The Internal Revenue Service has placed a $65,000 tax lien against the City of Aragon as a result of unpaid federal withholding taxes, including penalties and interest.

This represents an estimated nine percent of the current $725,000 budget.

Aragon Mayor Ken Suffridge called the lien an unexpected setback and stated that it will directly affect the financial operations of the city. Because of the lien, Suffridge has placed the purchase of all non-essential programs on hold, including the purchase of a new police car.

Some of the unpaid taxes date back to 2003, according to Suffridge, who took office in January 2012. He also explained that the City of Aragon has not had an official audit since 2007. “An annual audit would have raised a red flag to many of these issues,” he said. “I am looking forward to overcoming this financial crisis.”

When asked why the city has not conducted an official audit in five years, Suffridge said there were several reasons. “It’s been explained to me that the lack of an audit is because of a computer crash that took place in 2008. Records were lost because of that. We also had a water pipe break, and that destroyed a bunch of records,” Suffridge said. “It is extremely hard to catch up once you get behind.”

The city’s financial issue is further complicated by the loss of thousands of dollars due to uncollected city taxes and fees. Approximately 93 percent of the city’s tax revenue comes from residential property.

In late October 2012, Suffridge gave city staff instructions to begin an aggressive program to collect the unpaid debt.

“Aragon has a lot of outstanding taxes, and we are working hard to collect on it so we can put money back in our coffers,” Suffridge said.

In addition, the city is unable to receive state grants because of the failure to complete a yearly official audit.

Since learning of the lien, Suffridge has met with staff and presented a detailed plan of action, including cost saving measures and immediate implementation of new policies and procedures.

The mayor told his staff, “This is an unexpected set back, but we will survive it. Together, we will overcome this and end up in a much stronger position.”

He said he has asked city council members and staff to join him in a cooperative, team effort to move into 2013 with optimism.

“I have no intention of allowing this incident to cloud an otherwise very eventful and successful year,” he said.

During 2012, Aragon received donations totaling $62,700. These provided, at no cost to the taxpayers, a Community Center building, a severe weather warning horn, recreation funds along with several acres of land for recreation, taser equipment and office furniture.

Suffridge said Aragon now has a new motto, city seal and a city flag. More than $3,000 was also raised for the city’s fire department during the 38th Annual BBQ.

“In spite of financial woes, Aragon is alive and well,” Suffridge said. “We, like the Phoenix, will rise above these challenges.”