REPORT TO THE CITY COUNCIL
FROM: GEORGEANNE A. WHITE, City Manager
Office of Mayor and City Manager
RUTH F. QUINTO, CPA, Assistant City Manager
Office of Mayor and City Manager
SUBJECT
Title
Approve a Property Tax Allocation Agreement between the City of Fresno and the Fresno County Fire Protection District for a period of 10 years, effective through August 18, 2035
Body
RECOMMENDATION
Staff recommend that the Fresno City Council approve a Property Tax Allocation Agreement between the City of Fresno and the Fresno County Fire Protection District for a period of 10 years, effective through August 18, 2035.
EXECUTIVE SUMMARY
As a condition of annexation, the Fresno Local Agency Formation Commission (“LAFCo”) requires a Property Tax Allocation Agreement (“Allocation Agreement”) between a city and the Fresno County Fire District (“District”). The current Allocation Agreement between the City of Fresno (“City”) and the District expires on August 19, 2025. A renegotiated or extended Allocation Agreement is required as a condition of the Memorandum of Understanding between the City and the County of Fresno relating to property tax sharing, sales tax sharing, annexation, and development within the City’s sphere of influence (“Tax Sharing MOU”) for a period of 10 years from the effective date, through August 18, 2035. An renegotiated Tax Sharing MOU was approved by the City Council on July 17, 2025, however, three changes from the July 17, 2025 version have been requested by the District: updated language to section 4 for clarification regarding exempted annexations; updated language to Exhibit B so that it mirrors section 3.a.; and, an amendment to section 20 removing “elected” officials from the City’s indemnity of the District as the District does not have elected officials. A redline version is attached.
BACKGROUND
The Local Agency Formation Commission (LAFCo) has taken the position that they will approve annexations only when there is an Allocation Agreement, often referred to as a “Transition Agreement”, in place between a city and the Fresno County Fire District. As a result, the City has had an active Allocation Agreement since 2003. The current Allocation Agreement between the City of Fresno (“City”) and the District expires on August 19, 2025.
A renegotiated or extended Allocation Agreement is required as a condition of the Memorandum of Understanding between the City and the County of Fresno relating to property tax sharing, sales tax sharing, annexation, and development within the City’s sphere of influence (“Tax Sharing MOU”). An updated Tax Sharing MOU was approved by the City Council on July 1, 2025, however, three changes from the July 17, 2025 version have been requested by the District.
As with the agreement that was approved by Council on July 17, 2025, the attached agreement continues to address forced annexations in section 4 but now clarifies “substantially developed”. The second change clarifies language in Exhibit B so that it mirrors the language in section 3.a. Finally, the revisions amend section 20 to remove “elected” officials from the City’s indemnity of the District as the District does not have elected officials. All other provisions remain included in this Allocation Agreement addressing previous concerns and issues such as the calculation of the “transition fee”. A redline version from the Council’s July 17, 2025 version is attached.
Other aspects of the Allocation Agreement continue to include:
• The District agrees to indemnify and defend the City for the calculation and collection of the fee
• The term of the Allocation Agreement is for a period of 10 years, plus one additional 10-year extension with the agreement of both the City and the District
• The City and the District agree that this Allocation Agreement satisfies the intent and purpose of the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000
The agreement has been approved by the City Attorney’s Office as to form.
ENVIRONMENTAL FINDINGS
This is not a project under CEQA pursuant to CEQA Guidelines section 15378.
LOCAL PREFERENCE
Not applicable.
FISCAL IMPACT
There is no immediate fiscal impact as the fee is intended to be paid in full by new development as a condition of annexation and/or approval, and this additional revision has no fiscal impact.
Attachments:
Property Tax Allocation Agreement_Redline
Property Tax Allocation Agreement_Clean