Los Banos council passes new tax revenue sharing agreement with county

The City Council on Monday adopted a new property tax sharing agreement with Merced County that nearly doubles its current take.

The agreement now goes to the county, which has a Board of Supervisors meeting Tuesday. If approved, the agreement could solve a longtime complaint the city has had with its share of property tax revenues.

The agreement will allow the city to capture more of the property tax revenue from developments that were annexed but haven’t been developed after the current agreement, adopted in 1997, and any land the city will annex in the future.

That includes undeveloped property in the Villa Burano, Meadowlands II, The Villas, East Mercey Springs, Village Green, LaSalvia, Stonecreek South and Spadafore Giannone areas.

Several council members expressed relief after the agreement was presented Monday.

Councilman Tom Faria called the agreement a “great success.”

“It’s been a long, hard road,” Faria said, referencing the years of discussions the city has had with the county on the issue.

According to the current agreement, the city receives none of the general fund increment allocation and 100 percent of the fire fund allocation, while the county receives all of its general fund increment allocation and none of the fire fund allocation.

The new agreement would give the city the lesser of a 75-25 split of the general fund allocation. It also would give the city all of the base fire fund allocation.

That translates to about $18 per $100 of property tax revenue allocated to local taxing bodies under Proposition 13 for future annexations. It would give Los Banos $17 per $100 for undeveloped property within the city limits that has already been annexed after October 1997.

The result is an almost doubling of the city share, leading to a 53-47 split of the total allocation, including base and increment funds, in favor of the city for future annexed areas.

“The goal was to achieve a 50-50 split,” city attorney William Vaughn said.

Mayor Mike Villalta said he was glad the meetings were going to be over, pending approval by the county Tuesday.

This story was originally published June 6, 2016 at 5:47 PM with the headline "Los Banos council passes new tax revenue sharing agreement with county."