REIMBURSEMENT TO BURLINGTON NORTHERN SANTA FE RAILROAD (BNSF) FOR PROPERTY TAXES ON LEASED AREA OF GREENBELT

 

RECOMMENDATION

It is recommended that the City Council

1. Approve reimbursement to BNSF for property taxes paid on the leased area of the Greenbelt in 1995 and 1996;
2. Appropriate funds for the reimbursement from the UUT Railroad Right of Way Fund.

BACKGROUND

In June of 1998, a copy of the grant deed for Parcel B of the Greenbelt (purchased in 1996) was faxed to BNSF (formerly Atchison, Topeka & Santa Fe Railroad) as documentation that the City had purchased the property and therefore did not owe the property tax reimbursement. All tax amounts that had been billed were paid in August 1995, prior to the purchase of the land. No further correspondence was received from BNSF until April 2001.

ANALYSIS

It appears from the review of all of the documents relating to the property taxes that the City is liable for the reimbursement of property taxes to the BNSF. Parcel A of the Greenbelt (the southern 80%) was purchased in 1989. Parcel B (the northern 20%) was not purchased until 1996 because the title was not yet clear.

Railroad property is assessed property taxes by the State Board of Equalization rather than the County of Los Angeles, as with other property. Historically, the railroad paid the taxes and then billed the City at a much later date. (1983 - 1987 paid in 1987, 1990 – 1994 paid in 1995). Normally, taxes would be paid through escrow, however since these taxes had been paid by the railroad and not yet billed to us, the issue apparently did not come up during the purchase.

Staff recommends the amount of $13,752.46 be reimbursed to BNSF. The Tax Manager has agreed to waive all finance charges. Funds are available in the UUT Railroad Right of Way Fund (126).

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