SR - RES-11044 - REDISTRIBUTION OF PROPERTY TAXES FOR PROPERTY AT LEWIS STREET AND GARDEN GROVE BLVD1. SUBJECT
A Resolution agreeing to redistribution of property tax revenues from the City of Orange to the
City of Garden Grove due to the Lewis Street Reorganization of .901 acres of property located at
Lewis Street and Garden Grove Blvd
2. SUMMARY
In August 2017, the Council voted to support the City of Garden Grove's "Lewis Street
Reorganization between the City of Garden Grove and the City of Orange" (RO 17 -01)
application submitted to the Orange County Local Agency Formation Commission (OCLAFCO).
Application. This Resolution is the next step in the reorganization process and provides for the
redistribution of property taxes in connection with the reorganization.
3. RECOMMENDATION
Approve Resolution No. 11044 - A Resolution of the City Council of the City of Orange
agreeing to redistribution of property tax revenues due to the reorganization of .901 acres of
property located at Lewis Street and Garden Grove Blvd from the City of Orange to the City of
Garden Grove, pursuant to the Cortese -Knox- Hertzberg local government reorganization act of
2000.
4. FISCAL IMPACT
The Orange County Auditor Controller provided a revenue impact analysis for the proposed
jurisdictional boundary change (RO 17 -01). The analysis states that Orange's share of the one
percent levy of property tax generated within this territory is $62.99 annually. Upon completion
of this Reorganization, the City of Garden Grove will receive one hundred percent (100 %) of the
current property tax.
5. STRATEGIC PLAN GOAL(S)
2. Be a fiscally healthy community.
6. GENERAL PLAN IMPLEMENTATION
Land Use Element
Goal 7.0: Promote coordinated planning among City departments and agencies, property owners,
residents, special districts, and other jurisdictions in the region.
Policy 7.3: Coordinate planning efforts with adjacent cities, special purpose agencies, utilities,
and community service providers.
7. DISCUSSION
At their July 5, 2017, meeting the LAFCO Board formally received the proposed "Lewis Street
Reorganization" application (RO 17 -01). The application submitted to LAFCO includes a
detachment of one property, totaling approximately .901 acres, from the City of Orange to the
City of Garden Grove. Specifically, the reorganization includes .18 acres owned by the Christ
Catholic Diocese of Orange and .721 acres that is public- right -of -way in the City of Orange. At
their August 8, 2017 meeting the Orange City Council approved support of this detachment
application.
In conjunction with the City of Garden Grove processing a land use entitlement application for
the former St. Callistus Church, it was discovered that a small portion of the project site is in the
City of Orange. The reconfiguration of the Lewis Street Bridge during the SR 22 freeway
widening project created this irregular city limit which did not create a problem until this
proposed development project. Therefore, it was determined that the best practice is to transfer
this area of the project that is in the City of Orange to the City of Garden Grove. The proposed
"Lewis Street Reorganization to the City of Garden Grove" is also a city boundary change which
cleans up an inconsistent city limit that exists at Garden Grove Blvd and Lewis Street.
The proposed Resolution No. 11044 provides for the Property Tax exchange agreement which is
the next step in the reorganization process and is required by LAFCO for final approval. State
law requires the cities of Orange and Garden Grove to negotiate the amount of property tax
revenues to be exchanged upon completion of the annexation. Staff from both cities have
negotiated and agreed to the transfer of all future annual property tax revenues generated from
this .901 acre parcel of land from the City of Orange to the City of Garden Grove upon
completion of the annexation process. The amount of taxes to be transferred is a nominal $62.99
per year based on the area of land to be exchanged in its current state. At their October 24, 2017
Council meeting the City of Garden Grove approved this property exchange resolution
evidencing their agreement to this transfer of property tax. Should the City of Orange approve
Resolution No. 11044, the action will allow LAFCO and the County Auditor - Controller to
process the jurisdictional change and adjust future property tax revenue distributions. No further
City of Orange City Council action will be needed to finalize the boundary adjustment through
the LAFCO process.
Staff recommends approval of the attached resolution as it would facilitate processing of LAFCO
Lewis Street Reorganization RO17 -01 Application to resolve this discrepancy in city boundaries.
8. ATTACHMENTS
Attachment A — Site Map
Attachment B — Resolution No. 11044
RESOLUTION N0. 11044
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ORANGE AGREEING TO A REDISTRIBUTION OF PROPERTY
TAX REVENUE DUE TO THE REORGANIZATION OF .901
ACRES OF PROPERTY LOCATED AT LEWIS STREET AND
GARDEN GROVE BLVD FROM THE CITY OF ORANGE TO
THE CITY OF GARDEN GROVE, PURSUANT TO THE
CORTESE - KNOX - HERTZBERG LOCAL GOVERNMENT
REORGANIZATION ACT OF 2000.
WHEREAS, The City of Garden Grove initiated an application to the Local Agency Formation
Commission ( "LAFCO ") for detachment of the Parcel from the City of Orange to the City of Garden
Grove pursuant to the Cortese- Knox - Hertzberg Local Government Reorganization Act of 2000
(commencing with Section 56000 of the California Government Code), which application is designated
by LAFCO as the proposed " Lewis Street Reorganization between the City of Garden Grove and the City
of Orange (17 -01); and
WHEREAS, the RO 17 -01 Territory is respectively described and depicted on Exhibit "A" and
Exhibit "B" attached hereto, is currently located in Tax Rate Area 08 -002, and consists of (1) an
uninhabited parcel of private property identified as Assessor's Parcel No. 231 - 255 -01 owned by the
Christ Catholic Cathedral Facilities Corporation; (2) an uninhabited portion of a parcel of real property
identified as Assessor's Parcel No. 231 - 041 -28 owned by Christ Catholic Cathedral Facilities
Corporation; and (3) and portions of the Lewis Street and El Prado Avenue right -of -way owned by the
City of Orange;
WHEREAS, by motion made and adopted on August 8, 2017 at a regular meeting of its members,
the City Council of the City of Orange supported the proposed Lewis Street Reorganization to the City of
Garden Grove (RO 17 -01); and
WHEREAS, Section 99(c) of the California Revenue and Taxation Code provides that prior to
the effective date of any jurisdictional change, the affected agencies (i.e., the cities of Orange and Garden
Grove) are required to negotiate the amount of property tax revenues to be exchanged; and
WHEREAS, as required by Section 99 of the California Revenue and Taxation Code, the
Auditor - Controller of the County of Orange (the "Auditor- Controller ") has prepared a revenue impact
analysis for the proposed Lewis Street Reorganization to the City of Garden Grove (RO 17 -01) and
advised the cities of Orange and Garden Grove of the amount of property tax revenue and the allocation
factors for each affected city that are subject to a negotiated exchange in connection with the proposed
jurisdictional change for the Parcel; and
WHEREAS, both cities have negotiated and agreed upon the amount of property tax revenues to
be exchanged between the cities in connection with the proposed jurisdictional change for the Parcel.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Orange that the City of
Orange does hereby agree to the foregoing redistribution of property taxes for this reorganization, with
taxes allocated according to applicable revenue factors for the affected tax rate areas.
THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Orange
this 14 the day of November, 2017.
Teresa Smith