Bourbon County

Commission Meeting & Tax Payment Plan

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The commission meeting this morning heard from many citizens concerned about the payment plan that was being offered for people who couldn’t afford to pay their property taxes.  At the bottom of this page are a list of bullet points covering the facts about how various things are supposed to work.

The payment plan is a bit of a red herring because from a legal standpoint it does not allow anyone on it to do anything that a citizen could not do on their own. Even if you are on the payment plan, your name is required to be published in the paper and you are still responsible for all interest and penalties. The only thing the payment plan can do is help people schedule their payments. If the taxes have not been paid in full within three years, the property still must be sold at the sheriff’s sale. It doesn’t matter if it is on a payment plan or not.

If a payment plan is working as legally provided for, it allows the county to encourage people to make a series of smaller payments where they might put off making a large lump sum payment.

The real issue is whether or not people on the payment plan were given illegal preferential treatment. This would include:

  • Not having their names published in the paper.
  • Not being charged penalties and interest.
  • Not having their property sold at a sheriff’s sale after being delinquent for 3 years.

While there have been allegations that his has occurred, nothing has been proven. Part of the problem seems to be that it is difficult to get records out of the computer system. Some people allege that the records were not kept according to standard accounting practice. It seems like it would take someone savvy with Excel less than an hour to verify that everything has been done correctly once they had access to the data in a reasonable form.

Leaving people off of the list published in the newspaper if they were on the payment plan was illegal, but it could have been due to an oversight. It appears that they were listed in previous years, so it may have been a simple mistake.

The only thing that seems odd about this, is that you’d expect a computer system that dumped out a list of everyone delinquent on their taxes to show everyone delinquent on their taxes and require extra manual work to remove a subset of those citizens. It this occurred, then it would be hard to say that it was just a mistake. On the other hand, it is possible that compiling the list of  delinquent accounts is a very manual process. If so, it could easily have been that the people on a payment plan were in a different file drawer and it was an honest mistake.

The KBI and attorney general’s office have both been contacted and it appears that they are going to be looking into things.  Terry Sercer from Diehl Banwart Bolton has performed a high level audit and said the totals look as would be expected. He recommended that an audit be performed in more detail and giving particular attention to the accounts that were under the payment plan.

When Terry Sercer first started to speak, a white haired man wearing overalls stood up and said:

“Who are you?!”
Terry tried to explain.
“What authority do you have over the commission?!!”
Terry tried to explain that his role was just to offer advice.
“Let me offer you some advice! Zip your pants!”

With that the man stormed out of the room. (This exchange isn’t a word for word quote, but it gives you pretty good idea.) I believe the mans name was Charles, but don’t know his last name.

Toward the end of the meeting the commission voted to authorize Terry to do as he recommended and look into things.  He said he wouldn’t be able to start on it until Wednesday, but was going to try to give it some priority because of the importance.

I asked if the information he was going to be auditing was public record and was told yes. It should be available to anyone and while there might be some fee for making copies, anyone should be able to come in and ask to look at it. It was unclear if the information was available electronically or not.

 

What follows are some facts that were brought up in the meeting that might be of interest. If you have any corrections please post them in the comments.

Regarding the tax search information available here.

  • The website that allows people to go in and research tax histories has been up and down due to some issues and upgrades with the provider. That software isn’t hosted locally and no one has been messing with it to cover stuff up.
  • At one point the county would charge $60 per year for access to this information, but they are making the basic tax search available to everyone for free.
  • There was a mistake a day or two ago that caused all the amounts to have the decimal place moved two places to the left. This should be fixed now.

As far as the payment plan goes, here is how they are supposed to work legally:

  • The law allows the treasurer to create some type of payment plan. It doesn’t need to be a written policy.
  • The payment plan does not do anything that you couldn’t do on your own. In other words if you owed $1,200 in taxes, you could come in and pay it $100 per month regardless of whether or not you had a “payment plan”.
  • Even if you are on the payment plan, you must be treated just like any other delinquent account. The law only allows for partial payments to be made, but that does not change the status of the delinquent account.
  • It is illegal to not charge interest to people on the payment plan.
  • If taxes are being paid on a payment plan, it doesn’t change when the house would go to the sheriff sale.
  • It would be illegal for the county to not sell a particular house just because it is on the payment plan.
  • You have three years to pay your taxes before it is sold–regardless of whether or not you are on the payment plan.
  • The commissioner’s do not have the authority to stop the plan or determine what the policy is. They can make recommendations and request information.
  • The current payment plan has some type of contract associated with it that people signed agreeing to pay a certain amount every month.
  • Any delinquent account should be charged interest. The rate was either 11% or 12%. It is unclear of this is compounding or just simple interest.
  • There are fees associated with delinquent accounts as well. This includes the fee to help pay for publishing the list in the paper.

Regarding selling houses at a tax sale:

  • Often selling property in a tax sale produces less income than the costs associated with holding the auction.
  • Sometimes the county will decide not to hold a tax sale because it wouldn’t be worth the cost.
  • Justin Meeks and Susan Quick both recommended that a tax sale not be held last year saying that it would cost more than it brought in.
  • Tax liens — where the taxes are paid by an investor in return for a lien that accumulates interest on the property are not available in Kansas.
  • Often the only advantage of selling a property at a sheriff’s sale is getting it into the hands of new owners who will pay taxes on it.

Regarding getting rid of an elected official:

  • It is possible to do a recall election, but it would be expensive.
  • There is a process to oust an elected official. This is legally refereed to as an ouster.
  • There are certain crimes that will automatically oust an elected official.
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Fort Scott Fiber Initiative Meeting

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The Fiber Initiative meeting on Friday was designed to look at how to get better Internet access in the Fort Scott area. Fort Scott is well behind many of the nearby cities. Here is a list of cities along with the highest bandwidth package available for residential users:

  • Frontenac – 35Mbps
  • Pittsburg – 35 Mbps
  • Girard – 15 Mbps
  • Uniontown – 15 Mbps
  • Iola – 35 Mbps
  • Nevada – 25 Mbps

(thanks to Nick Graham for researching this)

In Fort Scott AT&T DSL offers up to a 7Mbps (download) / 768kbps (upload) connection while Suddenline tops out at 3Mbps/512kbps. In some places AT&T is only available at lower speeds and in many others it isn’t available at all.

Right now the only bandwidth on fiber optic cable that comes into Fort Scott comes from AT&T. The only alternative for people who need significant bandwidth is some form of wireless. This is what FSCC is using–a microwave link provided by Cox. Unfortunately these types of connections are not particularly reliable and they tend to cap out at much lower speeds than what can be achieved over fiber optic.

Suddenlink says they can do fiber runs in town that make use of the bandwidth they purchase from AT&T. It appears a 5 Mbps connection would cost around $1,300 per month. (For those of you in the meeting who heard me say that it would cost $3,000 per month, I mispoke and realized my error after consulting my notes from last year.) For comparison purposes the college is paying around $3,000 per month for a 45 Mbps connection and a significant portion of those costs are for KanREN network management services–the actual bandwidth is closer to $1,000 of that.

There are two basic problems. First, the limited bandwidth coming into Fort Scott is very expensive and only available from AT&T. The second problem has to do with actually getting bandwidth to the houses and smaller businesses.

To solve the first problem, we need to get more fiber running into Fort Scott. It appears that at least Cox and Quest have fiber runs that follow the railroad through Fort Scott, but there are no “junctions” so no one can tap into it here. The previous meeting was attended by Cox and there was discussion about trying to get a “junction” to allow businesses in Fort Scott to tap into the bandwidth from Cox. It sounds like the cost to dig up the fiber, put in a building with a junction, etc. would be roughly somewhere between $30k to $100k.

Larger cities have what is known as “carrier hotels” where anyone can buy bandwidth from multiple providers. This helps drive the price down because carriers can quote prices based on just the cost of bandwidth–not the cost of building out to various buildings. This type of arrangement also means there is more competition to drive down prices and allow companies that need redundant connections the ability to easily provision connections to multiple carriers. The client is then responsible for getting the bandwidth to their datacenter or office. The clients in this type of setup would be ISPs and larger companies that can afford the build out to move the data from the “carrier hotel” to wherever it is needed. Fort Scott needs to be able to get reasonably price bandwidth into the city before it is going to be cost effective to provide reasonably priced bandwidth to individuals and businesses in the area.

Better bandwidth to Fort Scott from multiple carriers could make the city a more attractive place to put datacenters, call centers and other bandwidth intense businesses.

The second problem has to do with how to get the bandwidth to the individuals and businesses. This is often refered to as the “last mile” problem. The two big players in this market with wired connections are AT&T and Suddenlink. RTS and Valnet offer some wireless connections in and around Fort Scott.

AT&T DSL service only works with wire lengths less than about 14,000 feet from the central office. While this seems like a long distance in Fort Scott, wire doesn’t go in a straight line and wasn’t originally installed to minimize the distance back. Also older infrastructure often can’t support the needs of DSL. There are many situations where one person has a good DSL connection, but their neighbor across the street can’t get service. In repeated calls to AT&T it does not appear that they are interested in building additional infrastructure in Fort Scott to support better connectivity to homes. (Although they may change their mind with pressure from someone other than me calling in as an end user.)

Suddenlink says they plan to eventually support 10 Mbps connections in Fort Scott, but doesn’t have a timeline for any upgrades. When I spoke with them in August 2010, they said they might start offering a premium tier in the first half of 2011. It sounds like they are hesitant to increase the bandwidth because their current network design within Fort Scott, is not adequate to handle the existing traffic much less traffic that would come if their speeds were greater. Suddenlink says that 50% of the Fort Scott traffic in the evenings is from Netflix. Interestingly they have their max bandwidth right below what it would need to be for HD Netflix streaming which would consume significantly more bandwidth.

From a technical perspective of what is possible, DSL typically maxes out at about 15Mbps while normal cable modems can typically support speeds up to 50 Mbps. (There are all kinds of different technologies to make this go faster, so I’m talking about typical networks with typical equipment.) Suddenlink does have some networks where they have 50Mbps and even 107Mbps connections. However, it appears that they only offer this in markets where they are trying to match speed with competition. AT&T DSL coverage is spotty enough that it doesn’t seem to be a big competitive driver.

The places that are offering extremely high speed connections are doing it with fiber. Google is planning to offer 1000Mbps connections in Kansas City in the near future. The price hasn’t been set, but it will probably be $30 to $70 per month. Chattanooga offers a 1000Mbps connection for $350 per month. They also have a 50Mbps plan that is priced in the same range as Fort Scott’s options.

I think the current plan is to come up with a plan for where the city wants to be at certain points in time and then see if the current providers are interested in helping to implement it. For example, here are some very rough ideas of possible targets from looking at what other cities are doing:

In 1 Year:

  • 10Mbps/2Mbps connections for less than $50 per month.
  • 3Mbps for less than $35 per month.
  • At least one fiber bandwidth provider other than AT&T
  • Free Wifi at Library and downtown

In 5 Years:

  • 100 Mbps connections for less than $100 per month.
  • Network reliability sufficient to run 911 services over the connections.
  • A “carrier hotel” with at least three carriers providing bandwidth.

In 10 Years:

  • 1000 Mbps connections for less than $100 per month.

Keep in mind, this isn’t a plan that is being proposed, it is just my quick attempt to demonstrate what a plan could look like.

Bourbon County Local News