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Finance staff outline county takeover of tax collection, estimate revenue and operational tradeoffs
Summary
City staff briefed the council on a county proposal to take over municipal tax collection; presenters estimated near-term cash-flow improvements and one-time foreclosure recoveries but warned of lost interest revenue and legal changes required to align payment schedules.
City finance staff presented a multi-part proposal under which the county would assume tax-collection duties for the City of Cortland and described the financial and operational tradeoffs for the city.
Staff said outstanding unpaid taxes as of the most recent counts included roughly $303,000 for school taxes, $320,000 for county taxes and about $608,000 for city taxes for tax years 2025 and earlier. They estimated combined recoverable revenue and transition benefits at roughly $1.75 million, driven by foreclosure recoveries and improved cash flow. The presentation also estimated the city would forgo an estimated $225,000–$250,000 in interest revenue as part of the transfer.
The staff presentation laid out required legal steps: repealing the local law that authorizes the city to collect taxes, amending the city code and aligning the city's budget calendar to a county collection schedule that shifts payments in future years. Staff said the county agreed to make the city whole on outstanding delinquencies by specified dates and to take over foreclosure processes; the county would also keep interest and penalties accrued after the handover.
Council members asked about cash-flow timing for retirement payments and whether the altered tax schedule (county collections moving to January/April in 2028) would give sufficient lead time to adapt the budget calendar. Staff responded that the county would pay collections to the city on a monthly lag (the 15th of the month following collection) and that the transition was intended to improve cash flow earlier in the year, while noting operational headaches and one-time reconciliation costs during implementation.
No formal action was taken; council members requested additional details and asked the county to make a formal presentation to answer technical questions about accessibility, potential satellite payment locations, and the proposed software and customer-service arrangements.
