South Jordan and Salt Lake County officials remain at a $14,735 impasse that is heading for a collision course with the county's scheduled May 27 tax sale of the South Jordan City Hall.
The issue is property taxes that were owing on the building when it became involved in a $72 million bankruptcy case. The owed taxes were not paid when the city acquired the building in 1986.South Jordan wants county officials to forgive the tax debt to clear the record; county officials say that isn't possible and plan to go through with the tax sale if the city fails to pay the tax obligation.
The issue surfaced last year when the building was first put on the tax sale roll.
County Commission Chairman Mike Stewart said the building was removed from the list last year after a meeting with city officials. "They told us they would make arrangements with the (county) treasurer's office to pay off the tax debt."
"This is the second time it's come before us and there has been no payment," Stewart added.
City Administrator Richard Warne said the city feels the taxes should be waived, that it is inappropriate for one government agency to tax another.
Stewart said the county has abated the portion of the taxes incurred after the city obtained the building but said the county cannot abate the taxes incurred while the property was in private commercial ownership.
Stewart and fellow commissioner Bart Barker said doing so would set a dangerous precedent in an era when governments dependent on property tax revenues are already suffering from declining property values.
"If we forgive $14,000 for South Jordan, how do we deny a $500,000 request from Salt Lake City?" said Stewart. "We've turned down similar requests from water conservancy districts in the past because of the precedent issue, and we feel we must continue."
Warne said the city hopes to talk with the county again prior to the tax sale to resolve the issue.
Stewart said the county is always willing to talk but added, "Unless there is something new or strange that wasn't known before, I don't know what would change."
Warne said the city is likely to raise issues regarding county spending obligations in South Jordan for flood control projects and curb, gutters and sidewalks on county-owned land within the city.
"It's clear the county has some obligations here related to flood control on property they own within the city," Warne said. "South Jordan has paid the county nearly $150,000 in flood-control impact fees but they haven't met their obligation."
Stewart said there is a possibility the city could resolve the tax obligation by offering in-kind services to the affected taxing districts. The city would have to work out the details of such an arrangement with each individual district.