County approves tax-sharing agreement with Lincoln

After a year-and-a-half of work between Placer County and the city of Lincoln, the county approved a new tax-sharing agreement with the city at Tuesday's Board of Supervisors meeting. The limited-term agreement will temporarily redirect future property tax increment revenue from the county to the city, beyond the current distribution formula. The tax-sharing agreement includes an annual revenue cap of $1.5 million under the eight-year term and a $2-million annual cap under the two-year extension. The county has agreed to retain just 2 percent of its share of the tax increment throughout the agreement's term, which will go into effect this fiscal year. County officials said that Lincoln officials requested the increased revenue share to meet basic standards for police and fire services, which have been challenged by continued regional growth. As a result, according to the county, the county has provided mutual aid assistance to help the city manage its calls for fire and police service. The agreement requires the city to submit an accounting of the funds to the county each fiscal year. There will be a biennial review with two county supervisors and two Lincoln City Council members meeting on the city's use of this funding over the prior two fiscal years. A focus will be on the city's progress in augmenting public safety services and the number of county mutual aid calls for service to the city during this period. The Placer County Board of Supervisors was not unanimous in the Tuesday vote. Placer County Supervisor Jim Holmes was the lone "no" vote. Holmes was concerned that there was no completed agreement on the sewer fee issues in the areas that will be included in the new tax-sharing agreement area. "There is going to be an increase in the sewer fees for SMD1 (Sewer Maintenance District 1, North Auburn) and they are already paying $96 a month," Holmes said during Tuesday's Board of Supervisors meeting. Holmes also voiced his concern of providing up to $11.7 million in funding to Lincoln while that city is still working through a state audit due to fiscal mismanagement. "We are going to be asked to give $11.7 million to a jurisdiction that has a history of mismanagement and what am I supposed to tell the rate payers when they ask me why we are raising the rate again," Holmes said. Although the other county supervisors said that they understood Holmes' concerns, they said that the two items were separate as the tax agreement is meant to rebuild public safety levels in Lincoln. "As tempted as I am to tie resolution of the sewer issue in, I don't think it is really in our best interest as a county to tie those two things together," Placer County Supervisor Kirk Uhler said. "I truly believe that it is in the best interest of the county as a whole to make sure that no one entity within our county is falling behind in levels of service that can be delivered." On Tuesday night, Lincoln City Council members discussed the tax-sharing agreement. "From the city's side, we had a great team that wouldn't take no for an answer and tried to circumvent whatever objections we had," said Lincoln Mayor Dan Karleskint during Tuesday's City Council meeting. During negotiations with the county, Lincoln officials agreed to move forward on regional initiatives, including updating a fee agreement for reimbursement of county expenses related to the future Placer Parkway and adoption of the Placer County Conservation Plan. Lincoln City Council approved the Placer Parkway on Sept. 22 and the conservation plan on Oct. 13. The tax-sharing agreement has the potential to generate an additional $8 million to $11 million that will go toward Lincoln's General Fund and ultimately increase the city's public safety levels. The agreement, effective once Lincoln City Council approves it, will last for a minimum of eight years. It can be extended two years if public safety levels are not met after the first eight years. The base profit will be split by the city collecting 36 percent of property tax income and the county taking the remaining 64 percent. As development occurs on these properties and the base property value increases, the city of Lincoln will collect 100 percent of profits over the base property value along with its 36-percent cut. Those areas include Twelve Bridges, Sun City Lincoln Hills, Lincoln Crossing and Foskett Ranch, which account for 94 percent of Lincoln's property tax income. Lincoln Councilman Paul Joiner was happy, yet surprised, to hear that the Board of Supervisors approved the agreement. "As you well know, I placed a wager with you on whether this would come to pass or not and the good news is I appeared to have lost that wager," Joiner said to Karleskint at Tuesday's Lincoln City Council meeting. "I think that the willingness to be creative, fluid and flexible in finding a solution to this problem was unlike anything I have seen." Lincoln City Council members are expected to officially approve the tax-sharing agreement during their next council meeting on Nov. 10.