HomeMy WebLinkAboutAgenda Report - April 15, 2009 E-15AGENDA ITEM Fwoo IS
CITY OF LODI
COUNCIL COMMUNICATION
TM
AGENDA TITLE: Adopt Resolution Authorizing the City Manager to Execute Agreement
Between the County of San Joaquin and the Cities of Stockton, Lodi, and
Tracy to Toll Statutes of Limitations for Claims Regarding Property Tax
Administration Fees
MEETING DATE: April 15, 2009 City Council Meeting
PREPARED BY: City Attorney's Office
RECOMMENDED ACTION: Adopt Resolution Authorizing the City Manager to Execute
Agreement Between the County of San Joaquin and the Cities of
Stockton, Lodi, and Tracy ("Cities") to Toll Statutes of Limitationsfor
Claims Regarding Property Tax Administration Fees
BACKGROUND INFORMATION: The State Controller issued a memo contending that counties
statewide are overcharging cities for calculating the property tax
administration fees (the "PTAF), regarding the Triple Flip (Revenue
& Taxation Code §97.68) and the Vehicle License Fee swap (Revenue &Taxation Code §97.70).
The issue has already resulted in litigation between several cities and counties in California. In order to
avoid legal expenses, City and County staff propose that the parties enter a tolling agreement (essentially
extending the Statute of Limitations for the Cities to sue if an agreement cannot be reached)to allow the
existing litigation to proceed and base any future negotiations regarding adjustments on the outcome of
the pending cases.
FISCAL IMPACT Potential refund of PTAF fees paid to County if litigation comes out in favor of
cities.
APPROVED:
Blair Kin , y Manager
AGREEMENT BETWEEN THE COUNTY OF SAN JOAQUIN AND
THE CITIES OF STOCKTON, LODI, AND TRACY TO TOLL
STATUTES OF LIMITATIONS FOR CLAIMS REGARDING
PROPERTY TAX ADMINISTRATION FEES
WHEREAS, the City of Stockton, a charter city; the City of Lodi, a municipal corporation;
the City of Tracy, a municipal corporation (collectively the 'Cities"); and the County of San
Joaquin (the "County") (collectively. the "Parties") may become involved in litigation regarding
the County's calculation of the property tax administration fees (the "PTAF), as related to the
Triple Flip (Rev. & Tax Code § 97.68) and the Vehicle License Fee swap (Rev. & Tax
Code § 97.70) that the County charges the Cities, pursuant to the Revenue and Taxation Code,
beginning in the fiscal year 20042005; and
WHEREAS, conflicting legal opinions as to the calculation of the PTAF have been
rendered by various state and local agencies and their counsel; and
WHEREAS, the Cities may have filed, or intend to file, claims (although the Cities do not
concede the legal necessity to do so) and to otherwise pursue legal remedies seeking refunds
of the amount of PTAF that the Cities claim the County has overcharged them in the 2006-2007
and 2007-2008 fiscal years and to obtain declaratory and/or injunctive relief regarding the
calculation of the PTAF in future years; and
WHEREAS, the Cities and County are aware that other cities and counties in other
areas of the State are involved, or may become involved, in litigation concerning the calculation
of the PTAF; and
WHEREAS, the Parties desire to avoid litigation in order to allow for additional time to
evaluate the law as it develops on this state-wide issue;
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. The Parties agree to toll the applicable statutes of limitations and applicable
claims filing periods for any party to file a claim, complaint, or petition against another party with
respect to the calculation of the PTAF, including, but not limited to, the applicable statutes of
limitations for the Cities to file a complaint, petition, or administrative claim seeking a refund or
reallocation to the Cities of the PTAF that the. Cities contend the County overcharged them in
the 2006-2007 and 2007-2008 fiscal years, which the Cities contend resulted or has the
potential to result in an under -allocation of property taxes to the Cities; and including, but not
limited to, the applicable statutes of limitations for the County to file a complaint, petition, or
administrative claim seeking an increase or reallocation to the County of the PTAF the County
may contend the County may have undercharged the Cities in any fiscal years.
2. This tolling agreement (also referred to hereafter as the "Agreement") does not
revive any statute of limitations period, clalms filing period, or deadline that expired before the
effective date of this tolling agreement. This -tolling agreement applies solely to those claims
that could be alleged as of the effective date of this tolling agreement in either (i) an
administrative claim to the County or the City pursuant to the applicable provisions of the
Government Claims Act and/or a County or City ordinance or (ii) a lawsuit. The tolling
agreement does not apply to any claims that could not be alleged as of the effective date of this
tolling agreement in an administrative claim to the County or the City pursuant to the applicable
provisions of the Government Claims Act and/or any County or City ordinance or in a lawsuit.
AGREEMENT BETWEEN THE COUNTY OF SAN JOAQUINAND THE CITIES OF STOCKTON. LOOI. AND TRACY TO TOLL.
STATUTES OF LIMITATIONS FOR CLAIMS REGARDING PROPERTYTAX ADMINISTRATION FEES
3. The purposes of this tolling agreement are to avoid litigation and to permit the
Parties additional time to evaluate the law as it develops on this state-wide issue.
4. The Cities and the County agree not to file any claims and not to initiate or
participate in litigation against each other related to the PTAFwhile this Agreement is in effect.
5. The tolling period for the Cities and the County extends from the effective date of
this tolling agreement until the earlier of the following:
a. The expiration of forty-five (45) days from the date one Party ("the
terminating party") delivers to the other Parties via certified mail and
facsimile at the addresses and facsimile machine numbers set forth in
Section 8 below, written notice that the terminating party desires to
terminate this tolling agreement, and is, in fact, terminating this tolling
agreement; or
b. July 1, 2012.
6. This Agreement constitutes the entire understanding of the Parties with respect
to the tolling of fhe Cities' and the County's claims as set forth in Section 1 above and correctly
states the rights, duties, and obligations of each Party as of the effective date of this Agreement.
Any prior understandings, promises, negotiations, or representations between the Parties not
expressly stated in this document are not binding.
7. Subsequent modifications of this Agreement, including, but not limited to, the
extension or amendment of the Agreement, shall not be valid or effective unless set forth in
writing and signed by the Parties. The Parties acknowledge that this Agreement applies to
potential claims that may be brought by the Cities regarding the calculation of PTAF for future
fiscal years, until such time as the Agreement is terminated pursuantto Section 5.
8. Notices under this Agreement, including specifically notice under Section 5.a
above, shall be given as follows:
a. To the City of Stockton. notice shall be given to both the City Attorney and
to the attorney specially representing the City in this matter.
Benjamin P. Fay, at the following addresses:
Richard E. Nosky, Jr.
City Attorney
425 N. Ei Dorado Street
Stockton, CA 95202
(209) 937-8898 FAX
Benjamin P. Fay
Jarvis, Fay, Doporto & Gibson. LLP
475 14th Street, Suite 260
Oakland, CA 94612
Fax: (510) 238-1404
2
AGREEMENT BETWEEN THE COJNTY OF SAN JOAWUINAND THE CITIES OF STOCKTON, =.AND TRACY TO TOLL
STATUTES OF LIMITATIONS FOR CLAIMS REGARDING PROPERTYTAX ADMINISTRATION FEES
b. To the City of Lodi, notice shall be given to the City at the following
address:
D. Stephen Schwabauer
City Attorney
221 West Pine Street
Lodi, CA 95240 -
(209) 333-6807 FAX
C. To the City of Tracy, notice shall be given to the City at the following
address:
Daniel Scdergren
Interim City Attorney
333 Civic Center -Plaza
Tracy, CA 95376
(209) 831-6137 FAX
d. To the County, notice shall be given to County Counsel at the following
address:
David E. Wooten
County Counsel
222 EastWeber Avenue, Room 711
Stockton, CA 95202
(209)468-0315 FAX
9. The Parties agree that this Agreement shall be effective upon its execution by all
Parties.
10. Each of the undersigned hereby represents and warrants that he or she is
authorized to execute this Agreement on behalf of the respective parties to this Agreement.
11. This tolling agreement may be executed In counterparts, and each fully executed
counterpartwill be considered an original document.
APPROVED AS TO FORMAN CONTENT: _ COUNTY CF SAN JOAQUIN
DAVID E. WOOTEN
COUNTY COUNSEL
By --
3
W:
ADRAIN VAN HOUTEN
COUNTY AUDITOR -CONTROLLER
DATED:
AGREEMENT BETWEEN THE COUNTY OF SAN JOAQUIN AND THE CITIES OF STOCKTON, LODI, AND TRACY TO TOLL
STATUTES OF LIMITATIONS FOR CLAIMS REGARDING PROPERTY TAX ADMINISTRATION FEES
APPROVED AS TO FORM AND CONTENT:
RICHARD E. NOSKY, JR.
CITY ATTORNEY
Bv:
JOHN M. LUEBBERKE
ASSISTANT CITYATTORNEY
CITY OF STOCKTON
Bv:
J. GORDON PALMER, JR.
CITY MANAGER
DATED:
ATTEST:
KATHERINE GONG MEISSNER
CITY CLERK
APPROVED AS TO FORM AND CONTENT CITY OF LODI
D. STEPHEN SCHWABAUER
CITY ATTORNEY
By:
APPROVED AS TO FORM AND CONTENT:
DANIEL SODERGREN
INTERIM CITY ATTORNEY
By.
By:
BLAIR KING
CITY MANAGER
DATED:
ATTEST:
RAND[ JOHL, J.D.
CITY CLERK
CITY OF TRACY
Bv:
LEON CHURCHILL, JR.
CITY MANAGER
DATED:
4
AGREEMENT BETWEENTHE COUNTY OF SANJOAQUIN AND THE CITIES OF STOCKTON, .-ODI, AND TRACYTO TOLL
STATUTES OF L MI TATIONS FOR CLAIMS REGARDING PROPERTY TAX ADMINISTRATION FEES
RESOLUTION NO. 2009-45
A RESOLUTION OF THE LODI CITY COUNCIL
AUTHORIZING THE CITY MANAGER TO EXECUTE
AGREEMENT BETWEEN THE COUNTY OF
SAN JOAQUIN AND THE CITIES OF STOCKTON, LODI,
AND TRACY TO TOLL STATUTES OF LIMITATIONS
FOR CLAIMS REGARDING PROPERTY TA)
ADMINISTRATION FEES
WHEREAS, a controversy exists regarding the County's calculation of the
property tax administration fees regarding the Triple Flip (Revenue & Taxation Code
§97.68) and the Vehicle License Fee swap (Revenue & Taxation Code §97.70).
California cities are universally contending that counties are overcharging for their
administration fee; and
WHEREAS, in order to avoid legal expenses, City and County staff propose that
the parties enter a tolling agreement (essentially extending the statute of limitations for
the cities to sue if an agreement cannot be reached) to allow existing litigation to
proceed and base any future negotiations regarding adjustments on the outcome of the
pending cases.
NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby
authorize the City Manager to execute agreement between the County of San Joaquin
and the cities of Stockton, Lodi, and Tracy to toll statutes of limitations for claims
regarding property tax administration fees.
Dated: April 15, 2009
I hereby certify that Resolution No. 2009-45 was passed and adopted by the City
Council of the City of Lodi in a regular meeting held April 15, 2009, by the following vote:
AYES: COUNCIL MEMBERS— Hitchcock. Johnson, Katzakian, and
Mayor Hansen
NOES: COUNCIL MEMBERS — None
ABSENT: COUNCIL MEMBERS— Mounce
ABSTAIN: COUNCIL MEMBERS— None
HL
City Clerk
2009-45