VIA: The county’s highest tax debtor
May 18, 2009
The Valley Improvement Association (VIA), a nonprofit corporation based in Rio Communities, owes more delinquent taxes to Valencia County than any other person, group or business — at one point almost $1 million in back taxes, according to county officials.
“It is our assumption that since VIA is the assessed owner for more than 13,000 records, as of the 2008 tax year, it would be correct to say that they do owe more in delinquent taxes than any other individual or entity — as the majority of these records are delinquent,” Kathy Trevino, the county treasurer’s mortgage specialist told Valencia!
VIA owns approximately 13,288 pieces of land in the county, from as small as a fourth of an acre to as large as 20 acres, according to records provided by the county treasurer’s office.
“Since VIA has so many records on file, we send them a CD of the properties owed instead of individual tax bills,” Trevino said.
Trevino and County Treasurer Dorothy Lovato said VIA, as of earlier this year, had 12,040 delinquent properties, in addition to 953 delinquent properties on file with the State of New Mexico’s Taxation and Revenue Department. That means county records show VIA has only 295 properties fully paid.
Teresa Scott, VIA’s executive vice president, said the association owns approximately 12,500 properties and owes back taxes on roughly 6,000 of them, not as many as the county says.
In a recent news story, the Valencia County News-Bulletin reported that VIA had paid their taxes on the land it plans to donate for the county hospital, proposed to be built in Rio Communities. The paper quoted Scott as saying, “There is 65 acres available for the hospital as well as other property in the immediate vicinity that VIA owns for the growth of additional services. And the taxes are paid on this property.”
The county sends VIA information about its tax debt once a year in June. It’s gearing up to send the latest numbers to the association next month.
How the debt occurred
In the 1960s, Horizon Corporation began selling quarter-acre parcels east of Tome and near Rio Communities. These vast areas, known as Rio del Oro and Canyon del Rio, were expected to develop into large master planned communities, as part of an ambitious residential and commercial corridor stretching from Denver, Colorado, to El Paso, Texas.
It never happened. Most of the landowners, living around the United States and world, never moved to Valencia County to begin developing their neighborhoods. This left ownership of Rio del Oro and Canyon del Rio fragmented and nearly impossible for new developers to buy up enough land in a single contiguous area to build new developments.
Horizon Corporation tried to clean up the mess by forming the Horizon Communities Improvement Association, which later became the Valley Improvement Association. As Horizon Corporation pulled out of the county because of legal and financial troubles, VIA’s role increased, until VIA had administrative responsibility for more than 31,000 property owners and the land they purchased from Horizon Corporation.
During that time and up until today, some property owners have lost interest in their land, forgot they owned land, and in some cases passed away and passed on the land to their children, who haven’t always been aware of their ownership. Many of these landowners owe property back taxes. Some of the land, because of the debt on it, has at times been foreclosed on, with VIA as the recipient of the land. When VIA receives land, it also receives the former property owner’s delinquent tax bill.
It’s been VIA’s stated goal to provide support to developers who are seeking contiguous tracts in these areas, by keeping records of ownership, building infrastructure and acquiring land through legal processes. The association had success with Las Maravillas, providing enough land to build that community. The proposed county hospital is another example in which VIA obtained 65 contiguous acres where the hospital might be built.
“There’s no doubt in our minds that this is a very complicated issue,” said Bob Davey, VIA’s president and chief executive officer.
How will VIA pay?
As recently as last year, VIA owed as much as $982,000, county records show. When the state readjusted its tax collection fee from $55 to $25 on properties delinquent for three or more years, that reduced the amount VIA owes by more than $200,000, to about $750,000.
Davey, however, said the association actually owes less, closer to $600,000, because of billing errors that both overcharge them on some properties and don’t charge them enough on others.
“We don’t owe as much as they say, and in some cases we owe more than they say,” Davey said.
The association disputes the county’s $750,000 tax bill, saying it includes $200,000 that resulted from clerical errors — VIA being taxed for land on which the taxes are paid, taxed for land it doesn’t own at all and taxed for land that doesn’t exist. The land the association said it doesn’t own is land it sold or deeded to new owners without the action reflected in county tax records. The land that doesn’t exist is land shown in Horizon Corporation’s platting, which VIA has since vacated but county records might still indicate are accurate, Davey said.
“Over time the problem becomes compounded,” he said.
Because VIA disputes some of the county’s records and has disagreements over what is owed on which property, it’s never paid off the debt. Scott said the association has a consistent revenue stream from assessments on its 31,000 members, which it could use to pay taxes. The association, in fact, pays taxes regularly. Davey said it has paid approximately $2 million in taxes over the last six or so years. The county noted recent payments of up to $51,000.
VIA isn’t the only taxpayer with a problem. Right now, roughly $9 million is owed in back taxes to the county by hundreds of property owners, Commission Chairman Pedro Rael said earlier this year when expressing concern about the problem the county has collecting taxes. Rael has complained about the county’s antiquated tax collection system and said the state doesn’t allow the county enough control over delinquent tax collection.
The county’s tax system is out of date, often not computerized and lacking in communication between the offices of the assessor and treasurer. The county says it needs $1.2 million just to buy new tracking software and train employees to use it.
There’s a catch-22 here, where the county needs more than a million dollars for a new system to collect back taxes but doesn’t have a million dollars because they don’t have a new system to collect back taxes. That leaves the county to request funding for the system from the state, a request commissioners and the county manager have made.
Until the county modernizes its tax collection system so that VIA’s records dispute can be put to rest or until the county can have more control over delinquent tax collection, it’s unlikely VIA’s tax debt will be paid in full.
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