It appears that a quietly launched lawsuit by the City of Corcoran against Kings County may be nearing an end. At issue is close to $200,000 illegally taken from the city almost nine years ago.
Back in 2006, counties across the state reformulated their Property Tax Administration Fee (PTAF), a fee assessed by each county for distributing property taxes to the cities in its jurisdiction. They did not mention the reformulation—which resulted in an increase in those fees—to the cities.
The fee went up dramatically, but was somewhat camouflaged by the ongoing real estate boom and other state finance changes.
That continued until 2012, when the city of Alhambra caught on and took umbrage with the calculation. Soon after, Alhambra filed suit against its county. Clovis was the next city to become publicly aware of the situation—thanks to a former Alhambra employee who took a job in the Central Valley city. It held off its litigation pending the outcome of Alhambra.
Alhambra initially won, then lost on appeal, then finally won in the state’s Supreme Court in 2012, getting back six years of illegally collected fees. Counties all over California then began repaying cities the difference between the fee collected in the formula before the change was made in 2006 and the additional money collected through 2012.
Most counties took that path. Kings County did not.
The City of Corcoran estimated it was owed $360,000 in repayments. To date, it has received $198,000—three years, plus interest. While admitting additional fees should not have been collected, the county has thus far refused to repay the remaining three years.
Corcoran has been joined in its lawsuit by the City of Avenal. The City of Hanford has filed litigation of its own, and is owed almost $1 million. Lemoore settled with the county for the initial three-year payment.
The cities have been attempting to work with the county since meetings began in early 2013.
“We realized that it might be a lot of money to repay in one lump, and we were willing to work with the county on that,” noted City Manager Kindon Meik.
However, with negotiations at a standstill, Corcoran’s leadership decided to press on with its suit against the county.
It appeared the issue could go to court as early as Tuesday. However, the board of supervisors decided to discuss the item once again in closed session before it gets moved to court.
“We believe they owe us the money and we would be remiss if we did not make our best effort to get it back here for the benefit of our residents,” said Mayor Jerry Robertson.
The city is asking for the back payment, plus interest. If it prevails, the county will also have to reimburse city legal fees.
Following its own closed meeting Tuesday morning, the board of supervisors seems poised to make a deal with the city. Supervisor Richard Valle said he hopes the county can make an announcement within the next two weeks.
While an agreement seems to have been reached, both sides have to reduce it to writing.
“We have also agreed to future meetings to heal our relationship,” noted Valle.