City and county eye tax-sharing agreement
EL CENTRO — The city of El Centro will request that the county enter into negotiations to establish a new tax-sharing agreement that would regulate how developer impact fees are levied and allocated.
The tax-sharing agreement that had existed between parties expired in about 2009 and has since been negotiated on a caseby-case basis, said county Supervisor Ray Castillo.
The tax-sharing agreement determined fees associated with the development of unincorporated land that is annexed into the city. Previous tax-sharing agreements required developers to pay impact fees to both the city and county.
The recent annexation of about 80 acres of unincorporated county land into the city had prompted city officials to question that longstanding practice.
City officials expressed concerns that the practice amounted to the doubling of impact fees for prospective developers, Castillo said.
“It’s understandable,” he said. “If we have to make changes we will.”
Castillo also serves as the board chair of the county Local Area Formation Commission, which has final approval over the annexation of unincorporated land.
Recently, LAFCO approved the annexation of about 80 acres of unincorporated county land into the city for the purpose of development.
Those development plans call for the Imperial County Office of Education to build a 17,500-squarefoot facility adjacent to its existing office campus on Sperber Road.
As a tax-exempt entity, ICOE did not have to pay the same impact fees that a traditional developer would have, Castillo said.
Fees are levied on proposed developments in relation to their projected impacts on traffic, school districts, utilities and public services such as police and fire.
Costs associated with installing a traffic signal installed at a major intersection can reach upwards of $1 million, Castillo said.
Previously, the city and county had reached a tax-sharing agreement in regards to proposed housing developments west of the city. Those proposed developments have languished for some time and have not generated much impact fees as a result, Castillo said.
City Council members have directed the city manager to write a letter to county officials expressing the city’s desire to negotiate a new tax-sharing agreement, said Councilwoman Cheryl Viegas-Walker. The existing practice creates a disincentive for prospective developers who may face costly impact fees, she said.
She also questioned why the county would insist on additional impact fees if its burden to provide services was actually lessened by the annexation of the unincorporated land.
“It’s surely a disincentive to annex property if there’s going to be exorbitant costs to bring that property up to building standards or to provide additional services to the property,” Viegas-Walker said.
The council had also asked that LAFCO be informed of any negotiations that the city and county possibly enter into.