Assessors missed Mitchell building for at least 12 years

• Below Book Auto

This building, which houses Below Book Auto on the corner of Ash Avenue and Burr Street in Mitchell, was inexplicably left off the Davison County assessment rolls for 12 years. (Chris Huber/Daily Republic)

Talk about it

Jim and Betty Arens say they were surprised recently to learn that their building on the corner of Burr Street and Ash Avenue in Mitchell had not been on the county’s tax rolls for at least 12 years.

There’s no way to accurately state how much the Arenses escaped paying in taxes over the years. Their new valuation for the building is $15,470. The levies for taxes payable in 2012 are not set, but under this year’s commercial levy of $24.868 per $1,000 of assessed valuation, the tax bill on the building would have been $384.71.

The property houses Below Book Auto Sales and Jim’s Tune-Up, businesses the Arenses have operated for 42 years.

“We paid our fair share of taxes over the years — or it always seems like we paid a lot,” Jim Arens said.

The Arenses were among 80 property owners who protested increased property valuations this year following a major reassessment of commercial properties in Mitchell.

Director Kathy Goetsch began reorganizing the Department of Equalization shortly after her appointment in late 2006 and set a goal of reappraising all county properties. In 2010, DOE staff scrambled to get current valuations for Mitchell’s commercial properties, many of which hadn’t seen a DOE assessor in 15 to 22 years. The resulting reassessments sent some property values soaring and set property owners howling.

It was during one those reassessment tours that Goetsch personally discovered no assessment card had been prepared for Below Book Auto.

The Arenses own lots 10, 11 and 12 on and near the Ash and Burr corner. Lot 10 is a residential lot, Lot 11 has a building that houses Below Book Auto, and Lot 12 is an asphalt parking lot that’s used for auto sales.

Goetsch said in a memo to the county Board of Equalization that the 1,380-square-foot building on Lot 11 that houses Below Book Auto “had been omitted from the assessment rolls for at least 12 years.” Goetsch later said the 12 years was “a guess” based on the slim information she had from past assessments.

“There’s too much we don’t know about what happened with this property,” she said. “All assessors could do is to list what they found and enter it on the books,” she said.

In her 2010 reassessment efforts, Goetsch said she incorrectly combined Lots 10 and 11 under one tax notice, thereby mixing residential and commercial properties.

That was corrected during April county Board of Equalization hearings, and from now on, the Arenses will receive three tax notices instead of two: one for a residence on Lot 11; one for the commercial property that houses Below Book Auto on Lot 11 — which includes a new valuation of $21,840 ($15,470 for the building and $6,370 for the land) — and an $18,370 valuation for the asphalt-covered Lot 12 ($6,370 for the land and $12,000 for the asphalt surface).

The matter had come before the county Board of Equalization because the Arenses protested the jump in taxes from $6,000 to $12,000 on their car lot. As it turned out, they didn’t have much to protest, given that they hadn’t paid taxes on their commercial building since at least the 1990s.

The Arenses, for their part, said they paid plenty over the years in the form of sales taxes on vehicle transactions and services, in addition to taxes on property that was on the tax rolls.

Coleen Skinner, a property tax specialist with state Department of Revenue, said there are procedures for adding omitted property to tax rolls. It can be done by local and county boards of equalization, by the state secretary of revenue, and there is also a provision for the county auditor to add omitted property.

With omitted properties, the county can try to recover up to six years of back taxes, Skinner said, but those decisions are up to the county board of commissioners upon advice of the board’s attorney.

Her office has no plans to do that, Goetsch said.

She said it’s not uncommon to find unlisted outbuildings during regular assessment visits to rural areas. Many of those buildings were built prior to 1998 when building permits were not required in rural areas. Missing a building within city limits is less common. Mitchell, for instance, has building permits on file that date back to the 1940s, according to John Hegg, city building inspector. Building permits have a twofold purpose. They help assure that a building is safely constructed and they also provide a record that can be used to place the property on the county tax rolls.

Goetsch believes it’s imperative for county assessors to maintain regular inspection schedules and stay on top of building permits to avoid similar assessment errors in the future. When she took over her the Equalization Office, it took her staff nearly a year to clear a backlog of unprocessed building permits.

The Arenses always paid taxes on their properties over the years, Goetsch said, but it has become obvious that at least the one property was not correctly assessed.

Betty Arens doesn’t feel they owe the county anything.

“Absolutely not,” she said in a no-nonsense tone of voice.

“I don’t feel I owe ’em, because I paid ’em. I just think they picked a bad time to do all this,” she said, “and not just for me, but for everybody.”

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