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TO: Mayor Richard C. Irvin
FROM: Charlie Koch, Asst. Director of Finance, Revenue & Collections
DATE: September 7, 2017
SUBJECT:
To establish an Administrative Processing Fee for "Exempt" Real Estate Transfer Stamps Transactions.
PURPOSE:
To obtain the City Council’s approval of a new Administrative Processing Fee for exempt real estate transfer stamp transactions for the Department of Revenue & Collections.
BACKGROUND:
During Mayor Irvin’s first few weeks in office, he visited all city departments to greet employees and learn more about the responsibilities of individual departments and divisions. While visiting the department of Revenue and Collections (R&C), one of the employees referenced a request to see the city administer an administrative fee on “exempt” real estate transfer stamp transactions. Currently, the city collects a fee for “standard” real estate transfer stamp transactions, but there is no charge for exempt (foreclosures, quit claim, trust, etc.) transactions, which are more labor intensive.
DISCUSSION:
There are two distinct types of stamps, one is a standard or traditional transaction, which has a fee for service built in the process as well as "exempt" transactions (foreclosures, quit claim, trust, etc.) and are currently processed free of charge. Exempt transactions are traditionally more labor intensive than standard transactions.
For example, in 2016 R&C processed 4,865 real estate transfer stamps of which approximately 25% were exempt. On average, staff spends thirty (30) minutes per stamp researching and completing any necessary paperwork, which means each exempt transfer stamp transaction costs the City of Aurora approximately $22.19.
Staff has recommended the implementation of a $30.00 administrative processing fee to cover staff time, which is consistent with the fee charged for a lost Real Estate Transfer Stamp. The city will send out letters informing local attorneys, title companies and organizations of the administrative fee.
IMPACT STATEMENT:
The implementation of the administrative processing fee will prevent the City of Aurora from spending money processing this type of transaction.
RECOMMENDATIONS:
That the Finance Committee forward the recommendation to the Committee of the Whole for discussion on Tuesday, September 19, 2017.
cc: Alderman O’Connor, Chairman
Alderman Mesicos
Alderman Bugg
Alderman Mervine, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Establishing an Administrative Processing Fee for Exempt Transfer Stamps.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, the City of Aurora, Department of Revenue and Collections would like to implement an Administrative Processing Fee to cover the cost of exempt transfer stamps; and
WHEREAS, the Department of Revenue and Collections has deemed it is prudent to modify its procedure regarding exempt transfer stamps.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that Resolution R93-11 is hereby amended effective November 1, 2017, to read as follows:
Section Eight: That an administrative processing fee of $30.00 be charged for all exempt real estate transactions under Chapter 44 Real Estate Transfer Tax.