REPORT/RECOMMENDATION TO THE BOARD OF SUPERVISORS
OF SAN BERNARDINO COUNTY
AND RECORD OF ACTION
REPORT/RECOMMENDATION TO THE BOARD OF DIRECTORS
OF SAN BERNARDINO COUNTY FIRE PROTECTION DISTRICT
AND RECORD OF ACTION
May 19, 2026
FROM
LUTHER SNOKE, Chief Executive Officer, County Administrative Office
SUBJECT
Title
Property Tax Exchange Related to LAFCO 3279 - Reorganization to Include Annexation to the San Bernardino County Fire Protection District, its North Desert Service Zone, and its Service Zone FP-5 (City of Adelanto)
End
RECOMMENDATION(S)
Recommendation
1. Acting as the governing body of San Bernardino County, adopt Resolution approving the property tax revenue transfer as a result of the pending jurisdictional change related to Local Agency Formation Commission proposal LAFCO 3279 - Reorganization to Include Annexation to the San Bernardino County Fire Protection District, its North Desert Service Zone, and its Service Zone FP-5 (City of Adelanto).
2. Acting as the governing body of the San Bernardino County Fire Protection District:
a. Approve the Application and Preliminary Environmental Description Form, including any documents with non-standard indemnification provision, related to Local Agency Formation Commission proposal LAFCO 3279.
b. Delegate authority to the Fire Chief/Fire Warden or the Deputy Chief to sign and certify the Application and Preliminary Environmental Description Form, which includes a non-standard indemnification provision, related to Local Agency Formation Commission proposal LAFCO 3279, subject to review by County Counsel.
c. Direct the Fire Chief /Fire Warden to transmit the Application and Preliminary Environmental Description Form and any documents under Recommendation 2.b to the Clerk of the Board of Supervisors within 30 days of execution.
(Presenter: Matthew Erickson, County Chief Financial Officer, 387-5423)
Body
COUNTY AND CHIEF EXECUTIVE OFFICER GOALS & OBJECTIVES
Operate in a Fiscally Responsible and Business-Like Manner.
Ensure Development of a Well-Planned, Balanced, and Sustainable County.
Pursue County Goals and Objectives by Working with Other Agencies and Stakeholders.
FINANCIAL IMPACT
Approval of this item will not result in the use of Discretionary General Funding (Net County Cost). The proposed property tax revenue transfer affects the San Bernardino County Fire Protection District (SBCFPD).
A determination of the property tax revenue exchange associated with the reorganization must occur prior to issuance of the Certificate of Filing by the Local Agency Formation Commission (LAFCO). The property tax transfer associated with this action shall only be effective upon satisfactory completion of the annexation proceedings.
The recommended redistribution of property tax revenue resulting from the pending LAFCO 3279 reorganization for fire suppression and emergency medical services is as follows:
|
Affected Agency |
Transfer To¹ |
Transfer From¹ |
|
City of Adelanto |
|
$225,095 |
|
San Bernardino County Fire Protection District - Administration |
$13,506 |
|
|
San Bernardino County Fire Protection District - North Desert Service Zone |
$211,589 |
|
|
San Bernardino County Fire Protection District - Service Zone FP-5² |
$0 |
|
¹ The transfer amounts above will be adjusted to account for growth in assessed valuation, with the intention to transfer 100% of the City of Adelanto’s (City) ad valorem property taxes to the SBCFPD to be allocated with 6% to Administration and 94% to the North Desert Service Zone.
² Service Zone FP-5 will not receive a percentage of the ad valorem property taxes as this zone is funded with a special tax.
BACKGROUND INFORMATION
LAFCO 3279 is a proposal initiated by the City and SBCFPD. The proposal would annex the City’s territory into the SBCFPD, its North Desert Service Zone, and its Service Zone FP-5 (Zone FP-5). The change of organization will entail the transfer of the City’s fire protection obligation and responsibilities to the SBCFPD and its related service zones.
Any change in the boundaries of Zone FP-5, the corresponding FP-5 special tax, or the North Desert Service Zone, to include the City, would require separate action(s) by the SBCFPD’s Board of Directors following the procedures identified in the Fire Protection District Law of 1987 found in Health and Safety Code section 13950 et seq.
On January 20, 2026, LAFCO issued a Notice of Filing (NOF) notifying the affected agencies of the reorganization proposal. The NOF requires the San Bernardino County Auditor-Controller/Treasurer/Tax Collector to estimate the property tax revenue and proportions by agency, which is used to establish the property tax revenue amounts to be transferred. A determination of the property tax revenue exchange associated with the jurisdictional change must occur prior to the issuance of the Certificate of Filing by LAFCO.
In accordance with Section 99 of the California Revenue and Taxation Code, the Board of Supervisors must, on behalf of any impacted special district, negotiate any exchange of property tax revenues and adopt a resolution related to the property tax exchange. The SBCFPD estimates that in addition to the property tax revenue transfer from the City of $0.2 million, there will be $2.6 million in new special tax revenue from the annexation into Zone FP-5. As a condition precedent to LAFCO 3279 taking effect, the boundaries of Zone FP-5 and the North Desert Service Zone must be amended to include the approximate 33,842 acres in the annexation area.
The SBCFPD anticipates that the cost of providing services to the annexation area in 2026-27 will be approximately $8.2 million. However, the total of the anticipated revenues, mentioned above total only $2.8 million, leaving a funding gap of $5.4 million. The transfer of additional revenue sources will be included as a condition of approval in the LAFCO review process and will require future agreement(s) to be approved by the City and the SBCFPD prior to the issuance of the Certificate of Completion signaling the transition of jurisdiction.
It is proposed that the funding gap be addressed by transferring 100% of the City’s Vehicle License Fee (VLF)/Property Tax Swap revenue. However, there is risk associated with the VLF/Property Tax Swap revenue, as it is subject to potential future State legislative actions or formula changes. This swap was implemented by the State in fiscal year 2004-05. The source of this revenue is property taxes allocated to education (schools and community colleges), but is based on the amount of VLF backfill revenue that would have been received by the agency (in this case the City) in fiscal year 2004-05, adjusted annually by the percentage change in assessed valuations. As a result, County staff believes that this revenue bears a higher risk of adjustment or elimination by the State in future years. To mitigate this risk, the SBCFPD will require that the agreement with the City to transfer this revenue will extend to any successor or replacement revenues that may be identified by the State. In the event that no such replacement revenue is provided, the agreement should require the City to identify an alternative revenue source sufficient to maintain the intended funding commitment. This risk is also partially mitigated by future increases in revenue associated with normal property taxes. Additionally, as former Redevelopment Agency obligations are satisfied, additional property tax revenue may become available to the SBCFPD, subject to applicable allocation formulas, jurisdictional changes, and statutory requirements.
Recommendation No. 1 will approve the general ad valorem property tax revenue amounts to be
transferred to the SBCFPD upon satisfactory completion of the annexation proceedings as required by Revenue and Taxation Code section 99.
The Application and Preliminary Environmental Description Form includes a non-standard indemnification provision. LAFCO has indicated that the Application is a joint application by the City and SBCFPD. By signing the Application, the applicants may be required to defend, indemnify, hold harmless, promptly reimburse, and release LAFCO, its agents, officers, attorneys, and employees from claims, actions, or proceedings challenging the approval of the Application or the related environmental document. The indemnification obligation may also include reasonable expenses, attorney fees, damages, penalties, fines, and other costs incurred by LAFCO if it is named in litigation or an administrative proceeding related to the Application.
On June 28, 2022 (Item No. 107), through Resolution No. 2022-147, the Board of Directors previously acknowledged and agreed to LAFCO’s requirement that legal indemnification be imposed as outlined in LAFCO’s Policy. Recommendation No. 2 reaffirms the Board of Director’s prior approval and clarifies that the delegated authority includes authorization for the SBCFPD Fire Chief/Fire Warden, or the Deputy Chief, to sign, certify, and submit the Application and Preliminary Environmental Description Form, including the non-standard indemnification provision, and any other required documentation needed to proceed with LAFCO 3279.
PROCUREMENT
Not applicable.
REVIEW BY OTHERS
This item has been reviewed by County Counsel (Julie Surber, Principal Assistant County Counsel, and Aaron Gest, Deputy County Counsel, 387-5455) on May 15, 2025; Risk Management (Stephanie Pacheco, Staff Analyst II, 386-9039) on May 13, 2026; and County Finance and Administration (Valerie Clay, Deputy Executive Officer, and Eduardo Mora, Administrative Analyst, 387-4376) on May 15, 2025; and LAFCO (Samuel Martinez, Executive Officer, 388-0480) on May 13, 2025.