Here is a screenshot of the 2005 property taxes for a local business. Half of this amount should have been due on December 20th 2005 and the other half on May 10th 2006. Since the taxes weren’t paid, they should have been published in October 2006 which would have started the redemption period. For non-homestead property that would have been 24 months.

So the property should have been at any Sheriff’s sale that occurred after October of 2008. However, the taxes were not paid until March of 2010. Was there no tax sale from October 2008 until some point after March of 2010? The Bourbon County website lists a 2009 tax sale list, but this property was not included. According to the Commission minutes, there was a tax sale held January 27th, 2010.

When I asked Treasurer wasn’t sure why this property wasn’t on the sale and she didn’t recall any reason why it was held off. It is important to note that there are many stages that property goes through before being listed on a sale and it is entirely possible that it was submitted as property for sale, from the Treasurer’s office but held out based on other criteria.

If there was a reason why the property was held off the tax sale, was the interest calculated correctly? The interest rate for 2005 taxes was 7%. The total amount owed would incurred interest from May 20th 2006 until March 22nd, 2010 or 46 months and two days.  Half of the amount would have incurred interest from December 10th, 2005 until May 20th, 2006 or 5 months 10 days. If we round the time to just months the total comes to $7,116.29 in interest. There should have been another $15 or so in fees as well.

According to Susan Porter, who used to work in the Treasurer’s office, the system we are looking at here, has a safe guard against accepting incorrect interest.  It requires that you manually over-ride the interest.

When this is entered to actually pay the tax on the tax payment screen the only way for the interest or penalty to be changed or removed is a manual override or to back date the payment calendar date. Until this is done the correct amount of interest and penalties are calculated correctly. ~ Susan Porter source

If this is correct, then someone would have needed to intentionally marked the amount as complete even though the system was showing there was still around $900 owed. I asked the Treasurer the discrepancy could be due to the way that the amortization schedule works. In other words if part of the taxes owed were paid early on, those taxes would no longer be accuring interest. So it is possible the taxes were calculated correctly, but since the date of each payment doesn’t show up on the public website, it is hard to tell.

Interestingly this particular company does have a payment plan that was setup in 2010. They own just under $30,000. The payment plan states that they will pay $2,000 per month from April 20, 2011 until May 20, 2012. This only comes to $28,000 which is about $2,000 less than what they owe without factoring in the interest.

According to Mr. Sercer, he was told that the payment plans were based on an amortization schedule produced by the old computer system and that sometimes it came up with “crazy” interest rates. The Treasurer confirmed that this was likely what had happened in this situation. It seems very odd that it would generate a completely even number that doesn’t even add up to the full amount much less include interest.

The problem isn’t so much that the property wasn’t sold. Obviously it is better if the taxes are paid. However, if a property doesn’t have the threat of being sold, it is possible for other payments to become the priority.

Is it possible that simply following the timelines specified for selling delinquent property would have encouraged enough payments to have made the past mill levy increase unnecessary?

 

Harvest Ministries owns the old Western building down town. In November of 2009, the Tribune ran a story about plans to turn it into a medical facility and television studio. There was also a story by KOAM.  In January of this year, the Tribune reported that the president of Harvest Ministries had been indicted on charges of fraud bankruptcy fraud.

Despite claiming innocence back in January Paul and Charolette House have both plead guilty to the charges according to eMissourian.

Apparently Mr. House pastored a church and he directed them to pay his salary to Harvest Ministries instead of to him directly. He then claimed he was not employed for bankruptcy and disability purposes while Harvest Ministries funneled the salary back into his personal accounts.

The county tax search shows that Harvest Ministries owns the property at 8 1st Street and 14 1st Street. There are outstanding taxes due on the properties of around $45,000 dating back to 2006.

With the Paul and Charolette House waiting to be sentenced early next year, it seems unlikely that there will be any plans to do anything with the building in the near future if ever.  It is possible that the county could sell the properties at the upcoming tax auction, but it may be difficult to find someone with a plan and the financing to do something with those buildings.

The County Attorney came in to discuss some issues related to the sewer district and moving a grinder pump. There was a discussion the best way to get electricity setup for a antenna on top of a water tower.

Jim Harris with Barry Tractor came in to discuss bids for rock crusher equipment.

 

Dean Mann

Dean Mann and two KDOT employees came in to discuss US Highway 69. KDOT did a meeting in Franklin yesterday to talk about the corridor from Fort Scott to Pittsburg. There is money allocated to put 4 lanes from Fort Scott South to 680th Street. This should begin in 2013 be completed by 2019.

KDOT is trying to get things prepared for the phase that comes after that. Mr. Mann said that some times the Federal government has money available for “shovel ready” projects. So the goal is to have the planning in place to take advantage of such funds if they become available. They want to complete the design and if there are no funds available it will “go on the shelf” until funds materialize. There is hope that by the time the Fort Scott section is constructed, there will be funds to continue with a four lane toward Arma.

The purpose of the meeting with the Commissioners was to ask if they would support getting the design done. While the addition wouldn’t have a direct impact on Bourbon County, it does have impact in how traffic moves through Fort Scott. Having local governments supporting the projects may help KDOT lean more favorably toward those projects instead of ones where there is not support or support hasn’t already been expressed.

Commissioner Endicott expressed concern that putting in the Arma connection might delay the Crawford County Corridor and asked if the money would be better spent on that project which would go from 680th Street through Pittsburg.  Mr. Mann explained that since the timeline of the Crawford County Corridor is unknown, the benefit of having a four lane in the Arma area may be very beneficial to have sooner (if funds become available) rather than waiting for the larger project.

Fort Scott is submitting a grant application today for a grant to turn US 69 from 18th Street to 23rd street into a 5 lane road.

The Commissioners passed a motion to support the plan as long as it didn’t delay the Crawford County Corridor project.

Dylan Morrow Director of Security SEKRCC (county jail)

Mr. Marrow talked with the Commissioners about some of the things he was doing to help reduce overtime. He also wanted to thank the Commissioners for helping him move around some responsibilities to be able to give some raises in his department.

The jail is spending a lot of money on plumbers and electricians, but that is just due to the age of the building.

Terri Johnson – County Attorney

The County Attorney suggested that the commissioners go into Executive Session to discuss a possible settlement for case 11CB45.

Another Executive Session was called for Attorney Client privilege regarding suits filed against the county and insurance claim loss ratio for 5 minutes.

Chairman Endicott asked the County Attorney what their next step should be related the allegations about the Treasurer’s office . The County Attorney said that she asked the Attorney General and KBI to look into the allegations back in August and she has yet to hear back from them regarding this request. She expects to hear back at some point in the near future.

The list that went to the abstractor in preparation for the tax sale was for 2007 and previous years delinquent taxes. In addition non-homestead properties could be foreclosed on for 2008 delinquent taxes. Ms. Johnson pointed out that from a practical standpoint there may need to be more than one tax sale depending on how property owners respond to the suit to foreclose and what type of delays occur on various properties.

There was some discussion about whether or not it makes sense to try to differentiate between homestead and non-homestead property and whether it is even possible to determine which properties fall into the homestead exemption category. In the past the county has just applied the three year rule to everyone.

No one disputes that there were mistakes made in the way that property taxes have been calculated for Bourbon County. However, any reasonable person realizes that there are going to be at least some mistakes made in this line of work no matter how careful you are.

The big question is whether the process has been fixed.  So lets take a look at an example of delinquent property that is showing it was brought current on 10/7/2010 a few weeks ago. Below is a screenshot from the tax search that raises some questions. This is for 2010 taxes. So $673.37 was due in December 20th of 2010 and the remaining $673.37 was due in May 10th, 2011. The tax rate should have been 7%, plus a $15 publication fee if the property were published in the paper.

The property is crossed out of the list that was originally sent to the paper. It is  part of the addendum to the list (see the last page of the PDF), but the amount listed as owed is off by $1,000. So it was probably printed in the paper with the rest of the property that was left of because it was part of the payment plan. However, it was not in the payment plan contracts we received.

 

There was a payment of $1,346.74 toward the tax and $7.05 toward the interest and fees on 10/7/2011. The website is showing that the amount has been paid and that there is no longer an amount due.  But the publication fee alone should have been $15.

For a rough idea of the interest that should have been charged, if we calculate 7% on the first half for January through September (10 months), it comes to $39.28 (673.37 * .07 / 12 * 10). If we calculate interest on the second portion from June through September (four months), it comes to $15.71 (673.37 * .07 / 12 * 4). That leaves off about 18 days of interest on the first payment and around 27 on the second payment. So the actual interest should be a bit higher if you calculate to the day instead of only including full months as I have done.

Still the total comes to $69.99 when you include the publication fee.  So why is it only showing $7.05?  One possibility is that payments were being made into an escrow account on the old system and the interest rate was based on the fact that a good portion of the principle was already paid. However, to only be charged $7.05 the interest would be for less than two full months on the December 20th half of the payment. In other word’s the property owner would have needed to pay almost all of the tax due except for a very small portion.

It is interesting to note that the list of delinquent taxes where this property was crossed off has the interest listed as $39 (the cents are obscured by a marker).

If the tax payer had done this, I would expect to see the December 20th half listed as paid as soon as the escrow account had enough money to pay it and given the very small amount of interest, this couldn’t have occurred any later than March. Perhaps the escrow accounts are setup to only bring the amount over, once the full tax has been paid. Even then the publication fee was not charged.

It is possible that the interest was calculated correctly and the publication fee was inadvertently omitted. The biggest problem here is that that process is not transparent and if you look at what is actually published on the website it looks like something is being done incorrectly. If the new system was being used to accept all the payments, it would be trivial for anyone to look and see exactly how the interest and fees had been calculated and how payments had been applied.