In a 3-2 vote, the San Benito County Board of Supervisors on Nov. 23 approved a 15-year commercial and industrial tax-sharing agreement with Hollister.
According to the agreement, any commercial or industrial project or property that is annexed into Hollister will provide 70% of the tax revenue to the city and 30% to the county. Hollister is required to distribute the county’s portion on an annual basis. The city receives the revenue from the State Board of Equalization.
Hollister City Council approved the agreement on Nov. 15. Aware of the supervisors’ hesitancy over the 20-year term, the council approved a minimum 10-year term.
Management analyst Dulce Alonso said the agreement includes sales tax, transient occupancy tax and property taxes.
“This has been a long time coming,” Supervisor Bob Tiffany said. “There has not been a master tax agreement for commercial-industrial development with the city for a number of years and we really need to move forward.”
Tiffany and Supervisor Kollin Kosmicki were part of the ad hoc committee that negotiated the agreement.
“The decision comes down to this versus, frankly, nothing,” Tiffany said. “The critical issue that I see is that we need to get more revenue and this gives us an opportunity to move forward in that area.”
Kosmicki said the agreement was a great deal for the community because it opens the door for economic development.
“It means we have an efficient mechanism to promote and streamline economic growth while taking advantage of the city’s infrastructure and services to support it,” Kosmicki said.
He added that as much as the county would like to have a 50-50 agreement, the city is taking the responsibility for services and infrastructure, which he said are costly.
The agreement was delayed by the Board of Supervisors on Nov. 9 to give newly appointed supervisor Betsy Dirks time to review the agreement. She was the deciding vote on Nov. 23 after she requested that the contract term be reduced from 20 years.
Dirks said she met people to discuss the agreement and said that to her, it came down to collaborating with the city and supporting economic development.
Resident Elia Salinas said she was not in support of the agreement because there was no estimate of the fiscal impact to the county.
“I think you’re being hoodwinked,” Salinas said, who accused the board at the Nov. 9 meeting of only considering the agreement because of the Hollister Research Campus. Tiffany and Kosmicki denied the agreement was pushed by a single project.
Supervisor Peter Hernandez, who along with Supervisor Bea Gonzales voted no, said he could not support the agreement because of the unknown financial impacts, which he said will depend on where projects are located.
“Bottom line is there is too much uneasiness in me about this contract,” Hernandez said. “Technically speaking we lose our negotiating ability with accepting this agreement because we at least now we can look at the individual impacts [of each project] and we can say ‘Yes, 70-30 makes sense,’ even saying that we’ll take 20 because there is little to none [impacts].”
Gonzales agreed with Hernandez that the uncertainties of a 20-year agreement did not allow her to support it.
“If we can do a seven or 10 I can [support it],” Gonzales said. “If this agreement proves itself to be beneficial then we can extend it for another 10, but if it’s not let us get out of it.”
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