County was alerted about tax error

White Mountain Independent
Wednesday, January 4, 2017
Trudy Balcom

APACHE COUNTY — An email thread that included representatives of the treasurer’s and assessor’s offices revealed that officials were notified of an error in tax billing over a month before more than 33,000 incorrect bills were mailed out.

The mistake will cost the county over $15,000 in mailing expense and possibly more for hiring temporary labor, though there are conflicting reports on whether that will be necessary.

The error involved a misplaced decimal point in two special taxing districts that support vocational and technical education at several area high schools.

The change in the decimal point increased the tax by a factor of 10, turning a $5 tax bill into a $50 tax bill. The error appeared on the tax statements mailed Sept. 28.

County Manager Delwin Wengert asserted at an Apache County Board of Supervisors meeting held Oct. 18 that he did not know anything about the error until after the tax bills were mailed out.

But a copy of an email obtained by The Independent shows that the county first received notice of the error on Aug. 24, more than a month before tax bills were issued.

Jennifer Stielow, vice president of the Arizona Tax Research Association, said Wednesday that she had called Apache County Finance Director Ryan Patterson on Aug. 24, when she discovered the error.

Stielow also emailed Darlene Teller of the Arizona Department of Revenue to notify her of the error.

The Arizona Tax Research Association is a nonprofit taxpayer watchdog group that advocates for efficient and effective use of taxpayer dollars.

Stielow said that her organization annually reviews tax rate and levy sheet documents for all Arizona counties before tax bills are mailed to look for errors.

“I’ve been doing this 16 years and every year there’s several errors across the state,” Stielow said.

The thread shows that Stielow emailed Judy Bender, a consultant who works for the Apache County Assessor’s Office, on Oct. 4, after tax bills were mailed. In part, her email said, “I notified DOR (Department of Revenue) of the tax rate error on August 24th and I recall that I talked to Ryan (Patterson) that same day to notify him of the error. He told me that he would fix the rate and levy sheets on the website and I just assumed that he would make sure the error was corrected beyond that.”

In a telephone interview Wednesday, Patterson said he corrected the tax rate online on Aug. 29 and had the county manager, Wengert, “sign off on it.”

Patterson said that normally a meeting is held to review the tax bills before they are mailed out.

That meeting includes his office, the assessor and the treasurer. He said he expected to discuss the error at that meeting. But Patterson said the meeting was never called, and the next thing he knew the tax bills had been mailed.

“We were waiting for the meeting that never came,” he said.

Wengert said Wednesday that a “breakdown in communications between departments” as well as simply missing the error during several rounds of proofing by different department heads led to the current situation.

He said the Finance Department failed to communicate the error and that both the Treasurer’s Office and the Schools Office did not see the error when reviewing the tax statements before mailing.

At a special meeting of the Board of Supervisors held on Monday, Wengert outlined four procedures the county intends to put in place going forward in order to prevent errors in the future. They include:

- Print tax resolutions so that they show both current year tax rates and previous year tax rates.

- Adjust the county’s tax software program so that tax rate variances will automatically generate a report.

- Create a working group that will include the assessor, treasurer, finance GIS and superintendent of schools that will begin meeting the first week of June to discuss tax issues

- Require that any changes to board-approved documents be reviewed and ratified by the Board of Supervisors.

A letter explaining the error is currently posted on the Apache County website. An amended tax statement will be mailed out in the future. Affected taxpayers who have already paid their bill can choose between a credit on their next tax statement or a refund of the overpayment.

The board voted to use contingency funds to pay for any costs associated with correcting the tax error.

The districts involved are the Northern Arizona Vocational Institute of Technology, or NAVIT, which allows high school students to receive college credit training at the high schools in St. Johns and Round Valley, and the Northeast Arizona Technological Institute of Vocational Education, which allows students on the Navajo Nation to receive training through a video conference distance learning network.