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City, districts reach deal to end tax fight
August 24, 2012, 05:00 AM By Heather Murtagh Daily Journal Staff

A tentative payment schedule stemming from a legal battle between the San Carlos Redevelopment Agency and three school districts over years of tax payments was reached along with the possibility of a long-term agreement between them.

In November, Superior Court Judge Joseph Scott sided with the San Mateo County Community College, Sequoia High School and San Carlos Elementary School districts in the 2009 lawsuit alleging the city’s Redevelopment Agency wasn’t honoring payments outlined in a 1986 agreement. The $4.3 million will be split between the districts. Since redevelopment agencies were dissolved, successor agencies are working out remaining obligations such as this settlement. This week, the schedule for those payments, to begin in January, was reached, said Barbara Christensen, San Mateo County Community College District spokeswoman.

San Carlos had appealed the decision. However, the city has reached a tentative long-term agreement with the schools that needs to go before the elected officials for each organization, said City Manager Jeff Maltbie. The San Carlos City Council will discuss the topic in closed session Monday, Aug. 27.

Before being dissolved, redevelopment agencies used tax revenue generated in an area to make improvements and make payments or other agreements of mutual benefit to other agencies who would typically receive tax revenue from the area.

A 1986 agreement, the districts argued, called for the agency to make larger payments including a fair share of the annual 2 percent inflationary increase in property tax assessments. Since then, the districts argued they were owed larger payments, and the judge agreed. From the city’s perspective, payments were only to be made when requests were made, the first of which came in 2009, City Attorney Greg Rubens said when the judgment was made.

Scott instructed the agency to make the payments in accordance with the California Community Redevelopment Law.

Of the $4.3 million judgment, the proposed payment will include $689,000 to the college district, $1.85 million for San Carlos Elementary and $3.76 million to Sequoia. The numbers are larger than the judgment to include interest, said Christensen. Each district gets a certain percentage from the revenue. Also, how the district was funded at the time — through student attendance or property tax rates — also came into play.

Heather Murtagh can be reached by email: or by phone: (650) 344-5200 ext. 105.

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