Originally created 03/12/06

Late taxes strain funds



If only a third of the people who owe Richmond County property taxes paid their bills, the city's looming $3.8 million budget shortfall would be over, at least for this year.

As of last week, $11 million in uncollected real-estate and personal property taxes dating back to 1998 were still on tax office books. And that figure does not include the 10 percent penalty on delinquent accounts or the interest that accrues at the rate of 1 percent a month.

Much of that overdue amount - $5.66 million - is owed for 2005 taxes, and most of that eventually will be collected through the lien process, which ends with the property being sold on the courthouse steps if the owner doesn't pay up before it reaches that point.

Augusta Commissioners Jerry Brigham and Joe Bowles, both accountants, say that if the city could collect the money owed, it would solve the government's cash problem.

"That would be the easiest and quickest fix," Mr. Brigham said.

Mr. Bowles said it is irresponsible for the government to allow taxes to be delinquent more than two years and not take action.

"It's not fair for those of us who pay taxes to bear the burden to fund the city's operations," said Mr. Bowles, a certified public accountant. "And as a part of the government, I hope to fix this problem."

The longer an account stays outstanding, the more difficult it is to collect it and for the taxpayer to pay it, he said.

"If you aggressively seek payment early, it will not become a burden on the taxpayer to come up with three years' taxes, penalties and interest," he said.

But collecting is often easier said than done, tax officials say.

About $500,000 of the $11 million total is on properties under appeal, such as Regency Condos Inc., which has a balance of $85,368 in taxes, penalties and interest on taxes from 2001 to 2005.

Owner Albert "Pete" Verdery said he has been battling the tax assessors office for 10 years.

"I bought these condos in 1993 for $400,000," he said. "The next year they assessed them at $3 million."

Mr. Verdery said he has gotten the taxes rolled back twice only to see the properties reassessed to a higher value in a year or two.

"The tax office is so screwed up," he said. "I have spent $75,000 in legal fees. They're taking one-third of the income from the condos for taxes."

Some taxpayers take their appeals directly to the Richmond County Assessors Board.

One of the biggest, and most complicated, examples involves Physicians Practice Group, which handles billing for doctors at Medical College of Georgia.

Pat Rice, an attorney for Physicians Practice Group, appeared before the board almost two years ago requesting tax exemption status for about a dozen real-estate properties and personal business property at six offices.

Mr. Rice contended the properties should be tax-exempt because the physicians group is a nonprofit 501(c)(3) organization formed to support the medical college's educational, charitable and scientific goals.

The board took no action on the request because members said they needed more information on the group's financial operations. They requested copies of the agency's Internal Revenue Service 990 forms and placed the matter in their attorney's hands. The Augusta Chronicle obtained those forms, which identified the subsidiary of Physicians Practice Group that actually owns the properties, PPG Properties LLC, as "nonexempt." Court records show PPG Properties sold five of those parcels in February to MCG Health Inc. for $885,000 - about 1 times their assessed value.

The assessors board is expected to decide May 8 whether to exempt Physicians Practice Group or require payment of the 2003, 2004 and 2005 taxes totaling $74,896.

Generally, property owners who appeal are billed a second time at 85 percent of the initial bill and are expected to pay that amount until the appeal is resolved, said Jack McAdams, a tax coordinator for the Richmond County Tax Commissioner's office.

And most of them do. About $3.8 million has been paid on 1,188 tax bills under appeal. An additional 228 under appeal have not been paid, Mr. McAdams said.

ACCOUNTS OFTEN become delinquent because the bills are returned to the tax office. Such was the case of Olin Chemical's 2005 bill of $26,474. The bill went to the corporate office in Connecticut and was returned to the tax office.

"We never received it," Elaine Patterson said Friday after being contacted by The Chronicle.

"The accounting department has sent payment for the taxes," Ms. Patterson said.

The tax commissioner's office is not obligated to re-send returned bills or track down the owners. It is the property owner's responsibility to make sure the office has the proper address, according to tax officials.

Frequently, some of the largest delinquent tax bills are never collected because of bankruptcies. W.R. Grace & Co. of Fort Worth went bankrupt owing $356,000, including penalty and interest, on 1999 and 2000 taxes. Spartan Mills went bankrupt and left the city unable to collect on $140,000 in 2001 taxes, penalty and interest.

Commercial & Military Systems on Mike Padgett Highway - which received a $15 million federal contract in 1999, according to the U.S. Department of Defense - filed for Chapter 11 in 2004 owing more than $43,000, dating back to 2003. The tax office cannot attempt to collect those taxes, even though the company is still operating.

The office can collect, however, the more than $68,000 in real estate and personal property taxes the company owes for 2005.

One of the company owners, Eugene Chin Yu, who also owns a nightclub on Bertram Road, did not return a telephone message left at his office Friday.

SOME LARGE DELINQUENT bills will never be paid because the personal property - equipment, machinery, furniture and fixtures - have disappeared along with the owners. For example, the delinquent tax office has been unable to collect a $50,510 bill for 2000 personal property taxes levied against Seco Aviation, which once operated at 537 Laney-Walker Boulevard Extension - a property still owned by Seco CEO Ray G. Anthony.

Mr. Anthony did not return a telephone message left at his office in Fort Lauderdale, Fla., on Friday.

Delinquent Tax Commissioner North Williamson said that although Mr. Anthony owns the property, his office cannot collect from him.

"It's got to be the identical name," he said. "Is it Seco Aviation? No. Then we can't levy against it."

Besides, he said, delinquent personal property taxes are the most difficult to collect because businesses often go out of business and sell or move equipment before tax bills go out.

"If a business owner sells the business and takes his personal property with him, the new owner is not liable for the taxes," he said.

Reach Sylvia Cooper at (706) 823-3228 or sylvia.cooper@augustachronicle.com.

Taxing bills

Some of the biggest outstanding bills in Richmond County.

Late Real Estate Taxes:*

- Suncreek Properties LLC; 1814 Fayetteville Drive; 2004, 2005 taxes $90,223

- Regency Condos Inc.; Thomas Lane; 2001-2005, $85,368 (under appeal)

- BTD Properties LLC; 3817 Oak Drive; 2003, 2004, 2005, $50,013

- Marcus A. Reid; 1536 Flagler Road; 2001-2005 taxes, $49,006

- Shelnut Properties LTD; 2005 taxes, $43,670

- Sapna Inc.; 3026 Washington Road; 2005 taxes, $42,008

- River Watch LLC; 100 Delta Drive; 2005 taxes, $41,545

- Gordon Micro LLC; 2176 Gordon Highway; 2002, 2003 taxes, $37,489 (under appeal)

- Towne Club Partners LLC; Berckmans Road; 2005 taxes, $41,205

- Airport Industrial Partners LLC; Forward Augusta Drive; 2005 taxes, $41,080 (under appeal) Late Personal Property Taxes

- Norfolk Southern Corp. Rail Subsidiaries, Roanoke, Va., 2005 taxes, $81,804

- Seco Aviation, 537 Laney-Walker Boulevard Extension, 2000 taxes, $50,806

- J.C. Apple Homes, 124 North Belair Road, Evans, 2000, 2001, 2002 taxes, $50,040

- Commercial & Military Systems, 2005 taxes, $30,808

- Norfolk Southern Corp., Roanoke, Va., 2005 taxes, $29,672

- Metrac Inc., Atlanta, for inventory at 3000 block of Mike Padgett Highway, 2005 taxes, $27,848

- Cingular Wireless LLC, Redmond, WA, 2005 taxes, $21,964

- General Electric Credit Corp., Danbury Ct., 2005 taxes, $21,429

- First Union Auto Finance, 8740 Research Drive, Charlotte, N.C., 1997 taxes, $24, 293

* Totals include penalty and interest

Source: Richmond County Tax Commission records