2013/03/12 City Council Resolution 2013-046RESOLUTION NO. 2013 -046
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING A SETTLEMENT AGREEMENT AND RELEASE
BETWEEN THE COUNTY OF SONOMA AND CITY OF ROHNERT PARK
REGARDING PROPERTY TAX ADMINISTRATION FEES FROM FISCAL YEAR
2006 -07 TO 2011 -12
RECITALS
A. Pursuant to state law, the County charges cities within the County a property tax
administration fee for assessing, collecting, and allocating property tax revenues.
B. The County treated property tax revenue diverted from the County's Educational
Revenue Augmentation Fund pursuant to Revenue & Taxation Code sections 97.68 and 97.70
("Diverted Revenue ") as a form of property tax, subject to the property tax administration fee.
C. A dispute arose between City and the County regarding the allocation of property
taxes, and whether property tax administration fees should be charged to the City on the Diverted
Revenue, beginning in fiscal year 2006 -2007 and continuing through fiscal year 2011 -2012 (the
"Administrative Fee Dispute ").
D. The legal issues germane to the Administrative Fee Dispute were the subject of
ongoing litigation recently decided by the Supreme Court of California in City of Alhambra v.
Cozmty of Los Angeles, Supreme Court of California, Case No. S 185457, in which the Supreme
Court held that Diverted Revenue paid to cities was exempt from the property tax administration
fee, and that counties had incorrectly included such revenue in the calculation of property tax
administration fees due from cities (the "Administrative Fee Litigation ").
E. In anticipation that the Administrative Fee Litigation would address legal issues
related to the Administrative Fee Dispute between City and County, the Parties entered into a
Tolling Agreement, fully executed on December 18, 2008, tolling any existing and future claims,
suits, causes of action, and defenses that could be timely filed or exerted as of the date of
execution of the Tolling Agreement, related to the Administrative Fee Dispute. The Tolling
Agreement remains in effect.
F. In light of the Supreme Court's ruling in the Administrative Fee Litigation, the
Parties desire to enter into a settlement agreement in order to completely and finally resolve the
Administrative Fee Dispute.
NOW, THEREFORE, the City Council of the City of Rohnert Park does hereby resolve,
determine, find and order as follows:
SECTION 1. Approval of Settlement Agreement. The City Council hereby authorizes and
adopts the settlement agreement and release with the County of Sonoma in substantially similar
form to that agreement attached hereto as Exhibit A, subject to minor modification by the City
OAK #4837- 9658 -8051 v]
Manager or City Attorney, which is hereby incorporated by this reference ( "Settlement
Agreement and Release ").
SECTION 2. Execution. The Mayor is hereby authorized by the City Council to execute the
Settlement Agreement and Release on behalf of the City of Rohnert Park.
SECTION 3. Effectuation. The City Manager is hereby authorized and directed to take all
actions to effectuate the Settlement Agreement and Release for and on behalf of the City of
Rohnert Park.
SECTION 4. Severability. If any action, subsection, sentence, clause or phrase of this
Resolution or the Settlement Agreement and Release adopted by this Resolution shall be held
invalid or unconstitutional by a court of competent jurisdiction, such invalidity shall not affect
the validity of the remaining portions of this Resolution or the Settlement Agreement and
Release adopted by this Resolution that can be given effect without the invalid provisions.
PASSED, APPROVED AND ADOPTED on this 12`" day of March, 2013.
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ATTEST:
k ne Buergler, City Clerk
Pam Stafford, Mayor
Exhibits: Exhibit A: Settlement Agreement and Release
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2013 -046
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release (the "Settlement Agreement ") is made and entered into
by and between the City of Rohnert Park, a municipal corporation ("City ") and the County of
Sonoma, a political subdivision of the State of California ( "County ") and is effective as of the
date of full execution by the parties as indicated below ( "Effective Date "). City and County are
also collectively referred to herein as "the Parties."
RECITALS
A. Pursuant to state law, the County charges cities within the County a property tax
administration fee for assessing, collecting, and allocating property tax revenues.
B. The County treated property tax revenue diverted from the County's Educational
Revenue Augmentation Fund pursuant to Revenue & Taxation Code sections 97.68 and 97.70
( "Diverted Revenue ") as a form of property tax, subject to the property tax administration fee.
C. A dispute arose between City and the County regarding the allocation of property
taxes, and whether property tax administration fees should be charged to the City on the Diverted
Revenue, beginning in fiscal year 2006 -2007 and continuing through fiscal year 2011 -2012 (the
"Administrative Fee Dispute ").
D. The legal issues germane to the Administrative Fee Dispute were the subject of
ongoing litigation recently decided by the Supreme Court of California in City of Alhambra v.
County of Los Angeles, Supreme Court of California, Case No. 5185457, in which the Supreme
Court held that Diverted Revenue paid to cities was exempt from the property tax administration
fee, and that counties had incorrectly included such revenue in the calculation of property tax
administration fees due from cities (the "Administrative Fee Litigation ").
E. In anticipation that the Administrative Fee Litigation would address legal issues
related to the Administrative Fee Dispute between City and County, the Parties entered into a
Tolling Agreement, fully executed on December 18, 2008, tolling any existing and future claims,
suits, causes of action, and defenses that could be timely filed or exerted as of the date of
execution of the Tolling Agreement, related to the Administrative Fee Dispute. The Tolling
Agreement remains in effect.
F. In light of the Supreme Court's ruling in the Administrative Fee Litigation, the
Parties desire to enter into this Settlement Agreement in order to completely and finally resolve
the Administrative Fee Dispute.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth below,
City and County agree as follows:
1.0 Compromise and Settlement.
The Parties to this Agreement, in consideration of the promises and concessions made by each
Party, agree that the foregoing recitals are true and correct, and agree to mutually compromise
and settle the Administrative Fee Dispute upon all of the terms and conditions in this Agreement.
2.0 Current Year and Future Collection.
Commencing with fiscal Year 2012 -2013, and each year thereafter, the County will cease
collection of property tax administrative fee on the Diverted Revenue unless and until authorized
by statute or subsequent court order to collect same.
3.0 Payment.
In consideration of the release set forth below, the County agrees to pay to the City the total sum
of Four Hundred Eleven Thousand Four Hundred Fifty Seven Dollars and One Cent
($411,457.01), within thirty (30) calendar days after the Effective Date of this Settlement
Agreement.
4.0 Release and Discharge.
4.1 In consideration of the payment set forth in Section 3.0, City, for itself, its
elected and appointed officers, employees, agents, administrators, successors and
assigns, does hereby release, acquit and forever discharge the County, its elected
and appointed officials, officers, employees, agents, administrators, successors
and assigns, from and against any and all past, present or future claims, demands,
obligations, actions, causes of action, subrogation rights, reimbursement rights,
damages, costs, losses of services, expenses and compensation of any nature
whatsoever, whether based on a tort, contract, or any other theory of recovery,
which said parties now have, or which may hereafter accrue or otherwise be
acquired or asserted on account of, or may in any way grow out of the
Administrative Fee Dispute, including, without limitation, any and all known or
unknown claims for damages, tax or fee refunds, interest, breach of contract, or
any and all known or unknown claims for subrogation and /or reimbursement
which have resulted or may result from the alleged acts or omissions of the
County, its elected or appointed officials, officers, employees, agents,
administrators, successors or assigns related to the Administrative Fee Dispute.
This release shall be a fully binding and complete settlement between the parties.
4.2 It is understood and agreed to by the Parties hereto that this settlement is
not to be construed as an admission of liability on the part of County, by whom
liability is expressly denied and that this Agreement is entered into solely to
resolve the Administrative Fee Dispute and avoid the time and expense of
litigation.
4.3 The City acknowledges and agrees that the release and discharge set forth
above is a general release and expressly waives any and all claims for damages
related to the Administrative Fee Dispute which exist as of this date, whether
known or unknown. The parties further agree they have agreed to exchange
payment of the sum specified herein as a complete compromise of matters
involving disputed issues of law and fact and mutually assume the risk that the
facts or law may be other than they believe and which facts, if known, would
materially affect their decision to enter into this Settlement Agreement. The
parties hereby acknowledge and expressly waive any and all rights based upon the
provisions of California Civil Code Section 1542, which reads as follows:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which, if known to him or her, must have materially affected his or
her settlement with the debtor."
5.0 Attorney Fees.
Each Party hereto shall bear all attorney fees and costs arising from the actions of its own
counsel in connection with this Settlement Agreement, the incidents described in the above
Recitals and referred to herein, and all related matters.
6.0 Representation of Comprehension of Document.
6.1 In entering into this Settlement Agreement, each Party represents that they have
relied upon the advice of their attorney, who is the attorney of their own choice,
concerning the legal consequences of this Settlement Agreement, that the terms of this
Settlement Agreement have been completely read and explained to them by their
attorney, and that the terms of this Settlement Agreement are fully understood and
voluntarily accepted by each Party.
6.2 The Parties declare and represent that each Party and counsel for each Party has
reviewed and revised, or had the opportunity to revise, this Agreement and therefore the
normal rules of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this Agreement or any
amendment of it.
6.3 The Parties further declare and represent that no promise, inducement or agreement
not herein expressed has been made to the other Party, that the Parties are not executing
this Agreement in reliance on any promises, representations, or inducements other than
those contained herein, that the terms of this release are contractual and not a mere
recital, and that the parties sign this release voluntarily, free of any duress or coercion.
7.0 Warranty of Capacity to Execute Agreement.
The City represents and warrants that no other person or entity has, or has had, any interest in the
claims, demands, obligations, or causes of action referred to in this Settlement Agreement,
except as otherwise set forth herein, that it has the sole right and exclusive authority to execute
this Settlement Agreement and receive the sums specified in it, and that it has not sold, assigned,
transferred, conveyed, or otherwise disposed of any of the claims, demands, obligations or
causes of action referred to in this Settlement Agreement.
8.0 Governing Law.
This Settlement Agreement shall be construed and interpreted in accordance with the laws of the
State of California.
9.0 Additional Documents.
All Parties agree to cooperate fully and execute any and all supplementary documents and to take
all additional actions which may be necessary or appropriate to give full force and effect to the
basic terms and intent of this Settlement Agreement.
10.0 Entire Agreement and Successors in Interest.
This Settlement Agreement contains the entire agreement between County and City, with regard
to the matters set forth in it and shall be binding upon and inure to the benefit of the executors,
administrators, personal representatives, heirs, successors and assigns of each. This Settlement
Agreement may be modified only by an agreement in writing executed in the same manner as
this Settlement Agreement.
11.0 Captions.
All captions to the provisions of this Settlement Agreement are solely for the convenience of the
Parties, are not a part of the Agreement, and shall not be used to interpret or determine the
validity of this Agreement or any of its provisions.
12.0 Counterpart Execution.
This Agreement may be executed in counterparts, each of which shall be deemed to be an
original and said counterparts shall constitute one and the same instrument.
M
IN WITNESS WHEREOF, the County of Sonoma, a political subdivision of the State of
California, has authorized the execution of this Agreement in duplicate by the Chair of the Board
of Supervisors and attestation by the Clerk of the Board, and the City of Rohnert Park, a
municipal corporation, has authorized the execution of this Agreement in duplicate by its
and attestation by its City Clerk.
DATED:
ATTEST:
By:
Veronica Ferguson, Clerk of the Board
DATED:
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
City Attorney
By:
[Name], Esq.
0
County of Sonoma
David Rabbitt, Chair
Sonoma County Board of Supervisors
City of Rohnert Park
[Name]
[Title], City of Rohnert Park
Office of the County Counsel
BY:
Kathleen A. Larocque
Chief Deputy County Counsel