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HomeMy WebLinkAbout031 - 04/05/2016 - REPEALING AND REENACTING SECTION 25-198 OF CITY CODE TO AUTHORIZE THE CITY'S FINANCIAL OFFICER TO COORDINANCE NO. 031, 2016 OF THE COUNCIL OF THE CITY OF FORT COLLINS REPEALING AND REENACTING SECTION 25-198 OF THE CODE OF THE CITY OF FORT COLLINS TO AUTHORIZE THE CITY'S FINANCIAL OFFICER TO COMPROMISE AND SETTLE CLAIMS THE CITY HAS AGAINST TAXPAYERS FOR THE PAYMENT OF SALES AND USE TAXES WHEREAS, in Article III of Chapter 25 of the City Code, the City imposes and provides for the collection of the City's sales and use taxes and for the collection of interest and penalties for a taxpayer's delinquent payment of those taxes ("Sales and Use Tax Code"); and.' WHEREAS, in Sections 21 and 22 of City Charter Article V, the City's Financial Officer is generally empowered to administer the City's collection of taxes and in the Sales and Use Tax Code the Financial Officer is granted specific powers to administer and collect the City's sales and use taxes; and WHEREAS, one of these specific powers is granted in Section 25-198 of the Sales and Use Tax Code and it authorizes the Financial Officer to compromise and settle claims the City may have for interest and penalties_arising from the delinquent payment of sales and use taxes, but the Sales and Use Tax Code does not currently authorize the Financial Officer to similarly compromise and settle claims the City may have for the delinquent taxes themselves; and WHEREAS, by specifically providing the Financial Officer with the authority to compromise and settle sales and use tax claims, this will allow the Financial Officer to evaluate those claims on a case-by-case basis to determine the legal and factual strengths and weaknesses of a particular City claim that is being disputed and to weigh whether the benefits gained by the compromise and settlement of that claim outweigh the cost of the collection process and the risks and costs of any resulting litigation; and WHEREAS, the reenacted Section 25-198 will require the Financial Officer to: (i) provide a written opinion for each compromised and settled claim explaining the "good cause" for that settlement and to retain that opinion in the files of Financial Services, (ii) require a written settlement agreement for all settled claims of $2,500 or more, and (iii) obtain the City Manager's approval for all claims settled in excess of$100,000; and. WHEREAS, the Council hereby finds that it is in the City's best interest to repeal and reenact Section 25-198 in order to grant the Financial Officer this additional authority to settle disputed sales and use tax claims in an amount up to $100,000 and to settle such claims in excess of$100,000 with the City Manager's approval. l NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. 1- e ti Section 2. That Section 25-198 of the Code of the City of Fort Collins is hereby repealed and reenacted to read in full as follows: Sec. 25-198. Compromise and Settlement by Financial Officer. a) The Financial Officer may for good cause compromise and settle any actually assessed or potential claim to tax, penalties and interest due to the City under this article. Such good cause may include, without limitation, legal and factual considerations, considerations of fairness and justice, and the financial inability of the taxpayer to pay a greater amount. b) The Financial Officer shall prepare and retain in the files of Financial Services for each settlement a written opinion explaining the good cause. for the settlement. The opinion shall also include a statement of. (i) the amount of the tax, penalties and interest that were assessed or that could potentially be assessed; and (ii) the amount paid by the taxpayer in accordance with the terms of the settlement agreement. In a circumstance where the amount of the tax, penalties and interest that could potentially be assessed cannot be reasonably determined, the Financial Officer shall state in the written opinion the reason why these amounts cannot be reasonably determined. c) Whenever a settlement by the Financial Officer results in a compromise of an assessed amount of$2,500 or more or for a potential claim the amount of which cannot be reasonably determined, a written settlement agreement between the City and the . taxpayer shall be required as a condition of settlement. The fully executed settlement agreement shall be retained in the,files of Financial Services together with the Financial Officer's opinion. d) Notwithstanding the foregoing; the Financial Officer may not compromise and settle a claim that waives more than $100,000 of assessed tax, penalties and interest or that waives an amount of tax, penalties and interest that could potentially be assessed but the amount of that assessment cannot be reasonably determined, unless the City Manager approves the Financial Officer's written opinion. e) In the event that the City Manager approves the opinion of the/Financial Officer and enters into a settlement agreement as set forth above, the City Manager shall notify the City Council in writing of such settlement. 2- Introduced, considered favorably on first reading, and ordered published this 15th day of March, A.D. 2016, and to be presented for final passage on the 5th day of April, A.D. 2016. of Foxroo SEAATTEST: cOLORAOO City Clerk Passed and adopted on final reading on the 5th day of April, A.D. 2016. OF pORrcO SEf L 'N Mayor ATTEST: cO ORAOO vV , City Clerk v 3-