County Could Lose Millions Because of Tax Computer Delay

A contractor’s failure to replace a computerized tax assessment system on schedule could leave the 1988-89 county budget $5 million short and could cost the county $2 million in investment earnings, Treasurer-Tax Collector Robert Citron said Tuesday.

In addition, Citron said, the contractor, New York-based Arthur Young & Co., is disputing the scope of its agreement and is asking for more money than the $1.9 million the county has been expecting to pay.

“The contract is to do a complete overhaul by a certain date for a certain amount, and they haven’t done it,” Citron said.

Because of that, he said, as many as 50,000 property tax bills will go out even later than they have in the past--when some have been delayed as long as 18 months. As a result, collection of tax revenue will be delayed beyond the end of the county’s 1988-89 fiscal year.

Contract Awarded in 1986

The contract was awarded to Arthur Young & Co., the low bidder, in 1986 with the understanding that it would, by early this year, have designed and implemented a new computer system to handle assessments for so-called supplemental property tax bills.

Under a state law that went into effect in 1983, such assessments must be made once annually on properties that change hands after the normal assessment period. The county’s old computerized system has never been able to adequately handle the additional work, causing long delays in getting notices to taxpayers.

Jacobs said his office had planned to use the new system to issue the assessments Oct. 1 so that the resulting tax bills would be paid by early next year. But because the system will almost certainly not be ready in time, he said, the issuance of the assessments has been postponed until April 1, 1989.

Months lost getting tax payments into the county’s coffers mean months lost getting it invested. And that, Citron said, means lost interest, as much as $2 million in this case.

And if the April 1 target date cannot be met, he said, many of the tax bills will not be collected until after June 30, 1989, the end of the 1988-89 fiscal year.

“The portion that would have gone to the general fund won’t be there, and serious budgetary difficulties could result,” Citron said. That portion could amount to $5 million, he estimated.

Richard Van Kirk, director of management consulting for Arthur Young’s western region, acknowledged the delay on the work and a disagreement with the county but said it was inappropriate and premature to talk about dollar amounts.

Concern over schedule delays, he said, have failed to take into account “other variables relating to (the contract’s) scope” that he would not discuss.

Van Kirk and county officials said they have been meeting and hope to resolve the matter.

In the meantime, Tax Assessor Brad Jacobs said, the work has continued.

Not ‘End of the World’

“It’s inconvenient and it’s unpleasant, but it’s not the end of the world,” he said.

Ron Rubino, director of data systems for the county General Services Agency, said delays are common in computer system contracts.

“Many times things come up that are new, that nobody saw when we started out,” Rubino said. “If the project proves to be larger than expected then they (Arthur Young & Co.) should get more money.”

Dan Wooldridge, an aide to Supervisor Don R. Roth, said members of the Board of Supervisors are now treating the dispute as one between the departments and Arthur Young & Co. but will enter the talks if it becomes necessary.