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HomeMy WebLinkAboutAgreement A-24-714 CityCounty MOU.pdf Agreement No. 24-714 1 MEMORANDUM OF UNDERSTANDING BETWEEN 2 THE COUNTY OF FRESNO AND THE CITY OF FRESNO 3 THIS MEMORANDUM OF UNDERSTANDING (MOU) is made and executed by and 4 between the COUNTY of FRESNO, a political subdivision of the State of California (COUNTY) 5 and the CITY OF FRESNO, a municipal corporation of the State of California (CITY). 6 WITNESSETH 7 WHEREAS, on January 06, 2003, COUNTY and CITY entered into a comprehensive 8 agreement covering development, annexations, sales taxes, property taxes, and other matters, 9 referred to as the 2003 Amended and Restated Memorandum of Understanding (2003 MOU); 10 and 11 WHEREAS, the 2003 MOU served in part as COUNTY's and CITY's master property tax 12 transfer agreement under Revenue and Taxation Code Section 99(d); and 13 WHEREAS, on January 27, 2004, COUNTY and CITY entered into a Standalone Tax 14 Sharing Agreement for the Copper River Ranch Reorganization to facilitate annexation to CITY 15 of approximately 760 acres; and 16 WHEREAS, on May 20, 2008, COUNTY and CITY entered into a Standalone Tax Sharing 17 Agreement for the McKinely-Hayes No. 3 Reorganization to facilitate annexation to CITY of 18 approximately 295 acres; and 19 WHEREAS, on December 5, 2017, January 5, 2018, May 14, 2019, June 11, 2020, 20 August 14, 2020, COUNTY and CITY executed amendments to the 2003 MOU, extending the 21 term of the 2003 MOU, to provide additional time for the Parties to complete ongoing negotiations 22 regarding a longer-term extension; and 23 WHEREAS, the Fifth Amendment, executed on August 14, 2020, affirmed that in the 24 event of the 2003 MOU expiration, the terms of the 2003 MOU shall apply to all changes of 25 organizations, including annexations, applications approved by CITY prior to expiration of 2003 26 MOU; and 27 WHEREAS, the 2003 MOU, as amended, expired August 29, 2020; and 28 1 357766v5 1 WHEREAS, on August 10, 2021, COUNTY and CITY executed a Standalone Tax Sharing 2 Agreement for the Dakota-Hayes No. 4 Reorganization to facilitate annexation to CITY of 3 approximately 89 acres; and 4 WHEREAS, on February 20, 2024, COUNTY and CITY executed a Standalone Tax 5 Sharing Agreement for the Bullard-Maroc No. 3 Reorganization to facilitate annexation to CITY 6 of approximately 0.85 acres; and 7 WHEREAS, COUNTY and CITY desire to execute a new MOU and due to the age of the 8 2003 MOU and the desire to make additional changes to the terms agreed to in the 2003 MOU, 9 COUNTY and CITY have determined that it is in their best interests to enter into this new MOU; 10 and 11 WHEREAS, COUNTY and CITY wish to continue to work together to develop a fair and 12 equitable approach to tax sharing and the encouragement of sound urban development and 13 economic growth; and 14 WHEREAS, in order to encourage timely economic development and environmentally 15 sound land use planning, it is important that any tax sharing arrangements between COUNTY 16 and CITY be determined in advance of such development and planning and that such 17 arrangements not be fiscally detrimental to either COUNTY or CITY; and 18 WHEREAS, COUNTY and CITY recognize the importance of COUNTY and CITY 19 services and are prepared to cooperate as provided in this MOU in an effort to address 20 COUNTY's and CITY's fiscal issues in providing such services, as well as their respective 21 economic and planning needs; and 22 WHEREAS, through annexation, CITY provides the opportunity for economic growth and 23 development which will benefit the residents of CITY and COUNTY and will support public 24 services for CITY and COUNTY; and 25 WHEREAS, close cooperation between COUNTY and CITY is necessary to maintain and 26 improve the quality of life throughout Fresno County, including CITY, and deliver needed or 27 desirable services in the most timely and cost-efficient manner to all CITY and COUNTY 28 residents; and 2 357766v5 1 WHEREAS, COUNTY recognizes the need for orderly growth within and adjacent to 2 CITY, for supporting appropriate annexations by CITY, and for promoting the concentration of 3 development within CITY, and 4 WHEREAS, CITY recognizes that development within CITY limits may also have the 5 effect of concentrating revenue-generating activities within CITY rather than in unincorporated 6 areas and that, as a result of Proposition 13 and its implementing legislation, annexation by CITY 7 of unincorporated territory can result in a loss of revenue sources for COUNTY unless there is 8 significant new development activity as a result of annexation; and 9 WHEREAS, annexation is appropriate where it results in the development of urban uses 10 in response to need; noncontiguous urban development of such uses in unincorporated areas 11 within CITY's sphere of influence is not orderly and may result in service inefficiencies and 12 unnecessary expense to COUNTY and CITY; and 13 WHEREAS, the parties recognize that COUNTY General Plan Goal LU-G provides that 14 COUNTY will direct urban growth and development within the cities spheres of influence to 15 existing incorporated cities and will ensure that all development in city fringe areas is well 16 planned and adequately served by necessary public facilities and infrastructure and furthers 17 countywide economic development goals; and 18 WHEREAS, the parties recognize that CITY General Plan calls for a balance of 19 development and investment in both infill and growth areas which meet the needs of the growing 20 population for housing, jobs, and services; and 21 WHEREAS, the parties recognize that when urban growth and development is directed 22 to cities there is a lost opportunity of development by COUNTY in the unincorporated area and 23 that sharing of local sales and use taxes generated by such development would serve as a tool 24 for the COUNTY to participate in receiving a share of that new revenue; and 25 WHEREAS, the parties acknowledge that California regulations requires that urban 26 growth and development be directed to urban centers or through the logical expansion of the 27 boundaries of those local agencies which can best accommodate and provide necessary 28 governmental services; and 3 357766v5 1 WHEREAS, it is the interest of the parties to require all new urban development to pay a 2 roughly proportionate share of the cost of urban services and infrastructure created by the 3 development, whether it occurs in the CITY or in the adjacent unincorporated area of the CITY's 4 sphere of influence. 5 NOW, THEREFORE, COUNTY and CITY hereby agree as follows: 6 ARTICLE 1 7 DEFINITIONS 8 Unless the particular provision or context otherwise requires, the definitions contained in 9 this article and in the Revenue and Taxation Code shall govern the construction, meaning, and 10 application of words used in this MOU. 11 1.1 "Base property tax revenue" means property tax revenue allocated by tax rate 12 equivalents to all taxing jurisdictions as to the geographic area comprising a given tax rate area 13 annexed in the fiscal year immediately preceding the tax year in which property tax revenues 14 are apportioned pursuant to this MOU, including the amount of State reimbursement for the 15 homeowners' exemption. 16 1 .2 "Property tax increment" means revenue from the annual tax increment, as 17 "annual tax increment" is defined in Section 98 of the Revenue and Taxation Code, attributable 18 to the tax rate area for the respective fiscal year. 19 1.3 "Substantial development" or "substantially developed" means real property 20 which, prior to annexation, has an improvement value to land value ratio equal to or greater than 21 1.25:1 , as determined by the Fresno County Assessor's records, as of the property tax lien date 22 in the fiscal year in which the annexation becomes effective under the Cortese-Knox Local 23 Government Reorganization Act, and on and after January 1, 2001, the Cortese-Knox-Hertzberg 24 Local Government Reorganization Act of 2000. 25 1.4 "Property tax revenue" means base property tax revenue, plus the property tax 26 increment for a given tax rate area in a given fiscal year. 27 1.5 "Tax apportionment ratio" means the tax apportionment ratio of the parties for a 28 given fiscal year and shall be ascertained by dividing the amount determined for each party 4 357766v5 1 pursuant to Revenue and Taxation Code Sections 96(a) or 97(a), whichever is applicable, by 2 that party's gross assessed value, and by then dividing the sum of the resulting tax rate 3 equivalents of both parties into each party's tax rate equivalent to produce the tax apportionment 4 ratio. 5 1.6 "Tax rate equivalent" means the factor derived for a jurisdiction by dividing the 6 property tax revenue allocated to that jurisdiction for the prior fiscal year computed pursuant to 7 Section 97 of the Revenue and Taxation Code by the gross assessed value of the real property 8 within the jurisdiction of the agency for the prior fiscal year. "Revenue allocated," as used in this 9 section, means "levied." 10 1.7 "Effective Date" shall mean the last date that all the parties hereto execute this 11 MOU between the COUNTY and CITY. 12 1.8 "Urban development" or "urban type development" shall mean development not 13 allowed in areas designated Agriculture, Rural Residential or River Influence in COUNTY's 14 General Plan or its applicable community plans as of the Effective Date of this MOU. 15 ARTICLE II 16 ANNEXATIONS BY CITY 17 2.1 Any annexations undertaken by CITY following the date of the execution of this 18 MOU shall be consistent with both the terms of this MOU and either The Standards (The 19 Standards or Standards) as set forth in Exhibit 1, attached hereto and incorporated by reference 20 herein as if set forth fully at this point or The Alternate Standard set forth in this Article II. This 21 MOU shall not apply to annexations proposed by CITY which are not in compliance with its 22 terms, or which fail to meet The Standards or The Alternate Standard. If a proposed annexation 23 is not in compliance with the terms of this MOU, including, but not limited to, The Standards or 24 The Alternate Standard, then the property tax exchange provisions of Article I II of this MOU shall 25 not apply in regard to that proposed non-complying annexation. An exchange of property tax 26 revenues between the COUNTY and CITY for any such non-complying annexation shall be 27 handled individually pursuant to Revenue and Taxation Code Section 99(e) or by the negotiation 28 of a standalone property tax exchange agreement between COUNTY and CITY. 5 357766v5 1 2.2 In order to encourage the orderly processing of proposed annexations, CITY shall, 2 at least thirty (30) days prior to filing any annexation proposal with the Fresno County Local 3 Agency Formation Commission (LAFCO), notify COUNTY of its intention to file such proposal 4 and the date upon which CITY expects such proposal to be filed. Upon COUNTY's request, CITY 5 shall meet with COUNTY to review whether the proposed annexation complies with this article 6 and The Standards or The Alternate Standard. Within thirty (30) days after the date COUNTY 7 receives notice by CITY of its annexation proposal, COUNTY shall notify CITY in writing if it has 8 determined that the proposed annexation is inconsistent with The Standards or The Alternate 9 Standard. The notice shall describe in reasonable detail the alleged inconsistency(ies). Upon 10 receipt of such notification, CITY may either modify the proposal to address the inconsistencies 11 with The Standards or The Alternate Standard identified in the COUNTY's written notice or adopt 12 a resolution finding that the proposed annexation is, in CITY's determination, consistent with The 13 Standards or The Alternate Standard. If County fails to give such notice within the thirty (30)-day 14 period, the annexation shall be conclusively deemed consistent with all provisions of this article 15 and The Standards or The Alternate Standard. 16 2.3 If CITY adopts a resolution making the findings described in Section 2.2, above, 17 then COUNTY may challenge such findings by appropriate court action provided such action is 18 filed within thirty (30) days of receipt of written notice of the adoption of CITY's resolution. The 19 court shall independently review the evidence and determine whether the proposed annexation 20 is consistent with this article and The Standards or The Alternate Standard. 21 As an alternative to a judicial challenge by COUNTY, the parties may, within the aforesaid 22 thirty (30) day period mutually agree in writing to arbitrate their dispute before a retired judge in 23 Fresno County, through proceedings governed by the California Arbitration Act (Code of Civil 24 Procedure § 1280 et. seq.). The parties, upon agreeing to arbitrate, will proceed with arbitration 25 in a timely manner. 26 If CITY attempts to proceed with such proposed annexation prior to the expiration of the 27 period in which COUNTY may file its court action or agree to arbitrate, or prior to final conclusion 28 of such court or arbitration proceedings then the property tax exchange provisions of Article III 6 357766v5 1 of this MOU shall not apply to that proposed annexation. 2 Notwithstanding the foregoing, CITY may proceed to LAFCO under this MOU if court or 3 arbitration proceedings are not completed within thirty (30) days after the filing thereof provided, 4 however, that LAFCO in its resolution of approval, at the request of the CITY, conditions such 5 approval upon the Executive Officer's receipt of a certified copy of the document evidencing the 6 finality of the aforesaid court or arbitration proceedings determining that the proposed 7 annexation is consistent with this article and The Standards or The Alternate Standard, or 8 alternatively, receipt of a written stipulation by CITY and COUNTY agreeing that the annexation 9 complies with The Standards or The Alternate Standard and permitting the completion of such 10 proposed annexation. If LAFCO declines to conditionally approve the annexation as provided in 11 this paragraph, or CITY fails to timely request such conditional approval of the annexation, then 12 the property tax exchange provisions of Article III of this MOU shall not apply. 13 2.4 For the purpose of promoting economic development and job creation, an 14 Alternate Standard for Annexation for significant industrial or regional commercial uses is hereby 15 created (The Alternate Standard). In the place of The Standards set forth in Exhibit 1 , The 16 Alternate Standard for Annexation shall apply to and govern the review of annexation proposals 17 for significant industrial or regional commercial uses. Annexation proposals for industrial/regional 18 commercial uses shall include a conceptual development plan, as described herein. The 19 conceptual development plan shall consist of the economic objectives to be achieved, the 20 service and financing strategy and its schedule, and shall include a map of the proposed 21 prezoning. The conceptual development plan's schedule shall include milestones for major 22 project components, to measure the progress of the project. Due to the complexity of such 23 projects the development schedule for planning and implementation may reasonably require a 24 period of five (5) to ten (10) years. The annexation proposal shall be submitted to and reviewed 25 by the COUNTY pursuant to Section 2.2. Annexation proposals that comply with the criteria of 26 this Section 2.4 shall be deemed to comply with Section 2.1. The annexation application to be 27 submitted to LAFCO shall be considered complete upon adoption of the prezoning by the CITY. 28 COUNTY and CITY agree to meet annually to review the progress toward the achievement of 7 357766v5 1 the economic development objectives and to identify ways to promote mutual economic 2 development objectives. The proposed annexation made under The Alternate Standard for 3 Annexation described in this Section 2.4 should not create islands and annexation boundaries 4 must ultimately minimize creation of peninsulas, corridors, or other distortion of boundaries. 5 2.5 Section 2.4 shall not apply if CITY rezones an area that was annexed using the 6 Alternate Standard for Annexation to a zone other than Industrial/Regional Commercial without 7 COUNTY's consent. 8 ARTICLE III 9 EXCHANGE OF PROPERTY TAX REVENUES TO BE MADE 10 UNDER SECTION 99 OF THE REVENUE AND TAXATION CODE 11 3.1 The property tax revenues collected in relation to annexations covered by the 12 terms of this MOU shall be apportioned between CITY and COUNTY as set forth in sections 3.2 13 and 3.3 below. The parties acknowledge that, pursuant to Government Code Sections 54902, 14 54902.1 and 54903 and Revenue and Taxation Code Section 99, the distribution of such 15 property tax revenues will not be effective until the revenues are collected in the fiscal year 16 following the calendar year in which the statement of boundary changes and the map or plat is 17 filed with the County Assessor and the State Department of Tax and Fee Administration. 18 3.2 In regard to the annexation of real property which is not considered substantially 19 developed at the time of annexation, COUNTY will retain all of its base property tax revenue 20 upon annexation. The amount of the property tax increment allocated to special districts whose 21 services are assumed by CITY shall be combined with the property tax increment allocated to 22 COUNTY, the sum of which shall be allocated between CITY and COUNTY pursuant to a tax 23 apportionment ratio depending on which of two separate geographic areas the real property lies. 24 Southeast Development Area 25 For real property lying within the Southeast Development Area (SEDA), as shown in 26 Exhibit 2 and Exhibit 2a, the tax apportionment ratio is as follows: 27 COUNTY: 49% 28 CITY: 51% 8 357766v5 1 Effective July 1, 2025, and throughout the term of this agreement, the tax apportionment 2 ratio for SEDA shall be as shown above. 3 Notwithstanding the foregoing provisions relating to the tax apportionment ratio of real 4 property within the SEDA, if CITY does not annex, accept, and/or otherwise acquire title to the 5 COUNTY rights-of-way identified in section 8.5 of this MOU within 12 months of the execution 6 of this MOU, for real property lying within the SEDA, the tax apportionment ratio is as follows: 7 COUNTY: 50% 8 CITY: 50% 9 The tax apportionment ratio for the SEDA shown immediately above shall become 10 effective on the day immediately following the expiration of the 12-month period provided for in 11 section 8.5 of this MOU, provided CITY has not annexed, accepted, and/or otherwise acquired 12 title to the COUNTY rights-of-way identified in section 8.5 of this MOU, and shall, in such 13 circumstances, remain in effect throughout the remaining term of this MOU. 14 If City annexes any real property within SEDA prior to the adoption of a specific plan for 15 SEDA, the tax apportionment ratio for that property shall be the same as for the Balance of the 16 Fresno Sphere of Influence, as discussed immediately below. 17 Balance of Fresno Sphere of Influence 18 For real property lying within the Fresno Sphere of Influence but not within SEDA (the 19 Balance of the Fresno Sphere of Influence), the tax apportionment ratio is as follows: 20 COUNTY: 60% 21 CITY: 40% 22 Effective July 1, 2025, and throughout the term of this agreement, the tax apportionment 23 ratio for Balance of Fresno Sphere of Influence shall be as shown above. 24 3.3 Notwithstanding the tax apportionment ratios provided in section 3.2, above, in 25 regards to the annexation of real property which is considered substantially developed at the 26 time of annexation, property tax revenue (base plus increment) will be reallocated as follows: A 27 detaching or dissolving district's property tax revenue (base plus increment) shall be combined 28 9 357766v5 1 with COUNTY's and the sum shall be allocated between CITY and COUNTY pursuant to the 2 following ratio: 3 COUNTY: 70% 4 CITY: 30% 5 ARTICLE IV 6 DEVELOPMENT WITHIN AND ADJACENT 7 TO CITY'S SPHERE OF INFLUENCE 8 AND COUNTY CAPITAL IMPROVEMENT FEES 9 4.1 COUNTY shall not approve any discretionary development applications for new 10 urban development within CITY's sphere of influence, as described in Government Code section 11 56425, et seq., unless that development shall have first been referred to CITY for consideration 12 of possible annexation. The CITY shall within thirty (30) days provide in writing to the COUNTY 13 its intent to initiate annexation proceedings. CITY and COUNTY agree to meet monthly following 14 notice from CITY of its intent to initiate annexation proceedings, to ensure progress in initiating 15 annexation; if progress (such as start of CEQA or filing of application for development) is not 16 made within 105 days, COUNTY may proceed with processing of application as described in 17 this Section. COUNTY may process discretionary applications for development permits for new 18 urban development within CITY's sphere of influence, only if said development is (1) consistent 19 with the most recently adopted CITY general plan and any applicable community plan, is (2) 20 consistent with COUNTY's general plan policies, and is (3) orderly and does not result in the 21 premature conversion of agricultural lands. For purposes of this MOU, "discretionary 22 development applications" shall mean General Plan Amendments, Rezoning, Tentative Tract 23 Maps, Tentative Parcel Maps, Conditional Use Permits, Director Review and Approvals, and 24 Variances. 25 26 4.2 If COUNTY adopts capital improvement fees, CITY shall require that an applicant 27 for any land use entitlement or permit within CITY shall pay all COUNTY, public improvement 28 fees applicable to the entitlement or permit. At COUNTY's request, CITY shall timely collect all 10 357766v5 1 such fees or shall require the applicant to present a voucher issued by COUNTY evidencing the 2 payment of fees directly to COUNTY. If adopted by COUNTY, the fees are to mitigate the impact 3 of development on required COUNTY facilities and services including, but not limited to, the 4 criminal justice system, health, social services, parks, transportation and library. If CITY collects 5 fees on behalf of COUNTY, CITY shall transfer the fees to COUNTY at the earliest time legally 6 permissible to do so. COUNTY may impose new fees and amend existing fees from time to time 7 in its sole discretion and in accordance with applicable law. COUNTY shall give CITY at least 8 thirty (30) days' notice before implementing any new fees or an amendment to existing fees. 9 Notwithstanding this Section 4.2, or any other provision of this MOU, COUNTY shall be solely 10 responsible for determining the amount of the fees and setting them in accordance with law. This 11 Section 4.3 shall not be construed as a representation by CITY as to the propriety of the fees or 12 the procedures used in setting them. 13 4.3 COUNTY shall hold harmless, defend and indemnify the CITY from all claims, 14 demands, litigations of any kind whatsoever arising from disputes relating to the enactment or 15 collection of COUNTY capital improvement fees. 16 4.4 COUNTY shall support urban unification and consolidation of urban services. To 17 this end, COUNTY shall oppose the creation of new governmental entities within CITY's sphere 18 of influence, except for such entities that may be necessary to address service requirements 19 that cannot be addressed by annexation to CITY. CITY and COUNTY will support transition 20 agreements with current service providers which recognize the primary role of cities as providers 21 of urban services and where current service providers have participated in service master 22 planning. 23 4.5 Within CITY's sphere of influence and for one-half mile area beyond that sphere 24 of influence, COUNTY and CITY agree that, in the early stages of preparation of zone changes, 25 circulation proposals and general plan amendments for new urban development, they shall 26 consult and formally notify at the staff level in such fashion as to provide meaningful participation 27 in the policy formulation process, and shall likewise consult on other policy changes which may 28 have an impact on growth or the provision of urban services. CITY shall also be given the 11 357766v5 1 opportunity to respond to COUNTY before the final document is prepared for presentation to 2 COUNTY's Planning Commission. COUNTY agrees that it will solicit comments from CITY in 3 the preparation of any Initial Study required by the California Environmental Quality Act 4 undertaken within the area. 5 Notwithstanding anything to the contrary herein, because of state-mandated directives, 6 including without limitation, the state Regional Housing Needs Allocation, COUNTY may 7 consider approval of zoning amendments in areas that are not currently planned for urban 8 development, in order to meet its obligations under a state-mandated directive. 9 4.6 City may, at any time during the term of this MOU, file the appropriate application 10 with LAFCo to modify or expand the City's sphere of influence. Any change in the CITY's sphere 11 of influence proposed by either COUNTY or CITY which would modify the area depicted in 12 Exhibit 3 requires the mutual consultation of both parties prior to submission to LAFCO. 13 ARTICLE V 14 IMPLEMENTATION OF SALES TAX 15 REVENUE COLLECTION 16 5.1 Pursuant to the Bradley Burns Uniform Local Sales and Use Tax Law, Part 5 1 .5, 17 Division 2, of the Revenue and Taxation Code (commencing with Section 7200), CITY shall, 18 concurrent with the execution of this MOU, amend its local sales and use tax ordinance, as 19 needed to comply with the terms of this MOU. The amendment of CITY's sales and use tax 20 ordinance (Ordinance Amendment) described in this Section 5.1 shall be timely forwarded to the 21 State Department of Tax and Fee Administration so that it will become effective as of April 1, 22 2025. The Ordinance Amendment shall enable COUNTY, pursuant to its sales and use tax 23 ordinance, to collect a portion of the sales and use tax revenues generated within the 24 incorporated areas of CITY in accordance with the applicable rate set forth in Section 5.4 below. 25 The format of this amendment by CITY to its local sales and use tax ordinance shall likewise 26 provide as a credit against the payment of taxes due under such ordinance, an amount equal to 27 the sales and use tax then due to COUNTY. 28 12 357766v5 1 5.2 If CITY fails to amend its sales tax ordinance as provided in Section 5.1, and if 2 CITY fails to remedy any such failure within thirty (30) days after CITY receives such notice from 3 COUNTY of the failure, then COUNTY may terminate this MOU as provided in Section 9.2 below. 4 5.3 CITY and COUNTY further agree that the annual report of the State Department 5 of Tax and Fee Administration and the Department of Finance Annual Population Estimates shall 6 be used as the data source for the purpose of calculating the per capita sales tax revenue 7 pursuant to this MOU. 8 5.4 Effective July 1, 2025 and throughout the term of this MOU, the Sales Tax Revenue 9 Sharing Proportion shall be established as follows: 10 CITY 5%. 11 ARTICLE VI 12 MANAGED GROWTH WITHIN AND ADJACENT TO SOUTHEAST DEVELOPMENT AREA 13 6.1 City agrees to manage growth and development in SEDA in the following manner. 14 Prior to any annexation within SEDA, the City shall develop an annexation strategy which 15 describes annexations of unincorporated areas within SEDA and unincorporated areas that are 16 currently on the eastern boundary of City's limits (Exhibit 2a) so as to avoid the creation of county 17 islands or irregular boundaries. The County will not oppose annexations that comply with the 18 Cortese Knox Hertzberg Act and this MOU. 19 ARTICLE VII 20 COUNTY AND CITY ASSURANCES ON USE OF REVENUE 21 7.1 COUNTY recognizes that certain revenue reallocated to it by this MOU would 22 otherwise have been appropriated by CITY to meet demands for services. In light therefore, 23 COUNTY agrees to use such new revenue in order to maintain levels of COUNTY services that 24 are supportive of CITY services, unless the Federal or state governments materially reduce the 25 level of funding for such services. Examples of such COUNTY services include, but are not 26 limited to, the criminal justice system, public health, and other similar services. 27 7.2 CITY agrees to continue enforcement of laws which result in the collection of fines 28 and forfeitures. 13 357766v5 1 ARTICLE VIII 2 COOPERATIVE EFFORTS AND LEGISLATIVE REFORM 3 8.1 CITY and COUNTY agree to work jointly for state legislation and appropriations 4 that would improve the fiscal condition of both CITY and COUNTY. 5 8.2 Within three months (90 days)following the Effective Date of this MOU, CITY shall 6 consider dismissing pending General Plan litigation against COUNTY. 7 8.3 CITY and COUNTY agree to work collaboratively to identify sites as part of 8 COUNTY's ongoing proactive rezoning program within CITY's Sphere of Influence necessary to 9 meet COUNTY's 6th Cycle Housing Element, Regional Housing Needs Allocation. COUNTY 10 shall conduct CEQA review as part of its proactive rezoning program. 11 8.4 CITY shall apply its Annexed Rural Residential Transitional (ANX) Overlay on 12 existing unincorporated COUNTY zoned Rural Residential parcels included in future 13 annexations within CITY Sphere of Influence. Any properties annexed through the ANX Overlay 14 shall have an extended implementation period of five (5) years for connection to utility services. 15 8.5 Within 12 months of execution of this MOU, and with City Council approval, CITY 16 shall annex, accept, and/or otherwise acquire title to COUNTY right-of-way for the following 17 intersections: 18 a. E. Belmont and N. Minnewawa Avenues, and 19 b. E. Clinton and N. Millbrook Avenues, inclusive of the CITY's proposed Mid Town 20 Trail. 21 Should City not annex, accept, and/or otherwise acquire title to the above COUNTY 22 rights-of-way within 12 months of the execution of this MOU, the tax apportionment ratio for real 23 property lying within the SEDA shall be an even 50% - 50% split between COUNTY and CITY, 24 as provided in section 3.2 of this MOU, above. 25 8.6 Prior to the expiration date of August 19, 2025, City agrees to renegotiate or extend 26 the Property Tax Allocation Agreement (Allocation Agreement) between City of Fresno and 27 Fresno County Fire Protection District (DISTRICT) so that required transition fees due to 28 DISTRICT are paid by development projects approved by CITY. Notwithstanding the foregoing 14 357766v5 1 sentence, however, failure of CITY to renegotiate the Allocation Agreement to allow said 2 transition fees to be paid by development projects as opposed to being paid by CITY does not 3 excuse CITY from its obligation under this section 8.6 to execute an extension to or replacement 4 of the Allocation Agreement prior to its termination, which extension or replacement ensures that 5 DISTRICT transition fees are paid regardless of the source of payment. Either (1) the failure of 6 CITY to execute such an extension to or replacement of the Allocation Agreement prior to the 7 termination of the existing Allocation Agreement, or (2) the termination of or other lapse in such 8 extension to or replacement of the Allocation Agreement without its own replacement, during the 9 term of this MOU, shall each be bases for termination of this MOU pursuant to section 9.2. 10 ARTICLE IX 11 GENERAL PROVISIONS 12 9.1 Term of MOU: 13 This MOU shall commence as of the Effective Date and remain in effect until 14 December 31, 2034 (Initial Term). This MOU shall be automatically extended for one additional 15 five (5) year period, through December 31, 2039 (Extension Term), unless either party provides 16 written notice not less than one hundred eight (180) days prior to the expiration of the initial 17 Term, of its desire to not extend this MOU. This MOU may also be terminated at any time by 18 mutual agreement of the Parties or as otherwise provided by this MOU. 19 9.2 Termination. 20 In addition, should all or any portion of this MOU be declared invalid or inoperative 21 by a court of competent jurisdiction, or should any party to this MOU fail to perform any of its 22 obligations hereunder as determined by a court of competent jurisdiction, or should any party to 23 this MOU take-any action to frustrate the intentions of the parties as expressed in this MOU as 24 determined by a court of competent jurisdiction, and does not correct such noncompliance within 25 the time specified in this MOU, then in such event, this entire MOU may be terminated as 26 provided in this Section. 27 Prior to this MOU being terminated for failure by City to comply with its material 28 obligations, COUNTY shall provide written notice to CITY specifying such alleged failure, and 15 357766v5 1 CITY shall comply with the obligations and terms specified in the written notice within thirty (30) 2 days after the date of receipt of the notice. If CITY complies within the thirty-day period, this 3 MOU shall remain in full force and effect. If CITY fails to comply within the thirty-day period, then 4 the City shall be in breach and the County may terminate this MOU. During the thirty (30) day 5 notice period and until CITY certifies in writing that it is in compliance with the provisions of this 6 MOU and COUNTY agrees in writing, no property tax exchange agreement, as required by 7 Section 99 of the Revenue and Taxation Code, shall exist between COUNTY and CITY with 8 respect to any pending annexations. 9 Prior to this MOU being terminated for failure by the County to comply with its material 10 obligations, CITY shall provide written notice to COUNTY specifying such alleged failure, and 11 COUNTY shall comply with the obligations and terms specified in the written notice within thirty 12 (30) days after the date of receipt of the notice. If COUNTY fails to timely comply with the terms 13 and conditions of this MOU, this MOU shall terminate. During the thirty (30) day notice period 14 and until COUNTY certifies in writing that it is in compliance with the provisions of this MOU and 15 CITY agrees in writing, at the election of the CITY, no property tax exchange agreement, as 16 required by Revenue and Taxation Code Section 99, shall exist between COUNTY and CITY 17 with respect to any pending annexations. 18 The provisions in Article III pertaining to the exchange of property tax revenues shall 19 survive termination of this MOU and will apply to all pending and future annexations. 20 Except as otherwise provided, the parties hereto have executed this MOU in the County 21 of Fresno, State of California, on the dates set forth above. 22 9.3 Geographic Application of MOU 23 This MOU shall apply only to the area identified as the City of Fresno's Sphere of 24 Influence as depicted in Exhibit 3. This MOU shall not apply to any sphere of influence beyond 25 the area depicted in Exhibit 3 unless and until the parties mutually agree to amend this MOU. 26 27 28 16 357766v5 1 9.4 Termination Due to Changes in Law: 2 The purpose of this MOU is to alleviate in part the revenue shortfall, if any, experienced 3 by COUNTY which may result from CITY's annexation of revenue-producing or potentially 4 revenue-producing properties located within the unincorporated area of COUNTY. The purpose 5 of this MOU is also to enable CITY to proceed with territorial expansion and economic growth 6 consistent with the terms of existing law as well as to maximize each party's ability to deliver 7 essential governmental services. In entering into this MOU, the parties mutually assume the 8 continuation of the existing state statutory schemes relating to the distribution of available tax 9 revenues to local government, annexations, planning and the other material matters set forth in 10 this MOU, and that assumption is a basic tenet of this MOU. Accordingly, it is mutually 11 understood and agreed that this MOU may, by mutual agreement be terminated should changes 12 occur in state statutory law, court decisions or state administrative interpretations which negate 13 the basic tenet of this MOU. 14 9.5 Modification: 15 This MOU and any of the provisions, covenants and conditions set forth herein may be 16 modified or amended only by a writing duly authorized by the respective governing bodies of 17 COUNTY and CITY and executed by each party's authorized representative. 18 9.6 Enforcement: 19 COUNTY and CITY each acknowledge that this MOU cannot bind or limit themselves or 20 each other or their future governing bodies in the exercise of their discretionary legislative power. 21 However, each party agrees that it will, insofar as is legally possible, fully carry out the intent 22 and purposes of this MOU, if necessary, by administrative action independent of ordinances, 23 and that this MOU may be enforced by injunction to the extent allowed by law. This provision 24 shall not be construed to preclude termination of this MOU because of failure of a party to 25 perform a legislative act in accordance with provisions of this MOU. 26 9.7 Entire Agreement and Supersession: 27 With respect to the subject matter hereof, this MOU supersedes any and all previous 28 negotiations, proposals, commitments, writings, and understandings of any nature whatsoever 17 357766v5 1 between COUNTY and CITY except as otherwise provided herein. This MOU does not 2 supersede the 1977 "Agreement Between the County of Fresno and the City of Fresno Relating 3 to Municipal Court Fines and Forfeitures," as amended. 4 9.8 Notice: 5 All notices, requests, certifications, or other correspondence required to be provided by 6 the parties to this MOU shall be in writing and shall be personally delivered or delivered by first 7 class mail to the respective parties at the following addresses: 8 COUNTY CITY 9 County Administrative Officer City Manager County of Fresno City of Fresno 10 Hall of Records, Room 300 City Hall 2281 Tulare Street 2600 Fresno Street 11 Fresno, CA 93721 Fresno, CA 93721 12 Notice by personal delivery shall be effective immediately upon delivery. Notice by mail 13 shall be effective upon receipt or three days after mailing, whichever is earlier. 14 9.8 Renegotiation: 15 If COUNTY enters into an agreement or memorandum of understanding, which includes 16 a master property tax exchange agreement under Revenue and Taxation Code Section 99(d), 17 with another city that has terms and conditions more favorable in the aggregate to that city than 18 those terms and conditions contained in this MOU, COUNTY agrees that it will negotiate such 19 terms and conditions upon written request from CITY, with the intent of offering that more 20 favorable agreement. Negotiations shall conclude thirty (30) days from the date of receipt of 21 notice by COUNTY and, if agreement is tentatively reached during that period, the legislative 22 bodies of the parties may consider approval any such amendment within thirty (30) days 23 following the date of the tentative agreement. COUNTY and CITY are not required to reach 24 agreement. 25 9.9 No Waiver of Government Claims Act: 26 For all claims arising from or related to this MOU, nothing in this MOU establishes, waives, 27 or modifies any claims presentation requirements or procedures provided by law, including the 28 18 357766v5 1 Government Claims Act (Division 3.6 of Title 1 of the Government Code, beginning with section 2 810). 3 9.10 Governing Law and Venue 4 This MOU shall be administered and interpreted under the laws of the State of California. 5 Jurisdiction of litigation arising from this MOU shall only be in California. Any action brought to 6 interpret or enforce this MOU, or any of the terms or conditions hereof, shall be brought and 7 maintained in the Fresno County Superior Court. 8 9.11 Authorization to Execute 9 COUNTY and CITY each represent and warrant that the individuals signing this MOU are 10 duly authorized to do so by their respective legislative bodies and that their signatures on this 11 MOU legally bind COUNTY and CITY to the terms of this MOU. 12 9.12 Counterparts 13 This MOU may be signed in counterparts, each of which is an original, and all of which 14 together constitute this MOU. 15 16 (Signature page follows.) 17 18 19 20 21 22 23 24 25 26 27 28 19 357766v5 I IN WITNESS WHEREOF, the parties hereto have executed this MOU in the County of 2 Fresno, State of California, on the last date set forth below. 3 4 County of Fresno, a Political City of Fresno, a Municipal 5 Subdivision of the State of California Corporation of the State of California (COUNTY) (CITY) 6 7 By: 8 Nathan Magsig, Chairman of the . D , Ma , i y of Fresno Board of Supervisors of the County of Fresno 9 Date: Z/20 f y Date: 10 11 Attest: By: 12 Bernice E. Seidel Ann a Pe a, Cou cil President 13 Clerk of the Board of Supervisors City of Fresno 14 County of Fresno, State of California Georgeanne White, City Manager Clerk to the Board of Supervisors 15 16 By: By: 17 Deputy GeorgianWhite, City Manager 18 19 Approved as to Legal Form ANDREW JA Z, C' y rney 20 21 By: 2 Je r M. intanilla Date 22 �-Wr r Deputy City Attorney 23 24 Attest: 25 Todd Stermer CIVIC City Cler 26 By: ✓� t Z-z�-Zo= Todd termer, City Clerk Date 27 28 20 357766v5 EXHIBIT 1 STANDARDS FOR ANNEXATION • The proposal must be consistent with adopted sphere of influence of the city and not conflict with the goals and policies of the Cortese-Knox-Hertzberg Act. • The proposal must be consistent with city general and specific plans, including adopted goals and policies. • Pursuant to CEQA, the proposal must mitigate any significant adverse effect on continuing agricultural operations on adjacent properties, to the extent reasonable and consistent with the applicable general and specific plan. • A proposal for annexation is acceptable if one of the following conditions exist: 1. There is existing substantial development provided the City confines its area requested to that area needed to include the substantial development and create logical boundaries. 2. Development exists that requires urban services which can be provided by the City. 3. If no development requiring urban services exists, at least 25% of the area proposed for annexation has: (a) Approved tentative subdivision map(s) (single-family residential) (b) Approved city entitlement (for other uses including multi-family ) 4. The annexation is to fulfill the city's Regional Housing Needs Allocation (RHNA) obligation which otherwise cannot be accommodated on lands currently within the city's incorporated boundary. 5. The annexation includes the full width of County road right-of-way along the annexation boundary and all County road right-of-way impacted or used by the project, or County road intersections to be improved as a result of the project within a minimum of/z mile of the annexation boundary. • The proposal would not create islands. Boundaries must ultimately minimize creation of peninsulas and corridors, or other distortion of boundaries. For any of the following circumstances listed below, a proposal for annexation is presumed to comply with all standards for annexation: • The request for annexation is by a city for annexation of its own publicly-owned property for public use. • The request for annexation is by a city in order to facilitate construction of public improvements or public facilities which otherwise could not be constructed. • The request for annexation is to remove an unincorporated island, substantially surrounded area, or otherwise address existing peninsulas and/or irregular boundaries. • The annexation is intended to mitigate or otherwise comply with standards/conditions required by another agency with respect to another development/annexation. Exchange of Real Property z r � ,.■r01 � - - Revenue �J z 3� Fresno . SHEPHERD TOLLHOUSE ' Southeast Development Area MEN (See Exhibit A v r ■'1■■rLiLuV7I%A% -11■®P'UFresno City Limits w,-.Nq ,r LU Outside of SEDA r�-.. 60 � 0�� ,fL1L'ARD�ir��irWl 17- yb�k•}� � 1�;: �:. �_ 1[�VI _ i■ ■■■ ��`w�r �1'■■■ �95 � +,c-SHAWRAW IFIENIVAdil, L' 9 LLAA P-1011 MENEM 119, EK4M "am WHITES BRIDGE k �`Z � �-���``���•/'■�■■�Vlc �ah, ■4.e Ratioce MEN CAI -M Exchange of Property Tax Revenue F -- I ial uLI.111 relating to Substantially JWJENSENDeveloped Real Property. era fi ■■■■,I"�.■■■ �■ ' IN AN Mimi � �����■1�`/4`�. ��J 'J��� CENT_RAL �i L _ � .. EXHIBIT 2A P `NI P o�o SOUTHEAST DEVELOPEMENT AREA PUBLITORKS,-D7�NN,NG ES.tt couNTr c R. DI I z 3 J cc V 3 ID Lu J ' ASHLAN' ' ' ' _ . V a DAKOTA DAKOTA J J Q U U f . . . . . . . .AIRWAYS SHIELDS . . . . . YJ tr Z Z U . 0 CLINTON ' ' ' ' ' ' ' ' Z z CCINTON • 7 . . . . . . . . . . . . . . . . . . . . w . . Vr �U . MCKINLEY Z Z J V OLIVE. Ms...:. . . . . . . . . . . . . . . . . . . �8 . . . SR-180 W B' BELMONT H Z H W c=i •TULARE . 3 . . . . . . 0 J J 3 KINGS CANYON KINGS CANYON/SR 1.80 KINGS CANYON LANE BUTLER BUTLER HIT aI I I IIHAMILTON _ J Q • V Z J w 0 C J = V VEZ CALIFORNIA. C7 U Ce Q CHURCH W ' 0 Z Z JENSEN • JENSEN Fromm ANNADALE �. .o �. W J V NORTH Legend N Clovis 0 Southeast Developement Area Fresno City Sphere of Influence 0 0.5 1 Miles Path: G:\4360Devs&Pln\GIS\Maps\Specific\City of Fresno S`,--,;-iq of Fresno SEDA.aprx 10/17/2024 w SAMPLE m " 1■1 COPPER ¢ MADERA COUNTY Z BEHYMER Q ©PERRIN N � ¢ A SHEPHERD w w TOLLHOUSE TEAGUE ¢ COL'E J ¢ NEES LU p- F- �^6$ z : Z ALLUVIAL a w 5 SPRUCE r S�-SR-168 WB' ER �iZ,- m w T N� = O ^�`b HERNDON O �G' . . SIERRA m O r�� SIERRA BULLARD ¢ FIFTH BULLARD 99 CO! m > 'Q• BARSTOW J BARSTOW O w ¢ p S1 O� SANJOSE O F J Z U ¢• N ~ rr SHAW S ' ' ' z (n ¢ O G a . . LL = 0 w 0 J ¢ 9 F z FMF GETTYSBURG 0 < LL OrCu) y = a J 9tie H SON z Y w ¢zwASH�AN O a w [ASHLAN¢ p Cr p J U Z . . O j ��O DAKOTA Y m DAKOTA , Z. . ) LL J ON SHIELDS •¢• F� g Z } m w SHIELDS ��f. SHIELDS 60 Y 'm'w N CLINTON 0 CLINTON . . . . . . . . . U ¢ . . . . . . . . . . p MCKINLEY . . ._ . . . `9�. - . . . . . . . . p . . OLIVE _ . . . . . . . .w z } SR EB z } Qp =1 SR-180 WB . . . . . . . .■ z w z¢ m F • . . . • . • BELMONT < _ . NIELSEN > ¢ TULARE p _ . . . . . . . WHITESBRIDGE WHITES BRIDGE J m �" '¢ • ; a m �q w cKINGS CANYON LU KINGS CANYON KINGS CANYON/SR 180 KINGS CANYON 0 w G 0 =.LANE LL . . O w KEARNEY NBUTLER Q 0 CC = H w CALIFORNIA J �:�3 Q OJ ¢ .0 CHURCH �Nw +O CHURCH c7 m w c7 } d . . . . . . . R JENSEN w LL 2i it FIFTH r w w • • NINTH ' ' ' ' ' 0 0 ANNADALE Y NORTH cwj S� = 0 Y v Z 99 L 7 CO w ¢ w 0 w 0. CENTRAL ¢ l�tc2 p GOODFELLOW AMERICAN w ST U p 9TF C7 JEFFERSON w CITY OF FRESNO Department of Public Works and Planning co Legend Development Services Division N City of Fresno San Joaquin River W* O� �560 S FRE`'� a���n� ■ ■ ! 0 1.5 3 City of Fresno Sphere of Influence ■■ ■ r County Boundary Line Miles Prepared by.CHUVANG G:14360Devs&PlnIGISIMapslSpe 6c CO( P�,N Exhibit 4 SOUTHEAST DEVELOPEMENT AREA PUBLICOU�OFnFMNO NWG YDAK�TA CC t GETTYSBURG 1:iU z 1ASHCAN• c DAKOTAdi�l d ••'� .. .. .. ' 1 . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . AIRWAYS SHIELDS . 'W Q r V Z. O . CLINTON. . . . . . . . .0. CLINTON . . . . ' . . . . . . . . . . . C7 MCKINLEY. Z Is. . . . . . . . 0 . . F- . . . . . . . vi . . . . . . . . F -. a OLIVE . . . . . . . . . . .. . . . . . . . . . . . . . . . l. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BELMONT. . . . . . . . . . . . . . . . TULARE' . . . . . . TIO: . . . .ICINGS CANYON KINGS CANYON/SR 180 KINGS CANYON •KINGS CANYON LANE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BUTLER' BUTLER .. . . . . . . . . . . . . . . . . . . . . . . HAMILTON 3 O o J . CALIFORNIA W Q W Q Z . z . . . . . . 5 � 2 %EN. CHURCH Q W .HZ Z . . . . . . . . . . F . Z. . . . . . . t7 W 2 Z �. ANNADALE a. . . . . LU a. . . . . . . G vi . a seem ------ -7— NORTH O J V Legend N Clovis Est. of Unannexed Land (3870 Acres) Fresno City Sphere of Influence Q Southeast Developement Area 0 0.47 0.95 Miles Path: G:\4360Devs&Pln\GIS\Maps\Specific\City of Fresno SEDA\City of Fresno SEDA.aprx 5/1/2024