Archived Story

City changes tax refund policy

Published 10:10pm Thursday, July 18, 2013

Suffolk officials have changed a policy under which the city assessor’s office refunded nearly 10 years worth of erroneous tax payments to Nansemond Cold Storage.

The assessor’s office approved a payment of $329,866.39, including interest, this year after learning in March 2012 that taxes had been levied for one building as if it had existed on two parcels.

State law allows property tax refunds to be approved by the assessor’s office for only three years worth of taxes. The code requires that refunds for periods longer than that be subject to approval by a court.

City Assessor Jean Jackson told members of the City Council about the error and her handling of the refund in a letter dated July 12. In that letter, she stated that her office’s policies regarding tax refunds had been “reviewed and changed so that no such payments will be made without a review as to its legality by the City Attorney’s Office, pursuant to the Code of Virginia.”

During Wednesday’s City Council meeting, City Attorney Helivi Holland read a brief statement in support of the assessor’s office’s handling of the matter.

“This was not a case of dispute about the taxes owed but a case where the city assessor completed extensive research to determine the amount that was overpaid by Nansemond Cold Storage, and the parties agreed to sum that was overpaid,” she said in a statement that drew no public response from City Council members.

“The Code of Virginia gave Nansemond Cold Storage the right to sue the city for the amount, and the city has authority to avoid litigation by settling matters before court.”

Suffolk officials have not directly addressed the apparent conflict between the state code’s prescription for handling such matters in open court and the assessor’s handling of the Nansemond Cold Storage case through a direct agreement between the two parties.

However, members of City Council met behind closed doors following a work session Wednesday afternoon, citing legal matters involving Nansemond Cold Storage.

In an emailed statement last week, Suffolk Chief of Staff Debbie George wrote, “It is my understanding that this was a case of double taxation that could have gone to court. The city chose instead to settle the matter.”

In her letter to council on Friday, Jackson wrote “… the process of refunding payments for erroneous taxes has been changed so that no such payments will be made without review as to legality by the City Attorney’s Office, pursuant to the Code of Virginia.”

In the same letter, Jackson wrote that a supplemental tax had been assessed on the property in question, because it had received rehabilitation tax credits for which the city discovered the company did not qualify.

Those credits had been granted for 10 years. Jackson’s letter stated that the supplemental assessment had been levied for the 2010 and 2011 tax years, for a total of $25,529.32, “in order to recoup the taxes that should have been collected by the City.”

Jackson’s letter did not address the apparent underpayment of taxes for the other eight years during which the rehabilitation credit was erroneously granted.

  • Roger Leonard

    A mistake was made, and any reasonable person can understand that. However, if we in fact have the “Greatest City Manager in the area”, why are there no processes in place to insure that the expenditure of funds are brought to her council for review, in such a case. I understand that the Assessor works for the Council, but it is in fact the job of the city manager to watch the public till and all that affect our city…

    Then we find we actually were getting it on both ends of this deal, with the company involved claiming tax-credits for ten years it was not even due… Where are the oversight and checks and balances here?

    If we have a professional staff, and I do know most to be so personally; why is there no accountability for such fiascos? If such an error is made, is it due to a lack of professional capacity? Or, might it be that those who profess to be guarding the hen-house and our dollars and just counting their own ill-gotten gains with recent 14+% raises? I would say we need an accountability review of this and other like issues, to determine greater understanding. I do like the idea of a review of all such transactions of the Assessor, by the city attorney to determine conformity to the law, However, it seems clear that we may have an assessor who may need more training. Will she get it to insure our standing in such transactions and cases? Doubtful…

    Then we need that great city manager we pay so much for, to do a better job of just asking the reasoned questions we expect of such significant intellect. Not going to happen I know, but that might change in the 2014/2016 elections…or we can only hope…

    Suggest Removal

    • Mr. Developer

      They hired someone with NO experience. The city has sent her to all kinds of fundamental education. Perhaps they should look at hiring someone that has come up through the assessment profession? Norfolk, Virginia Beach and other cities hire assessors that have actually worked in the field previously. Instead, Suffolk hires a newcomer with no experience. That is like hiring a gas station attendant to be the Fire Chief.

      Suggest Removal

  • jhuxster

    Well, our City Council has wanted us to be like the larger cities in the area and now it seems we have arrived. A city employee breaks state law, costs the taxpayers thousands of dollars and I’m sure she’ll be properly rewarded. There are so many questions that need to be asked and answered about this fiasco. For example, under what sensible, logical, rational policy was a check for more than $300,000 written and paid by the city without an approved contract? How was this expenditure not approved–don’t we have a city treasurer who is supposed to insure money is legally spent? What role did our “superb” city manager play in this fiasco? What’s happened to the back taxes apparently owed the city? Can we expect them to be paid with interest or will the taxpayer simply absorb this cost as well? Why is the city code having to be changed in the first place–isn’t this ALREADY covered by state law? What action will be taken against those involved? What’s going to happen to the Assessor who apparently approved an illegal payment? Here’s one I bet we never get an answer to–what is the relationship of the owner of Nansemond Cold Storage and high ranking members of city government? Knowing City Government as I do, I can’t help but think some incestuous relationship will raise it’s ugly head! I can’t help but remember the difficulty I had getting the city to refund me a small tax overpayment several years ago. It was less than $25 but it took me multiple phone calls, multiple letters, and multiple times getting frustrated and angry to get my check. And, I’m still waiting for a formal apology from the City Treasurer because of their inability to do their job properly and for giving me such grief. It just proves–unless you know someone in city government it doesn’t work for you.

    Here’s what I do know we will hear. Come budget time this incident will come up yet again. Taxpayers will hear about it, hear how much it costs the city, and our “fiscally responsible” city manager and city council will use this incident to justify yet another round of tax and fee increases to the taxpayers. Yes indeed, it’s a great time to be in Suffolk.

    Suggest Removal

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