Manassas Park undercharges residents $70,000 in property taxes after accounting issue

About 450 Manassas Park residents received lower property tax bills than they owed.

Keystone, a company hired by the city to handle all of its financial transactions, from taxes, permits and utility payments, undercharged property owners $156 on average, driving down about $70 $000 in city taxes.

Like most localities in Virginia, the city relies on property tax bills to fund local government operations. Residents receive bills twice a year, with payments due December 5 and June 5.

Residents can come to City Hall at 1 Park Center Court to pay or wait for the next set of property tax bills in the spring. City manager Laszlo Palko said the underbilled amount would show up on the spring bill.

To boot, a delay in mailing the fall 2021 property tax bills in November led city leaders to push back the Dec. 5 payment deadline by two weeks.

About 18,000 people live in Manassas Park, a city with one of the highest property tax rates in Virginia. On average, homeowners pay $5,300 in property taxes each year.

In 2015, the city entered into a contract with Keystone, purchasing the rights to use its software and paying regular support fees for maintenance and upkeep. Palko took responsibility for the error, calling it an accounting issue. He adds that the error could have been avoided if the city had hired a dedicated IT manager instead of relying on staff from its finance office to manage the system.

Palko took over as city manager in 2017, two years after the city committed to using the software. When he took the job, Palko learned that the system did not have an audit function. Two years later, Palko and his staff corrected the error, allowing credit agencies to assess the probability of repayment of the city’s debt.

Until recently, the government of Manassas Park was drowning in debt after building several public works projects in the early 2000s, including the town’s community center and a new police station.

In April, city leaders partnered with McLean-based real estate developer Norton Scott, LLC, and opened the Manassas Park Village at Park Center Court. A “course correction” for the city, the public-private project includes a new city hall, library, public square, retail stores and 164 housing units.

Meanwhile, Palko is working on finding a new financial system next year. Once the Board approves his purchase, it will take three years to implement a new system.

“What we need right now from our residents is patience,” Palko said. “If we don’t, we’re going to deal with these same issues in five or 10 years.”

Palko hired auditing and accounting consultancy firm BerryDunn to help research a new system.

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