Stanislaus County and eight local cities are closing in on a final joint settlement agreement in regards to an outstanding issue of the calculation of a property tax administration fee for assessing, collecting and allocating property tax revenues pursuant to the Revenue and Taxation Code, as a California Supreme Court decision in November 2012 found that counties had been overcharging cities for the service.

The California Supreme Court decision, City of Alhambra et al. v. County of Los Angeles, held that a complex calculation used by counties to charge for property tax administration fees resulted in counties overcharging cities. As a result, cities within Stanislaus County claimed the County should stop the collection of the disputed administration fee and reimburse each city for a portion of previous years’ fees.

Although the County disputed the reimbursement request, the County did stop collecting the fees during Fiscal Year 2012-2013. Officials from the County and eight cities have agreed on settlement terms with the agreement becoming official after each city signs the settlement agreement which is expected within the next 30 days.

Through the agreement, Stanislaus County will pay a total of $2,870,165 to be allocated to local cities, including the cities of Ceres, Hughson, Modesto, Oakdale, Patterson, Riverbank, Turlock and Waterford. According to the County, the City of Newman is not participating in the joint agreement, and the two will continue to work together to resolve the dispute.

Stanislaus County has already paid back $410,630 during May 2013, leaving a balance of nearly $2.4 million. The balance of these funds will be distributed by lump sum payments to each city within 30 days of their signed settlement agreement or within 30 days of their dismissing their lawsuit against the County on this subject.

According to the County, based on when a city preserved their rights, the settlement agreement will include three-and-a-half to four-and-a-half years of back payments.

In a press release, Stanislaus County stated that the ability of the County and cities to successfully work together and find a common agreement benefits the public by avoiding a potentially lengthy and costly publicly financed legal battle.