Grass Valley, CA November 19, 2019 – The County of Nevada and the City of Grass Valley are pleased to announce they have settled issues regarding the accounting and allocation of sales taxes in the Glenbrook Basin.
“We are pleased to put this issue behind us and strengthen our partnership with the City in serving our shared constituents,” said County Board of Supervisors’ Chair Richard Anderson.
Under an agreement made when the City annexed the Glenbrook Basin in the early 2000s, the City and County agreed to share sales taxes. Sales taxes are collected by the California Department of Tax and Fee Administration (and formerly by the Board of Equalization) and paid to the City because the taxable sales occur there. Under the City/County agreement, the City then pays the County its share of the sales taxes. A contractor hired to calculate repayments to the County overlooked some addresses from which sales taxes were paid and the City therefore paid the County less than it was due. When the contractor discovered its error in early 2017, 9 years of underpayments had occurred.
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Since January 2017, the City and the County have worked together to determine how much was in issue (approximately $800,000) and how much the City should pay in light of the running of statutes of limitation and claiming periods. After a one-day mediation assisted by retired Nevada County Superior Court Judge Al Dover, City and County representatives reached tentative agreement on terms on September 26, 2019. The City Council approved those tentative terms on October 8, 2019 and the Board of Supervisors approved them on October 22nd. The City Attorney and County Counsel have negotiated a formal settlement agreement which will be executed by both parties.
In addition to resolving the sales tax dispute, the City and County will also agree to treat the annexation of the Glenbrook Basin as complete even though a handful of residential parcels have not been annexed. This will allow those property owners to continue in County unincorporated status but grant the City the 50 percent shares of sales taxes to fund municipal services to the Glenbrook Basin, as the City and County envisioned when they agreed to the City’s annexation of Glenbrook Basin.
“The City and County have many issues we can work on together to improve the lives of the people we serve – housing, homelessness, public safety, economic development, infrastructure and more,” said Grass Valley Mayor Lisa Swarthout. “Resolving these issues allows us to move forward with that important work.”