West Linn, Wilsonville taxpayers overpay on capital bond tax
West Linn-Wilsonville School Board members were informed Nov. 16 that taxpayers have been overpaying on the district's capital investment bond.
A memo to the board was sent from Son Le Hughes, the district's chief financial officer, and Superintendent Kathy Ludwig on Nov. 14.
The memo detailed how the overage occurred, and the proposed corrective action.
In March, when the district built the budget for the upcoming fiscal year, the district's business office gathered the numbers on the US Bank pivot portal, which showed the total interest and principal due for fiscal year 2021 as $29.4 million, more than what was actually due.
And then, on July 15, the district submitted the tax levy to Washington and Clackamas counties based on information US Bank provided.
In October, the two counties provided the district with a tax levy certification. It was then that the West Linn-Wilsonville School District noticed the tax rate of $3.3321 instead of $3.00 per $1,000. For the current $206.8 million bond measure, as well as bonds prior, the district has promised voters that tax rates will not exceed $3 per $1,000.
The district contacted its investment broker, Piper Sandler and Co., which then contacted US Bank. According to the district, it was discovered that the discrepancy came from the fact that US Bank didn't take into account that the district refinanced its Series 2015 loan in February of 2020, lowering the cost of the loan. US Bank calculated the amount due on the loan as $3,117,755 more than the actual cost.
The Oregon Department of Revenue said there is no procedure for refunding the overage to taxpayers this fiscal year, so the recommendation brought to the board was for the district to levy a reduced amount next fiscal year to offset this year's increase.
Hughes said the district will implement a new system of "checks and balances" for submitting tax information to Washington and Clackamas counties going forward, in which Piper Sandler and Co. and US Bank have to be in agreement on the numbers before the tax information is submitted to the counties.
Board member Christy Thompson asked how the district planned to address the concern community members may have about the overpayment.
"That concern that some of our community members lost that use of — and I understand it's different for different people — but lost that use of that money for a year because the district has it … I don't know how to go about apologizing, acknowledging — I'm not sure," she said.
The district's letter to the community, sent out the week of Nov. 30, explained how the overage occurred and how the district plans to ensure it does not happen again.
Board member Dylan Hydes estimated homeowners would pay about $150 extra due to the overage, but said they'd pay about $150 less next year.
He asked Hughes if the district was at all to blame for the overage.
Hughes said the district used the numbers US Bank provided, resulting in the overage.
"The district has traditionally used a process for submitting tax information to Clackamas and Washington Counties that includes both the district's bond financial consultant and the district's paying agent. That process and system did include checks that we have since bolstered to ensure this will not happen again. New measures will include an additional final review and consensus of all parties before the submission of information. This final review, involving both the district's bond consultant and paying agent, will eliminate any potential for the submission of inaccurate information," Director of Communications Andrew Kilstrom told Pamplin Media Group.
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