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Home My WebLink About07. 15-381AUGUST 25, 2015 15-381 RESOLUTION (CARRIED__7-0_____LOST_______LAID OVER_______WITHDRAWN_______) PURPOSE: APPROVE RESOLUTION OPPOSING SENATE BILL 203 ASSESSING MIXED USE PROPERTY IN A BUSINESS IMPROVEMENT DISTRICT INITIATED BY: BUSINESS IMPROVEMENT DISTRICT WHEREAS, the Downtown Oshkosh Business Improvement District (BID) was created in 1987; and WHEREAS, the BID has since implemented a special assessment methodology, of its own design, approved by the BID Board of Directors and Oshkosh Common Council; and WHEREAS, currently, Business Improvement Districts may not assess exclusively residential or tax exempt properties; and WHEREAS, proposed 2015 Senate Bill 203 will require BID special assessments be imposed only on the percentage of mixed-use properties that is not tax exempt or residential; and WHEREAS, proposed 2015 Senate Bill 203 will be burdensome to accurately and fairly determine assessed values of tax exempt and residential portions of mixed- use properties; and WHEREAS, the Common Council of the City of Oshkosh is of the opinion that tax exempt and residential uses of mixed-use properties do benefit being located in the BID and should be fully assessed. NOW THEREFORE BE IT RESOLVED that the City of Oshkosh urges the Governor and Legislature to oppose 2015 State Senate Bill 203. BE IT FURTHER RESOLVED, that the appropriate City staff is hereby authorized to forward a copy of this Resolution to the City of Oshkosh’s locally elected legislators and to request those legislators to consider opposing Senate Bill 203. O O.IHKOIH TO: Honorable Mayor and Members of the Common Council FROM: Jeffrey Nau Associate Planner�/' DATE: August 20, 2015 RE: Support Downtown Oshkosh Business Improvement District (DOBID) Resolution Oppasing Proposed 2015 Senate Bill 203 State Senator Duey Stroebel introduced a bill (SB 203) that will force a change to the way Business Improvement Districts (BID) are able to annually budget for their operating plans (which are required to be approved by local legislative bodies) by exempting the residential and nonprofit components of mixed-use buildings from being included in the overall assessment tally. In the Oshkosh Downtown Business Improvement District (DOBID), annual budgets are generated using a combination of assessed value and street frontage to derive the special assessment for each property. Mixed- use buildings are currently included in that overall total. And while using overall assessment value is a common method used by BID's throughout the state, it is the not the only prescribed method for financing annual budgets. State statute 66.1109 f(3) provides great latitude in this regard by stating that an annual operating plan must include "a description of the methods of financing all estimated expenditures and the time when re/ated costs will be incurred." Meaning that if a particular BID within this State wanted to develop a method to exempt the residential component of mixed-use buildings it could do that at the local level without being required to as SB 203 proposes. SB 203 represents a further erosion of Municipal Home Rule. ANALYSIS Based on City Assessor's records, 39 of the 115 properties within the DOBID are identified as mixed-use commercial/residential properties. The Deputy City Assessor has explained that the city is currently unable to separate out the residential component from the commercial component of a mixed-use building's total property value. The value of the building improvements are intertwined in that they share elements of the building together (roof, foundation, entryways, mechanicals, plumbing, land, parking). Therefore, determining an accurate and fair percentage would be burdensome and need to be reevaluated on an annual basis. In March of this year the DOBID approved a revised assessment method to be implemented for 2016 which is modeled from the method used since its inception in 1987. The biggest change from the previous method is the introduction of a$400 minimum and $8,000 maximum assessment per property after formulations are complete utilizing street frontages and assessed values. Most properties will see increases in their assessment based on 2015's budget. The proposed legislation would further increase the assessment of properties utilized solely for commercial uses while giving modest reductions to the 39 mixed-use properties. The BID Board raised additional concerns at its August 18, 2015 meeting including that this proposed legislation removes the ability for BIDs to assess themselves appropriately to serve their goals and needs; if there is dissatisfaction from a BID's constituents with their assessment methodology, they already have the ability to change the method locally. In addition, it is of the opinion of the BID Board that residential and tax-exempt portions of mixed-use properties do benefit bei�g located in the BID and therefore should be fully assessed. FISCAL IMPACT SB 203 would create an additional administrative burden on the city by requiring the assessor to determine how to carve out the residential and nonprofit components of a mixed-use building and for which no current method exists. Additionally, if the residential and nonprofit component were taken off the overall assessment, that "burden" would then be shifted to all other the commercial and industrial properties within the BID making this a tax shift bill more than anything. RECOMMENDATION The Downtown Oshkosh Business Improvement District unanimously approved this resolution at its August 18, 2015 meeting. Approved, -�(�'ir—/o_'�� City Manager � oownTOwn O S H K O S H µappenin9 Now RESOLUTION OPPOSING PROPOSED 2015 SENATE BILL 203 - SPECIALLY ASSESSING A MIXED-USE PROPERTY IN A BUSINESS IMPROVEMENT DISTRICT WHEREAS, the Downtown Oshkosh Business Improvement District (BID) was areated in 1987; and WHEREAS, the BID has since implemented a special assessment methodology, of its own design, approved by the BID Board of Directors and Oshkosh Common Council; and WHEREAS, currently, Business Improvement Districts may not assess exclusively residential or tax exempt properties; and WHEREAS, proposed 2015 Senate Bi11203 will require BID special assessments be imposed only on the percentage of mixed-use properties that is not tax exempt or residential; and WHEREAS, proposed 2015 Senate Bi11203 will be burdensome to accuraYely and fairly determine assessed values of tax exempt and residential portions of mixed-use properties; and WHEREAS, the Downtown Oshkosh Business Improvement District is of the opinion that tax exempt and residential uses of mixed-use properties do benefit being located in the BID and should be fully assessed. NOW THEREFORE BE IT RESOLVED that the Downtown Oshkosh Business Improvement District opposes 2015 State Senate Bi11203; and BE IT FURTHER RESOLVED, that the Downtown Oshkosh Business Improvement District urges the State Legislature to oppose Senate Bill 203; and BE IT FINALLY RESOLVED, that the Downtown Oshkosh Business Improvement District Chair, David K. Sparr forward this resolution, upon passing to: The City of Oshkosh Mayor and Members of the Oshkosh Common Council for their consideration. �� _ � ;�� - David K. �arr � Date � Chairman, Downtown Oshkosh Business Improvement District Wisconsin Legislature: SB203: Bill Text Menu » 2015 u Related Documents » Proposal Text » SB203: Bill Text 2015 - 2016 LEGISLATURE 2015 SENATE BILL 203 Page I of 2 LRB-2422/1 MES:jld June 26, 2015 - Introduced by Senator STROEBEL, cosponsored by Representatives J. OTT, R. BROOKS, E. BROOKS, KOOYENGA, MACCO and MURPHY. Referred to Committee on Elections and Local Government. 1 AN AcT to create 66.1109 (5) (d) of the statutes; relating to: changing the 2 assessment method for business improvement districts. Analysis by the Legislative Reference Bure¢u This bill changes the special assessment method used in business improvement districts (BIDs). Under current law, based on the receipt of a petition from certain business owners in a designated area of a city, village, or town (municipality), a municipality may create a BID, which consists of contiguous parcels of land. A BID is governed by a board, whose members are appointed by the creating municipality's chief executive officer (mayor, city manager, village president, or town board chair). The board is required to adopt an initial operating plan for the BID, and may make changes to the operating plan each year, subject to the approval of the municipality's governing body. The creating municipality may impose special assessments on the property in the BID and may appropriate other money to the BID. All such funds must be placed in a segregated account. Generally, the funds in the account must be spent for the benefit of the BID to put into effect its operating plan and to pay for certain required audits. Generally, the board determines how such funds are spent. The creating municipality may terminate the BID by following certain procedures that are specified in the statutes. Under this bill, if a municipality specially assesses a mixed-use property in a BID, which is real property that is partly taxable, and partly tax-exempt or http://docs.legis.wisconsin.gov/2015/related/proposals/sb203 8/19/2015 Wisconsin Legislature: SB203: Bill Text Page 2 of 2 residential, the special assessment may be imposed only on the percentage of the property that is not tax-exempt or residential. For further information see the local fiscal estimate, which will be printed as an appendix to this bill. The people of the state of Wisconsin, represented in senate and assembly, do enact as follows: 1 SECTION L 66.1109 (5) (d) of the statutes ie created to read: Z 66.1109 (5) (d) If real property that is specially assessed as authorized under 3 this section is of mixed use such that part of the real property is exempted from 4 general property taxes under s. 7011 or is residential, or both, and part of the real 5 property is taxable, the municipality may specially assess as authorized under this F section only the percentage of the real property that is not tax-exempt or residential. 7 SECTION 2. Initial applicability. 8 (1) This act first applies to a special assessment that is imposed on the effective 9 date of this subsection. 10 (ENn) Menu » 2015 » Related Documents » Proposal Text » 5B203: Bill Text http://docs.legis.wisconsin.gov/2015/related/proposals/sb203 8/19/2015