Lack of override leads<br>to property tax errors
The Grand Canyon School District’s failure to hold an override election two years ago and Coconino County’s failure to verify submitted information for a tax levy led to a $163,711 property tax fiasco this year.
Taxpayers in the Grand Canyon School District, basically those who own property in Tusayan, have been spending much of the summer wondering why they were charged and if they would receive a refund from the county.
Paul Babbitt, Coconino County District I supervisor, said there would be no cash refunds, but the 2003 tax bills will be levy-reduced as a result of the mistake. Tax bills were being prepared last week by the county with the first payments due by Nov. 1.
"The override ran out and the school district didn’t realize it," said Teresa Morgan, county chief deputy school superintendent. "We were operating under the assumption that they had a full override and it was only partial. The Arizona Department of Education caught up to that ... and they said, sorry, you can’t spend it."
A seven-year override for the school district was approved in 1995, which amounts to a 10-percent override of the revenue control limit for the first five years, two-thirds of that 10 percent in year six and one-third of the 10 percent in year seven. However, the school district mistakenly extended the period for the full 10 percent in years six and seven and the county didn’t catch it.
"I don’t fully understand from the district how it happened, there was a change in management at the school district and they extended the period in which they were legally entitled to draw the additional amount," Babbitt said.
During fiscal years 2000-01 and 2001-02, the extra tax levy resulted in the $163,711. At the time, Dale Fitzner was school superintendent and Bruce Smith was the district’s financial assistant. Fitzner and Smith are no longer with the school district.
To avoid any budget problems, the school district should have held another override election after year five of the 1995 override, something school superintendent Ray Vernon discovered earlier this year.
"I think it’s unfortunate that that ran out without an election being held," Fitzner said. "I wasn’t given direction by the board nor did I have any specific information on that as part of my coming there. It wouldn’t have been that difficult."
The mistake, combined with a county tax assessment error made on Amfac property in fiscal year 2001-02, has taxpayers wondering about the accuracy of their bills.
"I’m very concerned with the first mistake with Amfac and then this mistake, though I know it’s not only the county’s mistake ... it puts a cloud over knowing if our property taxes are indeed being handled the way they’re supposed to be," Tusayan resident Clarinda Vail said. "I do think we have a better understanding ... but there’s still some concern about taxes being collected without authority."
Meeting on issue
County superintendent Cecilia Owen, Babbitt, school officials and residents gathered for a meeting on Aug. 27 at Grand Canyon for informational purposes and to try to find a solution to the situation.
"We were very much in agreement as to how it happened and what to do, to make sure the district only levied the amounts they’re entitled to levy for," Babbitt said about the meeting. "They can’t collect the taxes again, so whatever they’re entitled to, they’ve basically gotten."
Going back to how the situation evolved, both the school district and county were at fault.
"They forwarded a levy requirement to us and we took it on faith, there wasn’t a check at the very basic decision of do we have the authority?" Babbitt said. "An assumption was made extending that authority for a seventh year."
Babbitt said the situation has forced the county to take a look at its system of checking information.
"I think we’ve talked about the system enough now that we can assure people it’s not going to happen again," Babbitt said. "When we get a request to levy, we’ll double it back and ask, even though it’s not our position, to have it double-checked."
Taxpayers will likely receive some sort of notice about the issue, although there is still some confusion on that.
"The school is going to get that money (the $163,711 collected) but we’re still unclear on this until we get the tax bills," Vail said. "They didn’t seem to know for sure if it could be changed before the notices are coming out."
"It was requested that something be put in with each tax bill," Morgan said. "If we can, that’s probably what we’ll do."
The lowered tax levy will be in effect for one year only.
As for the $163,711, the school district is able to spend it as part of the 2002-03 maintenance and operation budget.
"The school will get to use the money that was overcollected and as far as I’m concerned, I’m OK with that," Vail said.
Money in GC account
Bonnie Haven, the school district’s business manager, said the money is sitting in county account earmarked for Grand Canyon. The amount is collecting 4.13 percent interest, which also goes to the school.
In the Sept. 10 school board meeting, Vernon tried to explain the situation to the school board, complete with detailed tax levy worksheets for the two years in question.
According to Vernon, the primary tax rate for 2002-03 will be 5.8997, which is an increase from 4.6403 in 2001-02. Vernon said the increase is due to a major increase in the small-school adjustment, a small increase in the total budget and fluctuating capital.
The secondary tax rate will go down from 2.8384 in 2001-02 to 8.3051 in 2002-03, which reflects no override being held two years ago. There will be an override election in November.
The school district lists a $222,640 carryover amount, which includes the collected taxes and interest, and $60,000 in tuition money collected from Williams last year.
While Vernon was addressing the subject at the meeting and mentioned providing details to taxpayers, school board president Chuck Wahler showed concern over the district’s responsibilities to inform the public about what’s happening with county taxes.
"I’m concerned about how much we do as opposed to how much the county is going to do to make this clear," Wahler said. "It’s not our issue ... it’s one thing to go to the taxpayers and say OK, we understand where the money is and we’re fine. But if they have an issue, I’m concerned about us being intermediates.
"I don’t object to what you’ve done to this point if it’s going to resolve the issue and they understand they money’s in there and it’s not gone away," Wahler told Vernon. "But they need to work with the county."