HomeMy WebLinkAboutAgenda Report - November 3, 1993 (55)00
CITY OF LODI
,'^-
COUNCIL COMMUNICATION
AGENDA TITLE: ALTERNATIVE TAX APPORTIONMENT (TEETER)
MEETINr DATE: November 3, 1993
PREPARED BY: Finance Director
RECOMMENDED ACTION: That the City Council adopt the attached Resolution to authorize the
San Joaquin County Auditor -Controller to apportion property tax revenues due the City of Lodi in
accordance with the provisions of the Teeter Plan.
BACKGROUND INFORMATION: On September 23, 1993, San Joaquin County notified all
local agencies in San Joaquin County that the County Board
of Supervisors would adopt an alternative property tax
apportionment method known as the "Teeter Plan" and requested cities to adopt a resolution to "opt -in"
to the plan (See Tab A). On October 5, 1993, the County Board of Supervisors adopted the Teeter Plan
at a regularly scheduled meeting of the Board. On October 7, 1993, the County Auditor -Controller's
Office mailed a copy of the Resolution adopting the Teeter Plan by the Board of Supervisors' (See Tab
B) and again requested that Lodi file the "opt -in" resolution with the County by October 31 in order to
receive our allocation of delinquent taxes in early November.
At the regular scheduled meeting of the City Council on October 20, 1993, the Teeter Plan was presented
to the City Council. During discussion on the Plan, members of the Council expressed their reserva•ions
as to whether adopting the Plan was in the best interest of the City. Staff requested the report be tabled
until the meeting of November 3, 1993 to allow time for additional research and to obtain additional
information to support the staff recommendation. The report was then tabled by the City Council until
November 3, 1993.
COUNTY REQUEST
The County Board of Supervisors has requested that cities in the County adopt a Resolution to "opt -in"
to the "Teeter Plan". This same request was expressed in a letter from the County Auditor -Controller
dated October 7 and extended the deadline for filing the "opt -in" resolution to October 31, 1993.
During discussions with the Auditor -Controller's Office on October 26 and 27 regarding the "Teeter
Plan", staff was informed that the County will implement this Plan for all cities based on recent Court
decisions in Tuolumne County and Sonoma County which ruled that cities do not have an option. If the
Plan is adopted by the County, than cities will receive their tax apportionment in accordance with the
Teeter Plan.
APPROVED:
THOMAS A. PETERSON Wyeledq. p„
City Manager
cc -1
The County justifies the Teeter Pian as a one-time opportunity to obtain approximately $10 million in
property tax which would otherwise go to schools in San Joaquin County. This shift in property tax will
be offset by the State in accordance with SB 742 in which the State will make up the loss to schools.
The County and many cities believe that this additional revenue more than offsets the loss in revenues
from property tax penalties. In addition, the County has reservations and concerns with maintaining two
tax allocation plans. It would be difficult to administer and require special programming.
REASONS FOR ADOPTING THE TEETER PLAN
The 'Teeter Plan" offers the following benefits to the City of Lodi:
' The City will receive a one-time increase in property tax revenue ($482,000)
* Simplifies property tax revenue estimation
* Stabilizes property tax revenue
* As a show of support for the Board of Supervisors' and other cities in the County during
difficult financial times
In addition to the benefits listed above, the City should consider the time value of a dollar today versus
the promise of future revenues. Today the City can get a one-time property tax distribution of $482,000
or receive between $30,000 and $38,000 per year in future years, maybe. These future revenues are not
guaranteed and are subject to uncertainty such as: changes in the delinquency rates, a change in the 18%
penalty, a change in inflation, a change in the tax allocation method, etc.
REASON FOR NOT ADOPTING THE TEETER PLAN
By supporting the "Teeter Plan" the City of Lodi forfeits the right to future tax penalties in the amount
of 1 1/2% per month of delinquent property taxes due the City. This is between $30,000 and $38,000
per year based on prior year history.
Dixon Flynn
Finance Director
Attachments
Resolution No
RESOLUTION REQUESTING INCLUSION OF LODI INTO
THE ALTERNATIVE ME111013 OF PROPERTY TAX DISTRIBUTION
KNOWN AS THE TEETER PLAN
WHEREAS, State Law authorizes counties to adopt alternative procedures for the distribution of
property tax revenue, commonly known as the Teeter Plan; and
WHEREAS, the Revenue and Taxation Code Sections 4701 and 4717 allow for this alternative
method of property tax apportionment; and
WHEREAS, this City Council has determined that adoption of the Teeter Plan by the County of
San Joaquin and application of the Teeter Plan to this City is beneficial;
NOW, THEREFORE, BE IT RESOLVED that the San Joaquin County Auditor -Controller is
authorized to apportion property tax revenues due this City according the provisions of the Teeter Plan.
Adopted by the City Council of the City of Lodi this 20th day of October 1993 by the following vote:
AYES: Council Members -
NOES: Council Members -
ABSENT: Council Members -
ABSTAIN: Council Members -
Jennifer M. Perrin
City Clerk
W
Office of the
County Admiristrator
COUNTY OF SAN JOAQUIN
Courthouse, Room 707
222 East Websr Avenue
Stoclaon. Caldomia 95202-2779
(249)468-3211
Same letter has been sent to:
City Managers
• Superintendent of Schools
Dear
September 23, 1993
• Redevelopment Agencies
Special Districts not governed b,v the County Board of Supervisors
.Alternative Method of Tax Apportionment (Tetter Plan)
P. 01
--2-,1- 4
Revenue and Taxation (RScT) Cod -c Sections 4;D1 through 4717 allow for an alternative method
of tax apportionment known as th,_ Tee:cr Plaa..fhis method allows counties to apportion 1000
of current utxes levied (billed) to taxing a•aut:cs anti eliminates the need to apportion delinquent
taxes collected.
On August 11. 1903, the County ; N.3arct cif Stti.e;visors conceptually approved the implementation
of the Teeter Plan effecdvc fiscal year 1993-9.1. Bated on the preliminary benefit analysis pre-
pared jointly by the Auditor- Con, rililer, lite I'rGasucer-Tax Collector, and the County
Administrator, except for the school disrupts. it is anticipated that this plan will provide substan-
tial one --time benefits for all local taxing entiti,:s. It will also provide a consistent, predictable cas-1
How in future years.
According to R&T Code Section 3 715, any agency that is deemed not to have the Country Trea-
sury as its legal depository must have its governing body adopt a resolution to be included in the
Teeter Plan. The County Auditor's Office t:tust receive your acency's approved resolution rs soon
as possible to allow the San Joaquin County Board of Supervisors' approval by the October 15
deadline.
Aa the TL::t; r ?l..n has tx:en scheduled to be held at the fol-
lowing time and place:
Date: Thurxlay, Scpternhs,-r 30. 1993
'rime: 8:30 a.m.
Place: Sheriff's Auditor L13 Post -It', branc fax transm.tS31 rrBmO 7571 •urpe9es • `-�
Counnoiv�e Ba: n; :t rem
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222 East '-Vt•her : ;• c lnie �: -
Stoc.L'ton. Caiifmni:; C C co
°eDt' t t x/ AA/C. F phone
Faa • Faa
- : r. - -
Alternative Method of Tax Appo.ti.x:.ncnt ;T;:ctcr Pian)
September 23, 1993
Page 2
The following attachments are in..-iaded lwre to provide you additional informetion regarding the
Teeter Plan and its impacts to your agency. T ese will be discussed in detail at Thursday's
meeting.
• Attachment A — Fact Sheet
Attachment B — Compari.-,on of Regular vs. Teeter Allocation for 1988-89 to 1992-93
Attachment C — Projected 1993-94 One -:r. -Me Benefit
. Attachment D —Sample "Opt -In- Resolution,
'Ale strongly urge your attendance as the Teeter flan may have significant short and long-term
fiscal implications for your agency. If you hive any questions before our scheduled meeting,
please do not hesitate to call me at 468-3211. or Adrian Van Houten. Auditor -Controller. at
468-3925, or Tom Russell, Treasurer -"fax Collector, ector, at 468--2133.
Adrian Van Houten 'rhomas R. Russell
Auditor -Controller Treasurer -Tax Collector
(_ r t>'
Biel Wingett
County Administrator
MGW:RSL
Attachments
#RSL09-15
r
Attachment A
County of San Joaquin
Aiternatjve Method o¢ Tax Apportionment
The "Teeter" Pian
Background/Status
In 1949, the State Legislature adopted Revenue and Taxation Code Section 4701 which
authorized the "Alternative Method of Property Tax Distribution." This alternative
method was proposed by the Centra Costa County Auditor -Controller whose last name
was Teeter, and therefore, the;netis scmetimes referred to as the "Teeter" PIan. As
stated in Section 4701, "It is. . . the object to this alternative procedure to accomplish a
simplification of the tax -levying and tox-apportioning process and an increased flexi-
bility in the use of available cash resources. Tris method has been used by Contra Costa
for over 40 years and is used in four o! her counties (Solano, Siski ou, El Dorado, and
TuoIumn ). Many counties are now considering whetter to convert to -Me -Teeter Plan
because of the local property tax shift to schoa:s and the one-time property tax reduction
provision of SB 742.
The basic concept of the Tceter PIan is that ea:'i taxing agency receives 100% of their cur-
rent secured tax levy. The amount paid each year in excess of actual collections is funded
from a Tax Resources Fund. Monies coilected from delinquent secured taxes are then
added back to the Tax Resources Fund. Delinquent and redemption penalties are placed
in a Tax Loss Reserve Fund. 1%" -en the rase^ -e fund reaches four percent of all taxes and
assessments levied for the fiscal year, ::ny e% -c ass is then available to the County General
Fund.
Currently, the :County Auditor -Controller apportions secured taxes as collected. Since
collections are normally 95`Yo !o 97% u: levy, there is always a portion o: b -:cured taxes
that become delinquent. When these delinquent taxes are paid, taxes and penalties are
apportioned to the taxing agencies. If the taxes are never paid and the property is sold by
the County, taxing agencies, including the County; wait at least five years to receive their
share of secured taxes.
Conversion to the Teeter Paan require, ;6ende-, to forego their distribution of delinquent
penalties and redemption per.lties, c•,rr, ally xt 1-1 /2% per month, on delinquent taxes
which they now receive under he c:jm en.iunal (regular) apportionment method. How-
ever, they would receive IGC r,c their `eCULCd tax levy each year, with the delinquent
and redemption penalties revesting v; the Loss Reserve Fund.
To convert to the Teeter Plan, San Co.t,;ty would be required to buy out the
existing delinquent taxes owed to ea.n tcix, . ..bency. It is estimated that the buy --out Of
all delinquent taxes, direct assessmcrts (t:.:i;;.iinb Mello Roos), and penalties, at June 30,
1993 to be approximately $29.5 rnillion.
Page I of 2
ate" ....y -
Revenue and Taxation Code Section 4713 recltti:es that five percent of the buy-out
amount, excluding the portion pertaining to special assessment, be deposited into the
Tax Loss Reserve Fund.
Potential Benefits:
The Teeter Plan offers the :axir - agencies i£: San Joaquin County the :ollowing benefits:
o
r Provides a one-time increase in pr,)perty tax revenues to all taxing agencies.
a Simplifies :he property tax revenue estimation and allocation process for the
agencies and the Auditor -Controller.
> Stabilizes property tax revenues for all recipient agencies.
Fiscal Implications:
The Te.>ter Plan has a direct effect on - ; ery a8ency that receives a share of San Joaquin
County's secured property taxes or places special assessments on the tax roll. All taxing
agencies converted to the Teeter Plan u-c;uld r�_ceive 95% of the delinquent property
taxes plus 951/6 of prior years' delinquent and redemption pen: Ities and 100% of current
year levy. Additionally, agen_ies, except sc'rcx4s, would also benefit because the County
would be buying out delinquent taxes at e :cperty tax distribution Afacrors not affected by
the property tax shifts for 1943-94.
For the County General Fund, the one-time increase in property taxes would be approx-
imately $8 8 million. This 58..x.: Billion will be used to finance the required reserves to
implement the Teeter Plan. Additionaily, SB 7212,'1993) allows counties converting to the
Teeter PIan a one-time proper• shift :eduction for the excess property tax revenue that
schools receive in 1993-94 due to the conversion. This one-time "credit" for the County
is estimated to be approximateiv S-_0.6 million.
Steps to Implementation:
> San Joaquin Countv l;cr.rd of Supervisors must adopt a resolution converting to
the Teeter Plan by C ktober 15, 1993.
a Any taxing agency ±rat deer ed not to have the County TreaFury as its legal
depository must have gov.,rn n5 reedy adopt a "opt -in' r,:sclution •o be
included in tht Teter Plan.
r Any modifications to t?,_ prope.:v tax ;tilocistion system must be implemented
prior to the firs; prcperr; taa Alucatior, inDecember 1993.
la e2of2
$27.5
x
$25.0
ri
F-
$22.5
U
o $20.0
i
Q
$17.5
$15.0
a
Scan Joaquin County Cities
Comparison of Regular Vs. Teeter Method Allocation
1988-89 1989-90 1990-91 1991-92 1992-93
® Re war
1
$18,341,509
$20,090,400
$23, 474, 203
525, 723,134
$24,841,161
Teeter
$18,106,441
$20,100,178
1 $23,484,021
$25,925,928
$211,743,915
1-14
27
cD
Z3
V-«
F
1
County of San Joaquin
Conversion to Teeter Plan -- Financial Analysis
Projected 1993-94 Secured & Delingent Property Tax Allocation
Counry Gwwrrd Fund
ROao Dtatrr:l3
Cowry Utxrlr
Cenwlory WbrcIs
:kmnc a Droa.ct.
U ua 1
c :r.A'Jn
L -.t 1 rq,
t. -r+,
M .1,..,C,
Ifitwt„q
Trory
Fapcn 11-x1 Sower
La:)wr-p Storm Drainage
Lauvop Street upping
La84op Nlnter District
Fire DIStr1C13
Flood Callrol DISL•icts
Lighting Districts
Maintonance Dlsbtcts
MOsolo Ab3te Dis4tC1
Fhoc:am U,>n Districts
Sr.nillm/ MOICis
Leckc,lad Commurwty Service
iY3'3( Conservation DisMils
lribjat; m Districts
Stodctan M4troTransit
Cciunty Son" Arew
Redeveloprrwnl Agencies
S.pl.nt4r 23. 1993
Conventional Allocation Me#" (Regular)
Current
309.632
U.u,911
Secured
Detinqu4nt
TOW
195% of C:u,p.$)
(AcWi 22-m t1.v I
Alk=bon
A .-005%
0
C e A40
51610
.: Ski"
2,310,127
41,755,1111
4,716,418
46,531,534
2,52n,4O0
151,028
2,661,117
1,73;.271
102,337
1,641, P07
139,922
10,099
150,022
31,16.]
2,349
3_.e-2
2r•8,s77
21,406
309.632
U.u,911
36,462
591,354
3,457,1 b0
208,100
3,72S,:na
1,]i: GEJ
105,576
1.a3<),i40
:,19►
51610
.: Ski"
2,310,127
468.520
2,972,353
229,021
3.202,174
40,939
2,704
-41,643
86,512
5,606
92,118
9,214
600
9.814
47,032
2,684
49,917
7,407.91S
354,795
7,042.710
614,711
48,644
665,355
95,211
7,654
102,866
214,923
19,966
234,&"
1,387,633
94,676
1,482,510
362,176
26,821
388,997
53.082
4,395
57,477
52.670
3,921
56,S92
400,707
26,523
426,630
1,517,311
112,037
1,629.348
408,629
40,113
446,741
91,699
8,197
97,895
5,970,031
342,727
6,312,758
7'"ImPlan Allocation Method
Current
Sowed DolinquwA
(I33Sd Gwpe.) (A6% of AA)
Unapprobonad
Tam Collected T0131 1993-04
(n An. -.Ana 03) Allocation Gain
F GffD4E4F ti.G-C
43,952,754
9,605,619
1769,838
55,318,211
8,796.677
2,662,621
397,101
72.411
3,132,133
451,016
1,8'30612
406,900
72.416
2,310,127
468.520
147,287
18,835
3,474
169,596
19,575
3;.1.1'%
4,11.1
758
3H,^13
4.iSC.
30? 6(A
46,439
8.557
358016
4e,723
70,953
10:,0,5
771,-131
11,11 0,37
3.6:0 +37
553,812
14.548
4.207.41W
4e2.ZK)b
11,154W.014
340,120
55,311
2,24:.504
sr•3 e;
'r:.r •. ��
32,791
7.065
279,300
i�-.:. •47
2,061.417
379,635
16,873,100
2.113.:=i
3,124,7v2
602,397
92.571
3,723,160
521,5b6
43.0!'14
5,617
1.000
49,711
6,068
9I w
11,701
2.083
104,849
12,731
9,6S
1,222
217
11,138
1.324
49,507
6,153
1,095
56,755
6,039
7.882,016
960,710
176,825
9.027.551
1,184,841
649,169
83,525
I5,300
743,084
82,729
100,223
13,286
1,451
115,959
13,093
:26,235
28,993
5,381
260,609
25,720
1,460,377
186,755
34,380
1,682,013
199,503
351,236
41,053
7,543
429.634
40,837
$5,876
7,516
1,392
64,784
7,306
55,443
7,116
1,320
63,879
7,287
Zr
421,165
51,289
0,253
481,707
$5.078
Z
1.607,169
207,787
38,372
1,843,328
213,980
430,135
55,832
10.401
496,369
47,627
96,525
22,734
4,111
123,371
25,475
"►
6,284,243
687,854
107,884
7.079,981
767,223
0
Freparvt 9/ SJC CAOWANOI-Ca4oMr
Asx«:,. o.,-...,:.....:.:«r..•a.+*ruwr a.,,-,,..«......... ..:
D
•i�
a'—
Resolution of the City Council of
Resolution 93--
Attachment
3
Attachment D
Resolution Requesting Inclusion of this City into
The Alternative Method of Property Tax Distribution
Known As The Teeter Plan
WHEREAS, State Law aum.ortzes counties to adopt an alternative procedure for the distri-
bution of property tax revenue. cummunly known as the Teeter Plan; and
WHEREAS. Revenue and Taxation Code Sections 4701 through 4717 allow for this alter-
native method of property tax apportionment; and
WHEREAS, this City Council has dctennine.d that adoption of the Teeter Plan by the
County of San Joaquin and application of the Tecu f Plan to this City could be beneficial;
NOW, THEREFORE. BF IT R i- 3,0LI N :D that ui an the approval of th-- Board of Supervi-
sors of the County of San Joaqu;a, LIX San Joaquin: County Auditor -Controller is authorized to
apportion property tax revenues due this City according to the provisions of the Teeter Plan.
Attachment D
Resolution of the Board of Directors of
Resolution 93—
Resolution Requesting Inclusion of this District into
The Alternative Meihod of Property Tax Distribution
Knovn As The Teeter Plan
WHEREAS. State Law uuthorizes courses to adopt an alternative procedure for the distri-
butior of property tax revenue, commonly known as the Teeter Plan; and
WHEREAS, Revenue and Taxation Code Sections 4701 through 4717 allow for this alter-
native method of property tax apportionment; and
WHEREAS, this Board of Directors his determined that adoption of the Teeter Plan by
the County of San Joaquin and applicatirn of the Teeter Plan to this District would be beneficial;
NUN. THEREFORE, BE IT RESOLVED ,hat upon the approval of the Bcatd of Supervi-
sors of the County of San Joaquin, the San hac;uin County Auditor-Ccntroller is authorized to
apportion property tax revenues due this District according to the provisions of the Teeter Pian.
TOTAL P-0
OFFICE OF THE AUDITOR -CONTROLLER
SAN JOAQUIN COUNTY
24 S. Hunter Street - Room 103
Stockton, California 95202
Phone: 209/468-3925
Fax: 209/468-3681'
Q�A4!!y
r.'
r.
a:
�i
ADRIAN J. VAN HOUTEN
AUDITOR -CONTROLLER
October 7. 1993
City of Lodi
221 W Pine St
Lodi CA 95241
Dear Council Members:
rNybion Chiefs
Angela Hou -Auditing
Shabbir Khan - Property Taxes
Margaret Miller - Accounting
Alternative Method of Tax Apportionment (Teeter Plan)
On October 5, 1993, the County Board of Supervisors approved Resolution R-93-646 adopting
and implementing the Alternative Method of Tax Apportionment, also known as the Teeter Plan,
effective fiscal year 1993-94. and indefinitely thereafter (see attached).
Our office will distribute the delinquent taxes during the first week of November. In order for your
agency to receive your allocation of the delinquent taxes, you must file an executed opt -in resolu-
tion (sample attached) with my office no later than October 31, 1993. Please note that at our
September 30th meeting, we informed you that the deadline to file the resolution was November
30, 1993. This change will allow us to advance the delinquent taxes to your agency in early
November instead of late December when the first property tax apportionment of the current
charges is normally made.
We strongly urge your prompt attention to this matter. If you have any questions, please call me or
Shabbir Khan of my staff at 468-392`_•.
very truly yourA.
A
an Houtcn
%%��
Auditor -Controller
AVH
Attachments
c: County Administrator's Office
Treasurer -Tax Collector
County Counsel
#RSL 10-03
Resolution of the City Council of
Resolution 93—
Resolution ;Requesting Inclusion of this City into
The Alternative Method of Property Tax Distribution
Known As The Teeter Plan
WHEREAS. State Law authorizes counties to adopt an alternative procedure for the distri-
bution of property tax revenue. commonly known as the Teeter Plan; and
WHEREAS, Revenue and Taxation Code Sections 4701• throush 4717 allow for this alter-
native method of property tax apportionment; and
WHEREAS, this City Council has determined that adoption of the Teeter Plan by the
County of San Joaquin and application of the Teeter Plan to this City would be beneficial;
NOW, THEREFORE, BE IT RESOLVED that upon the approval of the Board of Supervi-
sors of the County of San Joaquin, the San Joaquin County Auditor—Controller is authorized to
apportion property tax revenues due this City according to the provisions of the Teeter Plan.
r -
Before the Board of Supervisors
of the County of San Joaquin, State of California
RESOLUTION
R-93—
Resolution Adopting and Implementing the Alternative Method of
Distribution of Property Tax Levies and Assessments
WHEREAS. Chapter 3 (commencing with Section 470 1) of Part 8 of Division I of the ,
California Revenue and Taxation Code (hereinafter called "the Act") authorizes a county to elect
by resolution to adopt an altemative method of distribution of property tax levies and assessments
on the secured roll made by a county on its behalf or as the tax -levying and tax -collecting agency
for other political subdivisions; and
WHEREAS. upon election, the alternative method is applicable to'all property tax levies
and assessments made by the County on behalf of all public districts except those for which the
County Treasury is not the legal depository and which do not agree by resolution to participate in
such an alternative method; and
WHEREAS. the Act requires that the County establish a tax losses reserve fund which
shall be used exclusively to cover losses which may occur in the amount of tax liens as a result of
special sales of tax -defaulted property; and
WHEREAS. the Board of Supervisors of the County of San Joaquin desires to implement
the alternative method authorized by the Act.
NOW. THEREFORE. BE IT RESOLVED that the Board of Supervisors of the County
hereby elects. pursuant to Section 4702 of the Revenue and Taxation Code. to place into effect in
the C,.)unty the alternative method of uistribution of property tax levies authorized by the Act for
the 1593-94 fiscal year azd for all following years until discontinued pursuant to the provisions of
the Act.
BE IT FURTHER RESOLVED that the Board of Supervisors of the County elects. pursu-
ant to Section 4702.5 of the Revenue and Taxation Code. to extend the procedures provided by
the Act to assessments that are entered on the secured tax roll for the current year.
BE IT FURTHER RESOLVED that the Board of Supervisors of th,- County elects. pursu-
ant to Section 4713 of the Revenue and Taxation Code. to make the procedures provided for
therein ap; licable to delinquent taxes and assessments for the years prior to the 1993-94 fiscal
year.
BE IT FURTHER RESOLVED that the Auditor -Controller and the Treasurer -Tax Collec-
tor of the County shall establish and maintain a ",losses reserve fund in accordance with the pro-
visions of Section 4703 of the Revenue and Taxatic•n Code.
-0jr- ;.,
U
R -93 (V9 �
-
BE IF FURTHER RESOLVED that the Auditor -Controller and the Treasurer -Tax Collec-.
for of the County shall take all actions consistent with the provisions of the Act necessary to carry
out the purpose and intent of this resolution.
BE IT FURTHER RESOLVED that this alternative method of distribution shall be appli-
cable. pursuant to Section 4715 of the Revenue and Taxation Code, to those public districts for
which the County Treasury is not the legal depository and which have agreed thereto by a resolu-
tion of their governing board adopted not later than October 31. 1993.
BE IT FURTHER RESOLVED that the Auditor -Controller, the Treasurer -Tax Collector.
and all other officers and employees of the County shall do and perform all things necessary to
carry out the purpose and intent of this resolution.
5 1993
PASSED AND ADOPTED. this QCT by the following
vote of the Board of Supervisors, to wit:
AYES: BARBER, WILHOIT, SIMAS, CABRAL, SOUSA
NOES: NONE
ABSENP ONE
WILLIAM N. SOUSA
WILLIAM N. SOUSA. CHAIRMAN
Board of Supervisors
County of San Joaquin
State of Califonda
ATTEST: JORETTA J. HAYDE
Clerk of the Board of Supervisors
of the County of San Joaquin.
State of California
i
u .
-sem
By
f,1NDY DUBRUTZ
Deputy Clerk
-2-
Before the Board of Supervisors
County of�a �Jo a cLu� Sate of California
MOTION: WILHOIT / BARBER
Public Hearing to Consider Resolution Adopting and Implementing
the Alternative Method or Property Tax Apportionment
This Board of Supervisors does hereby approve the resolution adopting and implementing
the Alternative Method of PropertyTax Apportionment (Teeter Plan) for fiscal year 1993-94, and
indefinitely thereafter.
I MEREBY CERTIFY that the above order was passed and adopted on October 5, 1993
by the following vote of the Board of Supervisors, to wit.-
AYES:
it:AYES: BARBER, WILHOIT, SIMAS, CABRAL, SOUSA.
NOES: NONE
ABSENT: NONE
ABSTAIN: NON E
c: County Adtpinistrator. 'treasurer -Tax Collector
Auditor -Controller. County Counsel
Board Clerk
CIA iza"
IORETIAJ_HAYD'i':2: 'r c r..;
Clerk of the Board of Super Asors
County of San Joaquin ',.:
State of California '
JORETTA J. HATV11
8. INFORMA7 A Local Government Fina: SB 742 (Senate Committee
on Budget and Fiscal Review). Teeter Plan. Signed i v
,ov rnor.
In 1993-94, many counties in the state will be implementing a different property tax
allocation procedure in 1993-94 known as the 'Teeter Plan". First enacted in 1949, the
'Teeter Plan" provides an alternative way to handle the allocation of revenues attributable
to delinquent property taxes. Counties may, but arc not required to, use the Teeter Pian.
Prior to 1993-94, five counties (Contra Costa, EI Dorado, Modoc, Siskiyou and Solano)
implemented the Teeter PIan. Counties may adopt the Teeter Plan, after a public hearing,
by resolution of the board of supervisors. The plan will thereafter remain in effect unless
(1) the board orders its discontinuance or (2) a petition is filed with the board by not less
than two-thirds of the participating revenue districts in the county for its discontinuance.
Signed by the Governor on July 19, 1993, SB 742 extends the date by which counties must
pass an ordinance enacting the Teeter Plan from July 15 to October 15 for the 1993-94 fiscal
year. In addition, SB 742 allows counties adopting the Teeter Plan for the first time this
year to reduce their 1993-94 property tax shift pursuant to SB 1135 by an amount equal to
the net property tax revenues received by school districts in 1993-94 attributable to tile,
Teeter Plan.
Counties electing to operate under the Teeter Plan allocate property taxes to jurisdictions
based on the total amount of property taxes levied, not the amount collected. At the time
the county adopts the Teeter Plan, the county must forward to each local agency delinquent
property taxes from prior fiscal years. In each county that adopts the Teeter Plan for the
first time in 1993-94, the cities and all other taxing agencies will receive a lump sum
payment of all prior delinquencies.
For counties not operating under the Teeter Plan, interest and penalty is allocated to all
local agencies based on their pro rata share of the delinquent property tax. However, the
county does retain the penalty on delinquent property taxes if the delinquency is cleared up
within the same fiscal year. By adopting the Teeter Plan counties are allowed to retain the
interest and penalty on delinquent property taxes in exchange for advancing the full property
tax payment to other jurisdictions. Given the current spread between the rate at which
counties can borrow funds to finance the revenues they advance to other jurisdictions, and
the interest rate of 1890 and the 10% penalty charged on delinquent taxes, some counties
believe they can profit from adoption of the Teeter Plan.
Other counties have estimated that except for the one-time reduction in their property tax
shift in 1993-94, allocating property taxes pursuant to the Teeter Plan is a revenue loss for
counties over the next ten years. in fact, the only significant change to the Teeter Plan in
SB 742 is the one-time reduction in the property tax transfer. When evaluating the Teeter
Plan, cities must consider the property tax delinquency rate in their jurisdiction, the level
of recoverable delinquencies and their estimation of inflation and the cost of borrowing
money over the next ten to twenty years. (Referred to previously in Bulletin #28-1993.)
October 1, 1993
Property Tax Calculations for Teeter Plan
Calculating Delinquency rate based on actual amount billed to property owners (100% Secured)
Allocation Factor for City of Lodi
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
0.02451064
0.02524835
0.02404381
0.02348419
0.02067363
0.01801585
Allocation factor is county wide in relation to total tax levy
1986-1987
1987-1988
1988-1989
1989-1990
1990-1991
100% Secured
2,590,615.63
2,833,126.44
3,066,924.10
3,467,733.65
3,761,090.05
Collected by S.J.Co.
2,492,202.17
2,749,979.06
2,967,190.37
3,363,878.42
3,630,346.76
Balance (Delinquency)
98.413.46
83,147.38
99,733.73
103,855.23
130,743.29
Delinquency rate
3.80%
2.93%
3.25%
2.99%
3.48%
Calculating % paid to City of Lodi based on
actual amount bill to property owners
(100% Secured)
100% Secured
2,590,615.63
2,833,126.44
3,066,924.10
3,467,733.65
3,761,090.05
%95 paid to C c,f L
2,461,084.85
21691,470.12
2,913,577.90
3,294,346.97
3,573,035.55
Retained by S.J.Co
129,530.78
141.656.32
153.346.20
173,386.68
188.054.50
Calculating the difference between the delinquency and the amount retained by S.J. Co.
Retained by S.J.Co
129,."30.78
141,656.32
153,346.20
173,383.68
188,054.50
Delinquency
98,5#3.46
83,147.38
99J33.73
103,855.23
130,743.29
Difference
31.117.32
58.508.94
53,612.47
69,531.45
57.311.21
Allocation Factor for City of Lodi
1988-1989
1989-1990
1990-1991
1991-1992
1992-1993
1993-1994
0.02451064
0.02524835
0.02404381
0.02348419
0.02067363
0.01801585
Allocation factor is county wide in relation to total tax levy