Representatives of the South Dakota Citizens for Liberty (SDCFL) attended the Rapid City Area Schools Board meeting Monday night to let members know that they have begun foreclosure proceedings against one of the district's elementary schools.
The entire property owned by the school district, which is home to General Beadle Elementary School, the Rapid City Public Library and the Community Health Center of the Black Hills, was delinquent in tax payments dating back to 2016 - a total bill of $8,526.37.
"We are 50 days away from a special election where you are asking the voters in this school district to approve a 290 million dollar bond issue," said Tonchi Weaver, referring to the $190 million bond issue that is estimated to cost about $290 million when interest is added over the next 25 years.
"You are exactly 60 days away from the foreclosure of General Beadle School for failing to paying the special assessment tax. There are no exemptions to this assessment. You have been properly served and the clock is now ticking," she said.
On Nov. 4, 2019, Pennington County Treasurer Janet Sayler assigned the tax lien for the property to the Citizens for Liberty. The tax certificate for the property was purchased on Dec. 16, 2019 by the group. By being in foreclosure, the school district will now have to pay SDCFL the back taxes, interest and legal fees to avoid losing ownership of the property.
"I find it hard to believe that you guys expect us to pay an increased tax amount, but you haven't even paid your own property taxes in three years," James Bialota said.
Normally, schools are exempt from property taxes. However, they are not exempt from special assessments. The delinquent taxes on the property stem from the city's storm water drainage special assessment. The General Beadle property is the only one the school district is delinquent in paying.
"Putting a 20 to 30 million dollar property in pending foreclosure for your ignorance, forgetfulness, not paying your bills," Bialota said. "Homes and businesses are being foreclosed on right now for not being able to pay their own taxes."
Bialota said he gave SDCFL the information - which was public and had even been included in a legal notice that ran in the Rapid City Journal - after he discovered it to protect the property from a "greedy developer or a banker" who could have taken ownership of the property if the taxes, interest, penalties and legal fees were not paid by March 9, 2020 - 60 days from Jan. 6, 2020 when the tax certificate was issued to Tonchi and Toni Weaver who signed on behalf of SDCFL.
School Board President Mike Roesler thanked the group for bringing the error to the board's attention.
"We owned our mistake, and now you own our mistake," Roesler said. "So we will be doing business with you on that. And I would like to thank you for that because as Mr. Bialota said earlier, some greedy developer could have swooped in and caused the community real problems, so anyway, I just want to thank you."
Coy Sasse, who recently took over as the Director of Business and Support Services for RCAS, didn't want to place blame on anyone who was in the office before him. Facility Manager Kumar Veleswamy pointed out that the notice for that school had gone to the wrong address, but he confirmed that the property was delinquent in paying the special assessment.
The schools will work with SDCFL soon to arrange to pay the back taxes, penalties, legal fees and interest to get the property back in good standing with the county.
As the Journal reported in December, Pennington County is among the South Dakota counties that choose to conduct a tax-certificate sale each year. It is a method of collecting delinquent property taxes in a timely manner.
The process begins in November, when the Treasurer’s Office sends notices to property owners who haven’t paid their taxes. In early December, the office publishes a list of the delinquent tax bills that still haven’t been paid.
At the auction — always on the third Monday of December — the county offers up a tax certificate for each of the delinquent bills. Buying a tax certificate is a little like becoming a short-term lender. It involves an outlay of money with the hope of a future payback, plus interest.
The Citizens for Liberty will have a small profit on this transaction. The total for 2016 when the taxes first went unpaid was $1,886.29. The total today is $8,536.37. The school district will also have to pay interest and legal fees to redeem the property.
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