The Liberty County Development Authority on Monday voted to pay $137,721.92 in disputed property taxes from a former industrial tenant.
But the board also will seek a refund of more than $45,464 to cover the taxes, interest, penalties and fees levied since 2010 and 2011.
Attorney Kelly Davis, who also represents the county, briefed the board on correspondence from the board of commissioners asking that the entire amount be repaid.
“Of course, you know, this is a perfect storm,” Davis said. “The industrial authority never finds itself in the position of having to liquidate equipment, this is a first in your history.”
The issue has been ongoing for about a year. It arose when Liberty County Tax Commissioner Virgil Jones saw that the LCDA sold property left when BioAgra defaulted on its lease — property for which taxes had not been paid since 2006.
The LCDA in April voted to pay $61,005 for the taxes assessed on the tenant in 2007, 2008, 2009 but not to cover the interest or penalties, taking the position that the authority should not be liable for such additions because it was not the true owner of the property at that time and was not aware that taxes were outstanding.
They presented the case, however, that taxes should not have been levied in 2010 and 2011 as the property had transferred ownership to the LCDA by then, and its property is tax-exempt.
However, BoC Chairman and LCDA board member John McIver said that the taxes should be paid because the items were accounted for in the digest and several entities established their millage rates with the assumption that revenue from the property would be collected.
At a November board of commissioners meeting, Chief Appraiser Glenda Roberts said her office never received notification that the property had transferred ownership from a private entity to a public one, which is why it was not removed from the digest.
During that meeting, the board of commissioners agreed to request full payment up front with the understanding that the development authority then could request a refund for the years 2010 and 2011.
LCDA votes to pay full amount
The LCDA board on Monday discussed the matter at length — and reviewed the circumstances — before coming to a consensus.
LCDA Director of Finance and Administration Carmen Cole said the board currently has about $137,500 in proceeds from the sale of the equipment on hand. The amount owed is greater.
When he was outlining the possible solutions to the dispute, Davis noted that a refund is not a guarantee but that he would hope the BoC would offer one.
“This board of commissioners is not so naïve that they would say, ‘No, we’re not going to refund anything back to you,’ — I don’t think they would do that, but this has to be the process to get this thing resolved,” McIver said. He added that the taxes belong to the school board, hospital authority and city of Hinesville as well.
After more questions to clarify, board member Rep. Al Williams, D-Midway, who participated by teleconference, offered a motion.
“The bottom line is … it’s obvious that we owe the money; the citizens of this county now believe we owe a valid debt and won’t pay it,” Williams said. “We need to get this behind us; we’ve talked it to death.
“I move that we pay the full amount of taxes ’07-’11. That being done, file for a request of refund for interest and penalties …,” Williams said.
The vote carried unanimously. In the request for refund, the authority also will document the money it spent to oversee the auction of items and renovate the space to accommodate a new tenant.
Immediately following the vote, board treasurer Brian Smith motioned that the authority also review every lease it has, release the list to the tax assessors immediately and continue to review the leases and update the assessors on an annual basis.
“I think it’s a good thing,” Davis said. “Not only will it help the assessors, but it will also remind our industrial prospects of their obligations, because as you know, not just with ad valorem taxes but with Freeport exemptions — we’re not involved with that — but they have made mistakes with Freeport exemptions.”
The vote carried unanimously.
Cole pointed out that the authority does not have enough money in the designated account to repay the full amount and noted that the move will require a budget adjustment.
In other news on Monday, Karp, Ronning & Tindol auditor Chris Lightle also presented an audit report in which he commended the board for improving the timeliness of its reporting. He did not list any significant findings.