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Should real estate owned by community development agencies be taxed? Dawson Co. commissioners grapple with the question

Should real estate owned by community development agencies be taxed? Dawson Co. commissioners grapple with the question

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CDA sign

It’s the state’s position real estate owned by community development agencies should be taxed, while it’s the City of Lexington’s position this land is being held for development, which qualifies as public use.

LEXINGTON — The question of whether or not land owned by a community development agency should be taxed was front and center during the Dawson County commissioners board of equalization meeting on Tuesday, Feb. 16.

The question was raised during the prior meeting earlier this month when Assessor John Moore presented tax corrections regarding 14 land parcels owned by the Lexington Community Development Agency, CDA.

The CDA is a city board whose appointments are made by the Lexington city manager.

Moore said, during the meeting, the lots owned by the CDA are for residential development and said he was under the impression they were tax exempt, as these properties are being held for development. Eventually, the tax corrections were approved by the commissioners for all parcels, upholding their tax exemption.

The question was again brought up during Tuesday’s meeting. Moore said at the urging of the Nebraska Department of Revenue, notices were sent out to the community development agencies throughout the county which stated the county’s intent to tax the properties they owned.

The public hearing held during the meeting allowed for the representatives of the agencies to prove the land they own is for public use and it should be tax exempt.

Moore added the Department of Revenue has the authority to take these cases to the Tax Equalization and Review Commission, regardless of what the commissioners decide.

Brian Copley, the City of Lexington’s attorney, appeared before the commissioners and said he serves numerous capacities for the city, but one of those is assisting the city with the development of property through the CDA.

Copley said he was present to explain how the property lots were being used and the commissioners would determine if the lots were being used for a public purpose.

The 76 parcels in question, owned by the CDA, are mainly located in the northwest part of town. Copley said these lots are utilized for development.

Per state statue, public use has several facets, one of which is community development, said Copley. Community development can be defined as public purpose and all the lots are being held

for that purpose, he said.

The lots were originally acquired by the City of Lexington from John Wightman and then were conferred to the CDA. The CDA then sells the lots on an individual basis for $5,000 per lot, under the condition the buyer has to build on the location within 12 months. If no building occurs, the CDA reacquires the property, Copley said.

There are also certain lots which are conveyed to potential builders for free, but construction must occur within six months, said Copley.

“The sole purpose of owning and conveying the lots is to ensure that development is done,” Copley told the commissioners.

These are not income producing lots, said Copley, there are no homes or improvements on each of the 76 lots, said Copley. “We are holding them to make them available for people to acquire for the purpose of development,” he said.

The process of managing the lots has been set out in city ordinance and the city has made it their public intention of how the lots will be utilized.

Some of the empty lots, prior to them being named tax exempt, were valued at $15,000 to $16,000, Copley said the valuation was, “obviously not the fair market value of those lots.”

“It is the city’s position the lots in the northwest part of Lexington are being used for residential development, which meets the definition of public purpose under the statue,” Copley told the commissioners.

The purpose this is all done under is to bring more housing units to Lexington, which there is a shortage of in the community. “One of our main goals is to build as many houses as possible,” Copley said.

Commissioner Dean Kugler asked Copley where the funds came from to purchase the lots.

Copley said the funding either came from the city itself, or the CDA was able to use existing funds to purchase the lots.

There are also lots the CDA owns that are being held for commercial development, which are primarily located in the southeast area of Lexington.

The city has set up multiple redevelopment areas, these allow the city to enter into agreements with developers to ensure improvements are built.

“Our goal is to not to hold on to these lots, we prefer to get rid of all of them as soon as we could,” Copley said, “it is going to increase the tax base for ourselves.”

Copley did note redevelopment is a slow process and involves numerous factors, including getting people to build in the area.

Once the lots are sold, they then reenter the tax roll.

Dawson County Deputy Attorney Katherine Kühn said at this point in the meeting, the proper forms were not in the files to make these lots tax exempt. She asked that the forms be filed for the properties owned by the CDA.

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Kühn had said during the prior meeting, the City of Lexington needed to communicate and provide documentation about their intention with the lots. She had said an argument could be made that they are exempt, but the city has not offered the proper communication.

Copley said he was not familiar with the fact that there were forms which needed to be signed to ensure tax exemption for the CDA. He said he was aware of permissive exemption forms which are due for charitable organizations, churches, non-profits, etc.

The Assessor’s office was not able to provide a form for a political subdivision, because there are no forms for this type of organization, to his knowledge. Copley added there is a process in place for political subdivisions to seek exemption, but there are no forms required.

Moore said no political subdivision has to file for exemption once public purpose is determined.

Copley asked the commissioners to consider tabling the matter for a later meeting so time could be given to the parties to narrow the scope of the discussion around the lots.

The commissioners voted unanimously to table the issue.

During the regular meeting, Sheriff Ken Moody presented the monthly crime report, saying the average jail population was between 80-85 inmates. Calls for service were around normal.

Another public hearing was held to consider a conditional use permit from Timothy Chancellor to allow for a mounted solar conversation system on a property near the unincorporated community of Buffalo.

Chancellor had already appeared before the commission previously with this request, originally intending for the unit to be in the front yard, but changed his mind and wanted to install the solar unit on the roof, after the first plan had already been given the nod by the county’s planning commission.

To ensure all the legalese satisfied, a second hearing of the planning commission was held to consider the roof mounted unit, which was given approval on Tuesday, Feb. 9. In turn, the commissioners approved the permit.

Veteran’s Service Office Steve Zerr appeared before the commissioners requesting hiring another employee to ensure an assistant was in the office full time.

Zerr said the pandemic has brought the issue to the forefront and having full time help would be helpful in the office. At the moment, an assistant only works 20 hours, all day Mondays and Tuesdays and part day on Wednesdays.

While he is still helping roughly the same number of veterans, Zerr said their average age is getting younger and they are utilizing services for longer. The older veterans also at times have issues with the tele-health, which has grown in use due to the pandemic and Zerr’s office helps them with the technology issues.

As an overview, Zerr says his office primarily helps with compensation claims and helping get them into Veteran’s Affairs health care. They also help with death benefits for widows, headstones and burial claims.

Commissioner P.J. Jacobson said he felt like they didn’t have enough information and would like to see the full cost of hiring another person. The commissioners concurred and voted to table the matter until a March meeting.

Miranda Stoll, with Health Hearts and Families gave a report of her organization to the commissioners.

Bringing newly elected Commissioner Rod Reynolds to speed, she said they provide juvenile diversion services. If a juvenile gets into legal trouble, they can go through the program, which helps them find work, or their home life is addressed. The goal is to ensure they do not keep getting into legal trouble.

She said over the past year they served 68 juveniles and an increase in mental health help has been noted, due in part to the hardships of the COVID-19 pandemic. She said the Crime Commission asked if they could take on work in more counties, including Hooker, McPherson and Logan, this would add to their work load.

The commissioners approved the memorandum of understanding for the upcoming grant cycle for Healing Hearts.

The next discussion surrounded the commissioner’s bid letting procedure, which Commissioner Rod Reynolds hoped to see changed.

Currently, bids are opened in the opening regular meeting, where the bid prices are read in real time. Often times, those considering the bid need to leave the meeting or wait until the next meeting to make a decision on which bid to accept.

Reynolds said bids could be considered in a more efficient manner, by opening bids during committee meetings with the appropriate commissioner present. A written suggestion could then be presented to the board during a regular meeting.

This idea was well received by both the commissioners and county staff, the change in the process would be made going forward.

Highway Superintendent Mark Christiansen presented an agreement for a bridge replacement on Road 424 from Oak Creek Engineering. Christiansen said this road has been closed for some time. Due to the deck being in poor shape, the bridge needs to be fully replaced. It was repaired last year, but was only a temporary fix.

Commissioner Reynolds stressed the importance of getting the road back open for the residents who live in the area.

The bridge is over Spring Creek and the plan calls for two 10 foot culverts to be installed in place of the bridge. The commissioners approved the agreement.

In other action, the commissioners appointed Karen Smith to complete the unexpired term on the Dawson County Visitors Committee, which was vacated by Barry McDiarmid.

Commissioner Reynolds was also appointed as representative to the Lexington Area Solid Waste Agency, while Chairman Bill Stewart was named as alternate.

During the remainder of the board of equalization meeting, tax corrections were approved for parcels owned by Mark Peyton and Brand Farms.

Tax exemption was also approved for vehicles owned by Calvary Assembly of God, Church of God New Jerusalem, Community Action Partnership of Mid-Nebraska, Cozad Grand Generation Center, Dawson County Parent-Child Center, Goodwill, Lexington Christian Church, Ministerio Intel Dios Es Amor, Inc., Nazareth Covent and Academy, Overton Christian Church, Parkview Baptist Church, RYDE Transit, South Central Development Services and Trinity Lutheran Church.

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