Wednesday, September 28, 2022

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Did county overbill Ossipee residents on their municipal property taxes?

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QUESTION: Is it true that Alamance County’s tax office will have to send refunds to taxpayers in Ossipee because it mistakenly overbilled them in their last property tax statements? Could something similar happen to other communities that rely on the county’s tax office to collect their property taxes?

ANSWER: HAL, the sociopathic supercomputer in Stanley Kubrick’s 2001: A Space Odyssey, famously blames “human error” when things start to go wrong on the interplanetary voyage that occupies much of the film.

And, in goings-on much closer to home, it was also human error that apparently caused the county’s computerized billing system to mistakenly overcharge the residents of Ossipee on their municipal property taxes in 2020.

According to the Alamance County’s tax administrator, Jeremy Akins, an erroneous entry by one of his staff members was the immediate cause of this blunder, which resulted in 336 accounts being overbilled to the tune of about $30,200. Akins nevertheless stressed that this clerical goof was, in some ways, the byproduct of a convoluted process for administering property taxes in Ossipee that he had inherited when he took over the county’s tax office in 2013.

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Akins recalled that this idiosyncratic procedure evolved over time to distinguish the property taxes that the county collects on behalf of the town from those that ultimately fund the fire department that serves the much larger Altamahaw-Ossipee fire district.

According to the county’s tax administrator, the collection of the fire department’s property taxes had been simple enough for the county before the town of Ossipee obtained its corporate charter in 2002.

“When Ossipee incorporated, the A-O fire district lost the ability to tax into Ossipee,” Akins went on to recount. “But Ossipee still has the responsibility to provide fire service. So, what the town of Ossipee does is that they use their taxing authority to levy a tax, which they match to whatever the fire district is charging.”

Akins said that the county’s tax office initially collected both of these levies in Ossipee’s name since the Altamahaw-Ossipee fire department has no independent taxing authority. He added, however, that in 2008, the town asked the tax office to treat the fire department’s funds as a separate levy on each property owner’s bill. As a result, residents of Ossipee now see a line item for their municipal taxes, which are currently assessed at a rate of 7.25 cents for every $100 of property, and a separate item for the fire department, which receives 14 cents for each $100 valuation.

Akins conceded that the separation of these two revenues is little more than a diplomatic fiction, but one which his office has piously observed nonetheless.

“What we really should have is the town at [a rate of] 21.25 [cents],” he added. “But to accommodate them, we pretend that the fire district can also assess a tax.”

Akins said that, for one reason or another, a member of his staff mistakenly credited Ossipee with the combined tax rate of 21.25 cents when his office processed its latest tax bills in July of 2020. The same staff member then entered a figure of 14 cents for the Altamahaw-Ossipee fire department. Akins admitted that he himself failed to spot this mistake when he proofed the staff member’s entries. As a result, the town’s residents were effectively double billed for their fire protection, although the proceeds of this reduplication were passed along to the town, which wound up with nearly three times the revenue it should’ve received from the tax office.

Akins added that he and his colleagues remained blissfully unaware of this error until roughly a month ago when an audit of the town’s finances finally caught the discrepancy.

“The town got the money,” the county’s tax administrator confessed. “Fortunately, they didn’t go out on a spending spree, and the money is still there…But what really surprised me is that it for 11 months, not one of the citizens of the town said anything, nobody from the town said anything…and I didn’t know anything until the auditor found the triple payment.”

Akins added that the wheels are already in motion to correct this mistake, although it will take some time for the tax office to go through the process to make the town’s taxpayers whole.

“We will be sending out refunds,” he stressed. “So, the 336 people affected will get a refund if they’re paid up. If not, they won’t get a refund, but they will get a corrected tax bill.”

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