Taxing times in Huetter

COEUR d’ALENE — Kootenai County Commissioner Leslie Duncan recently suggested Huetter no longer be an incorporated city after it missed filing its budget hearing notification and was denied an extension.

“Hopefully, you guys will work really hard and do good for your residents, or think about being absorbed by a neighboring city,” she told City Clerk Lang Sumner and Mayor Brad Keene during a county business meeting on Tuesday.

According to the Kootenai County Auditor’s Office, cities are required to publish their proposed budget and their public hearing date twice, seven days apart. At the public hearing, the city council must vote on the budget. Then, the paperwork must be submitted to the County Clerk’s office no later than Sept. 8.

County officials said Huetter missed the deadline, filed incomplete or inaccurate forms with wrong dates, scheduled a budget hearing Sept. 6 but didn’t hold it, provided incorrect email addresses and then sought an extension. Commissioners unanimously denied it.

Since the BOCC declined Huetter’s extension request, that means it will not be able to levy property taxes on its residents for fiscal 2023. It will instead have to fund operational expenses from its fund balance.

Huetter’s $102,180 budget for fiscal year 2022-23 included a property tax levy of $69,515.

“It almost sounds as though we’re punishing the residents of Huetter,” said Commissioner Chris Fillios.

“I don’t know not approving is going to prove anything," he said. "On the other hand, I don’t know how to send a message because this has been habitual.”

Commissioner Bill Brooks agreed.

“The red flag for me is habitual,” he said.

Sumner apologized.

“We missed our scheduled date,” he said. “No excuses. Just simply missed it. Lots of errors were done.”

Sumner said the city, which lies between Coeur d'Alene to the east and Post Falls to the west along Seltice Way and has fewer than 200 residents, does not have schools or a fire department.

It operates a tight budget, he said, and is saving to improve its water system.

Sumner said the city has a carryover each year and has about $215,000 in its general fund.

“So we can self-fund our year,” he said.

Its expenditures for the next year were $78,892 for the general fund, $21,175 for the water fund, and $2,113 for the street fund.

Its expenses include city council salaries and Sumner's wages of about $36,000, utilities, insurance, equipment, internet and banking fees.

“Our budget is really pretty straightforward,” Sumner said. “The only reason we’re here is I simply made a multitude of mistakes.”

“I do apologize for any delay this has caused you folks,” he said.

Duncan wasn’t pleased.

“The issue is we have a lot of small districts who get their stuff in on time,” she said.

The Kootenai County Auditor’s Office provided The Press with an outline summarizing the situation:

• Huetter's budget was first published three days apart, rather than seven days apart, on Sept. 2 and Sept. 5. The budget was mislabeled as FY22.
• No city officials showed up for the public hearing on Sept. 6.
• The budget was then published again one day apart, rather than seven days apart, on Sept. 13 and Sept. 14. The budget was still mislabeled as FY22.
• The budget was voted on by city officials on Sept. 15, one week past the statutory deadline to submit their L-2 to the County Clerk or request an extension from the BOCC.

The outline also noted that commissioners can't grant an extension past Sept. 19. Huetter asked for an extension on Sept. 20.

County Clerk Jim Brannon was annoyed with the situation.

“The Clerk’s office spends a tremendous amount of time and energy working with all of our taxing districts, many of whom are smaller than the City of Huetter, in order to help them meet their deadlines,” said the outline.

The Huetter City Council held an emergency meeting about two weeks ago so Sumner could bring it up to speed on the situation.

He said he gave the council the details and takes responsibility for what happened.

Fillios was unconvinced.

“What assurance do we have that this isn’t going happen again?” he asked.

“I get the sense this is somewhat habitual with Huetter," Fillios added.

Keith Taylor, county deputy finance director, wrote that it is.

“The Auditor’s Office notes this is the second year in a row this has been the case, with last year’s drama playing out until nearly November,” he wrote in a Sept. 19 memorandum to commissioners.

“The City of Huetter has shown a pattern over the last decade of ignoring deadlines and being out of compliance,” Taylor wrote.

He wrote that the Auditor’s Office "has been flexible with all districts who have made reasonable attempts to certify a levy rate. Huetter's flagrant disregard to comply with statute is an insult to these taxing districts.”

Sumner said being city clerk is a second job.

“Forty hours on top of 40 hours,” he said.

Ten years ago, no one wanted the city clerk job, Sumner said.

“It was either the city dissolve or somebody step up and I stepped up,” he said.

Sumner said he has been a business owner, works in banking and understands finance.

"All I can do is say I will do my very best,” he said.

Sumner said he also asked the City Council to be his watchdog.

“They will now absolutely be on top of me doing this," he said. "Maybe it’s my time to fade away. We’ll see.”

Duncan said denying the extension was a difficult decision and questioned “how much does that hurt the residents because you’re saving for this new well.”

“I hate to punish them because of your mistake,” she said.

Sumner said he would be happy to work with Taylor to prevent future mistakes, but Taylor had doubts.

He wrote that following the failed Sept. 6 hearing, "a message was sent to the BOCC, the State Tax Commission and all the officials of Huetter, detailing the process to request an extension. No response was received from the City of Huetter. It later came to light that an incorrect email was provided to the Auditor for Mr. Summner. Despite this, no elected officials of Huetter responded or indicated that a response would be eminent."

Brannon expressed frustration during the meeting.

"If they don’t put the right email address, I don’t know how I’m suppose to communicate with them,” he said.

Duncan said “something’s got to change. Something drastic has got to change.

“Maybe the city decides to disband,” she said.

Fillios said he appreciated Sumner’s efforts, but had to deny the extension and send a clear message.

“Look guys, this is your town, your community. You need to pull it together, whatever that takes,” he said.