Wasatch County has released more information on the tax error that cost the county $6 million in under collected taxes. In a brief report the county has outlined a timeline of events and plans to prevent further errors in the future.
Wasatch County Assistant County Manager Dustin Grabau says the county published the two-page events summary to give the public a complete picture of what happened, when it happened, and the county’s plan to prevent further incidents from occurring again. Grabau notes that the original error occurred on May 8.
“The initial cause was the result of a database transfer,” Grabau explained. “We had an old database that we used for our tax system that we were transferring over into a new database. As a result of that transfer some data was misinterpreted which wildly overestimated this particular property. One additional mistake associated with that is most of those changes were applied in a provisional or proposed state, which means that they didn't actually affect the tax rolls, but this particular property was applied to the tax rolls.”
The home, located in the Twin Creeks area, was erroneously listed as having a taxable value $543 million above its actual taxable value. Grabau explains that while the amount of taxes that a government entity collects stays the same or close to the same year over year, property values in any taxing entity fluctuate to reach that budgeted amount.
“As values get adjusted overtime and new growth comes in, we divide the amount that were supposed to be collecting among all of the taxpayers,” Grabau continued. “By this one property being valued so highly, what it did is it lowered everyone else's tax rates by about $6,000,000. So that's the amount of money that wasn't collected by those taxing entities. As a result, in order to recoup those costs the way that state code is intended, there would be a slight increase to future tax years rate.”
On Saturday Oct. 19, the County Assessor Buff Griffiths was alerted to the error by her husband, County Clerk/Auditor Cal Griffiths. The assessor corrected the error on Tuesday Oct. 22, but by then it was too late to change rates. In the statement, the county assessor and county clerk acknowledge they did not accurately consider the impact of the error. The county document also notes that Oct. 19 was the conclusion of the Board of Equalization, during which the Assessor’s Office had an appraiser position vacant. The assessor has expressed a desire for additional staff above the vacancy. County Manager Mike Davis was alerted to the error by a citizen on Friday, Nov. 1. Davis then alerted the county council.
The state tax commission published a report that the average tax bill was unintentionally decreased by $194. The council has not yet decided how and how much of the under collected tax will be recovered in the coming years, but Grabau says there could be a slight impact.
“So, this $194 won't be recouped in a single year,” Grabau said. “If it is recouped, and not all of it will be, it will be over multiple years. I think the current direction of the council has been leaning towards a three-year recovery cost, but that's not set in stone yet. The council intends over the next few months to kind of more specifically evaluate the options that they have in these future years to potentially mitigate the impact to taxpayers.”
The county itself missed out on $1,011,679, the county fire district on $253,598 and the county parks district on $138,475. Some residents have asked why the county government doesn’t simply tighten its belt and not recoup the missed revenue over the next few years.
“That is certainly an option for the County,” Grabau explained. “One issue that the County faces is that we collect taxes for all of the entities, and we don't feel like we're in a position to be able to dictate to the school district what their approach is to their budgeting process. So, while we’ll certainly be able to address internal County policies on whether or not we will end up making adjustments to our budget or future tax rate. We don't want to have to speak for Central Utah Water or the school district.”
Of the $6 million that were not collected, the school district missed out on the vast majority of that money a total of $4,398,060. The Central Utah Water district also missed out on $217,215.
Wasatch County has analyzed how the mistake happened and what they can do to prevent a similar one in the future.
“There are a few checks along the way that should have been caught,” Grabau continued. “Ultimately it came down to timeline and urgency issues that people weren't able to expend as much effort as they probably should have on checking what those numbers were. That includes, we have a report that the assessors’ office can run that will show these high variance changes. We've made changes to our tax system so that the appraisers themselves who are individually appraising properties, will be able to see these dramatic shifts.”
The state tax commission is also changing its process to check changes at a more detailed level, in a way that will highlight unusual outliers.
The county document can be viewed here.