Late tax statement? Blame software

  • Article by: HERÓN MÁRQUEZ ESTRADA , Star Tribune
  • Updated: April 25, 2010 - 8:14 PM

At least 11 of 28 Minnesota counties are revolting against a new computer system linked to delays, inaccuracies in property tax bills.

A number of Minnesota counties that bought a $6.5 million computer system to handle annual property tax billings are revolting over using the new software amid concerns about its accuracy and delays it has caused in mailing out this year's statements.

At least 11 of the 28 Minnesota counties that bought the system, produced by a Michigan firm called Manatron, have abandoned it and are considering suing the company.

Leading the charge is Wright County, which abandoned the system and has refused to make more payments to Manatron. The company handles about 750,000 property tax records in Minnesota.

Wright County took its action in January over worries that it would be late in mailing 47,000 tax bills to constituents by a March 31 deadline.

This month, Ramsey County delayed mailing 160,000 property tax bills because of a computer glitch with the Manatron system. The county finally sent the mailings to the printer on April 15, avoiding delays in collecting millions of dollars in property tax payments.

The Manatron system was purchased in 2005 by the Minnesota Counties Computer Cooperative (MCCC), a joint powers organization that helps counties lower data processing costs.

Officials with MCCC, created in 1978, did not return calls for comment. In a statement, Manatron said that it is working to fix the system.

"It is difficult to replace old, large and complex software systems and processes that have been in place for decades," said Rachel Bryant, Manatron's marketing director. "We fully expect this project to be successful."

Switching to Manatron was supposed to save money. Washington County, among the earliest to buy into it in 2006, estimates it would have cost $3 million to create its own software system. The county, which plans to keep using Manatron, instead paid $500,000 through the co-op.

When Wright County dumped Manatron, the county had already spent $375,000 on the system. "It was not an improvement," said Bob Hiivala, Wright's auditor/treasurer.

In Carver County, the system made the county late in getting out about 7,000 tax statements. Carver also was late in mailing property valuation estimates, normally sent in the third week in March.

In Ramsey County, the system was creating inaccurate bills, which meant inspecting each record for accuracy, said Chris Samuel, manger of property records and revenue.

"It just became a time crunch," said Samuel, who said the county will extend the May 15 deadline for property tax payment if it could not get its statements out by Tuesday.

Part of the problem is the state property tax system, considered possibly the most complex in the country. Ramsey County alone has 5,000 projects and 380,000 special assessments to account for each year, Samuel said.

Also, state officials said Manatron was overconfident about its ability to handle Minnesota's property tax code.

"We told them of the complexity," said Samuel, who remains an advocate of the system. "I'm not sure that they believed us. Now they do."

Taxing workloads

Hiivala said the software's complexity meant it was creating two to five times more work to generate the same type of tax statements. "That was when I first noticed that things weren't right in paradise here," he said.

By December it became clear that the 47,000 property tax statements and property valuation estimates would be late if the county continued to use Manatron, Hiivala said.

The county had been working on the system conversion since 2006. Wright would reconsider Manatron if the bugs can be worked, Hiivala said.

Hennepin County is in the midst of a $7.5 million conversion to the Manatron system for its 400,000 parcel records. The hope is that Manatron will create a workable system for Hennepin, then use that expertise to correct the conversion problems of other counties, Hiivala said.

Jill Alverson, Hennepin County director of taxpayer services, said she has been following the Manatron conversion issues "very carefully. I can't say we're surprised with the problems," she said.

Alverson said she expects to convert Hennepin's system by 2012 and will be happy to tell other counties what she and Manatron learn. "We're moving very deliberately and with extreme due diligence," she said.

The benefits of getting a working system, Alverson and others say, is the savings and efficiencies that will result.

For example, Hennepin expects to make up its investment in 10 years, then average annual savings of $900,000 after that. Ramsey County expects to save hundreds of thousands of dollars once the Manatron system is operating as promised.

The lure of those savings is why many counties are willing to ride out the tough stretch of converting to the system.

"There's always going to be problems with a new system," said Angela Johnson, Carver County's assessor, whose office also has had "challenges" with the Manatron system. "We certainly are not planning to revert to the old system. We remain hopeful that this product will improve the process."

Heron Marquez Estrada • 612-673-4280

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