Title
Adopt Corrected Tax Rates for the Gonzales Unified School District calculated by the Auditor-Controller for Fiscal Years 2021-22, 2022-23, 2023-24, and 2024-25.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
Adopt Corrected Tax Rates for the Gonzales Unified School District calculated by the Auditor-Controller for Fiscal Years 2021-22, 2022-23, 2023-24, and 2024-25.
SUMMARY/DISCUSSION:
Pursuant to California Government Code Section 29100, the Board of Supervisors annually adopt tax rates for the secured property tax roll on or before October 3rd. While Article XIII A of the California Constitution limits the general property tax rate for local agencies to 1% of assessed value, additional tax rates may be levied to pay for voter-approved bonds.
The Gonzales Unified School District (GUSD) includes two distinct areas for issuance and repayment of bond indebtedness: a district-wide area and a School Facilities Improvement District (SFID) area. Due to an administrative error in the Auditor-Controller’s Office (ACO), the GUSD bond tax rate was not levied in the district-wide area, and the SFID area was over-levied from Fiscal Year 2021-2022 through 2024-25.
As a result, corrected tax rates have been recalculated to apply the correct levy in the district-wide area and to process refunds for the over-levied taxes in the SFID area.
The attached, Appendix A, reflects the corrected tax rates for the GUSD.
Approximately 850 parcels will receive tax bills with an additional amount due for each impacted fiscal year and approximately 2,140 parcels will receive refunds as a result of this correction. The details of the estimated impact to those parcels are provided in the attached, Appendix B.
Eligible taxpayers may apply for an installment plan allowing repayment over a four-year period pursuant to Revenue and Taxation Code 4837.5 provided the additional tax due is over $500, all other taxes due on the current tax roll are paid on time, and the taxpayer enters a payment plan with the Treasurer-Tax Collector’s Office (TTC).
To ensure impacted taxpayers understand the changes made to their property tax assessments, the ACO will provide a letter of explanation that will accompany the corrected tax bills. The letter will provide a direct contact in the ACO to help answer taxpayer questions.
To prevent this type of error in the future, the ACO has implemented several internal process improvements to the tax levy process including retraining staff on comprehensive bond review procedures and enhancing coordination with school districts and bond consultants during the tax levy process.
OTHER AGENCY INVOLVEMENT:
The Auditor-Controller’s Office is working closely with the Treasurer-Tax Collector’s Office to ensure the corrected bills are printed and mailed out.
The TTC anticipates a financial impact in the current year and the next four fiscal years related to a sustained commitment of staff resources to manage the correction and potential payment plan participation, which could represent a 174% increase over the current payment plan workflow. The current workflow is approximately 88 payment plans managed each year. This could increase to approximately 1,284 each year for the next four years, if all eligible taxpayers participate in the payment plan option. Additionally, the TTC anticipates needing to divert resources from existing tasks to ensure prompt mailing of the corrected property tax bills and to review the assessments eligible for refunds prior to issuance.
FINANCING:
Approval of the corrected tax rates, as outlined above, will resolve the omission of a tax levy for the district-wide area and facilitate a refund for the overpaid SFID area . There is no impact to the County’s property tax revenue, as these amounts relate solely to the repayment of voter-approved bond debt.
The Auditor-Controller’s FY 2024-25 and FY 2025-26 budget will absorb an estimated $5,000 correction process cost from the property tax software vendor. This budget will also cover approximately $5,000 in anticipated bill printing and mailing costs for the Treasurer-Tax Collector. Costs associated with the correction and the increase in payment plan workload in the TTC are currently unknown.
BOARD OF SUPERVISORS STRATEGIC INITIATIVES:
The corrected tax rates align with the Board of Supervisors’ Strategic Initiatives for Administration. These adjustments to the debt service tax rates will address the error of not levying a tax rate for the district-wide area and will facilitate the refunding of the SFID area for their overpayment.
Mark a check to the related Board of Supervisors Strategic Initiatives
__Economic Development
X Administration
__Health & Human Services
__Infrastructure
__Public Safety
Prepared by: Jennifer Forsyth, Auditor-Controller Analyst II, 755-5286
Approved by: Rupa Shah, CPA, Auditor-Controller, 755-5084
Attachments:
Board Report
Appendix A - Corrected Tax Rates for Gonzales Unified School District
Appendix B - Summary of Impacted Parcels