(September 23) A portion of land annexed by the city of Redlands inside what has become known as the “Donut Hole” has reverted to the county of San Bernardino. As a result, the county has revamped its tax sharing arrangement with the city of Redlands relating to the unincorporated pocket of county land surrounded by the city.
According to a report by county chief executive officer Greg Devereaux and his deputy, Katrina Turturro, which is dated September 23, “Tree Partners LLC, a developer,  submitted a reorganization proposal to the San Bernardino county Local Agency Formation Commission in 2013 which, as revised, will detach approximately 34.22 acres from the city of Redlands and return the acreage to the unincorporated area known as the Donut Hole. The developer plans to develop five parcels of  property in the Donut Hole area, consisting of two parcels currently in the city boundaries and three parcels in the county unincorporated area.”
The Donut Hole is surrounded on all sides by the city of Redlands.
According to the report, on September 10, 2013 the board of supervisors adopted a resolution that approved the property tax revenue amounts to be transferred as a result of the pending reorganization and approved two letters of intent, one which related to the apportionment of sales and use tax and the provision of certain municipal services to the reorganization area, and one letter which entered into an agreement with the city of Redlands for the apportionment of certain property tax revenues. The city of Redlands adopted a similar resolution which also approved both letters of intent.
In order for the Local Agency Formation Commission to issue the certificate of completion for the property involved, the county and the city must amend the sales and use tax agreement and approve an agreement for the apportionment of certain property tax revenues, pursuant to terms outlined in the letters of intent.
According to Devereaux and Turturro’s report, the amendment of the county’s contractual commitment to the city of Redlands “provides for apportionment of sales and use tax revenue to fund the provision of certain municipal services within the unincorporated area commonly known as the Donut Hole. This contract was approved on August 12, 2003 and established a sales and use tax sharing agreement between the county and the city allocating 90% of sales and use tax revenue to the city and 10% to the county. In return for the sales tax sharing agreement, the city committed to provide fire protection, law enforcement, retail water service, and wastewater collection and treatment services.”
Upon Devereaux and Turturro’s recommendation, the board of supervisors this week approved an amendment to the county/city contract to add the reorganization area to the boundaries of the Donut Hole, as defined in that agreement, thus ensuring adequate municipal services to the reorganization area.
“Approval of the property tax sharing agreement with the city will provide that the city will receive 35% of the county general fund share of property tax revenue generated by the developable  acres within the five parcels proposed to be developed by the developer,” the report states. “This 35% is proportional to the acreage of the two parcels currently in the city’s boundaries to all five parcels proposed for development. In return, the city will provide maintenance for the roads and streets immediately adjacent to the two parcels currently in the city’s boundaries. This agreement will terminate if all the parcels remain vacant five years after execution of the agreement.”
The arrangement was reviewed and signed off on by deputy county counsel Michelle Blakemore.