Error by assessor creates budget blues for Island Rec; high school sports at risk

Published 7:24 pm Monday, November 10, 2014

Island Rec is due to take a big hit to its bottom line in the wake of an error by the county assessor’s office in calculating three year’s worth of property tax revenue for park and recreation district.

Assessor Charles Zalmanek took responsibility for error, saying that he inflated the Island Rec property tax rate by mistake.

Island Rec received a total of $377,192 in excess revenue because the assessor adjusted its levy rate to a mark above the maximum amount approved by voters, which escalated over three year’s time to 24 cents per $1,000 of assessed value instead of staying fixed at its 17-cent ceiling.

Island Rec officials were notified of the error Nov. 6, Zalmanek said, and have been discussing the consequences and alternatives along with the assessor since that time.

“Island Rec’s levy ends next year and they’ve been discussing what to ask from the voters for a levy renewal,” he said. “That conservation could become a lot more complicated because of my screw up. I guess if they’d asked for 24 cents in 2010, and got it, they’d be in fine shape. But that’s not the case.”

Unlike most property tax levies, the rate of Island Rec’s, similar to that of San Juan EMS, does not “float” up or down in order to generate a pre-determined amount. It remains locked and fixed at a certain rate, and the amount of revenue it generates can fall along with an overall decline in property value within the district.

Like all other levies, it can only increase by 1 percent a year, however, plus the value of new construction.

“The Board was shocked and disappointed by this news,” Island Rec Director Sally Thomsen said in a Nov. 9 press release. “Rebounding from this recent development, Island Rec’s Board is looking into how best to continue providing its parks and programs that are an integral part of this community.”

Thomsen noted that Island Rec’s property tax levy also generates income to supplement the Friday Harbor High School sports program. Voters approved an increase in the park and recreation district levy in 2009 and roughly 41 percent of the revenue it collects now helps fund high school sports.

Following consultation with the state Department of Revenue, Zalmanek said Island Rec’s levy will be lowered in 2015 and the amount of revenue will fall from this year’s $605,000 to $305,000 in 2015, the final year of its six-year levy.

What’s more, Zalmanek, who noted that state auditor’s also missed the error in 2001, said that Island Rec will also have to pay back the “over-collected” amount of revenue, $377,192. He said state law will allow that payback to be done over time to help soften the financial hit the agency is now preparing to absorb.

Zalmanek said that it may be more urgent than ever for the Island Rec Commission to ask voters for help in solving its revenue woes in 2015.