Tax Snafu Shortchanges OC Cities, Schools

A delay at the county tax assessor’s office means every city and school district in the county will be shortchanged on property tax revenue from the county this month.

Each agency has been shorted by more than 75 percent of its usual property tax revenue, a situation that won’t be corrected until December, according to the Orange County Auditor-Controller’s office.

A representative from the Orange County Auditor-Controller’s office said he did not want to estimate how much money was delayed to agencies throughout the county. However, it’s no stretch to say it’s easily in the millions.

For example, according to the county tax ledger, the first property tax revenue apportionment for Seal Beach on Nov. 6. was $51,291.22. The previous year on Nov. 7, it was $378,501.70.

Cities, school districts and other special districts receive revenue from property taxes collected by the County. According to the County Tax Collector’s Website, secured property tax bills are due in equal installments on Nov. 1 and Feb. 1. Delinquency dates are Dec. 10 and April 10.

Frank Davies, administrative manager with the County Auditor-Controller’s office, said that normally each city receives about 4.5 to 8 percent of the total property tax charge for the year during the first apportionment period in November. This November, however, according to Frank Davies, the amount was 1 percent.

Davies detailed the percentage drop in an email to representatives from every Orange County city and most school districts (including Capistrano Unified School District and Saddleback Unified School District) and special districts (like Rossmoor), as well as the Orange County Fire Authority, the Orange County Sheriff’s Department and the Orange County Transportation Authority.

“This may affect your cash flow and budgeting projections,” said Davies in the letter. “This reduced revenue is mainly due to timing – the later delivery of property tax bills this year and an earlier cut-off date used for collections.“

According to Eliseo Gillamac, an administrative manager with the Auditor-Controller’s office, the missing percentage will be made up in December. Gillamac would not estimate how much money was delayed for the entire county.

In 2011, the initial tax levy was dated Sept 15. In 2010, it was Sept. 24 and in 2009 in was Sept. 22. This year it was dated Oct. 10, according to the records from the county tax ledger.

In an interview with Patch Wednesday evening, Davies said one of the reasons the tax bills were sent out “a little bit later” this year was because of the delays caused by installation of a new computer system in the County Tax Assessor’s Office took time.

“If you have a slight delay in one part ... it can build up and cause a delay later,” Davies said. “It’s not a computer glitch. The Assessor('s office) has upgraded their software.”

For many cities, property tax revenue is just one source of revenue – others include the vehicle license fee and sales tax.

However, for the small community of Rossmoor -- which receives about 75 percent of its revenue from property taxes -- Davies' Nov. 5 email detailing the delay was a shock, according to Henry Taboada, general manager of the Rossmoor Community Services District.

Rossmoor officials were expecting to receive $111,910 in revenue and, instead, received $31,693, a “drastically reduced” amount, according to a statement from the district.

Taboada said that the district will make up any missing funds from the reserve budget – the Rossmoor district’s annual budget is about $1.2 million, and the agency has almost $700,000 in reserves.

“We’re in good financial shape and we’ll be able to manage until December,” Taboada said. “It’s an inconvenience, but it’s not a catastrophe.

While it may be an inconvenience, most cities and districts would likely have the reserves on hand to make it through to the December apportionment, said Orange County Supervisor John Moorlach.

Additionally, the county treasurer is able to loan school districts the money if they go to the Board of Supervisors for help, added Moorlach.