The errors stemmed from a software programing change made in 2013 that allows title companies to electronically input information on real estate sales. Real estate excise taxes are assessed on real estate transactions and distributed to cities and counties specifically to pay for capital projects and infrastructure.
The city of
"We just noticed that our real estate excise tax revenues weren't tracking where we thought they should be," said City Manager
Real estate sales on the island started an upward trend last year, mirroring nationwide trends, Schulze said.
The city and county worked over several months to analyze the apparent shortfall. In July, a review of electronic records back to 2009 showed Bainbridge had been underpaid by a net
Records show the county had been overpaid by
All but a handful of errors occurred in 2013 and 2014, after the new eREET system had gone live. The error stemmed from discrepancies between two codes used to describe parcel locations, the "excise code" and the "parcel location code." Both link to the county's land information system (LIS) database.
Tests of the eREET system did not catch the potential for discrepancies due to coding errors. The errors occurred as the county imported data from the title companies.
"We take our responsibilities for accurately processing transactions very seriously and apologize that we did not detect this situation earlier," Green wrote to city officials.
The county has changed its program to take only the location code directly from the LIS when it processes eREET transactions, and Green has implemented monthly reports that allow cities to audit REET receipts.
That satisfies Schulze.
"I think the most important thing is the error has been identified and has been corrected," Schulze said. "It was good news. It was very positive news for the city."
The sudden influx of $978,963 won't have an immediate effect on
"I'm very pleased that Meredith found this and when it was found she corrected it," said
"Mistakes will happen. This was a big one and one of the biggest that I've been around," Green said. "I don't like making them, but we do make them sometimes, and they do need to be corrected."
Although REET and general fund revenues are kept separate and allocated for different purposes,
Like Schulze, Erickson is pleased with the increased accountability, but she would like to see the county add a staff position for large volume data analysis to assist the treasurer, assessor and other departments track and routinely test the accuracy of data management systems.
For the city of
Like most jurisdictions these days,
But as Bainbridge,
Once again conservative budgeting implemented during recession will cushion the effect for both jurisdictions.
"No budgeted projects are impacted," said
"Because of this, the reduction of almost
The county now has a practice of maintaining one year's worth of debt payments in an emergency reserve fund within REET. The
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