Property tax shortfall<br>due to county mistake

GC VILLAGE — A clerical error by the Coconino County tax assessor’s office has led to a property tax shortfall of $419,752.86.

As a result, Grand Canyon Unified School District officials fear community backlash from an error it did not commit. Personal property owners will likely be re-billed, although a definite course of action has not yet been determined.

"We want to avoid the district being the victim here," said Ray Vernon, Grand Canyon school superintendent. "The mistake had nothing to do with the district, but we’re the ones hurt because we’re going to be doing an override election in March. If the taxpayers are mad at the school, we will be punished and end up a double victim."

The school board met Tuesday night and although the result of that meeting occurred after newspaper presstime, Vernon said he would recommend that property owners within the district be re-billed at the current tax rate.

The other option to be considered by the school board would recommend that the shortfall be made up in fiscal year 2003 by increasing the tax rate. But that does not appear to be an attractive option.

Chuck Wahler, school board president, said the county clearly "screwed up" and favored a plan to re-bill property owners.

"It’s clear that this was a mistake and this is what the tax rate should have been rather than have a tax increase," Wahler said. "My personal feeling is that they ought to go back and re-bill or we might be doing a triple-whammy."

The "triple-whammy" refers to the possibility that the county will favor a FY2003 tax increase. Besides an increase making up the error, there would also be a possible regular increase and the school’s override election which will attempt to create funds because of Grand Canyon’s 100-plus high school enrollment.

"I can’t think of a worst time for this to happen," Wahler said about the county’s error, referring to the coming override vote.

Vernon said the school board could decide to not make a recommendation at all.

"The school board could say it’s their fault, let them fix it," Vernon said.

School officials met Thursday with Cecilia Owen, county superintendent of schools, and Christine Mazon, county assessor, about the situation. Vernon said county supervior Paul Babbitt, who represents the Grand Canyon area, was unable to attend the meeting.

"I want everybody to know that this is not the school district’s fault," board member Bess Foster said. "We didn’t do this."

Foster, who is the only school board member who owns property in the district, said "it’s going to be hard to make the taxpayers swallow this."

"As a school board member, I don’t like to have to do this because property owners have to pay so much," Foster said. "From the numbers I’ve seen as a taxpayer, I have a hard time figuring the difference."

The incorrect tax rate for the school only was calculated at 6.2814, which comes out to $628.14 for the owner of a home valued at $100,000. The correct rate should be 8.0659, which translates to an $806.59 bill for a $100,000 home.

If the county decides to carry over the amount to next year, property taxpayers would see the rate jump to 9.8504, or $985.04 for a $100,000 homeowner.

"It’s hard for this to happen, it makes me angry," Foster said. "It boils down to this being a major clerical error. This is a published tax rate ... it’s one of those hard things. But the school district did not do this."

Clarinda Vail, property owner in Tusayan, said the normal process has gone down the tubes, adding "it’s so unfortunate they don’t have enough employees down there (county offices) to handle everything."

County officials said the error was made in a December 2000 clerical error while billing properties at Grand Canyon. The properties were erroneously billed on the personal property tax roll and the real property roll. The personal property accounts should have been deleted.

"Basically, the error is to the tune of $419,000 that was inaccurately billed to Amfac," Vernon said. "The county supervisors need to decide how to fix this."

Bill Johnston, Grand Canyon National Park Lodges general manager, was not sure how the error was discovered, but believed it was caught on the county end.

In information prepared for the school district, Mazon said that in late summer or fall of 2000, "the previous administration was notified that Amfac was in the process of renegotiating their lease with the National Park Service. The new lease indicated a considerably higher value than what the assessor showed.

"At that time, a decision was made to canvass the Grand Canyon area to update and correct our data," Mazon continued. "It was also decided that the August 2000 billing would be deleted and a new billing would be done after the canvass was completed."

Through the process and during the transition from the personal to the real roll, Mazon said the personal property accounts were not immediately deleted since they were being billed in December.

"These accounts should have been deleted after the billing, but for some reason were not," Mazon said.

Mazon said her office is currently working on implementing new quality control methods to make sure those types of errors do not occur again.

"We will review the full cash value certification annually to identify any gross error for 2002," she said. "We will order a printout, or several printouts if necessary, to review personal property accounts that may be in error. We will keep a log of personal property accounts that have been cancelled. This list will be double-checked to assure they are in fact deleted."

Property tax bills in the Maine Consolidated School District were also discovered. Property in that district was erroneously valued in excess of $29 million. As a result, taxes were unevenly distributed causing individual tax bills to reflect a lower amount of tax than what is actually due.

A third error was made in the calculation of the countywide fire district assistance tax rate, which affects the Summit Fire District. A clerical error resulted in the adoption of a .0645 rate instead of .0885 for this tax year. The shortfall in tax collections comes out to $255,000, which would have been distributed to the Summit Fire District.

In an interview with Vernon, he stressed the importance of the Grand Canyon community realizing that the higher property tax bill they will likely receive is not an increase, but a correction of the original assessment and billing.

"They may be faced with what would be the corrected amount and will reflect the amount as if the error had not occurred," Vernon said.

The county error is just one factor in a handful of budget concerns for the school district. Besides the newly-created possibility that voters may nix the override because of a lack of understanding, it appears that Proposition 301 funds will be lower than anticipated. Vernon said a sales tax adjustment will lower that income source for the district.

For those seeking more information about Grand Canyon tax bills, call Mazon at 928-779-6505.