REPORT TO THE CITY COUNCIL
November 2, 2017
FROM: WILMA QUAN-SCHECTER, City Manager
City Manager’s Office
THROUGH: MICHAEL LIMA, Controller
Finance Department
SUBJECT
Title
Approve the First Amendment to the Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Fresno, dated January 6, 2003, relating to annexation, development, and property and sales tax allocation.
Body
RECOMMENDATION
It is recommended that the City Council approve a First Amendment to the Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Fresno, dated January 6, 2003, (the First Amendment) to provide a six month extension to the Amended and Restated Memorandum of Understanding, dated January 6, 2003, (the 2003 MOU).
EXECUTIVE SUMMARY
The City and County entered into a comprehensive 2003 MOU regarding the City’s sphere of influence, annexation of County land into the City, development, sales tax and property tax allocation, and other matters impacting both the City and the County. The 2003 MOU expires on December 31, 2017, and both parties would like to negotiate a long term extension. In anticipation of the forthcoming negotiations for a long term extension, City and County staff have agreed upon a short six month extension to provide the parties adequate time to negotiate a long term extension.
BACKGROUND
For decades, the City and County have worked together to develop a fair and equitable approach to sound urban and economic growth and tax sharing. In 1983, the County and the City entered into a Joint Resolution of Metropolitan Planning which provided a cooperative arrangement concerning land use and related matters. In 1991, the City, County, and Fresno Redevelopment Agreement entered into a Memorandum of Understanding, dated February 26, 1991, (the 1991 MOU) covering development and tax issues and later a First Amendment to 1991 Memorandum of Understanding, dated September 1998. Following a dispute regarding the 1991 MOU, which resulted in litigation involving both the City and the County, among other litigants, the parties entered into the 2003 MOU.
The 2003 MOU set forth: obligations related to the terms of annexing County territory into the City; the allocation of property tax revenues collected in relation to annexations under Revenue and Taxation Code Section 99; implementation of sales tax revenue collection and allocation of sales tax revenues generated from annexed territories; procedures related to expanding the City’s sphere of influence and sequencing development; and other cooperative efforts.
The 2003 MOU expires on December 31, 2017, and the parties wish to continue their cooperative efforts via a long term extension of the 2003 MOU. To allow time to negotiate such an extension, City and County staff have agreed to extend the 2003 MOU by six months. Accordingly, Staff recommends that Council approve the attached First Amendment, which has been approved as to form by the City Attorney’s Office.
ENVIRONMENTAL FINDINGS
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, this item does not qualify as a “project”; therefore it is exempt from the CEQA requirements.
LOCAL PREFERENCE
Local preference is not implicated because this item does not involve public contracting or bidding with the City of Fresno.
FISCAL IMPACT
The proposed amendment would continue the current tax sharing percentages thorough the end of Fiscal Year 2018. The City of Fresno currently receives about 21% of the property tax generated on parcels with the City limits. The Fiscal Year 2018 Property Tax estimate of $126,531,000 assumed no change in the tax sharing percentage during the fiscal year. Thus, approval of this amendment will not affect the General Fund budget.
Attachments:
First Amendment to the Amended and Restated Memorandum of Understanding