Routt County Treasurer’s Office under scrutiny after error results in millions worth of late payments to schools, other tax recipients
August 1, 2017
A recent mistake by the Routt County Treasurer's Office deprived schools, libraries and dozens of other local taxing districts of nearly $6 million worth of their property tax revenue for more than two months.
Treasurer Brita Horn said the problem occurred in early May after the tax recipients received property tax payments for April 21 to April 30 instead of for the entire month.
Some tax recipients who were shorted by the mistake worried about their financial situations when their initial payments were short by as much as hundreds of thousands of dollars of what they were expected to be.
The mistake has also drawn scrutiny from Routt County commissioners, who have spent recent days demanding answers from Horn about how the error occurred and how she plans to ensure it doesn’t happen again.
The error was not corrected until late July, after some of the tax recipients that were shorted checked their previous years’ budgets and noticed something appeared to be off.
Routt County itself noticed what appeared to be a $1.5 million hiccup in its tax payments.
Recommended Stories For You
County Finance Director Dan Strnad, who noticed some discrepancies in the county’s budget based on his long budget history, said he hadn’t seen this type of mistake arise in his 29 years at the county.
“This is something that should be cast in stone on a monthly basis,” he said of the property tax payments sent out each month from the treasurer’s office. “What comes in goes out. The system has worked for a long time.”
The county and other tax recipients started calling the treasurer's office to ask about the discrepancies last month.
Altogether, Horn said Tuesday about $5.8 million in property tax revenue was not distributed correctly and on time by her office.
All of the taxing entities that were shorted were made whole by July 24 — two months and 14 days after they should have originally received their full payments.
Horn, who is currently campaigning to become the state's treasurer, took responsibility for the mistake and the late payments in a letter she sent July 20 to the more than 100 tax recipients that were affected.
But she declined Tuesday to explain how the mistake occurred other than to make references to a software vendor and a personnel issue she said she couldn't discuss in public.
She vowed the mistake wouldn’t happen again.
"I don't call it an issue, I call it a concern," Horn said of the incomplete payments. "Routt County has some of the most amazing people that work for the citizens, and we're finding these people are humans and make mistakes. I definitely take responsibility for the staff, and I'm ensuring it's not going to happen again."
Horn stressed the money was always safe and secure, but it just didn't get delivered as it was supposed to.
She added the entities that were shorted for several weeks will receive the extra interest money that had accrued while the money was sitting in an interest earning account.
She said she was currently working to calculate how much interest each tax recipient will receive.
“We possibly made more interest income on those funds while invested (than) they could have, so everyone wins in the end,” she said.
Her letter to the tax recipients said her office had addressed the incomplete payment issue by "working with its software vendor."
"In normal circumstances, our routine internal procedures would have identified and caught this issue earlier," Horn wrote. "After a full investigation, we have identified why they did not and have taken appropriate corrective action to ensure it will not happen again."
She concluded by promising "to be transparent and honest … in every aspect possible, both when things go well and when things go wrong."
Something isn’t right
Before the mistake was discovered, some of the tax recipients affected started worrying about their financial situations when checks from the treasurer’s office came in much lower than expected.
The Hayden School District, for example, was short more than $500,000 due to the error.
Finance Director Jnl Linsacum said before the mistake was discovered, the district borrowed some money from an interest-free loan program and was also considering reaching out to the Colorado Department of Education about a contingency loan.
Linsacum was complimentary of how quickly the treasurer's office responded to the issue when it was discovered.
She said she was told a computer error led to the mistake.
Routt County commissioners were concerned by the issue and still had several questions on Tuesday about how the mistake occurred.
By 4 p.m., Commissioner Cari Hermacinski said the commission had not yet heard back from Horn on a number of questions, including details on the total scope of the incomplete payments.
She said commissioners felt “stiff-armed” by the treasurer because of the lack of information they were provided.
Commissioners demand answers
The commissioners have now sent two letters to Horn in recent days seeking answers about the incomplete tax payments.
In the second letter, sent late Tuesday afternoon, the commissioners took a stronger tone and called Horn’s previous responses to their questions in a Friday letter as “unacceptable.”
Horn responded to the initial letter from the commissioners by saying in an email her office is “taking this issue seriously and we will get back to you and the BCC as soon as we can with how the treasurers’ office will be handling the situation at hand.”
Commissioners have expressed concern about Horn’s mention of her office making interest payments to the tax recipients.
They asked Horn what authority she had to make interest payments, what the rate would be and what fund the payments would come out of.
“This isn’t someone overspending an office supply budget by $200; this is potentially a five- to six-digit number,” Hermacinski said of the potential interest payments made to the tax recipients.
Horn told Steamboat Today Tuesday the interest payments would not result in any additional expense to county taxpayers because the interest was being earned when the money was mistakenly still sitting in the treasurer’s office funds.
“The interest money is coming from the investment pool the money is sitting in,” she said.
Horn also said she needed more time to respond to the questions from the commissioners.
“I’m being absolutely transparent,” she said. “We’re doing our job as an independent, elected office.”