HomeMy WebLinkAboutItem No.34City of Lake Elsinore
REPORT TO THE CITY COUNCIL
REPORT TO THE REDEVELOPMENT AGENCY
To: MAYOR AND CITY COUNCIL
REDEVELOPMENT AGENCY CHAIR AND BOARD
From: RON MOLENDYK, CITY MANAGER
RON MOLENDYK, EXECUTIVE DIRECTOR
Date: FEBRUARY 23, 1993
Subject: STATE BUDGET IMPACT - RIVERSIDE COUNTY FIRE SERVICE
BACKGROUND
The State has once again put local governments on notice that
property tax revenue shifts will be more severe for 1993 -94. The
estimates presented by the League of California Cities, is 22 %.
The State has also indicated that Counties may be subject to a
shift of the Special District Augmentation Funds. This value has
been placed at $13 million dollars by Riverside County.
Special District Augmentation funds are property taxes collected
for specific services after the passage of Prop. 13 in 1978. Prior
to Prop 13, the County had the authority to adopt special tax rates
for these services.
The State feels that the services provided by SDAF taxes can be
replaced by charging fees for this service.
DISCUSSION•
The following recommendation represents a cooperative effort by the
County and City to preserve the integrity of fire services and to
retain as many property tax dollars as possible.
By withdrawing from the SDAF for fire service only, the property
taxes collected will flow through to the City and not the County.
These funds will be subject to the proposed 22% tax shift, but the
loss will be less than the shift for all SDAF funds.
The City's Redevelopment Agency Agreement for Tax Increment pass -
thru will have to be modified to request that the funds be
appropriated to the structural fire fund.
FISCAL IMPACT•
If the State does in fact shift all SDAF Funds from the County, the
loss of property taxes generated in the city for structural fire
services is estimated to be $252,000.00.
By withdrawing from the SDAF the projected 22% shift would reflect
a loss of only $56,000.00
The RDA pass -thru agreements total $127,000.00 and is part of the
funding for fire services in the city.
Government Code Section 25643 requires County Board approval of
these types of changes prior to March 1 of each year.
It is also recommended that the City Resolutions required to
withdraw from the SDAF, provide language that the request is
conditional on the State shift of SDAF funds.
C!, �c
FEBRUARY 23, 1993
PAGE TWO OF TWO
RECOMMENDATION•
Authorize the Mayor and RDA Chairman to sign resolutions requesting
the withdrawal by the City from the County SDAF and with assurances
that the funds will flow through the City and the RDA tax
increments will continue to flow to the Structural Fire Fund
through the pass -thru agreements currently in place. Both
resolutions will be considered null and void if the State does not
shift the County SDAF funds.
PREPARED BY:
APPROVED FOR
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