AR 091906 Property tax negotiations

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CITY OF COLTON AGENDA REPORT FOR THE CITY COUNCIL MEETING OF September 19, 2006 TO: Honorable Mayor & City Council members FROM: Dilu de Alwis, Finance Department Director k SUBJECT: Acceptance of Property Tax Negotiations from Island Annexations. DATE: Monday September 11, 2006 BACKGROUND The City of Colton has seven (7) unincorporated "islands" within its sphere of influence that qualify for annexation proceedings under SB 1266. Under this legislation, cities throughout California are permitted to annex islands of unincorporated territory that are substantially or totally surrounded by a city's corporate boundaries. The annexation of these islands will increase the efficiency of services delivered by reducing the irregular boundaries that currently exist. DISCUSSION/ANALYSIS On March 21, 2006, the City Council for the City of Colton approved Resolution R-36-06, which approved the City's island annexation program, and directed staff to file the annexation map with San Bernardino County Local Area Formation Commission (LAFCO). After filing the annexation map, staff received a request from LAFCO to submit a resolution of application to officially request LAFCO to initiate proceedings for annexation of the unincorporated island areas. The City held a duly noted public hearing on September 19, 2006 at which the City council received all oral and written protests concerning the annexation of the unincorporated "island" areas to the City of Colton. LAFCO requires the adoption of a resolution by the City of Colton, which indicates how the property taxes will be distributed between the County and the City of Colton. On September 12, 2006 the County of San Bernardino Board of Supervisors approved the property tax negotiations which results in the need for the City of Colton to adopt a similar resolution relative to this matter. FINANCIAL IMPACT With the approval of the attached resolution by the City Council and implementation by the San Bernardino County Tax Collector, the City of Colton will see an increase in property tax revenues as a result of this annexation. According to data provided by the office of the Tax Collector, the City will see a gross increase of $209, 243 in property tax revenues as a result of this annexation. The chart shown below breaks down the revenue into the various "islands" to be annexed and has been determined by the County of San Bernardino.