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SIERRA VISTA — Everyone who was allowed to speak, spoke.
And everyone who spoke apologized.
They were finally all together in one room on public view to talk about the tax rate jump that has angered citizens, triggered rumors and in some instances mixed educational apples with financial oranges.
“They” were the members of the Sierra Vista public schools governing board, the district superintendent, the assistant superintendent and the business manager.
  
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After calling the special meeting and work session to order, board president Connie Johnson welcomed the 50 or so citizens who turned out Wednesday evening at the district office building and told them that if any of their questions were not answered over the course of the evening to please “leave them with us” or “bring them to us.” The board’s goal was to be straight up with the public.
Multiple handouts were available that included pages of questions and answers, a presentation on Sierra Vista’s school district’s past and present tax rate calculations, and more pages describing how state and county equalization assistance to school districts are figured and distributed.
But what the public was there to hear was how could a clerical error that impacted them so severely have not been known by the people entrusted to running their local schools.
The first person to speak was Assistant Superintendent Bill Roach, who apologized to the board and the community for his and business manager Michelle Quiroz’s mistakes in “calculation and judgment.”
Roach said his failure to inform Superintendent Renae Humburg of the financial balancing act that was going on in the business office was “my error.”
He said steps have already been taken to prevent such an error from reoccurring and walked his listeners through the timeline of events that led to Sept. 28 — the date that Humburg, board members and the Herald/Review were first notified of the tax rate mistake that resulted in a $4.3 million shortfall of revenue from the state for 2006-2007. That amount must now be recouped by this year’s higher tax rate.
Quiroz took the floor with a detailed presentation lasting more than 30 minutes. It boiled down to the fact that when entering the total amount of the district’s assessed valuation on a budget worksheet for 2006-2007 that is supplied by the state, she manually divided it by 100 — a function the computer program performs automatically.
The result was that “on paper” the district looked to receive $26.5 million in revenue from the state and the property tax rate of $3.9 per $100 assessed valuation was based on that expectation.
In fact, the district was only entitled to receive $22.1 million, and the tax rate ought to have been $5.6 per $100 assessed valuation.
Quiroz discovered the error in March of this year, informed Roach and worked closely with the Cochise County Treasurer’s Office and the Arizona Department of Education to keep the bills paid in a timely manner for the remainder of the school year.
The district used its line of credit with the county over several months, and the state allowed the district to apply in March for special funds known as “sudden growth increase” that aren’t usually available until May.
Quiroz answered board members’ questions regarding her presentation.
Board member Don Rothery, referring to the entire tax “situation” that has ensued since Sept. 28 stated: “People have said to me over and over, ‘If you told us in March what to expect, we could have lived with that.’ We didn’t say it right, we didn’t do it right. We have to make definite changes in how the lines of communication flow between the superintendent and the finance office. How we communicate both internally and to the public.”
“I feel that our budgets last year and this year are defensible,” said board member Deb Scott. “We need to focus on our processes.”
Board member Hal Thomas questioned whether the financial correction could have been spread over two years instead of one.
Quiroz said she had investigated that question and the Arizona Department of Education told her it wasn’t possible.
“There weren’t any checks and balances here,” Thomas said.
“When the tax rate is computed, will it be brought to the board?”
Assured it would, Thomas apologized to the public and promised that as long as he was on the board the tax rate would be known as early as possible.
He further recommended that everyone appeal their valuations with the county assessor and go to the state tax court if they have to.
Board member Nancy Richardson said it was the board’s responsibility to make sure “all necessary information is open to the public” and that there was a need to improve internal and external communication.
Humburg offered her apology for the error in calculation, and then for “the bigger error. The one in communication. I had no advance clue.”
“I was also blindsided,” she said. “When I learned on the 28th what had happened I was in shock and dismay. I was devastated.”
Humburg said she was confident in the district’s business office, but that the administration must work on its communications and tell the community how it will perform those functions.
Said board president Johnson, “I truly am sorry. We try hard not to make mistakes. This district has a hard-working staff of excellent employees. I’ve been on this board a long time, and I promise you no error of this magnitude will happen again.”
She urged the audience to consider running for the office of school board member when seats become available.
Facts about the tax
On Wednesday, efforts were made to explain the error that caused the residential property tax rate increase for Sierra Vista schools to jump from $3.9 per $100 of assessed valuation to $6.5 in a single year.
Some quick facts:
• The error in calculation occurred in August 2006 but was not discovered until March 2007 when district business manager Michelle Quiroz was reconciling the accounts for February and noticed a negative cash flow in the monthly reports she receives from the Cochise County treasurer.
• The particular figure entered on the budget form is not one that is doublechecked at the state level.
• In July 2007, the board voted to request a $6 million advance from the state on funds for its 2007-2008 fiscal year. A memo that accompanied that agenda item said the request was based on a “cash flow analysis” and referred to a decrease in county equalization revenues and an overestimate of state equalization revenues for 2006-2007. The tax rate error was not mentioned.
• The district did not overspend its budget for 2006-2007.
• The district did not borrow money from the state.
• The shortfall of revenue was not connected with the snow day that was declared on the 100th day of school last year, a “marker” in calculating student enrollment and, in turn, revenue from the state.
• The 2007-2008 budget has been reviewed in detail and appears fiscally sound.
• While final numbers can’t be known until next year, it is possible the residential property school tax rate for the 2008-2009 fiscal year could decline to $5.2 per $100 assessed valuation from this year’s $6.5, which would reflect a tax decrease of $136.85 on a house valued at $100,000.
• The school district is audited annually by Heinfeld, Meech and Co., who follow standards laid down by the Auditor General of Arizona. The final audit for 2006-2007 is scheduled for next week.
Herald/Review reporter Cindy Skalsky can be reached at 515-4611 or by e-mail at cindy.skalsky@svherald.com.
Please! wrote on Oct 29, 2007 5:01 PM: