TO: Mayor and Members of City Council
THRU: Douglas J. Hewett, City Manager, ICMA-CM
Jeffrey Yates, Assistant City Manager
FROM: Chris Lowery, Strategic & Performance Analytics Manger
DATE: May 5, 2025
RE:
Title
Discussion of City Collection of Property Taxes
end
COUNCIL DISTRICT(S):
Council District(s)
All
b
Relationship To Strategic Plan:
Goal 5: Financially Sound City Providing Exemplary City Services
Objective 5.1: To ensure strong financial management with fiduciary accountability and plan for the future resource sustainability by aligning resources with City priorities.
Executive Summary:
City staff will present findings from an initial feasibility analysis on establishing an internal municipal tax collection office. The review compares current service costs under the Interlocal Cooperation Agreement with Cumberland County-projected to exceed $1 million in FY 2025-with potential operational, financial, and compliance considerations of bringing tax collection in-house. Key factors include staffing requirements, technology needs, customer service impacts, and adherence to state regulations. A recommendation for a comprehensive cost-benefit analysis will also be discussed.
Background:
In 2023, the City of Fayetteville and Cumberland County entered into an Interlocal Cooperation Agreement for tax collection. Under this agreement, Cumberland County receives 0.75% of taxes remitted on time and 1.75% of taxes collected through delinquency. Between 2016 and 2023, the County received an average of $495,000 annually, with projected FY 2025 collections totaling over $1 million. Given this rising cost, City staff have conducted a preliminary analysis to evaluate the feasibility of establishing an internal municipal tax collection office.
The City can collect its property taxes; however, the County must provide valuation, listings, and assessments. Statutorily, the City cannot usurp these functions from the County.
Issues/Analysis:
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