Wednesday, February 6, 2008
White Salmon Mayor David Poucher said it was quite a surprise to find out that the city owed the state an additional $26,000 due to unpaid excise taxes from 2005-2006.
"It came as a shock," Poucher said.
The shock comes courtesy of an unexplained error in which city officials stopped paying the required percentage of state taxes from local utility bills.
"We have to pay the state of Washington a certain percentage when the city collects its water, sewer, and refuse bills," Poucher explained. "When we charge for utilities, part of it goes to state tax, and we didn't pay our fair share."
The mistake was uncovered in January following an audit by the Washington Department of Revenue.
Poucher made clear that the city alone is responsible for putting itself in the position of having back taxes to pay.
"The audits are tools to help us. They did their job; we didn't do ours," he said. "But we'll correct it."
Poucher said the city has already made sure the error does not happen again.
"We corrected it immediately, and we're going to ensure we have double- and triple-checks," Poucher said, adding that the error is unacceptable.
"It's painful," he said. "It would have been nice if previous administrations had caught this, or not made the changes that caused it, since we were doing it right previously. We can't have this inattention to detail."
"It's probably the result of not having a clerk-treasurer at that time," said City Council member Brad Roberts, who serves on the city's finance committee. "It's an interesting topic -- why the city decided to stop paying those taxes."
Roberts questioned why the state did not notify the city it was failing to make its tax payments.
"In my business, if you miss an excise tax payment, they knock on the door," Roberts explained. "It surprises me that with the city they wouldn't have mentioned, `hey, where's our payment, guys?' It's quite amazing."
According to Poucher, an official from the Washington Department of Revenue will attend the Feb. 20 meeting of the White Salmon City Council to provide details about the unpaid tax. The meeting starts at 6 p.m.
Poucher added that the city has until at least September to pay the back taxes.
"That's an awful lot of money, and they have given us a bit of time to get our ducks in order," Poucher said.
The city appears to have enough money in reserve to cover the added tax expense.
"The money will come out of the water, sewer, and refuse reserve funds," Poucher said. "We'll come up with the money. We do have some in reserve. And we will do an amended budget."
With unexpected budget troubles coming to light over the last couple of months, Roberts wondered if there would be still more unpleasant surprises.
"I hope we're getting toward the end of this discovery period where we're uncovering these things, so we can figure out where we are," Roberts said. "There are probably more of these issues we'll need to correct, but I hope they're not expensive like this one."
Roberts said that with the hiring of Lori Kreps, the city's new clerk-treasurer, and with new political leadership in place, White Salmon may finally be getting back on an even keel.
"I'm real optimistic now with where we're headed," Roberts said.