Computer glitch throws off city tax bills
River Falls took action at its last City Council meeting to correct tax-accounting discrepancies realized after people began receiving their annual property-tax bill.
City Clerk Lu Ann Hecht explained after the meeting, "There was a hiccup in the transfer of data," adding that it's a first-time situation for the city.
She began learning of the discrepancies after a resident brought in their tax bill, which did not reflect adjustment made after the open-book review.
Hecht said the city's consultant, Associated Appraisal Consultants in Appleton, conducts the city's assessments, which means they determine the values used to calculate taxes.
The firm uses specialized software and stores the city's property records at its office. The clerk said Associated continues to investigate the cause of the errors.
Typically the appraisal professionals send the "tax roll" to the city and to each county. It is typically resent after adjustments are made following the city's annual open-book review period.
Hecht explained how citizens have a chance during open-book sessions to meet with assessors and challenge the value assigned to their property, usually asking to decrease it. In applicable cases, the assessor makes the adjustment then reports it to both the city and county so it will be reflected on the person's tax bill.
Hecht confirms that some of those adjustments weren't reflected on the 2012 property tax bills.
She said, "The assessor believed he sent them the information, and the county believed they were working with the correct version."
After the experts began digging in, a few different problems became apparent.
1) A significant property became tax exempt but wasn't counted as such
2) Adjustments to taxes on personal property were not reflected
3) Some defunct businesses were not removed from the personal property list.
4) Property owners who had adjustments after the open-book review did not see those adjustments reflected on their tax bill.
The errors result in River Falls having a collective total of about $15,474 less than it thought it would. However, Hecht explains that the city should be able to reduce that amount to about $2,300 by asking other taxing entities to share the deficit.
During 2012, Chippewa Valley Technical College bought from a private landowner, an adjacent tract of land to accommodate expansion. The property should have been recoded as tax-exempt but instead received a bill for $7,400.
Hecht explained that several businesses closed and should not have been assessed for personal property values, yet they show on the list of taxes to be collected. The clerk explained that only businesses pay taxes on the assessed value of their personal property -- usually the bigger things needed to run it such as bar, restaurant or retail equipment.
The personal-property assessment errors involved 14 accounts that should have been deleted, 21 accounts that should have reflected a lower assessed value, and 66 accounts that should have reflected increased values but did not.
"Of course the people who overpaid," Hecht said, "we'll give them a refund."
The clerk said people who underpaid will receive a notification letter sometime in February then two tax bills at the end of 2013. One will be for the current year and one will be for the amount leftover from 2012.
A memo to the City Council, included at the last meeting, says River Falls usually advertises for the providers of its various services every 7-10 years -- legal, banking, assessing, and more. The document says River Falls has worked with Associated for six years, renewing a one-year contract each year since the first.
Hecht adds that the people at the appraiser's office have always been helpful and good to work with. She doesn't doubt their ability and says 'due diligence' will likely be much more thorough next year.
The clerk said nobody is pointing fingers or placing blame. Hecht considers the discrepancies an unfortunate occurrence but said she's just glad it didn't affect more people.