City Council
December 6, 2022
AGENDA REPORT
TO: Edward D. Reiskin FROM: Erin Roseman
City Administrator Director of Finance
SUBJECT: Delinquent Real Property Transfer
Taxes
DATE: November 7, 2022
City Administrator Approval Date:
RECOMMENDATION
Staff Recommends That The City Council Conduct a Public Hearing and Upon Conclusion Adopt:
1) A Resolution Accepting And Confirming Reports Of The City Administrator On The Costs Incurred By The City Of Oakland For Delinquent Real Property Transfer Taxes And Authorizing The Recordation Of Liens With Administrative And Assessment Charges As Necessary Pursuant To Chapter 4.20 Of The Oakland Municipal Code, And Directing The Notice Of Lien And Assessment Charges Be Turned Over To The County Tax Collector For Collection;
Or
2) Adopt A Resolution Overruling Protests And Objections And Accepting And Confirming Reports Of The City Administrator On The Costs Incurred By The City Of Oakland For Delinquent Real Property Transfer Taxes And Authorizing The Recordation Of Liens With Administrative And Assessment Charges As Necessary Pursuant To Chapter 4.20 Of The Oakland Municipal Code, And Directing The Notice Of Lien And Assessment Charges Be Turned Over To The County Tax Collector For Collection.
EXECUTIVE SUMMARY
Staff recommends adoption of one (1) the proposed resolutions which will authorize the placement of liens on real property for unpaid City of Oakland Real Property Transfer Taxes (RPTT) and authorize the subsequent assessment, pursuant to Chapter 4.20 of the Oakland Municipal Code (O.M.C.), should the fees and charges remain unpaid prior to the transfer/recording of said special assessment levies to the Alameda County Tax Collector and Auditor Controller for inclusion on the next property tax roll. All fees, charges and due dates are detailed on taxpayer notices and City Council Hearing notices. The proposed resolutions will confirm the placement of liens on eighteen properties, and authorize the subsequent assessment for all fees and charges for the period of April 2022 through September 2022, as shown in Attachment A.
Nov 18, 2022
Edward D. Reiskin, City Administrator
Subject: Delinquent Real Property Transfer Taxes
Date: November 7, 2022 Page 2
City Council
December 6, 2022
BACKGROUND / LEGISLATIVE HISTORY
Pursuant to O.M.C. Chapter 4.20, all transfers of real property within Oakland city limits are subject to real property transfer tax. The tax is due upon sale or transfer of an interest of real property and is payable at the time of recordation with the Alameda County Recorder. Prior to January 2019, the tax rate was 1.50 percent of the total value of the consideration transferred, with some exceptions as provided in the O.M.C. Effective January 2019, the tax rate is tiered based on the amount of transfer, with some exceptions as provided in the O.M.C. See Table 1 below for current rates:
Table 1: Current Tax Rates
Amount of Transfer Tax
$300,000.00 or Less 1.00%
More than $300,000.00 up to $2,000,000.00 1.50%
More than $2,000,000.00 up to $5,000,000.00 1.75%
More than $5,000,000.00 2.50%
The seller and buyer are jointly and severally liable for payment of the tax as stated in Chapter
4.20 of the O.M.C.
ANALYSIS AND POLICY ALTERNATIVES
The recommended action is to place a lien on the property that would ensure the collection of delinquent taxes. A lien effectively makes the property as a collateral for the taxes owed. The collection of taxes is necessary to pay the usual and current expenses of conducting the affairs and priorities of the City, as set by the City Council.
Administrative hearings for delinquent real property transfer taxes were held on June 6, 2022, July 11, 2022, September 12, 2022, October 3, 2022 and November 7, 2022 to hear protests and resolve inconsistencies or inequities raised by property owners regarding the non-payment of real property transfer taxes.
Following the administrative hearings, the Finance Director filed with the City Administrator a written notice of those property owners against whom the City will file liens for unpaid taxes, penalties, interest, and other charges. Property owners subject to the recordation of a lien for delinquent RPTT were sent a City Council Lien Notice on November 8, 2022. The proposed resolution confirms the City Administrator’s report and authorizes the placement of liens on eighteen properties and authorizing the subsequent assessment for all fees and charges. After a public hearing by the City Council and upon approval of the proposed resolution authorizing the placement of the liens the delinquent charges and assessments that remain unpaid shall constitute a special assessment against said property and shall be collected at the time established by the County Assessor for inclusion in the next property tax assessment.
Edward D. Reiskin, City Administrator
Subject: Delinquent Real Property Transfer Taxes
Date: November 7, 2022 Page 3
City Council
December 6, 2022
Adoption of one of the proposed resolutions advances the citywide priority of a responsive, trustworthy government. The collection of taxes is necessary to raise revenue which, in turn, supports the City’s financial ability to carry out its affairs and priorities.
FISCAL IMPACT
A list of delinquent real property transfer taxes and administrative fees for the accounts not resolved at the administrative hearings is shown in Attachment A. Failure to place these liens will result in the loss of at least $ 219,098.20 in General Purpose Fund revenues and $ 2,700.00 in administrative fees, for a total of $ 221,798.20 over the period of April 2022 through September 2022, subject to ongoing Finance Department-Revenue Management Bureau actions.
PUBLIC OUTREACH / INTEREST
Property owners were notified of the administrative hearings held on June 6, 2022, July 11, 2022, September 12, 2022, October 3, 2022 and November 7, 2022 and afforded an opportunity to protest the delinquent RPTT or to resolve any inconsistencies or inequities regarding the non- payment of RPTT. The initial letter to the homeowner also provided a 60-day window to make a payment as well as the City’s procedure to lien the property if the account is unpaid after 60 days. Property owners subject to the recordation of a lien for delinquent RPTT were sent a City Council Lien Notice on November 8, 2022, 4 weeks prior to the public hearing, to allow additional time to resolve the account with staff prior to the hearing.
The public hearing is considered the time at which the City Council formally opens the public hearing and ends when the City Council formally closes the public hearing. At the public hearing the Council will hear the City Administrator’s reports on delinquent RPTT and proposed recordation of liens, along with any objections or protests which may be raised by any of the property owners liable to be assessed for costs incurred for delinquent RPTT, and any other interested persons, such as those that have a right in or claim against the subject property.
COORDINATION
In coordination with the Office of the City Attorney and the Finance Department Budget Bureau, the agenda report, resolutions, and supporting documents have been reviewed and/or approved for form, legality, and fiscal implications.
Edward D. Reiskin, City Administrator
Subject: Delinquent Real Property Transfer Taxes
Date: November 7, 2022 Page 4
City Council
December 6, 2022
SUSTAINABLE OPPORTUNITIES
Economic: Revenues fund essential City services, derived from revenues linked to property sales in Oakland.
Environmental: There are no environmental opportunities resulting from the recordation of liens.
Race & Equity: The ordinance might have some Race & Equity opportunities because all transfers of real property within Oakland city limits are subject to the real property transfer tax regardless of the property’s location, property’s value, owners’ race or ethnicity. Furthermore, in 2018, City council approved a measure to change the property transfer tax from a flat rate to a graduated rate in order to allow a lower rate for low to moderate income home buyers. The tax rate is tiered with four different rates, based on the amount of transfer. See Table 1 below for current rates:
Table 1: Current Tax Rates
Amount of Transfer Tax
$300,000.00 or Less 1.00%
More than $300,000.00 up to $2,000,000.00 1.50%
More than $2,000,000.00 up to $5,000,000.00 1.75%
More than $5,000,000.00 2.50%
Staff needs additional historical data of at least five years to make an informed recommendation of the opportunities.
Edward D. Reiskin, City Administrator
Subject: Delinquent Real Property Transfer Taxes
Date: November 7, 2022 Page 5
City Council
December 6, 2022
ACTION REQUESTED OF THE CITY COUNCIL
Staff Recommends That The City Council Conduct a Public Hearing and Upon Conclusion Adopt:
1) A Resolution Accepting And Confirming Reports Of The City Administrator On The Costs Incurred By The City Of Oakland For Delinquent Real Property Transfer Taxes And Authorizing The Recordation Of Liens With Administrative And Assessment Charges As Necessary Pursuant To Chapter 4.20 Of The Oakland Municipal Code, And Directing The Notice Of Lien And Assessment Charges Be Turned Over To The County Tax Collector For Collection;
Or
2) Adopt A Resolution Overruling Protests And Objections And Accepting And Confirming Reports Of The City Administrator On The Costs Incurred By The City Of Oakland For Delinquent Real Property Transfer Taxes And Authorizing The Recordation Of Liens With Administrative And Assessment Charges As Necessary Pursuant To Chapter 4.20 Of The Oakland Municipal Code, And Directing The Notice Of Lien And Assessment Charges Be Turned Over To The County Tax Collector For Collection.
For questions regarding this report, please contact Rogers Agaba, Assistant Revenue & Tax Administrator, at (510) 238-7009.
Respectfully submitted,
ERIN ROSEMAN
Director of Finance
Finance Department
Reviewed by:
Rogers Agaba, Assistant Revenue & Tax
Administrator
Prepared by:
Carmen Q. Mac, Revenue Operations
Supervisor
Edward D. Reiskin, City Administrator
Subject: Delinquent Real Property Transfer Taxes
Date: November 7, 2022 Page 6
City Council
December 6, 2022
Attachments (2):
Attachment A: R.P.T.T City Council Hearing Listing
Attachment B: Sample Notices Provided
ATTACHMENT A
REF DEBTOR NAME PROPERTY ADDRESS PARCEL # RECORDING # Invoice Number AMOUNT ADMIN FEE TOTAL 1 BELLO REAL ESTATE LLC 77 FAIRMOUNT AVE 116 010 -0836-016-00 2020192494 RPTT040722-10 $4,747.82 $159.14 $4,906.96 2 BELLO REAL ESTATE LLC 66 FAIRMOUNT AVE 218 010 -0801-054-00 2021404529 RPTT040722-11 $7,597.35 $159.14 $7,756.49 3 LOUGHRIDGE BRUCE 1453 5TH ST 004 -0075-009-00 2020192832 RPTT040722-13 $13,968.29 $159.14 $14,127.43 4 SPERAW KATHRYN ANNE ELIZABETH 647 HILLSBOROUGH ST 023 -0410-039-01 2021061856 RPTT051222-01 $12,359.32 $159.14 $12,518.46 5 IACOPI MICHAEL ALLAN 912 61ST ST 016 -1436-003-01 2022009574 RPTT051222-03 $17,220.00 $159.14 $17,379.14 6 BUCKNER RICHARD LEE JR 5085 KEARNEY AVE 029 -1261-003-00 2021006032 RPTT051222-08 $27,421.24 $159.14 $27,580.38 7 SMARTT JANET AND SMARTT JOHN M 3239 KEMPTON AVE 1 010 -0806-036-00 2021350958 RPTT051222-09 $9,179.66 $159.14 $9,338.80 8 ESTRELLA FOODS LLC AND ESTRELLA JOEL 4718 INTERNATIONAL BLVD 035 -2360-021-00 2020231090 RPTT071422-04 $37,786.66 $159.14 $37,945.80 9 AGUILERA ARMANDO AND ARMINDA 5444 CRITTENDEN ST 035 -2368-037-00 2020370185 RPTT080422-01 $6,796.88 $159.14 $6,956.02 10 RONQUILLO YOLANDA JUDITH 4650 DAVENPORT AVE 037 -2538-027-02 2020227122 RPTT080422-08 $1,964.64 $159.14 $2,123.78 11 RONQUILLO YOLANDA JUDITH 2935 SHORT ST 032 -2050-005-00 2020227119 RPTT080422-09 $1,687.10 $159.14 $1,846.24 12 STARLIGHT CAPITAL LLC 75 ECHO AVE 012 -0989-004-00 2021156568 RPTT090822-02 $23,821.88 $159.14 $23,981.02 13 NGUYEN MICHAEL 2552 TRUMAN AVE 048 -5625-018-00 2021363793 RPTT090822-04 $8,550.00 $159.14 $8,709.14 14 MADDEN CARMEN L AND MARY 5565 MORAGA AVE 048C-7176-034-00 2022000973 RPTT090822-05 $25,229.02 $159.14 $25,388.16 15 MCDANIEL ERIC 1446 96TH AVE 046 -5424-005-00 2020049627 RPTT090822-06 $3,177.58 $159.14 $3,336.72 16 SLOW CHEETAH INVESTING 2336 92ND AVE 046 -5480-037-07 2020213656 RPTT090822-07 $13,352.30 $159.14 $13,511.44 17 LAM BENJAMIN H 3230 BROOKDALE AVE 027 -0869-030-00 2021060480 RPTT090822-08 $1,946.08 $159.14 $2,105.22 18 MASTERS ANGELOU 1782 9TH ST 006 -0033-022-00 2021035110 RPTT090822-09 $3,875.00 $159.14 $4,034.14 **Interest Calculated Through December 2022 $220,680.81 $2,864.52 $223,545.33
CITY OF OAKLAND
R.P.T.T. CITY COUNCIL HEARING LISTING FOR 12/6/2022
SAMPLE LETTER
ATTACHMENT B
CITY OF OAKLAND
150 FRANK H. OGAWA PLAZA, SUITE 5342 • OAKLAND, CALIFORNIA 94612 Finance & Management Agency (510) 238-70 24
Revenue Division TDD (510) 238-3254
I
f you would like to schedule an appointment or have any questions, please e-mail me at [email protected] or call (510) 238-7024.
S
incerely,
Evelyn Parodi
E
velyn Parodi
Tax Auditor II
CITY OF OAKLAND
150 FRAN K H. OGAWA PLAZA, SUITE 5342 • OAKLAND, CALIFORNIA 94612
Finance & Management Agency (510) 2 38-7024
Revenue Division TDD (510) 238-3254
Notice of Administrative Hearing
on Petition for Redetermination
Real Property Transfer Tax
D
ate and time of hearing: Monday, June 6, 2022, Time: TBD (9:00AM - 3:00PM) F
ormat of hearing: Telephonic Hearing
A ca
ll-in phone number and conference ID along with detailed hearing instructions will be provided, via email, up to 2 days prior to your scheduled hearing. Telephonic hearings WILL BE RECORDED.
P
lease remember, you must specify the matter(s) you are appealing, the specific reason(s) upon which your appeal is based and provide documentation to support your claim(s). --
----------------------------------------- Detach here and return --------------------------------------------- Da
te of hearing: 06/06/2022 via Telephonic Hearing
If
yo u wis h to pursue a petition for redetermination, please confirm your attendance by completing and returning the portion of this statement below:
N
ame: __________________________________ Account No.: ___________________ A
ddress: _________________________________ Phone No.: ____________________ _ __
_______________________________ Email: _________________________ P
lease provide an explanation and cite the specific exemption(s) (OMC 4.20.050) regarding your appeal:
_________
_____________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ F
or further assistance and i nformation, please visit the City’s website at www.oaklandnet.com and select “Municipal Code” (Title 4 Revenue and Finance, Chapter 4.20 Real Property Transfer Tax).
CITY OF OAKLAND
150 FRAN K H. OGAWA PLAZA, SUITE 5342 • OAKLAND, CALIFORNIA 94612
Finance & Management Agency (510) 2 38-7024
Revenue Division TDD (510) 238-3254
Real Property Transfer Tax
Information Sheet
Petition for Redetermination: If you disagree with the applicability and/or amount of tax liability, you must forward a written petition for redetermination within sixty (60) days of the date of this notification. If a petition for redetermination is not filed in writing with the Director of Finance, Attn.: RPTT, 150 Frank H. Ogawa Plaza, Suite 5342, Oakland, California 94612, within the sixty (60)
day
period, the determination becomes final at the expiration of the period. (OMC 4.20.130).
Your correspondence m ust specify the matter(s) you are appealing, the specific ground(s) upon w
hich your appeal is based, and evidence to support your claim(s).
I
MPORTANT: If a petition for redetermination is filed within the sixty (60) day period, the Director’s designee will hold a hearing to hear your objections. Please refer to the enclosed notice titled “Notice of Administrative Hearing on Petition for Redetermination ” for details regarding the hearing. If you would like to arrange to have your matter heard prior to the date scheduled, please contact the undersigned.
P
enalty: Delinquent payments are subject to penalties, and a delinquency penalty of ten (10) percent of the amount of the tax due shall accrue. In the event a portion of the tax is unpaid prior to becoming delinquent, the penalty shall only accrue as to the portion remaining unpaid. A second penalty of fifteen (15) percent shall accrue if the tax remains unpaid on the ninetieth day from the date payment was delinquent. (OMC 4.20.070).
I
nterest on tax and penalty: Interest shall accrue at the rate of one percent a month or fraction thereof, on the amount of tax, inclusive of penalties, from the date the tax becomes delinquent to the date of payment. (OMC 4.20.070).
* P
ayment Due: Payment is now due and the total amount due includes penalty and interest computed to the date of this notice. Interest will continue to accrue at the rate of one percent per month or fraction thereof until the date of payment. To confirm the correct amount to be paid, please co ntact the undersigned for the payoff amount. Upon confirmation, please select a payment option below. For your convenience, a self -addressed envelope is enclosed. Failure to pay or resolve this matter within sixty (60) days of the date of this notice will result as an
as
sessment against the property. A lien will be placed on the property for the amount due and will be recorded by the Alameda County Recorder. If the recorded lien is not paid before August 10 th of
the current tax year, the amount of the lien will be added to your property tax bill.
SAMPLE LETTER