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HomeMy WebLinkAbout6.04.2025 Agenda Materials Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.oshkoshwi.gov LONG RANGE FINANCE COMMITTEE AGENDA June 4, 2025 5:00 P.M. To Whom It May Concern: PLEASE NOTE the City of Oshkosh Long Range Finance Committee will meet on Wednesday, June 4th, at 5:00 p.m., in Room 404 at the Oshkosh City Hall, 215 Church Avenue. ROLL CALL I. Citizen Input - (Up to the first 15 minutes of meeting – can be regarding any City Finance topic) II. Approval of April 2, 2025 Minutes III. Introductions (New Members) IV. Elect Chair and Vice-Chair V. Update from GOEDC VI. Real Estate Revaluation Policy VII. Next Meeting Date & Agenda Items – August 6, 2025 A. Revisions to the Fund Balance Policy B. Payment Arrangement Policy VIII. Adjournment If you have any questions, please call the Finance Office at (920) 236-5005 between 8:00 a.m. – 4:30 p.m. Monday – Friday. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.oshkoshwi.gov LONG RANGE FINANCE COMMITTEE MINUTES April 2, 2025 5:15 P.M. To Whom It May Concern: PLEASE NOTE the City of Oshkosh Long Range Finance Committee will meet on Wednesday, April 2nd, at 5:15 p.m., in Room 404 at the Oshkosh City Hall, 215 Church Avenue. The meeting was called to order by Adam Bellcorelli at 5:15 p.m. Members Present: Adam BellCorelli, Karl Buelow, John Zarbano, Koby Schellenger Members Absent: Todd Hutchison and Brian Wendt(Alternate) Staff Present: Julie Calmes-Director of Finance, Rebecca Grill-City Manager, James Rabe- Director of Public Works, Denise Edwards-Management Analyst ROLL CALL I. Citizen Input - (Up to the first 15 minutes of meeting – can be regarding any City Finance topic) • N/A II. Approval of February 5, 2025 Minutes • MOTION TO APPROVE: Koby Schellenger; 2nd John Zarbano • CARRIED: Approved unanimously, no added comments III. Introduction of the New City Manager, Rebecca Grill • Roundtable introductions of members to Rebecca. IV. Motion to change Long-Range Finance Committee meeting time from 5:15 p.m. to 5:00 p.m. • MOTION TO APPROVE: Koby Schellenger; 2nd John Zarbano • CARRIED: Approved unanimously, no added comments V. Special Assessment Update • Finance and Public Works are still working on a deferral policy. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.oshkoshwi.gov • Right now, Finance and Public Works are working on allowing connection charges to have the same payment options as special assessments, up to 15 years to pay. The second reading for this Ordinance change will be at the April 8, 2025 Council meeting. VI. Committee Discussion • Discuss creation of a Real Estate Revaluation Policy i. During the March 25, 2025 Council meeting, it was recommended to request LRFC to look into creating a real estate revaluation policy. ii. Reviewed documents from Finance and Community Development about the different types of revaluations and the corresponding costs. iii. Discsussed the need for more frequest revaluations in times where market values are changing at a fast pace, but also balancing that with not overburdening the taxpayers with costly revaluations. iv. Suggested that we wait until the assessed value is five to seven percent away from full value and have City staff place the revaluation in the next year’s budget. VII. Next Meeting Date & Agenda Items – June 4, 2025 • Update from GoEDC • Real Estate Revaluation Policy- Create a draft from suggestions. • Revisions to Fund Balance Policy VIII. Adjournment • MOTION TO ADJOURN: Adam Bellcorelli; 2nd Koby Schellenger • CARRIED: Approved unanimously • Meeting adjourned at 6:10 p.m. If you have any questions, please call the Finance Office at (920) 236-5005 between 8:00 am – 4:30 pm Monday – Friday. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.oshkoshwi.gov DATE: June 4, 2025 TO: Long Range Finance Committee Members FROM: Julie M. Calmes, Director of Finance RE: Revaluation Policy As discussed at our April meeting, the City Council has requested that the Long Range Finance Committee (LRFC) deliberate on creating a revaluation policy and provide a recommended policy before the 2026 budget workshops. City staff provided documents for LRFC’s review at the April meeting. Based on the feedback and inquiries received, staff have developed the attached draft policy for your consideration. Key Discussion Topics: - Compliance with State Statutes: Upon further examination of Chapter 70, it is clear that there is no statutory requirement for a municipality to conduct a full revaluation every ten years. The 2024 Non-Compliance notification from the Wisconsin Department of Revenue (DOR) states “state law (sec. 70.05(5)(b), Wis Stats.), requires a taxation district to assess property at full value at least once in every 5-year period. To meet this requirement, the total assessed value of each major class must be between 90% and 110% of full value.” - Frequency of Revaluations: Revaluations ensure accurate and equitable property assessments, reflecting changes in market conditions and property values. More frequent revaluations tend to result in smaller percentage adjustments, making it easier for taxpayers to adjust. - Cost-Benefit Analysis: We reviewed the four assessment types outlined by the DOR: Full Revaluations, Exterior Revaluation, Interim Market Update, and Annual Review/Maintenance. For your reference, staff has included the DOR chart again. The City Assessor’s staff conducts annual reviews/maintenance for residential properties during non-revaluation years, including updates due to annexations, exemption status changes, new construction, and classification changes. The City contracts with a third party for these same services for the commercial properties. These activities incur no additional budgetary impact during those years. It was noted that as assessment types progress from right to left on the Assessment Type chart, both cost and time commitments increase. Currently, the City manages residential assessments internally while contracting commercial assessments to a third party. Finance Department City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.oshkoshwi.gov 2025 Revaluation Costs: The proposals from Associated Appraisal Consultants, Inc. (AAC) for 2025 costs of each revaluation type are shown below. These are in addition to the normal annual maintenance contract. AAC indicated that the 2025 costs are elevated due to it being their initial year working with the City, necessitating extra onsite inspections. Additional costs for residential revaluations via the City’s Assessor department are estimated at $85,000 for 2025. The attached document details the weeks required for each assessment type and associated staff workload. Staff Recommendation: Based on the April discussions and further research, staff recommends that the Assessor’s department conduct an annual review of assessed values. If any major class’s assessed value deviates more than 5% from its full market value, a revaluation should be planned included in the budgeted for the following fiscal year. This recommendation authorizes the City Assessor to decide the extent of the revaluation needed. City of Oshkosh Revaluation Policy Purpose: Establish criteria and processes for conducting property revaluations in compliance with Wisconsin State Law. WI Statutes 70.05(5)(b) requires a taxation district to assess property at full value at least once in every five-year period. To meet this requirement, the total assessed value of each major class must be between 90% and 110% of full value. If the assessed value of each major class of property is not within 10% of full value at least once during a four-year period, the City will be deemed out of compliance with state law. Definitions: - Assessed Value: Dollar value assigned to a property by a public tax assessor for tax purposes. - Major Class of Property: A property class that includes more than 10% of the full value of the taxation district. - Revaluation: Process involving comprehensive property inspections and reviews to align assessed values with current market conditions. - Fair Market Value (FMV): Estimated sale price of a property under standard market conditions. Process: The Assessors department will conduct an annual review of the assessed values for each major class of property within the City. This entails calculating the percentage of full value for each major class to ensure it aligns with the statutory requirements. If any major class’s assessed value is found to be more than 5% out of alignment with its full market value, the Assessor is responsible for initiating a budget request for a revaluation during the budget process. The budget request may be for an interim market update, an exterior revaluation, or a full revaluation. Once the needed revaluation funding is approved through the budget process, the Assessors Department will commence public communication efforts. This will involve informing the community about the upcoming revaluation activities, timelines, and how it may affect them. Transparent communication is vital to maintain trust and ensure property owners are equipped with all necessary information. In addition, property owners retain the right to annually appeal their property assessments through Open Book and Board of Review. This ensures that any discrepancies or concerns regarding property values are addressed systematically and fairly, enabling adjustments where necessary to reflect true market conditions. VILLAGE OF SUSSEX ASSOCIATED APPRAISAL CONSULTANTS, INC. 13 CITY OF OSHKOSH ASSOCIATED APPRAISAL CONSULTANTS, INC. 13 WORK PROPOSAL OPTIONAL REVALUATION SERVICES Our revaluation assessment services will meet or exceed all requirements described in the Wisconsin Property Assessment Manual. Optional add-on assessment services for a revaluation would be in addition to the price of annual maintenance (see page 12). The figures below are for conducting a revaluation of only commercial classified parcels during the 2025 or 2026 assessment year. Cost of Services Full Inspection Revaluation $285,000 Exterior Only Revaluation $245,000 Interim Market Update Revaluation $160,000 Full & Exterior Onsite Revaluations AAC would physically inspect 100% of the taxable improved commercial properties in one year and update assessment records. All taxable parcels would be updated to reflect recent market value sales utilizing mass appraisal methods. A full inspection revaluation would include both interior walkthroughs and exterior inspections to update pictures and sketches. The exterior only revaluation option would only include onsite exterior inspections. All taxable commercial class parcels would be updated to reflect recent market value sales utilizing mass appraisal methods. Only those parcels with “Maintenance” related reasons to visit would be inspected onsite. This option works best when the property record card information is deemed reliable and a full inspection or exterior only revaluation has been completed within the last five years and the overall assessment level shows an unacceptable degree of variance in some neighborhoods, property types or classes. Without knowing the full extent of your existing property assessment records there would be additional charges should onsite inspections be needed to correct or collect missing property information. Annual Maintenance Assessment Services Not Included (see page 12) Assessment CAMA Software Not Included Web Hosting of Assessment Data Optional Educational Outreach Program Included Postage & Mailing Services Not Included Open Book & Board of Review Included Interim Market Update Revaluation Staff came up with some rough numbers on the staff time associated with different assessment types. We think it’s important to note that due to current staffing, it would not be possible to complete a “Full Revaluation” as defined by the DOR. A full revaluation is typically done when a community’s property data is very inaccurate. Thankfully, our property data is still reasonably accurate. To further emphasize this point, in 2024 while the City referred to that year’s assessment type as a revaluation, we believe what was really completed was a hybrid between an “Exterior Revaluation” and “Interim Market Update” as defined by the DOR. A normal non-revaluation year, or “Annual Review/Maintenance” as defined by the DOR, involves about 52 weeks of work. With the baseline of 52 weeks set, we believe that the revaluation in 2024 resulted in an additional 28 weeks of staff time. It’s worth noting that revaluations lead to a degradation of property data, as completing neighborhood reviews is delayed during years with a revaluation. Due to reduced response rates to sales and permit letters, our data is becoming less accurate and neighborhood reviews are an important way to improve the quality of property data. Having to delay or forego neighborhood reviews because of an increase in the frequency of revaluations will have a cumulative effect in degrading property data overtime. Another factor that cannot be overlooked is the additional hours worked by staff during a non- maintenance year, which we define as hours worked over the standard 37.5 hour per week. There are both financial and mental/emotional costs to these additional hours that we think should be considered. In fact, the City of Appleton, switched from a four-year revaluation cycle, to a five-year revaluation cycle, due in part to staff burnout and attrition. If it’s decided that a higher frequency of revaluations is necessary, it would be challenging for the office to accomplish revaluations at a greater frequency than once every five years with current staffing levels. With all that said, here’s our breakdown for staff time of different types of assessments: Annual Review/Maintenance (Normal Year) Weeks of Staff Time Description of work 52 weeks Normal responsibilities Total: 52 weeks Interim Market Update Total: 52-80 weeks Hybrid Between Exterior Revaluation and Interim Market Update (2024) Weeks of Staff Time Description of work 52 weeks Normal responsibilities 1 week Final review of sales 2 weeks Software table updates for land and cost 2 weeks Market modeling 7 weeks Property reviews and adjustments 1 week Notices of Assessment template and mailing 6 weeks Revaluation materials (website, pamphlets, info sheets, etc.) 3 weeks Open Book 2 weeks Time between Open Book and Board of Review 4 weeks Board of Review Total: 80 weeks Exterior Revaluation & Full Revaluation Unable to be completed with current staffing We also wanted to list the total number of parcels within the city as of 2024. As defined by the DOR, a “Full Revaluation” and “Exterior Revaluation” involves, at minimum, inspecting the exterior of all parcels. With three residential appraisers and two additional staff (one being part- time), it would not be possible to visit 19,024 residential parcels in a single year, even just doing exterior inspections, with other work that must be completed. Total Number of Parcels 2024 Type: Number of Parcels: Residential 19,024 Commercial 2,017 Agricultural 58 Manufacturing 129 Exempt 756 Total: 21,956 Overall, with current staff, it would be extremely challenging to increase the frequency of revaluations without a reduction in the quality of property data. Some type of assessment types, such as a “Exterior Revaluation” or “Full Revaluation” as defined by the DOR, would not be possible to be completed with current staff, and are likely unnecessary due to the City having reasonably accurate property data. Moving to more frequent revaluations will have a cumulative effect of degrading the existing reasonable accurate property data. We came up with this response collectively, so if any of the points we made require further clarification, please let us know and thank you for your time is reading this admittedly long email.