Embezzlement happens in Special Tax Districts, too

By Deborah Goonan, Independent American Communities

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The following report of an embezzlement arrest does not directly involve a homeowners association.

You see, Diamondhead is a city in Mississippi. Well, actually, the community was born more than 5 decades ago as a master planned resort community along the Gulf Coast. So, yes, there’s still a Property Owners Association (POA) in Diamondhead. No, it has not (yet) been officially dissolved, even after incorporating as a city in 2012.

But the City does not provide a fire department for Diamondhead. Instead, Diamondhead has its own Fire Protection District (a special taxing district).

So if you own a home or lot in Diamonhead, you’ll pay taxes to the City, a separate tax to the Fire Protection District (FPD), and, on top of that, you will still pay assessments to the POA.

More layers of government, more cost to Diamondhead residents and taxpayers!

Actually, Special Districts are becoming more common across the U.S. According to Census figures, there were more than 38,000 Special Districts in the U.S. as of 2012. Personally, I’ve owned homes with Water Management Districts, Mosquito Control Districts, Recreation Districts, and probably some others I cannot recall at the moment.

According to a report in the Sun Herald, a recent audit of the FPD uncovered financial irregularities. Hancock County Sheriff’s Office embarked on a criminal investigation, which has resulted in the arrest of Sandra Morris Zitterkopf, 55, for alleged embezzlement.

Zitterkopf was employed as a clerk for the Fire Protection District, responsible for collecting monthly fees from Diamondhead property owners.

Special Districts such as Diamonhead FPD are relatively small, sparsely staffed, stand alone units of government, often with no direct supervision or oversight at the municipal or state level.

The perfect opportunity for employee misconduct and theft.

However, in comparison to weak regulation for HOAs and POAs, state law requires regular audits for governments, including Special Districts. That alerts officials of misappropriation within months, not years. And states tend to enforce stiff penalties for convictions involving government theft, as opposed to notoriously weak penalties for corporate theft involving Association Governing boards, trustees, or managers.

 

Diamondhead Fire Protection District clerk arrested

BY WESLEY MULLER
wmuller@sunherald.com

DIAMONDHEAD
Hancock County sheriff’s deputies arrested an employee of the Diamondhead Fire Protection District on Monday, accusing her of embezzling more than $25,000 from taxpayers.

Read more here: http://www.sunherald.com/news/local/crime/article117578053.html#storylink=cpy

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2 Replies to “Embezzlement happens in Special Tax Districts, too”

  1. Hi Deborah;

    For an old guy in Ontario, I find this a bit confusing. So if I got it, a condo owner or a homeowner in an HOA also may end up paying the following:

    • municipal taxes • Property Owners Association (POA) assessments • Fire Protection District (a special taxing district) • plus other special taxing districts) • HOA fees • condo fees

    Could this be *a worse-case situation where a condo corporation sits inside an HOA and inside of all the others?

    The only advantage I can see in this is that the municipalities don’t pay much for new development and for future maintenance. Yet, then there would be no overall standards throughout the state.

    In Ontario, the government forces small cities and municipalities to merge into regional governments to maintain equal standards. Our cities can be huge covering massive areas.

    Condos In Canada, each province has its owner strata or condo Act and they can be so different. In Ontario, a condo corporation cannot stop anyone from renting their units (some downtown Toronto condos are 90% rented). Yet in BC they can.

    In Ontario the condo board can vote to have special assessments but in BC, the owners must approve the assessments.

    Personally, I think Ontario has the best condo Act that I know of and it is getting major changes in the next few months.

    On Sat, Dec 3, 2016 at 11:08 AM, Independent American Communities wrote:

    > deborahgoonan posted: “By Deborah Goonan, Independent American Communities > The following report of an embezzlement arrest does not directly involve a > homeowners association. You see, Diamondhead is a city in Mississippi. > Well, actually, the community was born more tha” >

    Like

    1. Holland, you said:
      For an old guy in Ontario, I find this a bit confusing. So if I got it, a condo owner or a homeowner in an HOA also may end up paying the following:

      • municipal taxes • Property Owners Association (POA) assessments • Fire Protection District (a special taxing district) • plus other special taxing districts) • HOA fees • condo fees

      Could this be *a worse-case situation where a condo corporation sits inside an HOA and inside of all the others?

      Yes! That’s exactly how it works here in the U.S. A condo owner in a master planned community will pay condo assessments, HOA assessements to the Master Association, plus school and property taxes and any applicable Special District taxes (usually added as line items on the property tax bill).

      Also here in U.S., there are many, many small municipalities, townships, boroughs,etc. sometimes with population of less than 1000-2000. No forced merging here, although sometimes small towns do annex to nearby larger cities or engage in shared services agreements for Police or Fire protection.

      And just as Canadian Provincial laws vary for condominium corporations, here in the U.S. HOA/condo/co-op laws also vary considerably from state to state.

      There’s no national standard, and fierce opposition to standards by HOA industry and home builder lobbyists.

      Like

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