What happened?

According to Carver County officials, a data entry error resulted in extra zeroes being keyed in on the value of a Waconia parcel, changing the value from $18,900 to $189 million. A proofing system failed to catch the error.

So what?

The faulty valuation was used to determine how much revenue the county was expecting to generate for its 2008 budget. As a result, the county had been planning to receive about $900,000 more in property taxes. Tax notices sent to county residents last month were based on the incorrect figure.

Now what?

Because of the error, which results in proposed property taxes being off by about $29 for the owner of an average-valued home, the Carver County Board has called a special meeting for 7 p.m. Tuesday, Dec. 11, at the Carver County Government Center in Chaska to consider the issue. To align the budget with the property tax notices sent last month, the board would need to trim about $900,000 from its 2008 budget.

By Richard Crawford

Carver County officials have called a special meeting for next Tuesday to consider how to resolve a $189 million assessing error that skewed proposed property tax notices and projected tax revenue for the coming year.

The problem is linked to a Waconia property that was mistakenly valued at $189 million instead of $18,900, according to county staff.

The County Assessor’s Office apparently entered an incorrect estimated market value on a parcel during a routine data entry procedure resulting in extra zeroes being added to the value, explained Mark Lundgren, director of assessment, property tax records and taxpayer services.

“It certainly hasn’t happened in Carver County in my memory,” said Lundgren in regard to the scope of the valuation error.

Lundgren said it was an honest mistake and the county is taking steps to make sure it doesn’t happen again.

In the meantime, revised tax statements are being sent to residents in Waconia and county commissioners are meeting Tuesday to determine how to proceed. In addition to affecting property taxes and budget revenue for the county, the city of Waconia and Waconia School District also face a revenue shortfall.

The faulty $189 million valuation would have generated about $2 million in additional tax revenue. Of that, the county had figured to receive $900,000.

The county is planning to consider recommendations to cut the 2008 budget by $900,000 so that proposed property taxes will match tax notices sent to residents in November.

If the budget isn’t cut, Hemze said taxes for the average-valued home in the county would have to increase by $29 over the figure indicated on the November tax notices.

Planned road upgrades and facility expansion are already driving Carver County's 2008 budget higher. The proposed budget (as shown on the November tax notices) would result in property taxes increasing by 6 percent - or $73 - on the average valued home for the county's portion of the property tax.“It kind of threw a wrench into everything,” County Administrator David Hemze said of the faulty evaluation. “It’s unfortunate. It’s a mistake and we’re concentrating on responding to the mistake and trying to ensure that it doesn’t happen again.”When County Commissioner Tim Lynch heard about the problem last week, he said his first reaction was: “Oh, no.”Lynch, who represents Waconia, said his hope is that commissioners can help rectify the problem by cutting $900,000 from the budget.

“It’s a county mistake and it has huge ramifications,” Lynch said. “If we tell you your estimated property tax is this … it should be.”

Even if the county pares back its budget by $900,000, the city of Waconia and Waconia School District will need to make adjustments to account for less property tax revenue.

 Richard Crawford can be reached at editor@chanvillager.com.   

Here is the full news release from Carver County:

Carver County Pay 2008 Proposed Property Tax Notice Correction

An error was identified in the estimated market valuations used to calculate Pay 2008 Proposed Property Taxes. The County Assessor’s Office placed an incorrect estimated market value on a parcel located in the City of Waconia.

Proposed property tax notices mailed to Carver County taxpayers on Nov. 13, 2007 were sent to provide taxpayers an estimate of their payable 2008 property taxes based upon their most recently assessed market value and the spending decisions recently proposed by each taxing district.

 A correction has been made and may result in an increase in the Payable 2008 City of Waconia, Waconia School District #110, County and Miscellaneous District property tax reported on the proposed tax notice. Because the estimated market valuation was erroneously assigned to a Waconia City property, parcels located in the city of Waconia could potentially experience an increase in city, school and county tax.

Parcels located in Waconia School District, outside Waconia City boundaries could potentially experience an increase in their school and county tax. All parcels located in Carver County could potentially experience a minimal increase in their county tax. Prior to Dec. 10, revised notices will be sent to Carver County taxpayers with parcels located within the boundaries of Waconia School District.

Letters communicating the tax impact will be sent to affected Hennepin County taxpayers.  Supplemental hearing dates will be included on the revised notices and letters to allow affected taxpayers the opportunity to attend.

The Assessor’s Office has reviewed their internal process and the functionality of the assessment software programs provided by our vendor to ensure accuracy in future valuation certifications.  

Consistent with the information reported on the initial notices, revised tax amounts will not include the Waconia School District bond referendum approved at the Nov. 5 General Election.