The city will reassess all "real, commercial and industrial properties in the city" as part of the investigation, according to a statement from
"I exercised my office's due diligence in terms of pulling the council minutes and applicable ordinances and realized that it was highly questionable," Telfair said.
According to a statement from Mayor
Rush was placed on administrative leave by Vice Mayor
Rush did not return two telephone inquiries by The Progress-Index for comment.
When asked if Rush would be the subject of a criminal investigation, Telfair said "the appropriate authorities are looking into some of the issues arising from the external investigation."
According to the city, Deloitte found "omitted commercial/industrial real estate assessments, lack of partial assessments of new construction, [and] improper property classification."
Other issues included: incorrect classification regarding the list of properties eligible for tax exemption; parcels listed as vacant even though they contained buildings; discrepancies in the city's Rehabilitation Tax Credit Program, which allocates tax credits to those with properties in historic districts; the office wasn't using property assessment software correctly; and that a large number of properties "claiming religious affiliation" that are tax-exempt have for-profit operations.
"There appears to be a pattern of those for-profit businesses being undervalued," Telfair said.
He added that independent investigators are currently working to identify the 500 properties not on the rolls. Telfair said investigations have found that the issues go back to at least 2008.
Telfair also added that for the past two years, real estate revenues have stayed the same, despite the fact that the city reassesses properties annually. Revenue from property taxes is the city's largest source of local funding.
According to the general fund budget of fiscal year 2012 through 2013, revenue from general property taxes was
Telfair said one of the reasons the city decided to go public with the property assessment issue was because of a request by a nonprofit organization for council to hear a request for tax-exempt status.
"We can't have the exemption request being heard when we know there are potential issues with their particular assessment," Telfair said. "We couldn't just say we were not going to hear it."
He added that coming forward was a matter of being honest with city residents.
"There are issues arising out of a city agency and those issues have to be publicly addressed," he said.
The city is taking immediate action, including searching for an interim city assessor and a permanent assessor.
Deloitte has used models to determine real estate revenues for the city based on investigation findings and what has been reassessed so far. Telfair said the number was higher than the previous fiscal year.
The city plans to adopt an ordinance ending all real estate tax exemption requests, and an ordinance revising the city's Tax Rehab Credit Program. The city aims to complete the forensic and external audits of the assessor's office.
The city will create a tax amnesty program for those potentially impacted by a possible change in real estate assessments. The amnesty allows owners of commercial properties who come forward with changed assessments to not pay the full amount of three years of back real estate taxes owed to the city. Instead, the city would only seek to recover one year of back taxes. Those who don't come forward with their new assessments would be subject to paying all three years of back taxes.
Williams said that even though real estate tax discrepancies could go back to at least 2008, property owners wouldn't be subjected to paying back taxes spanning back to that time period due to a
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