Thursday January 17, 2013

DUMMERSTON -- Less than a month ago, town officials thought they finally had a deal to resolve a tax dispute with Southeast Vermont Learning Collaborative.

It turns out, though, that they didn’t.

And that means the non-profit collaborative could be on the hook for thousands of dollars in taxes for last year, though one administrator remained hopeful on Wednesday that the matter still could be resolved.

"It’s unfortunate, but we’ll work through it," said Paul Smith, secretary-treasurer of the learning collaborative’s board.

The organization, which offers professional development to teachers in 12 supervisory unions, purchased its Route 5 headquarters in 2011.

That started a debate about whether the collaborative, which had been renting space in the former regional library, should be paying taxes now that it owned property.

The collaborative requested tax exemption, but Dummerston’s board of listers cited legal advice in denying that request. Talk of litigation followed as the town and the collaborative exchanged letters.

In December, the Selectboard announced a tentative deal: The collaborative would be classified as tax exempt but annually would pay the town about a third of the building’s grand list value in lieu of taxes.

Last week, however, the Selectboard received bad news: The state had ruled that deal improper.

"We thought we had this done," Selectboard member Tom Bodett said. "We finally had an agreement -- a good agreement."

The problem is that the town’s agreement with the collaborative was not timely and did not follow the proper channels, longtime Lister Doug Hamilton said.

After the collaborative was denied tax exemption, the organization should have appealed to the town’s Board of Civil Authority, Hamilton said. That didn’t happen.

An e-mail to the town from Michelle Wilson, operations chief for property valuation and review in the Vermont Department of Taxes, confirmed that point.

"If the landowner in question did not pursue the appeal process, then the decision of the listers stands, no matter what the Selectboard or any lawyers do," Wilson wrote.

The bottom line: It’s too late to declare the collaborative tax exempt for 2012, meaning the organization owes $7,540 in taxes.

Town officials say there is plenty of blame to go around, and they’re taking responsibility for negotiating an invalid agreement.

"My concern is, we didn’t know our own process," Bodett said.

Hamilton said the collaborative’s request was unique, and that caused problems. He maintains that it’s usually much easier to determine whether an organization is tax-exempt under state law.

"We didn’t know what the procedure was," Hamilton said. "I’ve been doing this for 18 years, and this is the first time we’ve ever had a situation like this."

The question this week is whether anything can be done to rectify the problem. Bodett on Wednesday said he is waiting for information from the Vermont League of Cities & Towns.

That information "should help us figure out where we go from here -- if we can go anywhere at all," Bodett said.

Smith said he believes there may still be some question about whether the collaborative could be declared tax-exempt for last year.

In the worst-case scenario, however, Smith said the organization can come up with the cash to cover the full 2012 tax bill.

"It’ll make things tight," he said. "And we’ll have to find some other ways to make up for those funds."

Hamilton is fairly sure that the collaborative will have to ante up. As of Tuesday, he said, the town’s grand list officially was closed and cannot be changed.

He and others noted, however, that the learning collaborative can apply for tax exemption for this year.

"I think this process just needs to start anew," Hamilton said.

Mike Faher can be reached at mfaher@reformer.com or 802-254-2311, ext. 275.