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March 1, 2010 (Work Session) Page 1839 through a reduction in the Transfer to the Capital Reserve Fund budgeted line item; and (4) adjusts the amount projected to be transferred to the Capital Reserve Fund based on the final arbitrage calculation provided by Bingham Arbitrage of $131,721.85 on February 22, 2010. She also pointed out the request contains a revised capital project ordinance and revised capital reserve resolution. She responded to questions from the Board, explained the concept of "arbitrage" and confirmed that the Sheriff's Administration and Annex buildings were completed and both were under budget. UPON MOTION of Commissioner Mynatt, seconded by Vice Chairman Poole and unanimously carried, the Board voted to place Budget Amendment (Sheriff's Administration Building Construction Close-Out - $774.22 and Adjustment to Capital Reserve Fund - $13.1,525.33) and Adopt Revised Capital Project Ordinance and Revised Capital Reserve Resolution on the March 15, 2010 Agenda as a Consent item. BOC - Request by Research City, LLC for Refund of Ad Valorem Taxes Paid on Real Property - $2,744.55 Richard M. Koch, County Attorney, presented the following information on a request by Research City, LLC for a refund of $2,744.55 in ad valorem taxes paid on real property purchased at a foreclosure: This request is being made pursuant to N.C.G.S. X105-381, which allows a taxpayer to apply to the Board of Commissioners for refund of taxes under certain circumstances. Research City, LLC is a limited liability company primarily managed by Ed McAfee, a Cabarrus County real estate agent. He is represented by Zac Moretz. Mr. Moretz also represents the St. Andrews Homeowners Association. He conducted a foreclosure sale for the HOA (Homeowner's Association) for homeowners dues on a house and lot (Lot 207) in St. Andrews subdivision located at 1219 Piney Church Road in Concord. Research City, LLC was the high bidder at the foreclosure sale and took title to Lot 207. At the closing in June, 2009, it paid three years of back taxes (2006-2008) to the County in order to extinguish the prior lien of those taxes and clear the title. Subsequently, it was determined that there was a defect in the title to Lot 207 and the closing was undone and Lot 207 was deeded by Research City, LLC back to the prior owners. Now Research City, LLC wants the County to refund the $2,744.55 in taxes it paid to the County on Lot 207 that it briefly owned but does no longer. N.C.G.S. X105-381 allows the Board of Commissioners to permit a refund to a taxpayer for "an illegal tax", "a tax levied for an illegal purpose" or "a tax paid through clerical error". Clearly, the back taxes for Lot 207 were not illegal or levied for an illegal purpose, as those situations involve imposition of a tax without legal authority to do so. The only possible basis here for refund is a tax imposed through clerical error. The leading North Carolina case construing "clerical error" as used in this statute is Ammons v County of Wake, 127 N.C. App 426, 490 S.E. 2d 569 (1997), cert. denied, 347 N.C. 670, 500 S.E. 2d 84 (1998). Ammons holds that a "clerical error" is considered a transcription error by the tax administrator, such as making an incorrect entry in the tax records. As Ammons also indicates, even an incorrect assertion by the tax assessor that is relied on by the taxpayer is not a "clerical error". Mr. Moretz claims his paralegal talked to someone in the County tax office, which person allegedly told the paralegal that the County could refund the taxes to Research City, LLC or apply the amount to the taxes on other properties owned by Mr. McAfee. The two persons in the Tax Collector's office directly responsible for collection of back taxes, Debbie Farmer and Dawn Josiah, had no contact with Mr. Moretz's office regarding this matter. Regardless, no one in the Tax Administrator's different departments has the authority to refund the taxes or to transfer the taxes paid to another account. Brent Weisner agrees with my interpretation of the statute and case law that N.C.G.S. X105-381 does not permit a refund of the taxes in this circumstance. Even in situations where the taxes are paid by mistake, which happens from time to time when mortgage companies write one check to the County to pay taxes from escrow accounts on multiple parcels, if the company pays on a parcel by its mistake, the money is not refunded. The mortgage company is required to collect from the person who owes the taxes. So it should be in this circumstance. Research City, LLC has a legal remedy against the owner of Lot 207 for the taxes it paid. I must also remind the Board that pursuant