HomeMy WebLinkAboutSpecial_Assessment_Replacement_FAQ
1
SPECIAL ASSESSMENT REPLACEMENT:
FREQUENTLY ASKED QUESTIONS
1. What are special assessments and what items are paid for by them?
A special assessment is a fee collected by the City for improvements or special services that
benefit a property. Special assessments are the funding mechanism for street reconstruction,
initial construction of sanitary sewers, water mains, sidewalk, driveway aprons, and utility
laterals (the pipes that service a home or building from the main pipes that are typically in the
street).
2. How were special assessments funded previously, and what recently changed?
Previously, special assessments were charged to property owners according to the front foot
dimensions of the abutting property to the improvement. On February 27, 2024, the Oshkosh
Common Council voted to eliminate special assessments for road and sidewalk reconstruction.
A combination of methods is being used to replace special assessments as the funding source
for these improvements, replacing the approximate $3.75 million charged annually through
special assessments. A Vehicle Registration Fee (VRF), commonly referred to as a “wheel tax”,
will be collected in addition to the regular annual registration fee paid for a vehicle. The fee
applies to vehicles kept in Oshkosh with automobile registration, autocycle registration, and
truck registration at 8,000 lbs. or less (except dual purpose farm). The city will collect
approximately $1.5 million annually through the VRF. Additionally, each of the city utilities
(water, sanitary sewer, and storm sewer) will be charged approximately $750,000 annually, for
pavement-related improvements to provide the balance of funding needed for improvements.
3. How was this newly approved method arrived at?
The August 29, 2023 Common Council Budget Workshop meeting included a discussion of
what could be done to either partially or fully replace pavement related (street and sidewalk)
special assessments. Utility related special assessments were not considered for replacement in
this, or prior discussions regarding the replacement of special assessments. Following that
budget workshop, staff investigated additional potential options, consisting of various mixtures
of a handful of potential funding sources. The potential funding sources reviewed as part of this
analysis included: Transportation Utility, Vehicle Registration Fee (VRF), Utilities assuming the
cost of pavement restoration over utility trenches, and additional General Obligation Debt. The
plan that was approved is a combination of some of the proposed options, with the intent of
finding a balanced approach to the new funding method.
2
4. Why don’t we just keep funding road reconstruction through special
assessments?
Over the past 10 years, the cost of capital improvements, and consequently special assessments,
have been rising faster than the rate of inflation. This has resulted in single family residential
properties seeing special assessments that have amounted to as much as $20,000 or more. While
these charges are infrequent, the impact on individual households has been significant. The
Common Council has looked at a variety of methods to replace these special assessments, and a
combination of funding methods appears to be the fairest approach to re-allocate these costs.
5. What are the benefits of the newly-approved plan?
The newly-approved method of funding is a balanced approach to collect the funds needed to
replace pavement related special assessments. The major benefit of this proposal is that the
burden of paying for improvements is no longer borne primarily by the abutting property
owners, as it previously was. The policy change benefits all residents by creating a sustainable
funding source to ensure high-quality streets for residents, businesses, emergency services, and
others.
6. Does this plan also fund the sidewalk rehabilitation program?
Yes, the sidewalk replacement/rehabilitation program is funded by this program. Property
owners will no longer receive a special assessment/charge for sidewalk replacement.
7. Does this plan eliminate all, or only a certain percentage, of the special
assessments levied upon property owners?
The newly-approved plan eliminates all pavement-related special assessments specifically for
road and sidewalk reconstruction (including the sidewalk rehabilitation program). New
developments and new utility construction will continue to be special assessed. Water, sanitary
sewer, and storm sewer laterals to a property will also still receive a special assessment.
3
8. As these new fees are collected, can they be used for anything other than road
reconstruction & related costs?
No. They are used exclusively for the purpose of eliminating pavement-related special
assessments. Road repairs and maintenance work on existing roads that are not being
completely replaced will continue to be funded through the city’s operating budget.
9. What will the Vehicle Registration Fee be for Oshkosh residents, and how
does it compare to other cities?
The approved Vehicle Registration Fee (VRF) for Oshkosh residents is $35 annually, in addition
to the regular annual registration fee paid to the State of Wisconsin for a vehicle. The fee applies
to vehicles kept in Oshkosh with automobile registration, autocycle registration, and truck
registration at 8,000 lbs. or less (except dual purpose farm) according to Wisconsin Department
of Transportation rules. Motorcycles are exempt. The VRF is effective as of July 1, 2024. The fee
compares with other Wisconsin cities:
▪ Appleton ($20)
▪ Eau Claire ($24)
▪ Green Bay ($20)
▪ Janesville ($40)
▪ Kaukauna ($10)
▪ Manitowoc ($20)
▪ Sheboygan ($20)
10. When will the Vehicle Registration Fee (VRF) begin to be collected?
The effective date of July 1, 2024, means that any City of Oshkosh registration starting on or
after July 1, 2024 will be charged the VRF (wheel tax). Because of Act 154, all auto and light
truck registrations have been set to expire at the end of the month. Every auto or light truck
with a JUN sticker will expire on June 30, 2024. This means the first day of the next year’s
registration will be July 1, 2024, and therefore will be subject to the VRF (wheel tax). All City of
Oshkosh registrations with a JUN sticker will be charged the wheel tax.
4
11. What license plates are exempt from a Vehicle Registration Fee (VRF)?
The Wisconsin Department of Transportation rules state that these special plates are exempt
from the VRF: Antique, Collector (“Collector Special” plates are not exempt), Ex-Prisoner of
War (if issued without registration fee), Historic Military, Hobbyist, and Medal of Honor. All
special plates issued to a farm truck, dual purpose farm truck or motor home are exempt from
the VRF. Motorcycles are also exempt from the VRF.
12. Large vehicles cause the most road damage. Why aren’t those vehicles paying
their fair share of the Vehicle Registration Fee (VRF)?
The Vehicle Registration Fee, by Wisconsin Statutes, specifically exempts vehicles over 8,000
pounds. The city agrees that this exemption creates some equity issues, particularly for
residents and small businesses. To offset that inequity, the city is charging its three utilities
(water, sanitary sewer, and storm sewer) a portion of road reconstruction costs. Businesses that
typically have the largest trucks also pay for these utilities in greater proportion than residential
properties. The idea is that allocating a portion of the former special assessment charges to the
utilities will offset some of the inequities of the VRF.
13. The proposed plan also includes revenue from utility fees. What is the cost
impact for rate payers?
Water, sanitary sewer, and storm sewer utilities will each be charged the amount necessary to
restore roads after these utilities have been replaced. The annual increase needed for special
assessment relief would be an annual increase in utility rates of between 0.25% and 0.5%. The
impact on a $100 monthly utility bill will average between $0.25 - $0.50 per month.
14. If the funding plan amount is not enough to fund the yearly cost of projects,
would there be less work done or money raised in another way?
The $750,000 charge to each utility is an estimated cost of an 8-foot utility trench for projects.
Each of the utilities will be charged that annually, which will go into a separate Capital Projects
Fund. While the cost of an individual utility trench may vary year to year, city staff will use this
average amount and leave it in the Capital Projects Fund to cover any costs that may be over or
under the actual cost. City staff will review the VRF amount and the utility contributions on a
regular basis to determine if projects are being funded on a sufficient basis.
5
15. If the Vehicle Registration Fee won’t be collected until mid-2024, how will the
lost revenue from the first half of the year be accounted for?
The city will borrow an additional amount to make up the difference in the first year of
implementation.
16. Why don’t we use my property taxes to pay for these improvements?
Property owners already pay for a portion of road reconstruction projects through property
taxes. The amount collected through special assessments has been done to also collect from the
many non-taxable properties in the city of Oshkosh, such as state-owned properties,
educational institutions, and churches. The city has looked for ways to replace special
assessments with a revenue source that continues to charge a portion of road reconstruction
costs to these same properties. The combined Vehicle Registration Fee (VRF) and the use of
utility funds helps achieve that objective.
17. Does the City benefit from the gas tax that already exists, and why isn’t this
used for road reconstruction?
The city receives a portion of gas tax revenue through the state for road maintenance purposes,
such as snow plowing and minor repairs. This amount covers a portion of the city’s operating
costs for its Streets Division.
18. Is it possible to create a city sales tax to fund special assessments?
By law, municipalities are not allowed to create sales taxes. Counties are able to create sales
taxes, but are not obligated to distribute those funds to other governmental entities.
19. What improvements will continue to be special assessed?
New developments and new utility construction will continue to be special assessed. Water,
sanitary sewer, and storm sewer laterals to a property will also still receive a special assessment.
6
20. Why are water, sanitary sewer, and storm sewer laterals special assessed?
Utility laterals are deemed by the State Public Service Commission as items that directly benefit
individual properties. As such, laterals must be paid by the benefitting properties. Special
assessments are the most efficient way to recoup these costs from individual properties and will
continue to be charged for utility laterals. Utility mains benefit the general utility user and are
funded through monthly utility charges.
21. For those who paid a special assessment in recent years, is there a way for
them to be compensated after this plan is implemented?
The city will be unable to refund previously paid special assessments that were approved,
charged, or collected under the previous method. The city also does not have funding available
to defer new fees for those who were recently special assessed. This new approach seeks to
establish a sustainable funding source that will move Oshkosh forward from the present time.
22. For those who paid a special assessment in recent years, is there a way for
them to be exempted from the vehicle registration fee for any period of time?
The vehicle registration fee is administered by the State of Wisconsin and the city does not have
any way of exempting individual vehicles or groups of vehicles from the fee. If a municipality
decides to enact a vehicle registration fee, the state will apply that fee to all statutorily allowed
vehicles.
Revised 5/2/2024