1. Adopt resolution authorizing execution of a Revenue Sharing and Property Tax Exchange Agreement between Yolo County and the City of Woodland related to planned annexations for the Woodland Commerce Center, Woodland Industrial Park, and HWY 113 / CR 25A Mixed Use Development (Woodland Research and Technology Park), and
    
2. Adopt resolution authorizing execution of the Second Amendment to the Gibson Ranch Revenue Sharing and Property Tax Exchange (Agreement 92-49, dated March 31, 1992).    

The City of Woodland is in the early stages of processing applications for development projects for property within the city’s voter-approved Urban Limit Line, but outside the current city boundaries.  Concurrent with the processing of the development applications, the city must commence annexation proceedings, consistent with the applicable state law as administered by the Local Agency Formation Commission (LAFCO).

Under state law, a prerequisite for LAFCO to process a duly submitted annexation application is agreement between the annexing City and County on a tax-sharing agreement governing the allocation of property taxes on parcels to be annexed.  The tax-sharing agreement is the primary vehicle available to help ensure that property tax revenues are allocated to the City and County consistent with each entity’s responsibility for providing municipal services to the residents and businesses within the newly-annexed territory.

City and County staff have reached tentative agreements, Att. A, on the parameters for a Revenue Sharing and Property Tax Exchange specific to three projects proposed for future annexation- the Woodland Commerce Center, Woodland Industrial Park and Woodland Research and Technology Park (113/CR 25 A Mixed Use Project). Below is summary of each proposed development a map of which is included as Att. C. The agreements were approved by the Woodland City Council on February 6, 2018.
 

Property Tax Revenues.  The tax-sharing agreement provides for the allocation of property tax revenues projected to be generated by development of the three properties, largely in proportion to the anticipated costs of municipal services borne by the City of Woodland and Yolo County. The County retained Goodwin Consulting Group to develop a proprietary formula to calculate current and prospective service impacts resulting from proposed annexation and development assumptions. A summary of the discretionary property tax allocation included in the proposed agreement is as follows:
 

Sales and Use Tax. With respect to the Woodland Research Park, base year sales and use tax revenues up to $155,000 per year shall be retained by the City.  In any year where the inflation-adjusted sales tax revenues generated by the project area exceed $155,000, the City will distribute 15% of the revenues in excess of the inflation-adjusted base revenues to Yolo County.

 The source analysis from Goodwin Consulting Group that underpins this allocation is attached as Att. D. Additionally, comparisons of the allocations in this agreement to other recent tax transfer agreements in the state are attached as Att. E and F. Additionally, as part of the negotiations related to revenue sharing for the subject parcels, the City and the County have agreed to amend the existing 1992 Gibson Ranch tax-sharing agreement related to sharing of Transient Occupancy Tax (TOT), or hotel tax revenues.  Per the proposed amendment, Att. B, the City will receive 100% of all TOT revenues from new hotels constructed within the City of Woodland. TOT revenues generated by existing hotels will remain subject to the tax-sharing formula provided for in the Gibson Ranch Agreement which obligates the City to pay the County the equivalent of 20% of the total citywide TOT.

Resolutions authorizing the execution of each agreement are included as Attachments G and H hereto.