TO: Board of Supervisors
FROM: Tracy A. Schulze, Auditor-Controller
REPORT BY: Tracy A. Schulze, Auditor-Controller
SUBJECT: Teeter Plan Promissory Note for Fiscal Year 2024-25
RECOMMENDATION
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Adopt a Resolution to authorize the issuance of the Fiscal Year 2024-25 promissory note for delinquent secured taxes and the continuance of the Teeter Plan for Fiscal Year 2025-26. (Fiscal Impact: Increased Revenue; Various Funds; Budgeted; Mandatory)
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BACKGROUND
The Napa County Board of Supervisors adopted Resolution No. 93-79 on July 13, 1993 to approve and implement the alternative method of property tax allocation specified in Revenue and Taxation Code Sections 4701 et seq. known as the Teeter Plan.
The Teeter Plan requires the County to pay each participating taxing jurisdiction one hundred percent (100%) of all taxes due at the end of each fiscal year, to that entity, regardless of whether such taxes have been collected by the County or are delinquent. In return, the County assumes the debt and collects all penalties and interest on delinquent collections. Staff are estimating the collections will generate approximately $500,000 in penalties and interest, which is reflected in the County's General Fund budget. This item authorizes the promissory note for fiscal year 2024-25 and the continuance of the Teeter Plan for fiscal year 2025-26.
The implementation of the Teeter Plan involves:
1) establishing the minimum balance for the Tax Loss Reserve in accordance with Section 4703 or 4703.2,
2) the creation of a Teeter Repayment Fund, and
3) issuance and execution of a Promissory Note to fund the prepayment of taxes.
Tax Loss Reserve:
There are two methods of establishing the minimum balance for the Tax Loss Reserve outlined in Revenue and Taxation Code. Section 4703 requires maintaining a minimum balance of not less than 1% of the total of all taxes levied on the secure roll for the year. Section 4703.2 requires maintaining a minimum balance of not le...
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