Noting that the tax levy would be spread over thousands of parcels, the Yuma County Board of Supervisors OK’d a request from the school superintendent asking for approval of a tax rate that would allow school districts to make up deficits from prior years as a result of court-ordered refunds to a solar company.
The supervisors discussed the issue at length with School Superintendent Tom Tyree and his business manager, Carolyn Marquez, and County Assessor Joe Wehrle during a Monday meeting.
Tyree explained that the deficits are the result of Agua Caliente Solar LLC filing a notice of claim with the State Board of Equalization, claiming that the board’s proposed full cash value of the company’s property was excessive and the board failed to include the value of investment tax credits when determining the “taxable original cost” for the tax years 2016 through 2019.
After both parties met, the board agreed to the claim. As a result, the impacted school districts will refund the company, which runs the Agua Caliente Solar Plant located 65 miles east of Yuma, in the following amounts: Hyder School District No. 16, $738,601; Antelope Union High School District No. 50, $647,134; and Southwest Technical Education District of Yuma, $14,031.
With Agua Caliente contributing less tax revenues, taxpayers will have to pay more to make up the difference from now on. The immediate problem is that school districts are now facing cash deficits due to four years of tax corrections that have to be paid back immediately. The supervisors expressed surprise that the refund of “excessive” tax revenues can’t be spread over several years.
Supervisor Russell McCloud said he was not comfortable proceeding with this until the supervisors heard of a better plan. “That’s an incredible amount of money … We’re talking about thousands of dollars per household in one year. That’s unattainable,” he said.
Supervisor Darren Simmons said that the county needed to take it back to the Board of Equalization and make them realize that it can’t happen in one year. “You’re talking very low income families out in this area,” he noted.
McCloud read the agenda item that asked for a tax rate “that would result in a levy that equals any cash deficit from the prior fiscal year … So that means we would just be handing you carte blanche. We’re going to set a rate no matter what that does to the residents? We can’t allow that. There has to be a plan,” he said, adding, “We’re talking $1.4 million.”
Marquez noted that this is the only way state law allows districts to recoup funds. She explained that since the solar plant came in, its assessed value has been generating enough tax revenue so other taxpayers have not been paying as much as they would have been. McCloud said he didn’t think the other taxpayers have been putting those savings aside just in case.
Supervisor Lynne Pancrazi suggested the supervisors table the agenda item and pick it up at the next meeting. However, Marquez noted that they needed to send the preliminary tax rates to the state by July 20.
McCloud asked to go into executive session at the end of the meeting to ask County Attorney Jon Smith for legal advice.
“We appreciate and we’re in sympathy with your feelings, which is the plight of the taxpayers in this county, but in this particular situation, we’re just doing what the law says we have to do to take care of that,” Tyree said.
Later, after continuing the discussion, Werhle explained that the Hyder district has 5,940 parcels and Antelope has 15,240 parcels. Depending on the valuation of each parcel, each taxpayer would pay between $80 to $200 to make up for their deficits.
The supervisors seemed relieved that it wasn’t thousands of dollars per parcel. Vice Chairman Martin Porchas recognized they were worried when they saw “the big number ... I honestly thought it was maybe 400, 500 properties, but it’s obviously a lot more.”
McCloud said he thought it would be a thousand dollars and more per property, but noted that having so many parcels “breaks it down to less” per property owner. He then said he saw no need for an executive session.
The supervisors approved the school superintendent’s request with a 4-0 vote, with Chairman Tony Reyes absent.
In other related action, the supervisors approved the appointment of the Arizona attorney general to represent Yuma County in the pending tax court case, which is entitled “Agua Caliente Solar LLC v. Arizona Department of Revenue, et al.”