION:
Approve the Property Tax Administration Fee for FY2012/13 to recover the cost to administer the property tax system to cities and local agencies in accordance with the Revenue and Taxation Code Section 95.3(f).
SUMMARY:
The Property Tax Administration Fee represents the total costs of the County to administer the property tax system. Revenue and Taxation Code ยง 95.3(f) authorizes the County to recover the property tax administrative costs attributable to cities and local jurisdictions within the County, excluding schools and Education Revenue Augmentation Fund (ERAF). The Auditor-Controller, Assessor-Recorder, Tax Collector / County Clerk / Treasurer, County Counsel and County Administrator's Office (by providing staff support to the Assessment Appeals Board) provide property tax administrative support. Their respective costs are included in the administrative fee calculation to determine the amount eligible for recovery from cities and other local jurisdictions. The total allocable property tax administration cost for FY2012/13 is $7,225,768. The allocation of $3,056,323 to schools and $1,093,562 to the General Fund are excluded. Therefore, the FY2012/13 recoverable amount for the County is $3,075,883.
FINANCIAL IMPACT:
The $3,075,883 in revenue to be received from the Property Tax Administration Fee is included in FY2012/13 budgets of the respective departments who provide the property tax administrative support.
DISCUSSION:
SB 2557, Maddy, (Chapter 466 of 1990), codified in Section 95.3(f) of the Revenue and Taxation Code authorizes counties to recover property tax administrative costs attributable to incorporated cities and local jurisdictions within each county except schools and ERAF. The total allocable costs for property tax administration services for FY2012/13 are $7,225,768 (Attachment A).
Schools are excluded by law from paying their share of the property tax administrative fee. The schools' share of the property tax administration costs represents approximately 42.30% of the total cost or $3,056,323. In addition, the cost for the County's General Fund share is excluded from the amount recoverable representing 15.13% of total cost or $1,093,562.
The Property Tax Administration Cost to be recovered is determined as follows (Attachment B):
Allocable Property Tax Administration Cost $7,225,768
Less: Allocation to Schools 3,056,323
Allocation to General Fund 1,093,562
Recoverable Cost _$3,075,883
The recoverable cost for each department who provides the property tax administration services are: Assessment Appeals Board $26,058; Assessor $2,210,705; Tax Collector $655,418; and the Auditor-Controller $183,702 for a total of $3,075,883. The calculation includes all actual direct costs and countywide overhead charges for the respective departments for FY2011/12. Other revenues received for property tax related functions are subtracted from the total cost to arrive at the net property tax administration cost to be recovered. The net cost is distributed to all local agencies based on their proportionate share of the total property taxes apportioned for FY2012/13.
ALTERNATIVES:
The Board may choose not to approve the Property Tax Administration Fee for FY2012/13 as recommended. However, failure to approve the Property Tax Administration Fee will result in the revenue loss of $3,075,883 to the County departments that provide the property tax administrative support. Therefore, it is recommended the Board approve the Property Tax Administration Fee as calculated.
OTHER AGENCY INVOLVEMENT:
The staff from the Assessor-Recorder, Tax Collector/County Clerk/Treasurer and the Assessment Appeals Board provided and reviewed the data used to calculate the Property Tax Administration Fee for FY2012/13.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION