The Brookings City Council decided last week to pay its past-due property taxes of $10,239 for the Salmon Run golf course rather than pay monthly interest payments of $138 until a state magistrate determines if the taxes demanded are even legal.
The amount now owed includes this year’s taxes of $4,658 and last year’s delinquent taxes of $5,378 and interest accrued on that.
According to a report from City Manager Janell Howard, County Assessor Jim Kolen’s appraisal of the property last November indicated the golf course was valued at $3.694 million and taxed it accordingly.
The city appealed to the Curry County Board of Property Tax Appeals and the Oregon Tax Court Magistrate, noting that the property belongs to a municipality and is therefore exempt from paying property taxes.
This February, the county board lowered the valuation by about 75 percent, to $754,590, bringing the tax due from $20,569 to $5,186. That amount, too, would be less — $4,658 — if the city paid it by Nov. 15, for which the county assessor gives a 3 percent discount.
The county board of tax appeals cannot exempt an entity from taxation, Howard noted, and the state magistrate has yet to issue a decision on the issue. Rice said that was to have been done by the end of August, before the next round of tax statements were due, but hasn’t.
She said she called the magistrate in September and was told they will have no more information until the judge issues the decision. Paying the tax to avoid amassing interest penalties will not come into the judge’s decision, either, Rice said.
All the while, however, Brookings has been racking up interest.
The course was taxable when it was leased to the Claveran Group and then Wild Rivers Golf, both of which operated the facility as a for-profit enterprise. City Attorney Martha Rice said that because the course is city-owned and contracts the maintenance to Early Management Team (EMT), a private company, it should be exempt from property taxes. EMT, a Brookings-based private company, also manages the golf course.
Rice said she hopes to hear from the magistrate soon, and noted that if the city wins that appeal, the county will likely have to return all the taxes paid and the interest charged.
It was noted, too, that the city’s wastewater treatment facility doesn’t receive property tax notices, and it is managed by a private company, as well.
“Generally, if you lease a public property to a private entity for a profit, it’s taxable,” she explained. “The county believes (the contract with EMT) is enough like a lease to make it taxable.”
When asked by Councilor Brent Hodges how that might extrapolate to the city’s hoped-for on-site caretaker at Azalea Park, she said it involves legal argument regarding the amount of control a person has over property.
“Our argument is that it’s along the same continuum, and it shouldn’t be taxable,” Rice said.
Hodges then asked why the city isn’t taxed because it leases out the ballfields to various organizations, and Mayor Jake Pieper noted the same in regards to when the city was considering contracting out its park maintenance.
“One’s hitting a golf ball,” he said, “and the other’s throwing golf discs.”
“Jeepers, creepers,” said Councilor Ron Hedenskog. “Your darned if you go right and you’re darned if you go left.”
Councilor Bill Hamilton again expressed his frustration that the golf course was ever considered a for-profit venture because the city has only made a profit once on the facility. That was for $20,000, in 2015.
“How long do we keep this up?” he said. “How long do we not make money at the golf course and keep paying taxes?”
He said the same earlier this year: “When does the bleeding stop? If you’re going to tax us for something, we’ve got to have money. Trying to keep this afloat is really hard to do, and then now we’re hit with this?”
Rice hopes the state magistrate will make the decision by the end of the year.