Van admitted, “It is my fault; I do the work.” Mayor Sarah Jackson wanted to negotiate. Van called it “complicated and the tax law” and they couldn’t split it more than three years. Council member Joy Markum called it “upsetting” over the “County taking a payment before we see documentation.” She fumed that Van “wrote a check to the State that affects what we get.” Van explained the school and cemetery districts should have gotten that money and told of the spread of money of proper taxes between them. Not just Loyalton, but for a number of districts he admitted, “I made the mistake of overpaying Loyalton for nine years,” and told the Council, “You still have the largest residual coming.” He told of trying to get it repaid over five years but the State wouldn’t let him.
Joy told of getting the $19,936.61 less than usual in taxes and “that hurts us.” Van explained working for the City as he does the County and would need another accountant of his stature to keep paperwork and reports going.
Mayor Jackson said the financial impact of $20,000 a year will “shut the lights off,” and told Van to go back to the State. Joy told of expecting the County to make payments and stated, “It wasn’t Loyalton who did it.” Van explained he was told what to do in repayment by the State Controller.
The possibility of City bankruptcy was discussed with Van explaining all debts would go to him. He’d done research and all bills go to the County and then to water and sewer.
Markum wanted the name and e.mail of the auditor and told Van to “be prepared to advocate on our behalf.” The mayor stated there would be a backup letter to Van’s e.mail to the State. Markum stated, “It will shut us down. That’s reality.” Council member Darlene Riedi moved and Markum seconded to direct a letter.
To: Loyalton City Council
Re: State Property Tax Audit
This last summer the State Controller’s Office performed an audit of the last nine years property distributions (AB8 Calculation). The State audi determined that I had made some small calculation errors and over paid the City of Loyalton.
Although these errors were small in any given year the cumulative effect was the City of Loyalton was over paid from 2019/10 thru 2017/18 an additional $59,809.82. Although the State has no issued a final report they require that these funds be paid back to the other taxing agencies (schools, fire district, cemetery districts and the county)This wil result in the allocation of property taxes for three years will be reduced in the December distribution by $19,936.61.
I am sorry for any hardship this will cause the City. If the City Council wishes I will attend a City Council meeting and answer any questions.
Van A. Maddox C.P.A.
Sierra County Auditor/Treasurer-Tax Collector
To: Van A Maddox, CPA
The City Council received your December 19, 2018 letter informing the City that the State Controller’s Office determined that you had made small calculation errors that resulted in the City being overpaid from 2009/2010 through 2017/18 in the total amount of $59,809.82. You further informed the City that in order for the County to be repaid, the City’s allocation of property taxes for three years will be reduced in the December distribution by $19,936.61.
The City is disappointed to learn that it has been overpaid, but fully understands the need to repay the County. While $19,936.61 in one year may not be a large sum to the County, it is a large amount to the City. The loss of that much money each year for three consecutive years will cause significant hardship to the City and further strain an already woefully inadequate budget.
The City respectfully requests that rather than requiring the repayment over three years, that it repay the County over nine years, which is the same period of time over which the overpayments were made. Under this scenario the allocation of property taxes for nine years would be reduced in the December distribution by $6,645.54. Please confirm in writing to the City Council that a nine year payment schedule is acceptable and send the City a check in the amount of $13,291.07, which represents the additional amount the City would have received with the December 2018 distributuion under a nine year repayment schedule.
Sarah Jackson, Mayor