How did houses on this Lexington street get free trash pickup for eight years?
When Tom McNally’s home on Jesselin Drive was reassessed by the Fayette County Property Value Administrator’s office in 2019, McNally started poking around on the PVA’s website to look at other homes in his neighborhood and their new taxable values.
He noticed something odd.
The taxes weren’t correct for some homes on Glendover Road, which is parallel to Jesselin Drive in the Glendover neighborhood.
Fifty-three Glendover Road homes, from 201 to 740, had petitioned the city in 2012 to be moved from tax district 4, where they paid taxes for streetlights, to tax district 1, which has higher taxes to cover garbage pickup, streetlights and street cleaning. The change in tax districts was supposed to take effect in 2013.
All of those homes were still in tax district 4, McNally noticed and PVA records confirmed. Yet, McNally knew those homes were getting city trash pickup. He saw the city’s trash cans on the street.
“They have received free city services for nearly eight years now,” McNally said. “That’s a lot of money. It’s not the homeowners’ fault; I don’t blame them.”
McNally spent the next three years trying to get someone in the Lexington-Fayette Urban County government to address the error. He sent multiple emails to various people. Finally, he contacted Councilwoman Susan Lamb, who represents the Glendover area. Lamb was not the council representative when the tax district on Glendover Road was changed from 4 to 1.
The Lexington council has recently appointed a tax district working group to address Glendover Road and other tax district issues, Lamb said. That group, which has met four times over the last year, first tackled Glendover Road at Lamb’s insistence.
The Glendover Road homeowners should soon receive a letter notifying them that beginning in 2022, their tax district will be changed and their taxes will go up, Lamb said.
“It’s very unfortunate that this hasn’t been caught until now,” Lamb said. “What has come out of this is that we are completely changing how we communicate those tax district changes to the PVA so this doesn’t happen again.”
Environmental Quality and Public Works Commissioner Nancy Albright said the Glendover homeowners will not have to pay back taxes from 2013 to 2021.
“It was not the homeowners’ fault,” Albright said.
The amount of lost revenue could be substantial after eight years..
For a $300,000 home, which is typical for Glendover Road, the difference in taxes between the two districts is more than $450 a year, according to PVA tax calculations. For 53 homes for eight years, the city failed to collect just shy of $200,000 in taxes.
An antiquated process leads to errors
There are eight urban taxing districts in Fayette County. Each urban service district has different tax rates based on the services received. Those rates are then applied to the assessed value of the home.
“It’s a patchwork of taxing districts,” said David O’Neill, the Fayette County PVA. “And it’s not necessarily by geographic boundaries.”
To change tax districts, 51 percent of homeowners on a street have to agree to the tax change. That’s what happened on a portion of Glendover Road in 2012, according to city records.
At the end of each year, the city sent a spreadsheet to the PVA’s office with all tax district changes. Those street names and numbers were manually entered into that spreadsheet by city staff, who pulled the street addresses from city council resolutions.
It was an imperfect process ripe for errors, city officials concede.
“There is a lot of room for human error in this process, which has been in place for many years,” said Susan Straub, a spokeswoman for the city. “The city identifies the appropriate tax district and sends it to the PVA, who enters it into his system. Billing relies on the PVA system. Changes can only be made once a year.”
Another contributing factor — the people who have manually entered those tax district alterations have changed over the years, said Lamb. Before being elected to council in 2014, Lamb worked in the council clerk’s office for 21 years, the last six as council clerk.
Staff changes in that city position, coupled with the coronavirus pandemic in 2020, slowed the government’s ability to change the tax district once McNally alerted city officials to the problem, Lamb said. McNally contacted city officials in 2019, 2020 and again in 2021, inquiring why the tax district had not been changed.
“It’s so frustrating,” Lamb said. “The government process moves very slowly.”
O’Neil said he found the spreadsheet for tax district changes that was sent by city staff in 2012 and the Glendover Road addresses were not on it, O’Neill said.
The city and the PVA’s office now use a different system that can create a single database so that the city can track and map all tax districts throughout the city. The information can be sent electronically to the PVA’s office rather than manually entered into a spreadsheet.
“This will allow for spot checks of taxing districts,” O’Neill said.
The city also can use parcel Identification numbers for those tax district changes. The PVA’s office uses parcel ID numbers rather than street addresses.
“We can have our databases synced going forward,” O’Neill said.
Albright said the tax district working group is also looking at other tax district errors that council members and others have brought to the city’s attention. It’s not known how many more streets are like Glendover — getting more city services than residents pay for, she said.
“What has come out of this is that we have been able to modernize our data processing that will hopefully minimize errors going forward,” Albright said.
Why did it take so long?
McNally said he doesn’t begrudge his neighbors for receiving free services.
But he’s disappointed it took the city so long to make the fix. Without Lamb, the tax district issue may not have been addressed, he said. It’s an issue of equity. The city needs to make sure it’s collecting taxes for the services it provides, he said.
“Eight years seems like enough time to figure it out,” McNally said.
This story was originally published November 17, 2021 at 9:38 AM.
