Haywood County tax office fiasco continues

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Haywood County tax office fiasco continues

Haywood County Tax Collector Mike Matthews (left) confers with his predecessor David Francis at a meeting of the Haywood Commissioners. File photo

Recent uproar over dozens of tax payments improperly waived by Haywood County Tax Collector Mike Matthews seemed to be quieted with his announcement that he’d personally cover more than $1,200 of the $4,100 he’d waived.

But the situation has now grown to include lingering questions about office operations as well as the elected nature of the position, and has left commissioners questioning Matthews’ competence and his commitment less than two months before he faces a tough re-election bout.

“The office has violated the state statute,” said Haywood Commissioner Kevin Ensley. “If this law has been broken — are there other problems? The commissioners have a fiduciary responsibility to make sure the taxpayers are protected and state statutes are followed. We must guard against [becoming] another ‘Buncombe County.’”

Ensley’s reference to Buncombe County is especially pertinent as allegations of egregious fiscal impropriety by well-liked long-time county manager Wanda Greene have municipalities across the state taking another look at their own oversight procedures.

At its simplest, state law says interest or penalties on property tax bills can only be waived in three specific circumstances — two of those are obscure situations where the tax itself is illegal; however, the third is in the case of a clerical error.

“Macon County is very rigid on penalties and interest. We will rarely ever release either. The only time we will do so is when an error beyond the control of the taxpayer or the county has happened,” said Richard Lightner, Macon County tax administrator. “An example would be if the bank did not post the lockbox accordingly to the date the bill was paid by the taxpayer.”

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Jackson County also takes a hardline stance on waivers.

“We do not waive penalties and interest unless there was a clerical error or the payment was postmarked prior to additional interest being added to the account,” said Tax Collector Brandi Henson. “This is not something that occurs on a regular basis.”

Matthews’ office took a more lenient stance on waivers, issuing more than 120 since his tenure began in January 2015. Matthews told The Smoky Mountain News last week that it’s “usually because of a postmark issue, or if it’s an error when somebody comes in here and pays 15 or 20 bills, and one got missed or didn’t get picked up in the system.”

Interim Haywood County Manager Joel Mashburn said the waivers were discovered during a routine internal audit, and deemed improper.

Matthews owned up to his mistake and said he’d personally pay up — at least, for the ones he personally authorized. A number of other clerks under his purview also issued waivers improperly.

“As a courtesy we would waive the interest because they came in with the intention of paying everything,” Matthews said Sept. 5. “So that’s when I would remove the interest, because that’s the way we were taught to do it.”

Matthews’ predecessor, David Francis, vehemently denied the suggestion that the practice had been in place during his tenure.

“He didn’t learn that from me,” Francis said.

The internal audit that turned up the improper waivers only dates back to the beginning of Matthews’ tenure, so a records request was made by The Smoky Mountain News Aug. 31 for a report detailing Francis’ waiver activity.

Mashburn told the Smoky Mountain News Sept. 4 that no such report existed and there were no immediate plans to create one. But on Sept. 7, Francis said that Haywood County Finance Director Julie Davis had indeed checked in on his waiver activity.

“When I spoke with her yesterday she said they did go back and do a report during my tenure,” said Francis. “There was nothing that showed up in the report, but I have not seen the report.”

Later that day, Davis confirmed the existence of the report by email, writing, “After we found the problems during Mike’s tenure, we ran a report back to January 1, 2012, to see if the practice was in effect before he took office. We did not find any instances of interest being waived improperly.”

“I don’t think she’s correct,” said Matthews, who, upon viewing the report that was delivered to The Smoky Mountain News Sept. 10, pointed out two specific instances.

The first was an October 2014 bill where it appeared interest in the amount of $160.67 had been waived.

“In this case, I’m going back in the notes,” he said. “The only reason that would have been done is because the sister-in-law was supposed to pay on the account. I could say, ‘My brother was supposed to pay on my parents’ house and I’m not going to do it because he was supposed to do it’ and that is not a justifiable reason to remove interest.”

Francis said no interest was waived in that case. “This was a 2014 bill [issued in September of that year], and it was paid on Oct. 31, 2014,” he said. “There would have been no interest that would have accrued on the bill until after Jan. 5, 2015. He is incorrect in that case.”

The second instance involved a November 2014 bill for $1,364.02.

“There was a check written, and it was retuned, and the interest was removed because of the bad check,” said Matthews. “A bad check is not a reason to freeze interest. I completely understand how that could happen, and why you would want to do that. I was always under the impression that was something we were able to do.”

“When it was actually paid and the interest removed was when Mike had assumed office in January of 2015,” said Francis. “I didn’t have any control over it or how payment was received or how it was credited at that time. I left in mid-December 2014.”

Francis said that two of his employees remained in the tax office upon his departure, but were both gone in fairly short order, taking their experience with them and making Ensley’s comment about “other problems” in the tax office appear more credible.

“Mr. Matthews after four years needs to own his office,” said Francis. “Two years ago I had to help him get the tax bills mailed out because he still didn’t know how to do it. This past year they had a problem with their settlement statement, they called me because they couldn’t figure out how to do it. At certain points in time, after four years, you should understand accounts receivable. There’s a certain simple accounting question one of the commissioners keeps asking, and he (Matthews) still doesn’t know the answer.”

He’s talking about Ensley.

“The formula seems to be simple — taxes collected divided by the net levy. Why did it take asking three times to get a simple formula that I still had to figure out myself?” said Ensley. “When he finally stated what it was, he stated it incorrectly. It seems after four years, he does not know the formula to an equation that he reports on every month.”

Ensley also revisited the nature of the position itself; Haywood County has the only remaining elected tax collector in the state, meaning commissioners don’t have the ability to discipline or remove a tax collector in the same way they could other appointed administrative positions like a county manager or department heads.

“The clerks should know that interest cannot be waived. It is up to him to make sure they know. This is why 99 other counties have an appointed tax collector,” Ensley said. “The main work of this office is to follow the statutes. I would think that he should be trained, but we cannot make him, since the collector is elected and not appointed. I heard he has not attended all the classes needed.”

Francis, who was retained by the county to serve in a variety of roles after his electoral defeat, backed up Ensley’s assertion.

“When I was training Mr. Matthews, after about four weeks, Mr. Matthews continually missed our appointments for the training,” he said. “I just dropped off and stopped training.”

Contentious public hearings in February 2017, aired out the “elected versus appointed” debate, but after commissioners unanimously passed a resolution calling for the position to become an appointed one, no action was taken at the state level, as would be necessary for such a change.

“The office of the tax collector is presently an elected office,” said Kirk Kirkpatrick, chairman of the board of commissioners. “The county can show the tax collector appropriate educational seminars, continuing education and training opportunities but we cannot make him go to them or use them to train employees.”

Given that the tax office handles the county’s largest revenue source, it’s importance to county operations cannot be understated.

“The efficient operation of the tax office is imperative, as this is the means for the county to collect the revenue that provides the services required to manage our county,” said Commissioner Mike Sorrells.

When budgets are finalized, spending numbers are based on estimated revenue collections; if the tax office can’t meet those expectations, it can play havoc with budgets, necessitating either use of the county’s “rainy day” fund balance to make up the difference at best, or the suspension of services at worst.

“The current Haywood County tax collection rate ranks 64th out of 100 counties,” Kirkpatrick said. “If our county collected at the state average, which is 1.5 percent higher than our present rate, it would mean $600,000 additional dollars to fund our departments like the Sheriff and EMS — programs that provide safety to our citizens.”

Ensley, Matthews’ harshest critic on the commission since the departure of former Chairman Mark Swanger, not only questions Matthews aptitude, but also his commitment.

“He makes around $60,000 (annually) plus good benefits. He comes into work around 10:30, 11 and leaves early — and that is if he shows up at all. Do you think that’s OK? There is no leadership and low morale in the tax collector’s office. Is that OK? If he does not work 40-50 hours a week, is he stealing from the taxpayers?”

Despite an upcoming re-election bid by the Republican Matthews, the criticism heaped upon him doesn’t seem to be the result of simple partisan politics; Ensely is also a Republican, and Matthews survived a spirited primary challenge from fellow Republican Tubby Ferguson this past May, but looks to have a tougher contest against Democrat Greg West this November.

“Republicans I know are hard-working, and work long hours,” said Ensley. “The Republican Haywood County Tax Collector, not so much. That’s what upsets me.”

Likewise Francis — who lost to Matthews in 2014 by just 230 votes out of more than 18,000 cast — says it’s not about politics, but about performance.

“There’s no sour grapes. I lost. No big deal,” he said. “It’s very important this office works effectively. And when you don’t take it seriously, and you don’t go in there and you don’t work hard, that’s what’s hurtful about the whole thing. You cannot put in a full week’s worth of work during your tenure, that’s what’s hurtful. People had enough respect for you to elect you to this office, but you don’t respect the office enough to put the in effort that is needed to get the job done.”

Kirkpatrick also insists it isn’t personal, despite rumored clashes between Matthews and some current and former commissioners.

“Throughout this process, there has been an underlying false understanding that the commissioners do not want to see Mike succeed,” he said. “That is not the truth. We, along with other department heads, have assisted Mike and attempted to make sure his office does well. However, we cannot ignore the many issues that have arisen and pretend like everything is OK. I’m not much on beating people up, but I do want them to perform to the best of their capabilities. I personally like Mike and want to get along with him, but that does not matter when it comes to the county and the people.”

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