Homeowners on a Lexington road had free garbage pick up for 8 years. Now they have to pay
Many homeowners on a Lexington street that have received free trash pick up and other city services for nearly eight years will finally be taxed for the city services they receive starting in January, Lexington city officials said.
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.
Due to a transcription error, the change in tax districts and a higher taxing rate was never communicated to the Fayette County Property Value Administrators office, which sends tax bills to homeowners.
The 53 homes received city services at the much lower rate from 2013 to 2022. Those homes and another home on Codell Drive that was also supposed to be in a higher taxing district have now been placed in the correct taxing district, according to city officials and PVA records.
The homeowners will begin paying the higher rate beginning in January 2023. That change was made after the Lexington Herald-Leader asked why the tax districts hadn’t been changed last week.
The Herald-Leader first wrote about the tax mix-up in November.
The amount of lost revenue could be substantial.
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.
City officials have previously said they will not ask the homeowners for those back taxes. It was not the homeowners’ fault the tax districts were not changed.
The problems with the taxing districts on Glendover Road, and other tax district issues, prompted the city to start a tax district work group. One of the first issues the city tackled was the problem with the tax districts on Glendover Road, said Lexington-Fayette Urban County Councilwoman Susan Lamb, who represented the Glendover Road area until the 2020 council redistricting.
Lamb was not on council at the time the tax districts were changed.
“I kept pushing for this to be the first issue we addressed,” Lamb said. It was much easier for the group to tackle the Glendover Road issue because the record was clear the homes were not being taxed correctly, she said.
The city has also overhauled how it communicates tax district changes with the PVA’s office.
An imperfect system ripe for 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.
To change tax districts, 51% 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, city officials said.
It was an imperfect process ripe for errors, city officials concede.
Moreover, the people who entered the information into that spreadsheet have changed over the years, said Lamb.
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.
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.
That means the city’s database and the Fayette County PVA’s database are now synced going forward, David O’Neill, the Fayette County PVA, told the Herald-Leader in November.
It’s not known how many other tax district errors need to be fixed. Lamb said due to member’s illness the work group has only met a few times over the past few months.
Susan Straub, a spokeswoman for the city, said the the home on Codell Drive that had its taxes corrected was on the same city council resolution that was not communicated to the Fayette County PVA’s office in 2012. Those 54 houses are now in the correct taxing district.
The tax district group will continue its work into 2023, she said.
Wheels of government turn slowly
Tom McNally, who lives on Jesselin Drive, which is parallel to Glendover Road, noticed the tax district error in 2019. He alerted the city to the error multiple times over multiple years. McNally previously said he did does not blame Glendover homeowners for receiving free services for so long.
McNally said he was frustrated it took so long for the city to correct the error after it was alerted to the problem but is thankful the city has finally fixed it.
“I was getting ready to just throw my hands in the air,” McNally said. “The wheels of government (progress) turning slowly is a huge understatement.”
This story was originally published May 25, 2022 at 6:00 AM.
