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Complaint sheds light on errors, delays within assessor’s office

by KAYE THORNBRUGH
Staff Writer | January 18, 2024 1:08 AM

COEUR d’ALENE — A complaint to the Idaho State Tax Commission about Kootenai County’s failure to provide “accurate and timely” property value information has shed light on work processes in the assessor’s office that led to a $53 million valuation error and delayed the distribution of tax notices.

Kootenai County Treasurer Steve Matheson submitted the complaint Jan. 4.

“Delays, errors and omissions in the value of information have interrupted the generation of levy rates for all taxing districts in Kootenai County,” Matheson wrote in a letter to the state tax commission. “Accurate and timely value failures are the result of systemic control weaknesses. As a result, the county is at risk of being held negligent when ensuring the uniformity and equity in property value assessments throughout Kootenai County.”

Kovacs did not respond to requests for comment from The Press.

The complaint comes on the heels of Kootenai County Assessor Béla Kovacs’ own request that the Idaho State Tax Commission audit the work processes of five county departments, including his own.

The administrative rule under which Kovacs sought an investigation has narrow constraints, however, and the tax commission has since indicated it doesn’t have the authority to conduct the type of audit Kovacs wants.

“I have received employee input regarding internal control weaknesses regarding property assessment, levy calculations and tax collection, including the applicable Idaho statute or rule, as well as any specific examples of errors, delays or inaccuracies over the past couple of years,” Matheson wrote to the tax commission.

Attached to the complaint are submissions from county employees, some of whom Matheson said provided input anonymously due to “fear of retribution.”

In an effort to streamline and automate work processes, some county employees said Kovacs eliminated essential quality control measures. For example, in the past, when appraisers completed a permit, they placed the paperwork in a file drawer for an appraisal technician to review.

“This is the point when the appraisal techs (last pair of eyes on a file) could have found any large errors in value or other inadvertent errors (i.e. $54 million error),” one employee wrote. “If they found anything questionable, they would go back to the appraiser to have it reviewed again.”

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 in 2023. The error wasn’t caught until October and affected seven taxing districts, to the tune of nearly $200,000.

Some county employees say the earlier process used by the assessor’s office would have likely caught the mistake that was missed by a new, automated process.

Last April, Kovacs implemented a “paperless system” for permits, mapping packets and revaluation, eliminating the final review by appraisal technicians. Employees said the new process wasn’t thoroughly tested before Kovacs put it in place.

“With his constant witch hunts to find ‘systemic errors,’ he ignorantly changed one of the most important working quality control systems in the process,” one employee said. “Change and improving antiquated processes is a good thing, but not until it is proven to work better than the previous working system.”

Kovacs also reorganized his office’s organizational chart, shifting appraisal technicians — now called “business intelligence analysts" — from working under the appraisal manager to working directly under Chief Deputy Assessor Ben Crotinger.

“Everything (the business intelligence analysts) do is automated by macros so they don’t have to look at paperwork,” one employee said. “It now gets placed directly into a box for scanning. No other person looks at it again.”

Aubrey Hollenbeck, a former Kootenai County residential appraisal technician, said she left her job at the county last year due to Kovacs’ poor management.

She said the business intelligence analyst positions Kovacs created to replace appraisal technicians don’t cover the necessary work. The $54 million valuation error is the result, she said — and she fears it’s only the beginning.

“The new job leaves many holes and room for error,” she said in a letter submitted with the complaint. “Bèla has cost the taxpayer so much money already and this is sure to bring more expense to the citizens of Kootenai County.”

Hollenbeck told The Press she hopes to see Kovacs held accountable for his actions and decisions as assessor. She said she believes Kovacs is wasteful with taxpayer money and county resources.

“Béla is not fit ethically, professionally or morally for the office that he holds,” she said. “In a county of Reagan Republicans, he is the Nixon.”

The paperless system created another hurdle, one employee said. Cities issued new construction permits, but the new, automated permit upload system didn’t find them. If the permits aren’t visible in the computer system used by the assessor’s office, they can’t be tracked.

During 2023 occupancy inspections, appraisers reportedly identified parcels that had new dwellings built on them, most of which were occupied.

“It is only through the diligent work and knowledge of the neighborhoods by the appraisers that they were found and corrected,” one employee said.

Documents included with the employee’s letter show the assessed value that would have been lost if the parcels had not been identified and corrected: $9.7 million.

Those parcels were located within one Kootenai County district, but the employee said there is “no doubt” that the problem exists in all districts.

“These properties would not have been assessed at market value per Idaho Code 63-314 under the current permit system used in our office,” the employee said. “In this case, we got lucky. We can’t rely on luck in the future.”


    Kovacs