TO: Board of Supervisors
FROM: Ryan J. Alsop, Chief Executive Officer
REPORT BY: Tracy A. Schulze, Auditor-Controller
SUBJECT: Resolution to Transfer Fire Protection Tax Revenues Collected in the City of Calistoga to the City of Calistoga
RECOMMENDATION
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Conduct a public hearing and adopt a Resolution pursuant to Revenue and Taxation Code Section 99.02 approving the transfer of Fire Protection Tax revenues collected within the City of Calistoga tax rate area to the City of Calistoga. (Fiscal Impact: Reduction of revenues of approximately $500,000 per fiscal year; County Fire Fund, Fund 2100; Budgeted)
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BACKGROUND
Ad valorum property taxes are collected and allocated as required by Proposition 13 AB 8 factors, which were established in 1978. Records at the time the factors were created indicated structural fire protection within the City of Calistoga was serviced by County Fire. Therefore, the fire protection tax revenue collected from Calistoga’s tax rate area has been allocated to County Fire. Over the years, the City of Calistoga has established a fire department with full staffing and apparatus to provide structural fire protection services to its residents. As a result, service agreements between County Fire and City Fire were implemented. Under the most recent Agreement for First Responder Services executed by the parties in 2024, the County paid the City to provide first responder services in certain County areas.
After discussions between the Calistoga City Manager, the County Chief Executive Officer, and the respective Fire Chiefs, it was determined to be in the best interests of both jurisdictions and their residents to terminate the current agreement and replace it with an automatic aid agreement. Under an automatic aid agreement, neither party would pay for first responder services provided by the other party in designated areas. In addition, the parties agreed that the fire protection tax collected within the City of Calistoga tax rate area should be redirected from the County to the City of Calistoga to fund fire protection services for its residents.
The amount of Fire Protection tax collected in the City of Calistoga’s tax rate area is approximately $500,000 per fiscal year. If approved by the Board, the amount of Fire Protection Tax revenue the County receives would be reduced by approximately $500,000 per fiscal year beginning in fiscal year 2026-27; such amount would be allocated to the City going forward, adjusted by annual assessed valuations and the AB 8 calculation.
Pursuant to California Revenue and Taxation Code (RTC) Section 99.02, the County may, by Board adoption of a resolution at a noticed public hearing, exchange any portion of its property tax revenues with another local agency within the same tax rate areas if it finds that (a) revenues are available for this purpose, (b) the transfer will not change the ratio of fees, charges or assessments in relation to other revenues of the County, (c) the transfer will not impair the County's ability to provide existing services, and (d) the transfer will not result in a reduction of property tax revenues to school entities. The item before you is the resolution required by RTC Section 99.02(b). If approved by the Board, the City Council must then adopt a resolution pursuant to RTC Section 99.02(c) accepting the property tax transfer.
If the tax transfer is approved by both parties, the Auditor-Controller will create a new tax code to reflect “City of Calistoga Fire Protection”, directly allocating the Fire Protection tax revenue to the City according to the Prop 13 allocation methodology starting with the tax bills for fiscal year 2026-27, and distribute the funds in the same manner as all other taxes.
Requested Action: Adopt a resolution approving the transfer of fire protection tax revenues collected in the City of Calistoga tax rate area from the County to the City of Calistoga.
FISCAL IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Fund 2100, County Fire Protection |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
The City provides its own Fire Protection Services to its residents. Therefore, the property tax revenue collected for these services should be transferred accordingly. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
Future Fire Fund budgets will reflect the reduction of revenues |
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Consequences if not approved: |
The County Fire Fund will continue to collect the tax revenues which would require the County and City to continue service agreements. This is inefficient and not in the best interest of the City and County residents. |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.