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City of Findlay Ends Estimated Tax Process

Post Date:08/08/2019 10:29 AM

The Following Communication was sent on August 7th, 2019.

Dear Honorable Members of Council:

Since 2009, the City of Findlay has utilized the practice of waiving estimated payments as set forth in accordance with the Codified Ordinance of the City of Findlay 194.07(F)(1), Ordinance No. 2015-101, and Resolution 36-2009. The purpose of this practice was to limit refunds, decrease the number of excessive overpayments, and stabilize the overall revenue of the City.

Despite the effectiveness of stabilizing city revenue, there continues to be a negative perception of this practice. It is clear that we have not effectively communicated its value or the consistent application of the process across all eligible entities. Over the previous few weeks, I have been working with the Auditor with the intention of continuing the process of waiving estimated income tax payments in a more structured fashion. However, as we have gone through this process, it has become clear that to implement a process that I believe meets the standards of our community, it would cause an extensive administrative burden. This, coupled with the fact that the City now has appropriate financial reserves to cover any unexpected refunds, has a two year budgeting process, and clear mechanisms for managing variances in revenues, I am reassured that the City will not be greatly hindered by the discontinuation of this practice.

Therefore, after great examination of the existing practice, lengthy discussion with the Income Tax Administrator, and in light of the City’s current strong financial position, I have instructed the Income Tax Administrator to disregard Resolution 36-2009 and the related subparagraph 194.07 (F)(1) of the Codified Ordinances. This recommendation was shared at this afternoons Income Tax Board and the following motions were approved.

  1. Motion to recommend to City Council that the City of Findlay no longer waive estimated payments, recommend that City Council change language of windfall provision in Ordinance 193.12(c) to read “Any time more income than anticipated is received in the General Fund in any given calendar year, Council may, on its own motion, transfer a lump sum from the General Fund to the General Capital improvement Fund.”, and recommend that City Council add language to the Ordinance to not allow the Income Tax Administrator to waive estimated tax payments prior to a formal adoption of a policy by the Income Tax Board.
  2. Motion that Taxpayers not currently in the estimated tax waiver program will not be allowed into the program and Taxpayers currently in the estimated tax waiver program will be responsible to begin making estimated payments for Tax Year 2020.

Additionally, per recommendation of the Income Tax Administrator we will be administratively requesting that Taxpayers currently waiving estimated tax payments make the appropriate extension payments by April 15th, 2020 for tax year 2019. In the coming weeks, our Tax Department will be in contact with the affected taxpayers and communicate a process to begin making estimated payments for tax year 2020. By the reports my administration submits to City Council each month, we will continue to closely monitor the City’s revenue and business tax variances closely to ensure the City does not repeat the mistakes that brought about the need for this practice in 2009.

Finally, related to this change, I am also recommending the following changes to further insulate the City of Findlay from future revenue fluctuations and provide further flexibility in managing the financial health of the City of Findlay.

  1. REFUND BUDGET: Increase the annual refund budget as part of the annual budget review.
  2. MODIFY COF 193.12: The windfall provision cannot remain in place as we transition back to estimate payments. Further, the focus on fiscal responsibility and capital funding has made this practice unnecessary. (Addressed by ITB at meeting)

    RECOMMEND: 193.12(c) Read as “Any time more income than anticipated is received in the General Fund in any given calendar year, Council may, on its own motion, transfer a lump sum from the General Fund to the General Capital Improvement Fund.”

  3. ONE TIME NOTIFICATION: Notify all Taxpayers currently carrying a credit balance of $20 or greater, of said balance, on or about February 17, 2020.

  4. REGULAR NOTIFICATION: Notify all Taxpayers with a carry-forward credit balance of $10,000 or greater, of said balance, on or about February 17 each year.

I appreciate your patience and input as we continually evaluate City of Findlay practices to ensure they uphold our mission, vision, and values. If you have any further questions or comments on this topic please do not hesitate to contact me.

Sincerely,

Mayor Christina M. Muryn

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