Assessor pins $53 million error on other county officials

COEUR d’ALENE — Kootenai County Assessor Béla Kovacs has asked the Idaho State Tax Commission to audit the work processes of five county departments, including his own, according to emails obtained by The Press.

In response, some county officials say they welcome an investigation.

The request comes in the wake of a $53 million property value assessment error, which affected seven taxing districts and delayed the distribution of property tax notices until this week.

When an appraiser mistakenly entered the front footage of a lakefront property as 6,966 feet instead of 69.66 feet, the property’s valuation jumped from $1.4 million in 2022 to $54.3 million this year.

Last month, Kovacs told commissioners the valuation was reviewed by multiple employees in his office, including the appraiser, a manager and “business intelligence analysts,” but no one caught the error until October.

The error affected seven taxing districts, to the tune of nearly $200,000 in total: Kootenai County, the Coeur d’Alene School District, Worley Highway District No. 4, Worley Fire, Kootenai County EMS, North Idaho College and the Community Library Network.

The original tax bill generated using the incorrect valuation, which was not mailed to the property owner, was $203,588.77. The correct tax bill was $2,468.87.

Kovacs did not respond to requests by phone and email for comment.

In a Nov. 22 email, Kovacs said he believes “systemic problems” beyond his control are to blame for issues in county government, pointing specifically to the county’s computer system.

“This process is painstaking and fraught with problems,” Kovacs wrote. “It has taken a heavy toll on the people, morale and quality of work. Kootenai County needs to break with the past."

He wrote that as the assessor, he needs a reliable computer system that is not built "on a house of cards." 

Kovacs went on to say his email served as a request to the Idaho State Tax Commission for a “comprehensive audit of the computer system(s), work processes, business workflows, technical process steps” performed by the county’s IT department, as well as the offices of the assessor, clerk, treasurer and commissioners.

Multiple members of the state tax commission were copied on the email, but it’s unclear at this time whether Kovacs’ email constitutes a formal complaint.

Kootenai County Treasurer Steve Matheson said he welcomes any investigation by the Idaho State Tax Commission.

“I think they’re going to conclude there is a problem and I think I’ll smile when they say what it is,” he said.

The administrative rule under which Kovacs requested an investigation has narrow constraints, Matheson noted, and may not include all the elements Kovacs wants audited. Under the rule, an investigation means “observation and close examination of a county official's application of property tax assessment or administration law and tax commission rules.”

“I’m hoping we expand (any investigation) here at the county to include everything,” Matheson said.

In a Nov. 20 memorandum to county elected officials and to the state tax commission, Kovacs said the multimillion dollar error wasn’t the result of any systemic problems in his office and the subsequent tax bill delay wasn’t his fault.

“In this case, there was one typographical error and it is not reoccurring,” Kovacs wrote. “There is no indication, evidence or data to suggest that there is a ‘systemic mistake.’”

Instead, Kovacs pointed to the county’s computer system and laid blame at the feet of other elected officials.

“Why did the commissioners not immediately order a correction of the levy rates on Oct. 24?” Kovacs said in the memo.

Commissioners don’t examine or approve valuation changes individually. Instead, they approve the valuation changes put before them by the assessor’s office as part of the weekly consent calendar, which groups routine business and reports into one agenda item that can be approved in a single action.

The board did just that Oct. 24, approving the valuation amendment and then signing it, along with Chief Deputy Assessor Ben Crotinger.

Kovacs also questioned why the treasurer did not take action Oct. 24 to “cancel taxes and make necessary adjustments.”

But Matheson said the treasurer has no authority to alter values determined by the assessor.

“Your claim that a significant valuation error by the assessor is to be corrected by the treasurer as a ‘tax cancellation’ is absurd and once again demonstrates your lack of understanding how significant valuation errors affect taxing district levy rates,” Matheson said in a Dec. 3 email to Kovacs.

Idaho law provides county commissioners with the authority to order a correction to be made prior to the distribution of tax notices, which must occur by the fourth Monday in November.

Matheson said he decided not to distribute tax notices so the commissioners could first order corrective action, which they did Nov. 16.

Chief deputy treasurer Jill Smith said she stands by the work performed by her office.

“We invite this audit,” she said. “We are confident in the work we do.”

Smith said Kovacs has inundated the treasurer’s office with dozens of lengthy emails, so many that staff can’t respond to them all.

“He is the biggest obstacle to this county in getting our work done,” she said.

Among these emails is a public records request Kovacs submitted to the treasurer’s office, seeking all emails, written correspondence and reports issued or received between April 1 and Dec. 6.

Kovacs also seeks all correspondence between the treasurer’s office and the assessor’s office, his own office — records to which he should already have access — as well as any communications between the treasurer’s office and the office of the county commissioners between Jan. 1, 2022 and Dec. 6 of this year.

Kootenai County Commissioner Bill Brooks said he believes Kovacs’ complaint is an attempt to foist responsibility for his own office’s mistakes onto other departments. He said Kovacs has exhibited a pattern of similar behavior.

“Whenever he makes a mistake, he will take 45 minutes to explain why it’s not his fault,” Brooks said.

Since commissioners, including Brooks, voted unanimously in May 2020 to appoint Kovacs to the office of assessor, his tenure has been rocked by controversy and challenges.

Last year, more than 30 county employees publicly pleaded with voters not to elect Kovacs, calling him a detriment to the office. Kovacs delivered the 2022 property values more than a month late, leaving taxing districts temporarily unable to finalize their budgets. Commissioners then made the unprecedented decision to cut Kovacs’ pay in half last year, though a judge later ordered them to restore it.

Brooks said he never expected Kovacs to fill the shoes of his predecessor, the late and much-loved Rich Houser, who had worked in the assessor’s office from 1986 until his death in 2020.

“That would be unfair to Béla,” Brooks said. “But what’s happened so far, there’s no excuse for. None. He’s not only doing a disservice to the people he has to work with within the county. He’s doing a disservice to the taxpayer.”

While Matheson emphasized that he welcomes any audit by the Idaho State Tax Commission, he said administrative issues at Kootenai County can’t be fixed by the state.

“This is a Kootenai County issue,” he said. “I hope they help us out, but we can’t wait on them. Waiting for the tax commission to come in and save the day is a little bit naïve.”

    Steve Matheson
  

    Brooks