In 2007, Scotts Valley Redevelopment Agency was a government body that was dedicated to renewing neglected and blighted urban areas. Redevelopment efforts typically targeted restoration of historic buildings, removing unsafe buildings, lowering crime, attracting businesses, creating landscaping and developing suitable new housing.
In Scotts Valley the RDA accomplished many projects such as to provide funding for affordable housing; to rebuild Scotts Valley Drive; bring in new business and more. All were funded by the RDA.
In their 2011 Budget Act, the State of California Legislature approved the dissolution of the California’s over 400 Redevelopment Agencies. February 1, 2012, the RDAs were officially dissolved. As a result, property tax revenues were then used to pay for servicing required payments on bonds and other enforceable obligations than had been paid by the RDAs.
In 1978 when Proposition 13 was passed, it limited the tax rate for real estate. It stated in Section 1. (a) The maximum amount of any ad valorem tax on real property shall not exceed one percent of the full cash value of such property. The one percent tax is to be collected by counties and apportioned according to law to the districts within the counties.
Scotts Valley Mayor, Dene Bustichi, explained that in 2007 Council member Randy Johnson and Mayor Bustichi approached the County requesting a tolling agreement because the allocation of taxes to the city of Scotts Valley was incorrect. The County disagreed and the City of Scotts Valley was forced to file a lawsuit to protect the taxpayer’s rights. It was believed that SCC had shortchanged Scotts Valley of the amount of property tax allocations that the city should receive. He said “the county froze the property tax allocations for Scotts Valley at four percent of the one percent allowed of total collected property tax permitted by Proposition 13. Other cities were allocated at between seven to 20 percent. We did not think that was fair for Scotts Valley property tax payers.”
Scotts Valley prevailed in a substantial part of the suit, but the litigation has taken many turns during the past years. It has been a long running suit.
In 2015, the State Department of Finance approved the implementation of a court ordered settlement of the long-running dispute between the County of Santa Cruz and the City of Scotts Valley. The settlement agreement was approved by the San Mateo Superior Court in February and the matter was pending before the Department of Finance before the terms were able to be implemented.
Bustichi believes the resolution of the dispute is good for the tax payers in Scotts Valley because it protects them from further litigation costs. He said “We acted to protect the taxpayers of Scotts Valley, and we look forward to a new era of trust between Scotts Valley and the County.”
Both sides look forward to putting the matter behind them. Rather than pursue a case that dates to 2007, the two sides agreed to a settlement that protects taxpayers from further court cost while laying the groundwork for strengthening of the relationship between the City and County.
Both the County and City would like to thank Assemblymember Mark Stone, D-Monterey Bay, for his support of the agreement and his work with the Administration and the Department of Finance to bring this matter to a conclusion. We would also like to express our appreciation to the Department of Finance for their thoughtful review of the Court’s actions.
“This case has dragged on too long, and I am grateful both sides were able to come to a mutual agreement,” Santa Cruz County Supervisor Bruce McPherson said. “This shows what can happen when people set aside their differences and work together to find a solution.”
“It was the collaboration of the current group that made good communication possible. We wanted a new beginning and did not let old arguments poison the discussion,” said Bustichi. “Now,” he observed, “the property taxes generated in Scotts Valley will benefit Scotts Valley.”
