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By Editor Becky Watts
ZEBULON - The Board of Assessors met on July 16, 2024 and made a motion to recommend to the commissioners that the county needs to pay the fine of $48,645 rather than signing the Consent Order that was sent to the county by the Georgia Department of Revenue. There is a lot to this that can be read in depth below, but there were several reasons that were discussed at length in the meeting.
There is a lot to this so a walk through the history of this Consent Order, request for the review by the Georgia Department of Revenue, the audit of the Tax Assessor's Office by a State Review Board, and the penalty itself are needed to understand the entire picture of what is going on.
Further actions will continue on this matter tomorrow. The Pike County Board of Commissioners will hold a joint workshop with the Board of Assessors on Thursday, July 18, 2024 at 2 p.m. in the upstairs courtroom at the Pike County Courthouse.
History
The county was penalized $48,645 by the Georgia Department of Revenue in January of this year because the county's Tax Digest in 2022 was "not uniform and equalized" and there were assessments that were not between 36% and 44% of the assessed values on property in 2019 and 2022. $48,645 is based on a $5 penalty for every parcel of land in the county because the county was not in line with Georgia Department of Revenue requirements. (Click here to read the penalty letter: pikecountytimes.com/secondary/DORpenaltyletter2024.pdf.)
There is a process with several moving parts working together with taxes in our county. The Board of Assessors and the Tax Assessor's Office work together on setting the sales ratio for the county. The Board of Commissioners and the Board of Education work to put together their budgets and needs for their portion of county taxes which results in setting a millage rate for the county and school portion of taxes which ties into the sales ratio amount for each piece of property that is set by the Tax Assessor's Board.
In the May 21, 2024 meeting, the Board of Assessors voted to leave the square footage at $91 per square foot even though Chief Appraiser Greg Hobbs recommended raising it to $98 per square foot since the current sales ratio is at 35% and is below the state's recommended value of 36%. The state requirement of 14 mills for Quality Basic Education Act (QBE) with the Board of Education was cited as a major reason for that decision. QBE requires that the county pay its portion of school funding according to a 1985 law called The Quality Basic Education Act or QBE in order to obtain funding from the state. More on this in a moment. [Note from the Editor: I pulled sales ratio out of the first sentence of this paragraph in two places and replaced it with the square footage. I am sorry for that error.]
Next year is a review year, and board members will discuss and vote on the sales ratio to ensure that the value per square foot meets state requirements of 36% to 44% of the assessed values in the county. (Read more here: pikecountytimes.com/secondary/taxassessor6.3.24.html.)
The Pike County 2024 Performance Review was issued by the Georgia Department of Revenue. This 101 page document is the investigation of the Tax Assessors made by an independent Performance Review Board that was conducted back in March and delivered to the county approximately three months later.
Members reviewed minutes of meetings, read through policies and procedures of the Tax Assessor Board, looked through tax digest data for 2021, 2022, and 2023 tax years. They interviewed a number of people in the county including current and former Tax Assessor Board Members, members of the appraisal staff, and many employees in the county that interact with the Tax Assessor's Office. They also reviewed a sampling of properties within the county to verify the accuracy of the county's tax records and techniques that were used to appraise these properties and reviewed staffing levels and equipment used by the appraisal staff.
There was a list of 24 comments and concerns that were presented to the county in this review from interviews with county employees by the Review Board. Concerns about values and equity were presented as well as a lack of communication. Other concerns included tax digests are not being submitted in a timely manner, that Board of Assessors members were not completing state mandated education in a timely manner, a lack of supporting documentation being given to board members to make decisions, delegation of duties to staff members as well as a need for additional training for staff members, current resources not being used efficiently, a lack of on-site field reviews, and an issue with communication to ensure that there are adequate vehicles to perform regular duties.
Suggestions were made to the county by the Review Board based on the County's request for the review and a possible waiver of the fine. Increased pay was suggested in order to retain employment, a need for continuing education in assessment, and a need for updated technology for cited by this Review Board. There were several recommendations made by the Review Board regarding changes to current procedures and valuation methods to ensure proper valuation throughout the county and advised that "The appraisal staff should perform a door-to-door, three-year physical review of all parcels. The PCBTA should also review current electronic data annually, and purchase change-detection software to ensure all missing or incorrect building data is added to the Digest." It was also pointed out that if parcels in the county are not within the 36 to 44% range on sales ratio, the county is missing out on funding from public utilities that operate within the county.
Overall, the primary areas of concern gathered from interviews within the county were communication, education, and organization. Suggestions were given on how to obtain each of these directives in this 101 page document. (To read through this 101 page document, click here: pikecountytimes.com/secondary/Taxassessorperformancereview2024.pdf.
The 13 page Consent Order was issued by the Georgia Department of Revenue after the county appealed the $48,625 penalty and asked for a performance review investigation of the Pike County Board of Tax Assessors. The Department of Revenue agreed to permanently waive the penalty or a portion of the penalty if the county agreed to its terms which include 54 written mandates.
Those 54 terms include ensuring that the sales ratio is between 36% and 44% of the assessed values prior to the 2025 Digest, developing a request for proposal redefining the scope of work for the appraisal staff which will include a physical review of all property in the county at least once every three years, updating county procedure to match state mandates, taking state mandated training including data entry on the CAMA System for property valuations, installing specific software in the office, ensuring that due process is given to each property owner when it comes to the appeal process, obtaining updated digital aerial mapping that corresponds with GIS parcel data and verifying tax district information, and contracting with a vendor to ensure that the 2025 digest is completed before July 15, 2025.
Quarterly reports are also required from now through the submission of the 2025 Tax Digest that include a list of six items pertaining to staffing and training, status of physically reviewed areas and timelines for completion, data entry and valuation requirements, results of sales assessment ratio studies regarding valuations on all classes of properties, and a financial report showing itemized expense activity for the quarter and year to date.
The Revenue Commissioner will advise the county within 30 days whether or not the county failed to comply with the Consent Order. If the county fails to meet the terms and conditions laid out in this document, there will be a penalty assessed in the amount of $500 per working day until the conditions are met up to the total of the original penalty of $48,625. (To read this 13 page document, click here: pikecountytimes.com/secondary/pikeconsentorderDOR2024.pdf
The July 16, 2024 Board of Assessors Meeting
The first problem that was discussed is that the school system cannot go lower than 14 mills or they will lose their QBE state funding that will require citizens in the county to pay more taxes. Overtaxing citizens was a concern for this board both in this meeting and in a previous meeting where they voted to leave the sales ratio at $91 per foot rather than raising it this year, but it was noted that it can be raised next year if that is needed to ensure that the sales ratio is between 36 and 44% as is required by the State Department of Revenue. The number may remain the same if the market levels out or cools too. (More on this in a moment. And you can read the article entitled "Board of Assessors Leaves Sales Ratio at $91 Per Square Foot" by clicking here: pikecountytimes.com/secondary/taxassessor6.3.24.html.)
Much time was spent discussing what is needed in order to try to meet state requirements for physically walking each property one time every three years. The lack of staff in the past was cited as well as a need for current staff that is dedicated to help deal with the amount of paperwork that is generated on a daily basis. One board member noted that the audit says that our facilities are inadequate but the consent order mandates that the county give what is needed to do the job. The number of parcels per appraiser was a topic of discussion as well.
Members were concerned with trying to meet the mandates but were also concerned that the county would fail the requirements of the Consent Order and end up paying the entire penalty regardless but in $500 per day increments.
Here is part of the discussion from the meeting when members were discussing the Consent Order with Attorney Morton: "Y’all voted to authorize me to set the ball in motion. Asked for a Performance review. But the Consent Order is tied to the Penalty that we were given. We asked for a waiver and told them that we would be willing to abide by their wishes rather than paying the $50,000. $50,000 or under the state’s thumb? The county is on their radar now. Said that there will be an impact if we say no. You have the right to say no, but there will be repercussions. The Department of Revenue wants compliance to state law. They gave us a proposal to help us abide by state law. Where does the money come from and what will public perception be about this penalty? You have the right not to agree, but public perception is affected by this penalty. Are you going to explain that it is cheaper to pay the penalty to avoid an increase in taxes because it will require an increase in taxes to comply with the consent order? Said that Christopher did the math on this, and it’s a $5 penalty versus $250 in taxes. There could be consequences for not complying in the way that the Department of Revenue said that we need to. There is possible recourse. But the penalty would have to be paid within 30 days..."
A discussion outside of the meeting on the $5 penalty versus $250 in taxes with member Christopher Tea resulted in the following explanation: "...the school system cannot go lower than 14 mils, even though their budget last year only required 12.107 mils. This resulted in the school system collecting approximately $1,262,091, or $116.34 on average per parcel, in excess tax revenue over their actual 2023 budget. Going lower than 14 mils would result in the district losing their QBE state funding. In contrast, the penalty of $48,645 is $5.00 per parcel." That was a specific number mentioned in the meeting so Pike County Times was interested in the details behind it. (Click here to read the entire conversation from yesterday's meeting: pikecountytimes.com/secondary/taxassessor7.16.24.html.)
More discussion during the meeting. Why would we sign a consent order that we know that we can’t comply with? One member said that the Department of Revenue may cut us a break if we are trying to meet their requirements. We still have to be within the percentile because that is what the law requires.Though even as Hobbs advised that, he said that according to two companies that he spoke with today, there is no way to get this completed by July 15, 2025. "They (the Department of Revenue) recommend that we hire an outside company," he said, "and the companies are saying that this can’t be done. There is no win here for anyone."
Members agreed that it appeared to be an exercise in futility to sign the Consent Order knowing that we are not going to be able to meet the requirements.
When the discussion was ended, the Board of Assessors voted 5-0 to recommend that Pike County not sign the Consent Order and pay the $48,625 fine to the Department of Revenue.
Closing
Since the Pike County Board of Commissioners is the governing body here in the county, commissioners will be discussing the Review and the Consent Order to decide whether or not to sign it.
The biggest concern for the County Commissioners and the Board of Assessors is working to get the county into compliance with state requirements for Pike County's assessments through the Tax Assessor's Office.
Not signing the order could result in repercussions that may be unseen at this time as the county attorney pointed out in yesterday's meeting. How to ensure that the Tax Assessor's Office is working toward state compliance is a question that will have to be answered if the county decides not to sign this document.
Signing the order will bind the Tax Assessor's Office to monthly, quarterly, and and yearly deadlines with the Department of Revenue that could result in monetary penalties of $500 per working day up to the overall penalty of $48,645.
Accountability for changes that were suggested from the state level could likely factor into the final decision of whether or not to sign the Consent Order.
The Pike County Board of Commissioners will hold a joint workshop with the Board of Assessors on Thursday, July 18, 2024 at 2 p.m. in the upstairs courtroom at the Pike County Courthouse. The public is invited to attend this meeting.