Negotiations continue on tax-sharing agreement the city has with county

mgaytan@losbanosenterprise.com May 23, 2014 

The City Council in two weeks will review and seek direction from city staff regarding the revenue-sharing agreement Los Banos has with the County of Merced.

According to city officials, the city has been renegotiating the agreement, which splits taxes on annexed property among various countywide agencies, with the county for more than three years.

Some of those agencies include the Los Banos Unified School District, Merced Community College District and the Los Banos Cemetery District.

The current agreement was entered in 1997, and only applies to property newly annexed into the Los Banos city limit.

Prior to 1997, the state legislator required cities and counties to enter into these agreements to determine what the tax split was going to be on properties moving from county to city limits, according to city officials.

The point of this agreement is for the city to provide services that weren’t available prior to annexation – therefore there should be a negotiated sharing agreement to define how the property taxes are going to be split.

Since 1997, the city has had approximately 13 annexations.

According to city leaders, renegotiating began back in 2010.

In a phone interview Thursday, Mayor Mike Villalta said the action wouldn’t be needed if the county would be more genuine with it’s negotiations.

According to city officials, the current agreement is not beneficial to Los Banos.

In an April interview, Merced County Supervisor Jerry O’Banion said a future agreement is still in the works.

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