Minutes - 19761004 - Laserfiche WebLink

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i'-' N. C. General Statute 159-27 (b) requires the distribution of taxes collected during the current year (i.e., 76) that were levied in the two prior years (i.e., 75,74) to be distributed to the fund for which they were levied. For taxes levied in any year before the immedi- ate two prior years, G.S. 159-27(c) requires that the Board authorize either distribution to each fund, as above, which is the County's current practice, or distribution only to the General Fund. z recommend that the Board authorize the latter, that all taxes more than two years delinquent be credited to the General Fund when collected. I have attached a chart which indicates the effect of this on the Special Districts in 1975, had this practice been in use. This would provide considerable benefit to the Finance and Tax Departments in terms of dis- tributing delinquent taxes on a monthly basis, which requires many hours of personnel time and some computer activity. There is obviously some loss to the Special Districts and T would recommend that we attempt to replace this loss by crediting interest earned on investments to each of the district funds according to their average end of the month cash balance, as we do with all County-wide funds. This interest distribution is required by G.S. 159-30 (e) but in practice Orange County has arbitrarily allocated the interest to the General Fund as a payment for collection and other expenses related to the fund. A payment for this purpose is permitted by G.S. 159-13(B)(18), but the Orange County method is questionable and, in fact, was cited by our auditors in 1975. If we apply all interest to the appropriate fund, a task which is not. time consuming, we can accomplish three things: 1) replacement of a portion of lost taxes; 2) full and clear compliance with the Statutes; and 3) elimination of frequent criticism by the dis- trict that we are profiting from "their money." Regarding item 3), the districts should then feel better about un-needed funds deposited with the County, since we can warm a much better rate of interest by utiliz- ing the total holdings of all funds, and, at the same time, there is no particular advantage to the County-wide funds in keeping the district money on hand. The attached chart also shows the effect of interest, had it been applied to the distribution of 1975-1976. Only the School District would have received considerable less interest than the collections from delinquencies two years and prior. rt should be noted that this was also in the year of the best delinquent tax collection record the County has had, and that with continued good first year collections the amount of delinquent accounts will never again be so significant." SFECIAL DISTRICT TAXES & INTEREST 1975-76 Year of Levy 1974 1973 1972 1971 1970 1969 1968 1967 1966 1965 1940-1964 Total 1972 and prior Effect of 1975-76 Interest (if applied) 1975-76 Collections School Fire Sanitary Districts Districts District 79,776 19,091 452 14,907 3,589 297 4,898 1,332 130 1,770 72 69 995 23 16 426 + 5 3 166 4 50 22 2 34 8,363 1,435 218 1,612 1,701 216