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School district, others to help city with payout to Wheaton Franciscan

Nov. 23, 2011

The city will seek to recoup $4.1 million from other taxing jurisdictions to help replenish funds it spent following a state Supreme Court ruling in a suit filed by Wheaton Franciscan.

Last summer, the state Supreme Court ruled that a large portion of the Wheaton Franciscan outpatient health care facility in Wauwatosa qualifies as tax exempt. Factoring in interest, Wauwatosa had to pay an $8.4 million to Wheaton Franciscan for erroneously collected taxes.

The Wisconsin Department of Revenue has approved the city's request recoup $6.2 million, the largest single charge-back state officials can recall.

State law does not allow the city to seek help from the other entities who taxed Wheaton Franciscan to cover the interest payment, although it can - and is - requiring the those other entities to refund their share of the $6.2 million in tax dollars returned to the health care provider.

The Wauwatosa School District will be responsible for paying back $2.1 million to the city. About $2 million in refunds will come to the city from Milwaukee County, Milwaukee Metropolitan Sewerage District and Milwaukee Area Technical College for their portions of the taxes levied. Those funds will be due back to the city by mid-February.

Of the total payment, the city will cover $4.3 million, City Finance Director John Ruggini said. The Budget and Finance Committee likely will vote to move forward with a plan to borrow that money in December, so the city can replenish its coffers before the end of the year, he said.

Although financial ratings agencies have been downgrading government at all levels due to the economy and financial issues they're facing, the city last week learned it has retained it AAA bond rating, the highest a municipality can achieve.

Mayor Jill Didier credited the rating to the city's economic sustainability and efforts to maintain its infrastructure. Higher ratings lead to lower costs of borrowing.

"People want good investments, and Wauwatosa is a good investment," she said.

The city expects to pay back the debt in 2015 when the Milwaukee County Research Park tax district pays out.

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