Geneseo residents will have next year's tax bill adjusted to make up for an overcharge on this year's bill.
About this story: City of Geneseo taxpayers will have their tax bill adjusted in 2018 to make up for a bond error that overcharged residents on their tax bill this year. Refunding the money is the "right thing to do" said aldermen.
Geneseo residents will have next year’s tax bill adjusted to make up for an overcharge on this year’s bill.
Aldermen voted 8-0, including an emphatic “absolutely” from alderman Jason Robinson, to approve a prior year tax adjustment resolution during the Tuesday, Aug. 8 city council meeting.
A bond error resulted in $320,050 more being collected than intended. The city refinanced a 2007 bond in order to save residents an additional $411,704.
However, because the 2007 bond wasn’t callable until 2018, even though the city had transferred the amount owed to the new 2016 refinanced bond, the 2007 bond technically still existed and needed to be abated.
City staff and aldermen, as well as the city’s financial advisers and legal representatives, were unaware that the 2007 bond needed to be abated.
Because it wasn’t, the county levied $320,050 for the bond.
Geneseo Mayor Kathy Carroll-Duda said some have asked how they city didn’t catch the initial error.
At the Aug. 8 meeting, Carroll-Duda pulled out a stack of bond documents nearly a foot tall and indicated the city paid financial advisers and legal officials to advise the city, and none of them caught the unusual bond abatement situation.
The correct solution, said Carroll-Duda, “is to return the money to the citizens.”
While some have demanded the city return the money immediately, doing so would be nearly impossible.
“We have no access to the county’s database,” said Carroll-Duda. As a result, city officials would have no way of knowing if a resident had paid both of this year’s property tax installments, one installment or neither of the installments.
Instead, state precedent calls for errors to be rectified on the following year’s tax bill. Henry County Treasurer Tim Wells made the same recommendation in a letter to city officials.
Citizens won’t see a line item designating their refund on their 2018 bill, said Wells explaining the prior year adjustment would “be built into the overall fund rate.”
The prior year adjustment resolution approved by council members “declares your intent to rebate the money” city administrator Lisa Kotter told the council.
“This is the most appropriate way to try and resolve this and move forward,” she said.
Also at the Aug. 8 meeting:
• City engineer Morgan May gave a report on ongoing projects. May said the water and sewer work on First Street is nearing completion. Crews have until Aug. 25 to finish the work.
The engineer noted water and sewer work at the Highway 82 turn lane site north of Geneseo has been completed. Construction on the turn lane area is “30 percent complete” and May said the project is expected to be complete by mid-September.
Crews bore under both the Green River and the Hennepin Canal as part of a project to run a second water main from wells north of the rivers to Geneseo. May said casing for the project has been installed, and the entire project is expected to be finished by the end of the year.
• Aldermen learned the city had received an Accounting Excellence Award from the Government Finance Officers Association. The award was presented in honor of the city’s 2016 fiscal year comprehensive annual financial report. Aldermen acknowledged city finance director Kara Wiesemeyer for her work. “This is a big deal and it shows we’re doing things right,” said alderman Martin Rothschild.
• Approved a $600,000 letter of credit requirement from Maple Leaf Subdivision.