Lawsuit costs causing budget problems for county assessor

Legal fees from assessment-based lawsuits have exhausted the Jefferson County Assessor?s budget, forcing the assessor to tap her reserves and initiate furloughs.

Beginning Friday, the assessor?s office will be closed one day per week through the end of June.

The Jefferson County Conference Board voted Monday to institute an austerity program and authorize spending $25,000 of the assessor?s reserve fund this fiscal year ? the decision does not become official until the budget is amended during a meeting May 9.

Monday, assessor Sheri Blough Neff presented the board with a forecast of her budget. Accounting for just payroll and insurance, she anticipates a negative $12,177 balance at the end of June and, once the $52,533 in reserves has been spent, a negative $3,478 balance at the end of September.

Those figures do not take into account an estimated $5,000 per month in outside incidentals, such as the office supplies Blough Neff has been purchasing out-of-pocket, nor a $13,657 legal bill due in September.

The assessor?s office began the fiscal year with $30,000 budgeted for legal fees. Three individuals pursuing 22 lawsuits, which have now been settled through the Property Assessment Board in Des Moines, plus some lingering legal fees from the previous year, have cost the assessor?s office $126,000.

?I?m a small budget compared to some of the rest of you, and I think this incidence is a real good example for all of us to kind of remember and think about. This could happen to any of you. All it takes is a lawsuit or anything of that nature, and your balances could be driven down,? Blough Neff said.

Her proposal was to access the office?s reserves and borrow money from the county or apply for a $65,000 line of credit from one of the local lending institutions to get through September when property taxes are due.

The legal bill owed in September could come out of the $80,000 budgeted for legal fees in 2011-2012, she said.

?That?s providing I don?t have any lawsuits. May will be the month of protest, and we have probably 135 petitions out right now. Jay Marcus, who is the leading attorney in these lawsuits, has six out. We?ve spent numerous hours providing him with information,? Blough Neff said. ?There?s no way of preventing these lawsuits.?

The value of commercial property in Jefferson County dropped some this year, and farmland, especially lower grade farmland, took a significant jump thanks to application of the new soil survey, Blough Neff reported. Some farmers have requested petitions.

Blough Neff explained the lawsuits can?t be handled by the county attorney?s office because the cases are best handled by experts in real estate law. Jefferson County Attorney Tim Dille pointed out the petitioners aren?t just burying the assessor?s office in requests, they?re also submitting extensive discovery requests to the office?s legal representation ? all of which takes time and costs more money.

?This appeals board that the Legislature threw in about four or five years ago ? it doesn?t cost these people anything to file with them. They?ve just got to file a piece of paper with them. If they go to court, there?s a lot of fees involved,? Dille said.

?Everything that happens at the appeals board is subject to going to court,? Blough Neff said.

?We just had a case thrown out on University Manor, which is the land under the condos that sit on campus, for the fourth time. They?ve been to court once ? they lost. They?ve been to the PAB twice, and they appealed the third time to the PAB, but it got thrown out,? she continued. Each entity has upheld the valuation, but the assessor?s office still had to go through the hoops, Blough Neff said.

Jefferson County Supervisor Lee Dimmitt expressed discontent with the cycle. The 22 lawsuits this year resulted in the taxes dropping from $259,000 to $178,000 in 2010 and $177,000 in 2011.

?You spend $100,000 to collect $50,000 ? it?s not good business sense,? he said.

Jefferson County Supervisor Dick Reed said it?s necessary to protect the county?s property values and maintain equity.

?My initial thought was that every taxing entity chip in because [Blough Neff] works for every taxing body. She doesn?t just work for Jefferson County. She doesn?t just work for Fairfield. She doesn?t just work for Packwood. She is the reason you?ve got your tax dollars,? Reed said.

His suggestion was quickly rejected.

Jefferson County Supervisor Steve Burgmeier recommended giving the assessor access to $25,000 of her reserves to get through the fiscal year. The office?s budget issues would then need to be addressed again at that time.

?If you?re not going to cut expenses, I won?t vote for it,? said Dave Hollingsworth, the representative from the Pekin Community School District Board of Directors.

He advocated living without the office?s contracted appraiser until there are sufficient funds in the budget. That idea was rejected because the appraiser may secure another contract in the meantime, and the assessor?s office is already down one employee since a resignation last week.

Gail Miller, president of the Fairfield Community School District Board of Directors, favored furloughs.

Blough Neff figured each day the office is closed cuts $588 from the budget for payroll. She said her office would be able to make do with the $25,000 and reduced hours through the end of the fiscal year.

The conference board consists of the county?s mayors, supervisors and representatives from the Fairfield Community School District and Pekin Community School District; the three entities each get one vote. The Jefferson County Assessor?s Office, as overseen by the conference board, is a separate budgeting entity from the rest of the county.