Title
Ordinance to Authorize the Treasurer of the City of Hampton, Virginia, to Remove Amounts Shown as Unpaid PILOT Fees and Accrued Interest from the City’s Tax Records for Fiscal Years 2014, 2015, 2016 and Every Fiscal Year Thereafter Pursuant to the 2016 Appropriation Act
Purpose
PURPOSE/BACKGROUND:
The Commonwealth of Virginia (the “Commonwealth”) owns certain parcels of real property in the City of Hampton (the “City”), known as Fort Monroe, and being that same property conveyed to the Commonwealth by quitclaim deed from the United States of America, acting through the Director of Real Estate, United States Army Corps of Engineers, recorded June 14, 2013, in the Clerk’s Office of the Circuit Court of the City of Hampton, Virginia as Instrument Number 130009559 at Page 264.
Pursuant to the Fort Monroe Authority Act (Code of Virginia §2.2-2336 et. seq.), the General Assembly of the Commonwealth (the “General Assembly”) created the Fort Monroe Authority (the “Authority”) and recognized the need for municipal services for Fort Monroe's visitors, residents, and businesses.
Pursuant to Code of Virginia §2.2-2342(B), the Authority shall annually pay to the City a fee in lieu of taxes, based on a statutorily prescribed formula set forth with the intent to pay the City an amount comparable to the amount that would have otherwise been paid to the City if certain properties at Fort Monroe had been privately held (the “Pilot Fee”).
The City imposed Pilot Fees on the Authority for fiscal periods from July 1, 2013 to June 30, 2014 (“FY 14”), July 1, 2014 to June 30, 2015 (“FY 15”), and July 1, 2015 - June 30, 2016 (“FY 16”).
Pursuant to Code of Virginia §2.2-2342(C), the Authority shall have the right to contest the assessments made on property at Fort Monroe owned by the Commonwealth or itself or any property for which the Commonwealth or the Authority shall be responsible for PILOT fees using the procedures utilized by other citizens of the City, including appeals to the Board of Review of Real Estate Assessments for the City and appeals therefore to the Circuit Court of the City.
The assessments of the real property at Fort Monroe have not been challenged by the Authority nor have the Pilot Fees been determined to be erroneous so as to allow the City to make a statutory adjustment, refund, or waiver of the unpaid Pilot Fees.
The General Assembly, through its biennium appropriation of funds, prescribed that notwithstanding any other provision of law or agreement, the amount paid pursuant to §2.2-2342(B) by the Authority to the City from all sources of funds for FY 14, FY 15, and FY 16 shall be an amount less than the Pilot Fees statutorily prescribed and assessed by the City for those fiscal periods.
Further pursuant to Code of Virginia §2.2-2342(B), in the event the Pilot Fee is not paid to the City when due interest shall accrue and all unpaid Pilot Fees and interest thereon shall rank in parity with liens for unpaid taxes, collectible by the City as taxes are collected.
In support of the decision of the Governor and the Authority, regarding the conveyance of certain real property in Fort Monroe to the United States of America to become a unit of the National Park Service, the City released certain portions of Fort Monroe conveyed to the National Park Service from any statutorily prescribed encumbrance resulting from any and all unpaid Pilot Fees and related interest for FY14, FY 15, and FY 16 without releasing the obligation of debt owed by the Authority to the City for the unpaid Pilot Fees by Deed of Partial Release dated November 5, 2015 and recorded in the Office of the Clerk of the Circuit Court for the City of Hampton, Virginia on November 6, 2015, as Instrument #150014191.
The 2016 Appropriation Act requires that beginning July 1, 2016, the Authority shall not pay any Pilot Fees to the City until the City records in the land records in the Office of the Circuit Court Clerk of the City an instrument removing any liens or claims of liens on the real property of the Commonwealth at Fort Monroe.
The City recorded a Deed of Satisfaction and Release on June 20, 2016 at Instrument Number160007756, in compliance with the 2016 Appropriation Act.
Notwithstanding the recordation of the Deed of Satisfaction and Release, the Treasurer has no legal mechanism to remove the unpaid Pilot Fees for Fiscal Years 2014, 2015, 2016 and thereafter from the tax records other than the authority expressed in the 2016 Appropriation Act which takes precedence over any other local or state law or regulation. The proposed Ordinance authorizes the Treasurer to remove the unpaid Pilot fees and accrued interest from the tax records for the foregoing fiscal years. The 2016 Appropriation Act also requires the City not to assert any future liens on the property owned by the Commonwealth, thus the Ordinance allows the Treasurer to remove future unpaid Pilot Fees from the tax records without having to go back to council every year. The Ordinance does not apply to any Commonwealth owned real property transferred or conveyed to a party other than the Commonwealth and any leasehold interests taxable pursuant to §58.1-3203 of the Code of Virginia, 1950, as amended.
The fiscal impact is as follows: $502,386.47 for Fiscal Year 2014, $423,555.62 for Fiscal Year 2015 and $143,290.80 for Fiscal Year 2015. Fiscal Years 2017 and thereafter cannot be determined at this time.
Discussion:
See purpose/background above.
Impact:
See purpose/background above.
Recommendation:
Rec
Approve the Ordinance.
Body
WHEREAS, the Commonwealth of Virginia (the “Commonwealth”) owns certain parcels of real property in the City of Hampton (the “City”), known as Fort Monroe, and being that same property conveyed to the Commonwealth by quitclaim deed from the United States of America, acting through the Director of Real Estate, United States Army Corps of Engineers, recorded June 14, 2013, in the Clerk’s Office of the Circuit Court of the City of Hampton, Virginia as Instrument Number 130009559 at Page 264;
WHEREAS, pursuant to the Fort Monroe Authority Act (Code of Virginia §2.2-2336 et. seq.), the General Assembly of the Commonwealth (the “General Assembly”) created the Fort Monroe Authority (the “Authority”) and recognized the need for municipal services for Fort Monroe's visitors, residents, and businesses;
WHEREAS, pursuant to Code of Virginia §2.2-2342(B), the Authority shall annually pay to the City a fee in lieu of taxes, based on a statutorily prescribed formula set forth with the intent to pay the City an amount comparable to the amount that would have otherwise been paid to the City if certain properties at Fort Monroe had been privately held (the “Pilot Fee”);
WHEREAS, the City imposed Pilot Fees on the Authority for fiscal periods from July 1, 2013 to June 30, 2014 (“FY 14”), July 1, 2014 to June 30, 2015 (“FY 15”), and July 1, 2015 - June 30, 2016 (“FY 16”);
WHEREAS, pursuant to Code of Virginia §2.2-2342(C), the Authority shall have the right to contest the assessments made on property at Fort Monroe owned by the Commonwealth or itself or any property for which the Commonwealth or the Authority shall be responsible for Pilot fees using the procedures utilized by other citizens of the City, including appeals to the Board of Review of Real Estate Assessments for the City and appeals therefore to the Circuit Court of the City;
WHEREAS, the assessments of the real property at Fort Monroe have not been challenged by the Authority nor have the Pilot Fees been determined to be erroneous so as to allow the City to make a statutory adjustment, refund, or waiver of the unpaid Pilot Fees;
WHEREAS, the General Assembly, through its biennium appropriation of funds, prescribed that notwithstanding any other provision of law or agreement, the amount paid pursuant to §2.2-2342(B) by the Authority to the City from all sources of funds for FY 14, FY 15, and FY 16 shall be an amount less than the Pilot Fees statutorily prescribed and assessed by the City for those fiscal periods;
WHEREAS, further pursuant to Code of Virginia §2.2-2342(B), in the event the Pilot Fee is not paid to the City when due interest shall accrue and all unpaid Pilot Fees and interest thereon shall rank in parity with liens for unpaid taxes, collectible by the City as taxes are collected;
WHEREAS, in support of the decision of the Governor and the Authority, regarding the conveyance of certain real property in Fort Monroe to the United States of America to become a unit of the National Park Service, the City released certain portions of Fort Monroe conveyed to the National Park Service from any statutorily prescribed encumbrance resulting from any and all unpaid Pilot Fees and related interest for FY14, FY 15, and FY 16 without releasing the obligation of debt owed by the Authority to the City for the unpaid Pilot Fees by Deed of Partial Release dated November 5, 2015 and recorded in the Office of the Clerk of the Circuit Court for the City of Hampton, Virginia on November 6, 2015, as Instrument #150014191;
WHEREAS, the 2016 Appropriation Act requires that beginning July 1, 2016, the Authority shall not pay any Pilot Fees to the City until the City records in the land records in the Office of the Circuit Court Clerk of the City an instrument removing any liens or claims of liens on the real property of the Commonwealth at Fort Monroe;
WHEREAS, the City recorded a Deed of Satisfaction and Release on June 20, 2016 at Instrument Number160007756, in compliance with the 2016 Appropriation Act; and
WHEREAS, notwithstanding the recordation of the Deed of Satisfaction and Release, the Treasurer has no legal mechanism to remove the unpaid Pilot Fees for Fiscal Years 2014, 2015, 2016 and thereafter from the tax records other than the authority expressed in the 2016 Appropriation Act which takes precedence over any other local or state law or regulation.
NOW, THEREFORE, BE IT ORDAINED, by the Council of the City of Hampton, Virginia, as follows:
1. That pursuant to the 2016 Appropriation Act, the Treasurer of the City of Hampton is authorized to remove from the tax records unpaid Pilot Fees and all interest that has or may accrue thereon in the amount of $502,386.47 for Fiscal Year 2014, $423,555.62 for Fiscal Year 2015 and $143,290.80 for Fiscal Year 2016 on the tracts or parcels of land lying and being in the City of Hampton, Virginia, and belonging to the Commonwealth at Fort Monroe as set forth in Exhibit A attached to this Ordinance;
2. That pursuant to the 2016 Appropriation Act, the Treasurer is authorized to remove from the tax records any future unpaid Pilot Fees on the real property belonging to the Commonwealth at Fort Monroe without having to obtain any formal approval of the City Council; and
3. That this Ordinance does not apply to any Commonwealth owned real property transferred or conveyed to a party other than the Commonwealth and any leasehold interests taxable pursuant to §58.1-3203 of the Code of Virginia, 1950, as amended.