HomeMy WebLinkAboutAgenda - 12-10-2013 - 6c 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: December 10, 2013
Action Agenda
Item No. 6-c
SUBJECT: Property Tax Releases/Refunds
DEPARTMENT: Tax Administration PUBLIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Dwane Brinson, Tax Administrator
Spreadsheet (919) 245-2726
Health Systems Properties, LLC
Memorandum of Understanding
PURPOSE: To consider adoption of a resolution to release property tax values for four (4)
taxpayers with a total of six (6) bills that will result in a reduction of revenue.
BACKGROUND: The Tax Administration Office has received four taxpayer requests for release
or refund of property taxes. North Carolina General Statute 105-381(b), "Action of Governing
Body" provides that "upon receiving a taxpayer's written statement of defense and request for
release or refund, the governing body of the Taxing Unit shall within 90 days after receipt of
such a request determine whether the taxpayer has a valid defense to the tax imposed or any
part thereof and shall either release or refund that portion of the amount that is determined to
be in excess of the correct liability or notify the taxpayer in writing that no release or refund will
be made". A refund occurs when a tax bill has already been paid. A release occurs when a tax
bill remains due, and such action creates an adjustment to the outstanding tax bill.
Three of the requests are for Health System Properties, LLC. In January 2012, a Memorandum
of Understanding (MOU) was created between Health Systems Properties, LLC and Orange
County, but the MOU was not implemented at that time. The MOU established that Health
System Properties, LLC would pay to the Tax Office a sum of $18,205.73 in 2011 and future
years. These payments would be in lieu of paying a tax bill based on the true property value as
Health Systems Properties, LLC is exempt from property taxes under North Carolina law.
These two requests create a $149,936.12 refund for the two previously paid tax bills (2011 and
2012). Contingent upon approval of this item, the County would provide a check with the refund
to Health System Properties LLC.
The third request for Health System Properties, LLC would result in an adjustment to the 2013
unpaid bill to lower the amount due by $78,404.34, per the MOU. To make these reductions,
and fulfill the agreed-upon amounts due, assessed values for 2011, 2012, and 2013 should be
reduced as shown on the accompanying spreadsheet.
It should also be noted that Health System Properties, LLC did provide the County with the
agreed upon amount as outlined in the MOU of $18,205.73 in both 2011 and 2012. Staff
understands that the 2013 payment will be made following resolution of these requests.
2
Additionally, there is a release for University of North Carolina Hospitals at Chapel Hill in the
amount of $76,141.77. A release occurs when a tax bill is unpaid, and it creates a new amount
due. This is government-owned property which is exempt by operation of law, but was taxed for
2013 due to an inadvertent omission of an exempt code when the property was recently
subdivided.
North Carolina law allows the Board to approve property tax refunds for the current and four
previous fiscal years.
FINANCIAL IMPACT: Approval of this change will result in a net reduction in revenue of
$306,849.12 to the County, municipalities, and special districts. The Tax Assessor recognized
that refunds could impact the budget and accounted for these in the annual budget projections.
RECOMMENDATION(S): The Manager recommends the Board approve the attached
resolution approving these property tax release/refund requests in accordance with North
Carolina General Statute 105-381.
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NORTH CAROLINA RES-2013-109
ORANGE COUNTY
REFUND/RELEASE RESOLUTION(Approval)
Whereas,North Carolina General Statutes 105-381 and/or 330.2(b)allows for the refund and/or
release of taxes when the Board of County Commissioners determines that a taxpayer applying for the
release/refund has a valid defense to the tax imposed; and
Whereas,the properties listed in each of the attached"Request for Property Tax Refund/Release"
has been taxed and the tax has not been collected: and
Whereas,as to each of the properties listed in the Request for Property Tax Refund/Release,the
taxpayer has timely applied in writing for a refund or release of the tax imposed and has presented a valid
defense to the tax imposed as indicated on the Request for Property Tax Refund/Release.
NOW,THEREFORE,IT IS RESOLVED BY THE BOARD OF COUNTY
COMMISSIONERS OF ORANGE COUNTY THAT the recommended property tax refund(s)and
release(s)are approved.
Upon motion duly made and seconded,the foregoing resolution was passed by the following votes:
Ayes: Commissioners
Noes:
I,Donna Baker,Clerk to the Board of Commissioners for the County of Orange,North Carolina,
DO HEREBY CERTIFY that the foregoing has been carefully copied from the recorded minutes of the
Board of Commissioners for said County at a regular meeting of said Board held on
,said record having been made in the Minute Book of the minutes of said Board,
and is a true copy of so much of said proceedings of said Board as relates in any way to the passage of the
resolution described in said proceedings.
WITNESS my hand and the corporate seal of said County,this day of
12013.
Clerk to the Board of Commissioners
Clerical error G.S. 105- 381(a)(1)(a)
Illegal tax G.S. 105- 381(a)(1)(b)
Appraisal appeal G.S. 105- 330.2(b)
0
BOCC REPORT - REAUPERSONAL
DECEMBER 10, 2013
NAME
ABSTRACT
NUMBER
BILLING
YEAR
ORIGINAL
VALUE
ADJUSTED
VALUE
FINANCIAL
IMPACT
REASON FOR ADJUSTMENT
Dale Jackson
303352
2012
4,020
0
(44.59)
Illegal tax- double billed
Health System Properties, LLC
281883
2011
6,000,700
1,179,481
(74,266.06)
Illegal Tax -- Amount Agreed Upon per MOU
Health System Properties, LLC
281883
2012
6,000,700
1,088,336
(75,670.06)
Illegal Tax -- Amount Agreed Upon per MOU
Health System Properties, LLC
281883
2013
6,000,700
1,039,656
(78,404.34)
Illegal Tax -- Amount Agreed Upon per MOU
Mary Avary Whittier
317409
2013
1,240,100
1,041,000
(2,322.30)
Clerical Error
University of North Carolina Hospitals at Chapel Hill
988774
2013
4,950,700
0
(76,141.77)
Illegal Tax -- Governmental Exempt Property
Total
(306,849.12)
November 14, 2013 thru
November 20, 2013
5
U N C
CONTRACT ROUTING FoRm
Parties: UNC Health System Properties, LLC and Orange County Contract#:
Term: Effective 01/01/11 - 06/30/111
®New ❑Renewal ❑Amendment ❑ Termination
❑Accounts Payable ❑Accounts Receivable
Purpose of Contract: In return for valuable consideration Health System Properties, LLC
will pay $18,205.73 as a fixed amount oti an annual basis for the roperty located at 1350
Raleigh Road. �, �� "� 'wr " �� M
Dept.: Strategic Planning Dept. Contact: Mary Beck Phone: 966-4038
REV'I 'W itm ftllowit� order):
r
, L ;ercsifden!?66
ort or Purchasing
� ld Hospitals Date
ylvi hibaut,) (Gar -lark)
Depat°tn nt m -c or Date HS'P President Date
(Mmtr ;heck) (William L. Roper
3.
Property Committee Date
(Mel Hurston) / �2
Contract to be signed by the CEO of the UNC Health care System or his/her designee
following the completion of this form.
Copy to Purchasing on: Copy to Department on:
Date "` -/9 / Date jr d,
V.rc.°..... "3` �,_✓��8 li".i�.A%dY J'�H"-f��"a�'...
PERSON REQUESTING CONTRACT: (Ray Lafrenaye)
1. Terms of Contract: 01/O1/11 - 06/30/111
2. If payment to be paid by Health System Properties LLC: HSP Account
Enter Cost Center/Dept:
3. Total Estimated Costs: $18,205.73
Please return signed routing and contract originals to Ray Lafrenaye,Facility Planning&Development
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ORANGE COUNTY
Office of the County P.O. BOX 8181 17
Attorney 200 S. CAMERON STREET
HILLSBOROUGH, NC 27278 Cato
January 4, 2012
JAN
Sylvia Thibaut
Assistant General Counsel w
UNC Health Care System .
Legal Dept.
101 Manning Drive
4th Floor, Wing E
Chapel Hill, NC 27514
Re: Memorandum of Understanding for Health System Properties Acquisitions
Dear Sylvia:
Enclosed for signature are two originals of the referenced Memorandum. Both have been signed
by the Orange County Manager, Frank Clifton. Once Mr. Roper has signed them please forward one
signed original to me at the above address.
Thank you for your work on this.
Yours truly,
John Roberts
Encl. (2)
7
MEMORANDUM OF UNDERSTANDING FOR HEALTH SYSTEM PROPERTIES ACQUISITIONS
NOW COME Health System Properties, LLC, corporate entity, and Orange County, a political
subdivision of the State of North Carolina,together"the Parties", and acknowledge and agree to the
following:
1. In return for good and valuable consideration,the receipt of which is hereby acknowledged,
Health System Properties, LLC, has agreed to pay a sum equal to the 2011 property tax amount
on a tract of land, located in Orange County, Chapel Hill, North Carolina, at 1350 Raleigh Road
(Orange County Property Identifier#9798-44-1499), which it purchased on May 12, 2005.
2. The Parties agree that Health System Properties, LLC, will pay$18,205.73 as a fixed amount on
an annual basis, upon receipt of an invoice from the Orange County Tax Collector Office,for the
property located in Orange County, Chapel Hill, North Carolina, at 1350 Raleigh Road (Orange
County Property Identifier#9798-44-1499).
3. The Parties agree that the$18,205.73 shall be distributed annually on a pro rata basis the same
as the tax receipts for any other similarly situated property would be distributed.
4. Health System Properties, LLC, does not own and did not construct the building located in
Orange County, Chapel Hill, North Carolina, at 1350 Raleigh Road (Orange County Property
Identifier#9798-44-1499).
5. The University of North Carolina Hospitals constructed the building located in Orange County,
Chapel Hill, North Carolina, at 1350 Raleigh Road (Orange County Property Identifier#9798-44-
1499), and entered into a ground lease with Health System Properties, LLC, effective 1 January
2011,for ninety-nine years and six months, for that property.
6. The term of this Memorandum of Understanding ("Memorandum") shall coincide with the term
of the ground lease referenced in Section 5 above. This Memorandum shall thereafter
automatically renew for successive terms of one-year or for the full term of any successive
ground lease.
7. The Parties hereby agree that Health System Properties, LLC,will not pay any amount, annual or
otherwise,for the structures or equipment located in Orange County, Chapel Hill, North
Carolina, at 1350 Raleigh Road (Orange County Property Identifier#9798-44-1499).
8. The Parties agree that this Memorandum constitutes and expresses the entire agreement and
understanding between the Parties concerning the subject matter herein.
This the day of January 2012.
Health System perties, LLC Orange County
By: "' By:
William L. Roper, r a ant Frank Clifton, unt ' n`wa r