State board says Floyd County supervisors acted within law on jail project, but resolution error cuts taxes anyway

By Bob Steenson, bsteenson@charlescitypress.com

The State Appeals Board said a group of petitioners did not prove that the Floyd County supervisors had spent money inappropriately or acted incorrectly regarding the new law enforcement center and courthouse update project.

But the petitioners may ultimately get the reduction in property tax collections that they wanted anyway, as the Appeals Board in its ruling Monday identified an error in the budgeting process that could mean the county collects $1.184 million less than it had planned in property taxes next fiscal year.

Incorrect numbers were used in a resolution passed by the Board of Supervisors setting the maximum property tax that can be collected in the general services and rural services parts of the 2021-22 budget.

Floyd County Auditor Gloria Carr said she used the wrong column of figures when making up the resolution for the board to vote on, but there was evidence of what the board had actually intended, and she hopes the resolution can be rescinded or corrected.

If it can’t be changed, Carr and Supervisor Chairperson Linda Tjaden said, the county will need to make some tough decisions on a budget they said was already very tight.

“Obviously the first thing you’re going to look at is the project,” Tjaden said. “At this point we’re so close to opening (the LEC) that it makes no sense to not finish up that part of the project, so if there are any reductions I’m sure one of the big areas that we’re going to have to look at is the courthouse.”

She added, “There’s just a lot of things we need to know first before we’re going to act on it.”

The decision made at a telephone conference meeting of the State Appeals Board Monday afternoon was the culmination of a process started in March by members of the Coalition for Better County Government and others, raising questions about the law enforcement center project’s costs and the Board of Supervisors’ decisions on funding the project, and whether they could legally spend more than the voters had authorized to bond for the project.

As a result of those decisions, county property taxes were going to take a large increase in the new fiscal year, a situation that the petitioners said was creating a hardship for county property owners.

Gordon Boge, the president of the Coalition for Better County Government, said he was waiting to get more information from the state on what Monday’s ruling meant, but “until I hear otherwise, I do believe the Floyd County taxpayers did prevail.”

“From what I understand right now I’d say it’s a win for the Floyd County taxpayers,” he said.

The coalition had submitted a petition with more than 1,000 signatures to the county in early April that forced a hearing by the State Appeals Board to examine the county’s spending and budgeting process. That hearing was held May 10 at Wrightz Auction Co. north of Floyd.

The State Appeals Board, consisting of the director of the Department of Management, the state treasurer and the state auditor, made its decision on the hearing Monday.

Carrie Johnson, one of two members of the Iowa Department of Management who was at the Floyd public hearing held in May, summarized each side’s arguments and made the recommendation for the state board to consider.

“The petitioners did not meet the burden of proof to justify a reduction in the fiscal year 22 budget. The county met the burden of proof for the increase in the fiscal year 22 budget, but it’s important to note there was an error in the county budget process,” Johnson said.

At the budget public hearing held March 1, the so-called “max tax” hearing, the supervisors and a group of county residents discussed a proposed max tax that could result in a 24.55% increase in the general services tax collection, and a 1.99% increase in the rural services tax collection.

According to the notice of public hearing published before the max tax hearing, the general services property tax was going to increase from the current $4,853,764 to a maximum of $6,045,351, and the rural services tax was going to increase from the current $2,119,559 to $2,161,823.

Those figures and the 24.55% and 1.99% increases were the figures discussed — sometimes heatedly — at the public hearing.

But on the resolution passed after the hearing ended, the supervisors approved a maximum general services collection of $4,853,764 and a maximum rural services collection of $2,119,559, using the figures for the current year rather than the proposed budget for next year, although the resolution did include the intended percentage increase numbers.

“Code of Iowa 331.434 specifically states that the board, meaning the Board of Supervisors, shall not adopt a tax in excess of the estimate published, or the applicable amount specified in the resolution adopted under section 331.434(a), which is the max levy resolution,” Johnson said.

The total reduction is $1,142,000 in the general services collection and $42,264 in the rural services collection.

The state board unanimously passed Johnson’s recommendation to not change the budget because of the protest, but to reduce the amount of tax allowed to be collected because of the error in the resolution.

State Treasurer Michael Fitzgerald, agreeing with the recommendation regarding denying the petitioners’ complaint, noted that the referendum to bond for the LEC and courthouse project passed with 68% of the vote.

“That’s a pretty overwhelming show that certainly the county’s behind it,” he said.

Contacted after the meeting, Auditor Carr said error in the max tax resolution was the result of her copying the wrong column, and no one caught the error before it was passed.

“I have a call to the Department of Management office. I played the recording from that (max tax) meeting and it’s very clear at that meeting that the percentage increase was the 24.55%. The board of supervisors were very clear that they were approving an increase of 24.55% for general services and 1.99% for rural services. They were very clear,” Carr said.

“I just, on the resolution, I typed the wrong numbers. I typed the numbers from the wrong column. I just don’t know if there is any kind of appeal to the appeal board for a technical issue like this,” she said.

“The other side of this is it’s interesting hearing the comments from the Appeals Board that this (LEC project) is obviously something that was necessary, that they got the residents behind it. There’s nothing wrong with what we did in doing the premiums on bonds. We met our burden to prove that everything we did was appropriate and the petitioners did not meet the burden of proof on their side,” Carr said.

The error in the resolution wasn’t anything that the petitioners caught, she said.

Supervisor Tjaden said they are waiting to see if there is any way to change the resolution and the State Appeals Board ruling.

“All of this is kind of up in the air right now, trying to figure out, first, is there anything we can do go back to the Department of Management to correct that resolution. If we can do that, that’s No. 1. If that can’t be done then we’re going to have to look at where we can come up with money,” she said.

Tjaden said she doesn’t blame Carr for the error.

“I told her, we as a board have a responsibility to this, too. We need to be looking at those resolutions very closely to make sure, if we see errors or mistakes, that we’re pointing them out,” she said.

“I told her, we had so much going on during that whole budget process, and I know errors can be made. I get that. We all can make errors, and have. But this particular one is a reminder that all three of us (supervisors) need to be very closely looking over these documents before we go and approve them,” she said.