HomeMy WebLinkAbout27. 20-191 APRIL 28,2020 20-191 RESOLUTION
(CARRIED 7-0 LOST LAID OVER WITHDRAWN )
PURPOSE: REQUEST WINNEBAGO COUNTY TAKE ACTION TO WAIVE
INTEREST AND PENALTY FEES FOR LATE PROPERTY TAX
INSTALLMENTS
INITIATED BY: CITY ADMINISTRATION
WHEREAS, a novel strain of the coronavirus, named COVID-19 has spread
throughout numerous countries including the United States; and
WHEREAS, the United States Department of Health and Human Services has
declared a Public Health Emergency; and
WHEREAS, the State of Wisconsin has declared a Public Health Emergency; and
WHEREAS, the Common Council for the City of Oshkosh ratified the Declaration
of Emergency for the City of Oshkosh on March 18, 2020; and
WHEREAS, the Federal, State and Local Declarations of Emergency have resulted
in significant disruption of public access to government facilities and of citizens'
everyday routines; and
WHEREAS, the City of Oshkosh recognizes the economic burdens placed upon
property tax payers as a result of this emergency and desires to provide temporary relief
for the remaining tax installment payments due for property taxes payable in 2020; and
WHEREAS,the Wisconsin Legislature has passed Act 185 for COVID Relief which
in part provides that a taxation district may provide that a property tax installment
payment due and payable after April 1, 2020 shall not accrue interest or penalties if paid
on or before October 1, 2020 if both the County and taxation district adopt resolutions
authorizing the waiver of interest and penalties.
NOW, THEREFORE BE IT RESOLVED by the Common Council for the City of
Oshkosh that consistent with the provisions of Act 185 the City of Oshkosh hereby requests
Winnebago County to pass a resolution making a determination of hardship on a general
basis for the City of Oshkosh due to the current COVID-19 pandemic and authorizing a
APRIL 28,2020 20-191 RESOLUTION
CONT'D
waiver of interest and penalties for late payments of installments of property tax
installments due and payable on May 31 and July 31, 2020 provided that the total amount
due and payable is paid on or before October 1, 2020. Interest and penalties shall accrue
from October 1, 2020 for any amounts payable in 2020 that are delinquent after October 1,
2020.
Oshkosh
TO. Honorable Mayor and Members of the Common Council
FROM. Russ Van Compel, Director of Finance
DATE: April 22, 2020
RE. Request Winnebago County Take Action to Waive Interest and Penalty Fees for
Late Property Tax Installments
BACKGROUND
On April 15, 2020 the Governor of the State of Wisconsin signed Act 185, a bipartisan
legislative package responding to the COVID-19 pandemic. Part of the Act which impacts
municipalities allows local taxation districts to waive interest and penalties for late payment of
property tax payments. The ability to waive interest and penalties is only available for
installments which are due and payable after April 1, 2020.
The City of Oshkosh has elected to be on a four installment plan for real estate taxes;January
31, March 31, May 31, and July 31. Most cities in the state and Winnebago County follow the
minimum two payment plan; January 31 and July 31. Prior to July 31, the local units are
responsible for tax collections. After July 31, the county is responsible for tax collections. After
July 31 the County settles with local governments and make the local units whole by carrying
any uncollected amounts. In a typical year this "settlement" date is August 20t1
Under the provisions of Act 185, which allows cities to elect to waive interest and penalties,
installments that are due and payable after April 1, 2020 shall not accrue interest or penalties if
the total amount is paid on or before October 1, 2020. The Act also provides that the August
settlement occur as planned for payments through July 31 and settle the remaining unpaid
taxes on September 20, 2020. The decision to waive interest and penalties can be applied
"generally" across the entire community or it can be applied for individual taxpayers based on
a "case-by-case finding of hardship" If a city chooses to waive interest and penalties, it cannot
do so unless the County Board first adopts a resolution that allows for such a waiver
ANALYSIS
Important questions to consider
1. Does the City want to waive interest and penalties on delinquent property tax
installment payments that are due after April 1?
Finance Department
City Hall,215 Church Avenue P.O. Box 1130 Oshkosh,WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us
2. If yes, do we want to apply generally or on a case-by-case finding of hardship. If on a
case-by-case basis, what standards will the City use to determine hardship? What
strategies will we implement to protect against claims of bias or prejudice? The League
of Wisconsin Municipalities strongly encourages using a general waiver citing
overwhelming economic hardship the community is experiencing as a result of the
COVID-19 pandemic and the "Safer at Home" order
3. Is the City Council willing to request that the County Board pass a resolution to allow
for the waiver?Are there other partners that could assist with the request to the
County Board?
4. Will the new final settlement date cause a cash flow issue for the City? I don't think so.
Last year the taxes collected through July 31 equated to 98% of the total levy Therefore
2% of the levy was transferred to the County
FISCAL IMPACT
Through March 31, 2020, 67.5% of the tax levy was collected. For the same time period in 2019,
collections through March 31 represented 71.5%. Assuming the same rate of tax collections, I
would anticipate that maybe the total collections at the end of July would be in the 90 - 94%
range. If the collection rate ended up at 90%, the amount of taxes that the county will be
holding would be$10,633,000. This would be an increase of approximately $8,500,000. These
amounts are based on the total levy The City represents about 40% of the total levy and
would therefore be short about$3,400,000 for approximately two months. Based on current
interest rates, the City would be facing about $6,000 in lost investment earnings.
RECOMMENDATION
Staff recommends that Council authorize this resolution to request that Winnebago County
pass a resolution to allow for a waiver of interest and penalties as provided for in Act 185
Respectfully Submitted, Approved:
Russ Van Compel Mark Rohloff
Director of Finance City Manager
Finance Department
City Hall,215 Church Avenue P.O Box 1130 Oshkosh,WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us