{CW112700.6} Page 1 of 12
MASTER PROPERTY TAX REVENUE AGREEMENT
BETWEEN THE COUNTY OF STANISLAUS AND THE CITY OF PATTERSON This MASTER PROPERTY TAX REVENUE AGREEMENT ("Agreement") is made and executed on this ___ day of _____________, 2022 (“Effective Date”), by and between the County of Stanislaus, a political subdivision of the State of California ("County"), and the City of Patterson, a municipal corporation of the State of California (the "City"). County and City may each be referred to as a “Party” or collectively as the “Parties”.
RECITALS
A. Section 99 of the California Revenue and Taxation Code authorizes local agencies, such as City and County, to enter into master property tax sharing agreements to provide adjustments to the allocation of property taxes upon annexation.
B. It is the purpose of this Agreement to adjust the allocation of property tax revenue between City and County and address the requirements under Revenue and Taxation Code Section 99 and adjustment of the appropriation limits of the affected governmental agencies pursuant to Section 3(b) of Article XIII B of the Constitution of the State of California.
C. City and County recognize the importance of maintaining consistent property tax sharing arrangements across similarly situated jurisdictions and the importance of a standing master property tax revenue sharing agreement to facilitate sound planning for development and the continued provision of services as a result of development, and it is the intent and purpose of the Parties to accomplish this goal to the greatest extent possible.
D. City and County previously entered into an agreement, known as the Master Property Tax Sharing Agreement, effective May 7, 1996, for the purpose of adjusting the allocation of property tax revenue pursuant to Section 99 of the Revenue and Taxation Code upon a change of organization (“1996 Agreement”).
E. Under the 1996 Agreement, which was entered into by the County and all nine cities, the County agreed to share future increases in real property tax revenue above the base amount with 70% of the tax growth going to the County and 30% to the Cities.
F. In 2006 the parties entered into Amendment No. 1 of the 1996 Agreement to clarify technical issues and the intent of that agreement.
G. City and County have worked together to develop a revised approach to property tax sharing, improving locally available revenues.
{CW112700.6} Page 2 of 12
H. City and County seek to align the interests of their respective jurisdictions in a way that promotes and financially encourages future economic development and the provision of housing.
I. As provided for in this Agreement, City and County intend to ensure the timeliest, most efficient, and most cost-effective delivery of services provided to the public.
J. It is the intent of City and County to identify and include all annexations which were subject to the 1996 agreement; to identify any annexations after 1996 that were separately negotiated and include those in this Agreement where applicable; and to identify unincorporated areas which will be specifically excluded from this Agreement.
K. The annexation areas identified in Exhibit A comprise only those tax rate areas for which the parties intend to modify the sharing of future annual property tax increment.
L. The annexations and unincorporated areas identified in Exhibit B, comprise those areas which are specifically excluded from this Agreement.
M. The parties intend by this Agreement, that beginning with the 2022 Assessment Roll, for all tax rate areas identified in Exhibit A, the parties will share equally the County’s future annual tax increment, as that term is defined in Section 98 of the Revenue and Taxation Code.
N. The parties intend to share equally the annual tax increment, for all future annexations which are not specifically excluded by this Agreement, that occur after the effective date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and promises herein contained, the City and County hereby agree as follows:
AGREEMENT
Section 1. Recitals. The recitals above (“Recitals”) are true and correct and are hereby incorporated into and made part of this Agreement. In the event of any inconsistency between the Recitals and Sections 1 through 12 of this Agreement, Sections 1 through 12 shall prevail.
Section 2. Definitions.
(a) “1996 Agreement” shall mean the Master Property Tax Sharing Agreement entered into between the City and the County effective May 7, 1996, for the purpose of adjusting the allocation of property tax revenue pursuant to Section 99 of the Revenue and Taxation Code upon a change of organization and its Amendment No. 1 of 2006. {CW112700.6} Page 3 of 12
(b) “Annexation” shall mean the inclusion, attachment, or addition of territory to the City pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. (c) “Ad Valorem Property Tax” shall mean the tax imposed on real and tangible personal property based upon the value of the property. (d) “Base Property Tax Year” shall mean the tax year immediately preceding the year in which the State Board of Equalization recognized and notifies the County Auditor-Controller of the Annexation.
(e) “Educational Revenue Augmentation Fund” or “ERAF” shall mean a requirement of the County Auditor-Controller to shift a certain percentage of annual allocations of local property tax revenues from counties, cities, and special districts to a specified fund which is utilized by the State of California to reduce its financial obligation to public schools and help meet its minimum state funding requirements pursuant to Proposition 98. (f) “Incremental Property Tax Revenue” shall mean the total amount of property tax revenue increase or decrease computed from the assessed valuation over the Base Property Tax Year. [reference Revenue and Taxation Code Section 96.5] (g) “Tax Rate Area” shall have the same meaning as defined in Revenue and Taxation Code section 95(g)(1).
Section 3. Reporting. From and after the first fiscal year following the effective date of each Annexation, County Auditor-Controller will report, as part of the regular AB 8 report process, to the City Manager and to the County Executive Office the calculation and the actual amount of the Ad Valorem Property Tax revenue available for allocation and distribution pursuant to this Agreement. After provision of this report, either party may request to meet and confer with the other party to review the annual report.
Section 4. Allocation of Ad Valorem Property Tax Revenue for New Annexations.
When a jurisdictional change occurs, the Ad Valorem Property Tax revenue attributable to the territory Annexed to the City, for all land use types, shall be adjusted in the following manner:
(a) For Annexations other than County unincorporated islands or properties identified in Exhibit B, County shall retain its one hundred percent (100%) share of the Ad Valorem Property Tax revenue attributable to the Base Property Tax Year amount. After Annexation, the annexing City shall receive a fifty percent (50%) share of the County’s Incremental Property Tax Revenue.
County shall retain the remaining fifty percent (50%) share of the County’s Incremental Property Tax Revenue.
(b) Where an Annexation includes land served by a special district, City shall receive the entire amount of the Ad Valorem Property Tax allocated to the special district upon the detachment of the annexed territory from the special district or the dissolution of the special district.
{CW112700.6} Page 4 of 12
(c) Except as set forth in subsection (d) below, for any Annexation effecting an unincorporated County island or listed in Exhibit B, the annexing City shall meet and confer with County to determine the allocation of the Ad Valorem Property Tax revenue of the unincorporated County island when each such island is considered for Annexation. (d) For an Annexation requested or initiated by County or required by state or federal law pertaining to, in whole or part, any unincorporated County island or disadvantaged community, the annexing City shall meet and confer with County to determine the allocation of the Ad Valorem Property Tax revenue of the unincorporated County area considered for Annexation.
The provisions of this Section 4 shall survive and remain in effect following any termination of this Agreement, i.e., there will be no reversion back to the 1996 Agreement tax sharing rates.
Section 5. Allocation of Incremental Property Tax Revenue. Beginning with the property assessments included in the 2022 Assessment Roll based on property values established as of January 1, 2022, and delivered by the County Assessor to the County Auditor-Controller by July 1, 2022, the County’s Incremental Property Tax Revenue for all Tax Rate Areas identified in Exhibit A, shall be shared evenly between City and County: fifty percent (50%) to City and fifty percent (50%) to County. The County’s Incremental Property Tax Revenue sharing established under this Section 5 is calculated prior to any property tax revenue shift for ERAF. This Section 5 is prospective only and shall begin being applied by the County Auditor-Controller when property tax revenues are distributed during Fiscal Year 2022/2023. An example of the calculation performed by the Auditor-Controller to implement this agreement is attached as Exhibit C.
The provisions of this Section 5 shall survive and remain in effect following any termination of this Agreement, i.e., there will be no reversion back to the 1996 Agreement tax sharing rates.
Section 6. Adjustment of Appropriation Limit. Pursuant to Section 3(b) of Article XIII of the Constitution of the State of California, City shall increase its appropriation limit by the amount of Ad Valorem Property Tax revenue received after the adjustment provided for in Section 4 is completed. County shall decrease its appropriation limit by the amount of Ad Valorem Property Tax revenue that is transferred to City. It is also expected that any special district will decrease its appropriation limit by the amount of Ad Valorem Property Tax revenue it has had transferred to City upon detachment or dissolution.
Section 7. Additional Property Tax Agreement Discussions. County agrees to continue to meet and confer with City to address alternatives models of Ad Valorem Property Tax distribution to lessen the impact of ERAF.
Section 8. Term of This Agreement. The term of this Agreement shall commence as of the Effective Date and continue thereafter until one of the parties terminates this Agreement.
Any party may terminate this Agreement by formal action upon no less than 60 days’ notice and termination shall be effective on the first day of July following service of the notice of termination. {CW112700.6} Page 5 of 12
Section 9. Modification This Agreement constitutes the entire agreement between the Parties hereto. To be effective, any amendment, modification, or revision of this Agreement must be a writing duly authorized and signed by both Parties.
Section 10. Entire Agreement With respect to the subject matter hereof only, this Agreement replaces and supersedes the 1996 Agreement, as well as any and all previous negotiations, proposals, commitments, writings, and understanding of any nature whatsoever between County and City.
Section 11. Notices Any notice or communication required hereunder between the parties must be in writing, and may be given either personally, by electronic mail (“email”) (with original forwarded by regular U.S. Mail), by registered or certified mail (return receipt requested), or by Federal Express or other similar courier promising overnight delivery. If personally delivered, a notice shall be deemed to have been given when delivered to the party to whom it is addressed. If given by email transmission, a notice or communication shall be deemed to have been given and received upon actual receipt of the entire document by the receiving party's email server. Notices transmitted by email after 5:00 p.m. on a normal business day, or on a Saturday, Sunday or holiday, shall be deemed to have been given and received on the next normal business day; if given by registered or certified mail, such notice or communication shall be deemed to have been given and received on the first to occur of (i) actual receipt by any of the addressees designated below as the party to whom notices are to be sent, or (ii) five (5) days after a registered or certified letter containing such notice, properly addressed, with postage prepaid, is deposited in the United States mail. If given by Federal Express or similar courier, a notice or communication shall be deemed to have been given and received on the date delivered as shown on a receipt issued by the courier. Any party hereto may at any time, by giving ten (10) days written notice to the other party hereto, designate any other address in substitution of the address to which such notice or communication shall be given. Such notices or communications shall be given to the parties at their addresses set forth below:
County of Stanislaus City of Patterson
Chief Executive Officer City Manager
County Counsel City Attorney
County of Stanislaus City of Patterson
1010 Tenth Street, Suite 6800 P.O. Box 667
Modesto, CA 95354 Patterson, CA 95363
Section 12. General Provisions
(a) Governing Law. The validity, interpretation and performance of this Agreement shall be controlled by and construed pursuant to the laws of the State of California. (b) Venue. Venue for all legal proceedings shall be in the Superior Court for the County of Stanislaus.
{CW112700.6} Page 6 of 12
(c) Severability. This Agreement shall automatically terminate if this Agreement, in its entirety, is determined by a court of competent jurisdiction to be invalid or unenforceable. If any discrete provision of this Agreement shall be determined by such court to be invalid and unenforceable, or if any discrete provision of this Agreement is rendered invalid or unenforceable according to the terms of any federal or state statute, which becomes effective after the Effective Date of this Agreement, the remaining provisions shall continue in full force and effect and shall be construed to give effect to the intent of this Agreement. (d) Waiver. A waiver by any Party of any breach of any term, covenant, or condition herein contained or a waiver of any right or remedy of such Party available hereunder at law or in equity shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant, or condition herein contained or of any continued or subsequent right to the same right or remedy. No Party shall be deemed to have made any such waiver unless it is in writing and signed by the Party so waiving.
(e) Captions. The captions of this Agreement are for convenience and reference only and the words contained therein shall in no way be held to explain, modify, amplify, or aid in the interpretation, construction, or meaning of the provisions of this Agreement. (f) Mandatory and Permissive. “Shall” and “will” and “agrees” are mandatory. “May” or “can” are permissive.
(g) Successors and Assigns. All representations, covenants and warranties specifically set forth in this Agreement, by or on behalf of or for the benefit of any or all of the Parties hereto, shall be binding upon an inure to the benefit of such Party, its successors, and assigns. The Parties warrant and represent that they have the right and authority to execute this Agreement and that they have not assigned or transferred, or purported to assign or transfer, to any person or entity this Agreement or any portion thereof. The Parties shall not assign or transfer this Agreement without the written consent of the other Party.
(h) Counterparts. This Agreement may be executed simultaneously and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument.
(i) Other Documents. The Parties agree that they shall cooperate in good faith to accomplish the objectives of this Agreement and, to that end, agree to execute and deliver such other instruments or documents as may be necessary and convenient to the fulfill the purposes and intentions of this Agreement.
(j) Authority. The signatories to this Agreement warrant and represent that they have the power and authority to enter into this Agreement on behalf of their respective Party, and all formal requirements necessary or required to enter into this Agreement have been fulfilled. {CW112700.6} Page 7 of 12
(k) Document Preparation. This Agreement will not be construed against the Party preparing it, but will be construed as if prepared by all Parties. (l) Advice of Legal Counsel. Each Party acknowledges that it has reviewed this Agreement with its own legal counsel and, based upon the advice of that counsel, freely entered into this Agreement.
(m) No Joint Venture. Neither this Agreement, nor payment, shall constitute or create any form of association, joint venture, partnership, or cooperative activity, of any nature whatever, for any purpose between the City and the County.
[Signatures on following page]
{CW112700.6} Page 8 of 12
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date set forth above.
COUNTY OF STANISLAUS
By: ____________________
Jody L. Hayes
Chief Executive Officer
“County"
CITY OF PATTERSON
By: ____________________
Ken Irwin
City Manager
"City"
APPROVED AS TO FORM:
Thomas E. Boze, County Counsel
By: ____________________
Thomas E. Boze
County Counsel
APPROVED AS TO FORM:
By: ____________________
Nubia Goldstein
Patterson City Attorney
Authorized by Resolution No.2022-0298
Adopted June 14, 2022, by the
Stanislaus County Board of Supervisors
Authorized by Resolution No.
Adopted ,2022, by the
Patterson City Council
{CW112700.6} Page 9 of 12
EXHIBIT A
Board of
Annexation Tax Rate Equalization
Annexation Date Area Roll Year
1. North-South Reorganization (Area 1) 03/10/1997 005-026, 005-027 1998/1999
2. North-South Reorganization (Area 2) 03/10/1997 005-040** 1998/1999
3. West Patterson Reorganization 06/05/2003 005-043, 005-045 2004/2005
4. West Patterson Business Park Reorg. 02/08/2005 005-046, 005-047, 2006/2007 005-048, 005-049,
005-050, 005-052
5. Villages of Patterson Reorganization 06/29/2007 005-054, 005-055 2008/2009
6. City Facilities Reorganization 04/27/2010 005-057, 005-058, 2011/2012 005-059
7. Southeast Industrial Reorganization 06/08/2010 005-056 2011/2012
8. Arambel-KDN Business Park Reorg. 01/08/2014 005-051, 005-060, 2015/2016 005-061, 005-062
** Redevelopment Areas as Identified by State Board of Equalization {CW112700.6} Page 10 of 12 PATTERSON Areas Annexed Subsequent to the 1996 Master Property Tax Share Agreement »«• Re 005058 005054 "I Zach*- 1 Kc ^005062 S
005055
1997
005061
io 005052]
PATTERSON
005048' . 0°50j} 005047
I
Tax Rate Areas
ii
o
o
00 n>
£ J
t
i
J
e
J
O
gI—4gCT1
West Patterson
Business Park Reorg.
2005
\
\ Not a
\-
V I
\
%
©
i
p
0xQ50^\--- Southeast Industrial
\ Reorganization
2010
Villages of Patterson
Reorganization
2007
North-South <
Reorganization
(Area 1) •—005027>
Arambet-KDN
\
Business Park Reorg.
2014
\X
x
x-wi*!* x<005054*^^
s 005060
I
X
,005040
<
(Ml
City Facilities
Reorganization , 2010
ws
West Patterson
Reorganization 005043
2003 : !
a
North-South
Reorganization
(Area 2)
1997
I
r
i ] Annexation Boundaries
ii
i
i
tI
i!
i
'005051
L
X 005050
°°505^<MI
/z^xKLQO^^^J
City Facilities KJ - {po$o'
Reorganization ~w li ... Source: Stanislaus County ITC-GIS, Stanislaus CountyAuditor, Stanislaus LAFCO, June 2022 {CW112700.6} Page 11 of 12
EXHIBIT B
THERE ARE NO AREAS EXCEPTED FROM THIS AGREEMENT
{CW112700.6} Page 12 of 12
EXHIBIT C EXHIBIT C
in
<n
CO
O in
in <n8
<n <n v> in <n
{CW112700.6} Page 12 of 12 £
-in
2rc
OO
coI zo
cld
ro
ai >
£m
id
cn
in
oi
<bcoQ. E5
8?
^r
ID
LD
ma
OJ
in
aj QJbc
8o
in
ID
in
ID
_C
in
2r O£
co
in
co
in
o
IDO
id"
sc
(0c
CNQ. LU5
0<
_c
in
5- c
J)
in
IDm
co
inCXI
UJ
CL
LU
"O
g&w
in
(0
in£
ooCDC
oi no
nj
OJ
(0§2
co
in£
00CD<
’t l£)
r< cxi
ID m-H
8o
£
00 co£
co
00CXI
£
CXI
00 ID
s?
fX.
cn
£o8
8?
!d
£o8
<nq
in
in
in£o
ID
CXI
8o8o
8fo
<n
-in$
<n
oo*
r0) <n0
.Ec2oo>
0) IS3E3
Js? o
2§
in
-o
c *-*
iZD
O 00 M- m
in
id” rd
_o
8 Si I "
S> Cc
•§o
5, £t6CL £eSc5 * ce
o>
O a)
QJ OX£
_o
S O' Eos§
.52
5 •£ H
** cu
in -c >
01 *c o co p -c £ s
S- = “
ifa; 2
_
K
v>
in*
252
8 CM m
o
g
ins I 1« 8
il I
.2Q
a. %,
in j= °3 J2 ™ § £ t2 J < £ 5 5 i L-3 2 1§
ie e = &S2 j MC
-2<
o 0)
s
•4=5 I 5
rax <v
> ™ X r" Hl s I 3 £8 1 S “ CXI
"OCoco3o
Qj 8
4)Co€
ilEx ° >2 -S c
s?
2 2
(wQ.
C 1 B ? J
“* a» >
.Eo
3§ ro o c o
v>
<£
CL _C
Lu <n
Is-U> LL £ < £ 5? | 2 2 O C < Q I
<Ti m
ai 00
“O
2- co
5*
Af
s g
@)u
& 08 f * f ui q £
<3 is 1° 1<u “O™ o c O s ™ 2
©I <U
.f*
3!
.•& S
<J .2 § « » M—
(0o
m .£i 5 Ij
li3 2 S a < =
S5 .£
•N
<y I
Sod c ™ E
-2>O
§
t1u
a;X
Q. 0J 2 >S
(0 co
=£a*
ox—
ox
E£
ra
in£
ooCD<