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Home My WebLink AboutReso - CC - 021-1997RESOLUTION NO. 21-97 AUTHORIZING ACKNOWLEDGMENT OF RECEIPT AND RELEASE OF ALL CLAIMS FOR REBATE OF PROPERTY TAXES PAID BY CITY AND COUNTY OF SAN FRANCISCO FOR WATER FACILITIES RESOLVED, by the CITY COUNCIL of the City of Burlingame, California and this Council does hereby FIND, ORDER and DETERMINE AS FOLLOWS: 1. The public interest and convenience require execution of the Acknowledgment of Receipt and Release of All Claims with the City and County of San Francisco. 2. The City Manager be, and he is hereby, authorized to sign said agreement for and on behalf of the City of Burlingame. 3. The City Clerk is hereby ordered and instructed to attest such signature. Mayor I, JUDITH A. MALFATTI, City Clerk of the City of Burlingame, do hereby certify that the foregoing Resolution was introduced at a regular meeting of the City Council held on the 3rd day of MARCH , 1997, and was adopted thereafter by the following vote: AYES: COUNCILMEMBERS: HARRISON, JANNEY, KNIGHT, O'MAHONY, SPINELLI NOES: COUNCILMEMBERS: NONE ABSENT: COUNCILMEMBERS: NONE x City Clerk ACKNOWLEDGEMENT OF RECEIPT AND RELEASE OF ALL CLAIMS THIS ACKNOWLEDGEMENT OF RECEIPT AND RELEASE OF ALL CLAIMS is executed by the CITY OF BURLINGAME ("Customer") as of MARCH 3 1997, in light of the following facts and circumstances: 1. The City and County of San Francisco ("San Francisco") owns real property ("property") in Alameda, San Mateo and Santa Clara Counties (collectively "Counties"), which is used by the San Francisco Water Department ("SFWD") in its operation of a wholesale water system. 2. SFWD has paid ad valorem property taxes on this property levied by Alameda, San Mateo, and Santa Clara Counties. 3. In 1984, San Francisco entered into a Settlement Agreement and Master Water Sales Contract ("Water Sales Contract") with 30 cities, water districts and other agencies to which it sells water on a wholesale basis ("Suburban Purchasers"). Customer is one of the Suburban Purchasers. 4. The Water Sales Contract provides that property taxes paid by SFWD on the property are an expense of the wholesale water system, a portion of which should be allocated to the Suburban Purchasers based on their aggregate average annual water use during each fiscal year. Accordingly, SFWD wholesale water rates have been set so as to recover the Suburban Purchasers' share of property taxes levied on the property. 5. In 1987, San Francisco commenced lawsuits against San Mateo and Alameda Counties for refunds of property taxes, which lawsuits were later consolidated. In the lawsuits, San Francisco contended that each County had not valued San Francisco's property in compliance with Article XIIIA of the California Constitution and, as a result, had imposed excessive property taxes on San Francisco. In 1995, the California Supreme Court ruled in San Francisco's favor and ordered that taxes inappropriately collected be refunded to San Francisco. City and County of San Francisco v. County of San Mateo, (1995) 10 Cal.4th 554. 336143.6 2112197 6. As a result of settlement negotiations, San Francisco and each of the Counties have agreed to the amount due to San Francisco for the taxes overcollected through fiscal year 1994- 95, as well as interest on those taxes. The Counties have collectively paid San Francisco $5,987,797.40, and San Mateo and Alameda Counties have either paid or have agreed to pay an additional amount to San Francisco upon its receipt of this Acknowledgement of Receipt and Release of All Claims from all Suburban Purchasers for all years through FY 1994-95. San Francisco is prepared to accept the foregoing amounts as full satisfaction of the Counties' obligations to refund overcollected property taxes through fiscal year 1994-95 upon delivery of Acknowledgements of Receipt and Release of All Claims from the Suburban Purchasers. 7. The Bay Area Water Users Association ("BAWUA") is a California nonprofit corporation whose members are all of the Suburban Purchasers. BAWUA and San Francisco have determined the amount of the total payments by the three Counties which should be retained by San Francisco and the amount which should be rebated to the Suburban Purchasers, based primarily on the proportionate usage by San Francisco and the Suburban Purchasers during the relevant time period after execution of the Water Sales Contract (i.e., FY 1984-85 through FY 1994-95). The methodology by which the aggregate amount to be rebated to the Suburban Purchasers collectively ($4,308,503.08) and the amount to be rebated to Customer individually ($121,027.25) is set forth on Attachments A-1 and A-2 which are incorporated herein. 8. San Francisco is prepared to issue a check directly to each Suburban Purchaser for an amount calculated in accordance with Attachments A-1 and A-2 as soon as it has received Acknowledgements of Receipt and Releases of All Claims from all Suburban Purchasers. IN CONSIDERATION of payment in the sum of ONE HUNDRED TWENTY ONE THOUSAND TWENTY SEVEN AND 25/100 DOLLARS ($121,027.25), Customer and its officers, employees and agents, forever release and discharge San Francisco, the San Francisco Public Utilities 336143.6 -2- 2/12/97 Commission, the SFWD and their respective officers, directors, employees and agents (cumulatively, the "City") from all actions, causes of action, damages, fees, tax refunds, interest, water rate adjustments, claims and demands, in law or in equity, they now have or may have in the future ("Claims") against the City with respect to San Francisco's recovery from Alameda, San Mateo and Santa Clara Counties of the sum of $8,009,953.03 as a refund of ad valorem property taxes imposed on the property from the fiscal year ending June 30, 1985 through the fiscal year ending June 30, 1995. Customer further agrees not to raise, in any demand for arbitration made under Section 8.02 of the Water Sales Contract, any claim for reduction in the Suburban Revenue Requirement for any year prior to FY 1995-96 related in any way to the recovery by San Francisco of $8,009,953.03 from the three Counties as a refund of ad valorem property taxes. With respect to the matter covered by this Release (i.e., refunds of property taxes by the Counties), Customer specifically, knowingly and expressly waives any and all rights that it may have under 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 favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." Customer certifies that it has read and understands the foregoing release. IN WITNESS WHEREOF, Customer has executed this Acknowledgement of Receipt and Release of All Claims by its duly authorized officer as of the day and year first above written. CITY OF BURLINGAME By: Date: MARCH 4 1997 Name: DENNIS ARGYRES Title: CITY MANAGER 336143.6 -3- 2112/97 CITY OF BURLINGAME (continued) Approved as to form: City Attorney ATTEST: me ATTACHMENT A-1 TO ACKNOWLEDGEMENT OF RECEIPT AND RELEASE OF ALL CLAIMS CALCULATION OF AMOUNT TO BE REFUNDED TO SUBURBAN PURCHASERS COLLECTIVELY STEP 1. Total Amount Paid by Counties applicable to years beginning FY 1984-85 Alameda County San Mateo County Santa Clara County STEP 2. Add Interest Earned by San Francisco on Amounts Paid through December 31, 1996 STEP 3. Add Additional Payments Received from San Mateo and Alameda Counties After December 15, 1996 Subtotal STEP 4. Subtract Taxes Paid By Lessees And Excluded From Wholesale Rates (9.76%) Subtotal STEP 5. Apply Suburban Proportional Factor (10 Year Average) Subtotal Less San Mateo County Settlement Adjustment Total To Be Refunded To Suburban Purchasers $8,009,953.03 $7,228,181.61 $4,536,406.78 $3,478,122.86 $1,674,008.24 $640,530.30 $171,387.70 $2,045,903.93 ($781,771.42) x .6276 ($227,903.70) $4,308,503.08 337503.2 2/12/97 ATTACHMENT A-2 TO ACKNOWLEDGEMENT OF RECEIPT AND RELEASE OF ALL CLAIMS CALCULATION OF AMOUNT TO BE REFUNDED TO SUBURBAN PURCHASERS INDIVIDUALLY Total To Be Refunded To Suburban Purchasers (from A-1) $4,308,503.08 NAME OF SUBURBAN PURCHASER Alameda County Water District Belmont County Water District City of Brisbane City of Burlingame Coastside County Water District Cordilleras Mutual Water Association California Water Service Company City of Daly City East Palo Alto Waterworks District PERCENT OF TOTAL REFUND REBATED* Estero Municipal Improvement District Guadalupe Valley Municipal Improvement District City of Hayward Town of Hillsborough Los Trancos County Water District City of Menlo Park City of Millbrae City of Milpitas City of Mountain View North Coast County Water District City of Palo Alto Palomar Park Waterworks District Purissima Hills Water District City of Redwood City City of San Bruno City of San Jose City of Santa Clara Skyline County Water District Stanford University City of Sunnyvale Westborough Water District 6.93 2.01 0.19 2.81 0.66 0.0028 19.77 2.56 1.23 3.09 0.13 9.91 2.08 0.05 2.15 1.63 5.12 6.86 1.97 8.46 0.03 1.02 6.07 1.70 1.69 2.87 0.08 1.70 6.59 0.64 100.00% INDIVIDUAL REBATE $ 298,586.59 $ 86,457.01 $ 8,206.84 $ 121,027.25 $ 28,577.31 $ 122.71 $ 852,619.72 $ 110,112.05 $ 53,155.61 $ 133,198.37 $ 5,694.07 $ 426,805.54 $ 89,415.93 $ 1,993.36 $ 92,538.23 $ 70,051.43 $ 220,609.56 $ 295,666.00 $ 84,728.58 $ 364,410.55 $ 1,317.36 $ 43,768.83 $ 261,705.05 $ 73,170.71 $ 72,757.96 $ 123,818.24 $ 3,442.71 $ 73,151.67 $ 283,949.86 $ 27.443.98 $ 4,308,503.08 * Percentages shown have been rounded (i.e., multiplying agency's percentage times the total refunded ($4,308,503) will produce a rebate amount slightly different than that shown). These percentages reflect a 10 -year average of SFPUC purchases. 337503.2 2/12/97