REPORT TO THE CITY COUNCIL
May 24, 2018
FROM: WILMA QUAN-SCHECTER, City Manager
Office of the Mayor & City Manager
THROUGH: JANE SUMPTER, Assistant City Manager
Office of the Mayor & City Manager
SUBJECT
Title
Approve the Second 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 Second Amendment to the Amended and Restated Memorandum of Understanding between the County of Fresno and the City of Fresno, dated January 6, 2003 (the Second Amendment), to provide a one-year extension to the Amended and Restated Memorandum of Understanding, dated January 6, 2003 (the 2003 MOU).
EXECUTIVE SUMMARY
The City and County entered into the 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 expired on December 31, 2017, and was extended for an initial period of six months to allow the parties to negotiate a long-term extension. This second amendment will allow City and County staff additional time to continue to negotiate the prospective long-term agreement.
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 MOU, 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 expired on December 31, 2017, and on December 5, 2017, the parties agreed to the First Amendment which extended the term of the MOU to June 30, 2018. To allow time to negotiate a long-term agreement, City and County staff have agreed to an additional twelve-month extension. Accordingly, Staff recommends that Council approve the attached Second 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 through the end of Fiscal Year 2019. 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:
Second Amendment to the Amended and Restated Memorandum of Understanding