BOARD AGENDA MEMORANDUM
Government Code § 84308 Applies: Yes ☐ No ☒
(If “YES” Complete Attachment A - Gov. Code § 84308)
SUBJECT:
Title
Accept the Corrected Fiscal Year 2024-25 Safe, Clean Water and Natural Flood Protection Special Tax Summary Report and Adopt a Corrected Resolution Providing for Levy of the Special Tax Rates and Authorizing a Procedure for Correcting Special Tax Amounts for Fiscal Year 2024-2025.
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RECOMMENDATION:
Recommendation
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A. Accept the Corrected Fiscal Year 2024-25 Safe, Clean Water and Natural Flood Protection Special Tax Summary Report; and
B. Adopt the Resolution PROVIDING FOR CORRECTED LEVY OF THE SPECIAL TAX PURSUANT TO THE SAFE, CLEAN WATER AND NATURAL FLOOD PROTECTION MEASURE IN THE COMBINED FLOOD CONTROL ZONE OF THE SANTA CLARA VALLEY WATER DISTRICT AND AUTHORIZING A PROCEDURE FOR CORRECTING SPECIAL TAX AMOUNTS FOR FISCAL YEAR 2024-2025.
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SUMMARY:
On May 14, 2024, the Board adopted the staff recommended special tax rates for FY 2024-25 to pay for the cost of the Safe, Clean Water and Natural Flood Protection Program in the combined flood control zone of the Santa Clara Valley Water District (Valley Water).
In August 2024 it came to staff’s attention that one special tax rate was incorrectly recommended due to an administrative error for land use category Group B: Land used for institutional purposes such as churches and schools or multiple dwellings in excess of four units, including apartment complexes, mobile home parks, recreational vehicle parks, condominiums and townhouses standard rate per acre, for parcels that are greater than 0.25 acres in size.
The proposed correction is shown below in yellow highlight. Note that the Group B minimum rate for parcels up to 0.25 acre, as well as the rate for condominiums and townhouses, do not need to be corrected.
Group A: Land used for commercial or industrial purposes: $626.59 per acre, $156.63 minimum for parcels up to 0.25 acre.
Group B: (1) apartment complexes, mobile home parks, recreational vehicle parks: $446.29 469.94 per acre, $117.49 minimum for parcels up to 0.25 acre; and (2) condominiums and townhouses: $38.12 per unit.
Group C: Parcels up to 0.25 acres used for single family residences and multiple family units up to four units: $78.29. The first 0.25-acre of a parcel of land used for single family residential purposes: $78.29.
Group D: (1) Disturbed agricultural land, including irrigated land, orchards, dairies, field crops, golf courses and similar uses: $4.02 per acre, $40.15 minimum on parcels less than 10 acres. (2) The portion of the parcel, if any, in excess of 0.25 acre of a parcel used for single family residential purposes: $4.02 per acre.
Group E: Vacant undisturbed land (1) in urban areas: $1.18 per acre, $11.83 minimum on parcels less than 10 acres; and (2) in rural areas: $0.16 per acre, $11.83 minimum equal to the Group E urban category minimum.
Approximately 4,000 parcels are impacted by the correction. If the rate is not corrected with the Santa Clara County Assessor’s Office, the Safe, Clean Water fund would receive revenue that is $238,000 lower than the FY 2024-25 budget. In addition, revenue loss would continue in future years because future year special tax rates are indexed to the adopted special tax rates from the prior year. If the Board adopts the corrected resolution, staff will work with County staff to determine the economic feasibility of processing a corrected tax rate for the parcels included in the Group B land use category impacted by the rate correction for FY 2024-25. Initial inquiry suggests that the cost to process corrected tax bills for the affected parcels would exceed the lost revenue for FY 2024-25. Most importantly, if the Board adopts the corrected resolution, the special tax rates for FY 2025-26 would be indexed to the corrected FY 2024-25 special tax rates.
Background for Reference
Provisions of Resolution 20-64 (Providing for the continuation and levy of special tax to pay the cost of a Safe, Clean Water and Natural Flood Protection Program in the combined flood control zone of the Santa Clara Valley Water District (Valley Water) subject, nevertheless, to specified limits and conditions) require Valley Water’s Chief Executive Officer to prepare a written report recommending rates for the Safe, Clean Water and Natural Flood Protection (Safe, Clean Water) Special Tax, which was approved by voters on November 3, 2020. Rate limits as specified in the Safe, Clean Water ballot measure are indexed to the fiscal year (FY) 2023-24 rates plus the change in the Bay Area Consumer Price Index (CPI) or 2 percent, whichever is greater.
Based on projected costs of the Safe, Clean Water Program activities, and reports released by the Bureau of Labor Statistics indicating that the change in CPI from February 2023 to February 2024 was 2.4 percent, staff recommended that the special tax rates for FY 2024-25 be set at their maximum level, which would reflect a 2.4 percent increase. The Corrected Staff Report (Attachment 1) reflects the corrected Group B rate.
ENVIRONMENTAL JUSTICE AND EQUITY IMPACT:
The Safe, Clean Water and Natural Flood Protection Parcel Tax was approved by voters in November 2020. Revenues from the parcel tax fund critical flood protection projects, such as the Coyote Creek Flood Protection project which benefits disadvantaged communities.
FINANCIAL IMPACT:
Accepting the corrected Group B rate for the Safe, Clean Water and Natural Flood Protection Special Tax for FY 2024-25 would allow future year tax rates to be established at the correct rate. Not accepting the corrected Group B rate would result in lost revenue to the Safe, Clean Water fund in perpetuity.
CEQA:
The recommended action does not constitute a project under CEQA because it does not have a potential for resulting in direct or reasonably foreseeable indirect physical change in the environment.
ATTACHMENTS:
Attachment 1: Corrected Staff Report
Attachment 2: Resolution
UNCLASSIFIED MANAGER:
Manager
Christopher Hakes, 408-630-3796