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Monroe Co. superintendent's $1.1 million mistake results in tax increase for thousands of taxpayers

More than 10,500 taxpayers affected
Posted: 3:14 PM, May 10, 2018
Updated: 2018-05-10 23:38:12-04

MONROE COUNTY, Ind.--  A school superintendent made a $1.1 million mistake that’s resulted in tax increases for thousands of taxpayers in Richland and Bean Blossom townships, Call 6 Investigates has learned.

“I was shocked and surprised,” said Kathy Abell, a longtime taxpayer in Stinesville. “At a school board meeting last year, we were assured our taxes would remain neutral, they wouldn’t increase or decrease. So, when I received the bill I was unpleasantly surprised my taxes had gone up.”

Abell’s spring property tax bill increased by $120.

“It’s quite a bit for me and my family,” said Abell. “I don’t make a lot of money. I work part-time from home.”

Gosport homeowner Lisa Land’s property tax bill went up $72, although she said the amount was lower than others because they purchased a property with little value.

“I stay home with the kids and we’re a single income family,” said Land. “$72 doesn’t seem like much, but it really does add up.”

Land contacted Call 6 Investigates Kara Kenney to dig deeper into exactly what happened.

The tax bills show it was the school district’s tax rate that increased from 2017 to 2018.

Call 6 did some checking and found out the Richland-Bean Blossom Community School Corporation (RBBCSC) superintendent Dr. Mike Wilcox made the error while preparing the debt worksheet submitted to the Indiana Department of Local Government Finance.

Dr. Wilcox erroneously reported the 2013 Lease Rental bond payment for the first six months of 2019 as $1,224,208 and the Building Lease payment as $1,375,500.

The building lease line is the total bonds used to build Edgewood Primary School and Edgewood Intermediate School.

School board president Dana Kerr told Call 6 the Lease Rental payment should have been included in the Building Lease payment box, rather than being listed separately.

“The increase in the Debt Service property tax rate was simply a mistake,” said Kerr in a statement to Call 6 Investigates. “The RBBCSC School Board apologizes to our
taxpayers for the mistake.”

The school district submitted the worksheet to the Indiana Department of Local Government Finance, the state agency responsible for ensuring property tax assessment and local government budgeting are carried out in accordance with Indiana law as well as approving tax rates for schools and other taxing authorities. 

DLGF did not question Dr. Wilcox’s calculations, said Kerr.

“According to the DLGF, as long as there was capacity for extra funds in our operating balance, they will collect the extra funds that RBBCSC reports are needed in the Debt Worksheet,” said Kerr. “In 2017, the total funds for debt service were calculated as $4,891,524. For 2018, that number rose to $5,993,473 due to the error, which caused the tax rate increase.”

Call 6 Investigates contacted DLGF last week about the error, and we are still waiting for answers from the state agency.

Call 6 Investigates also contacted Monroe County Auditor Catherine Smith who said she did not know about the problem until Call 6 contacted her.

Smith then notified the Monroe County Council at the May 9 meeting.

 “It made the tax rate go up, higher than it should,” said Smith. “No one contacted me, the school hasn’t contacted me.”

Smith said 10,605 tax bills are impacted by the increase.

Monroe County councilor Marty Hawk, who represents the impacted area, expressed concern upon learning of the blunder.

“This is just so regrettable because I know no one on that school board intended for this to happen, nor did the superintendent intend for this to happen,” said Hawk. “It’s a terrible error and there’s no way to change it now. The tax rates are already set.”

Taxpayers are asking for a credit on their accounts.

“I don’t know why there couldn’t be a refund to taxes or adjustments couldn’t be made,” said Abell.

Others are questioning the timing of the superintendent’s blunder, given the school corporation is starting millions of dollars in construction projects including renovations and improvements to athletic facilities.

"People make mistakes, but it's very convenient that they made this error as they're getting ready to embark on a major building project," said Land.

The school board president denied the increase was intentional.

“It was not related to the new facilities projects as the bonds for those yet to be started projects are not in effect for 2018,” said Kerr. 

The district plans to use the additional funds to reduce interest payments on new bonds.

“It is our hope that the Community will be receptive to our good faith efforts to maximize the value of the $1,100,000 in extra funds collected to benefit the schools by a sum of over $1,700,000,” said Kerr.

The district is also taking steps to avoid mistakes from happening in the future.

“The Debt Service Worksheet, and other components of the budget will be brought to the RBBCSC School Board and the public in much more detail than it has in the past; before submittal to the DLGF,” said Kerr. 

In 2019, the RBBCSC property tax rate for debt service will go back to approximately $0.61, which is the same rate as 2017.

The 2018 property tax rate for debt service is $0.728.

As for Lisa Land and Kathy Abell, they said many taxpayers are still in the dark about what happened.

The district held a meeting on the topic on April 30, but many residents were unaware of the meeting.

“I’m not happy about it, and I’m not comfortable with how all of this is being done,” said Land.  

They’re pushing for public officials to mail letters to everyone impacted by the $1.1 million blunder.

"Let taxpayers know what happened and how and why it was going to be resolved,” said Abell. “I don't really feel like that's going to happen."

This is not the first time the Richland-Bean Blossom Community School Corporation has faced scrutiny .

They faced criticism after deciding in 2017 to close Stinesville Elementary School

Also, a recent State Board of Accounts audit was quite critical of the district’s financial reporting policies and procedures .

The audit resulted in seven corrective action plans put in place by the district and signed by the superintendent on March 28, 2018.

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