By CECILIA FOX
Record Herald Writer
Courtesy of the Record Herald; Printed 12.9.12
TIPP CITY- Before approving next year’s operating budget, council had a serious discussion about health insurance and continued funding for several programs Monday night. At the meeting, council approved the 2013 operating budget, which projects $44,043,742 in total appropriations.
General Fund appropriations, expected to total $6,038,814, are up just over 4 percent from last year. The budget was also amended to include an additional $14,500 in council health insurance, because another council member signed up for health insurance.
But before council approved the budget, councilman Bryan Budding suggested several amendments, which included cutting funding for council health insurance, Tipp-Monroe Community Services, the Downtown Tipp City Partnership, the aquatic center, and the city’s annual Fourth of July fireworks show.
“Right now we are projected to spend $320,000 in the General Fund more than we are going to be bringing into the General Fund,” Budding said.
Budding has said before that “luxuries” like fireworks and Christmas lights are not the responsibility of the government. At the last meeting, he also said that he was unwilling “to lay the burden of someone else’s recreation at the feet of the taxpayer” especially when the 2013 budget is projecting a deficit.
“So we’re going to project a deficit and we’re going to spend money on things that aren’t even necessities?” Tipp City resident Paul Lee asked council, echoing Budding’s comments.
Mayor Dee Gillis pointed out that the operating budget functions as a guideline for the upcoming year. Each budget item must be voted on by council as it comes up.
There are opportunities to reduce costs throughout the year.
“As a point of clarification, I think the 2012 budget was projected to run at a slight deficit and it’s actually now running at a slight surplus. The city’s actually run at a surplus, I believe, for eight consecutive years and has added more than a million dollars to its general fund balance,” City Manager Jon Crusey said.
The council discussed Budding’s proposed amendments, but ultimately voted against them, approving the budget as amended to include additional health insurance. councilman Mike McDermott said that he would like to see further discussion on council health insurance and pool management.
“Even though we project a deficit in our budget for 2013, that projected deficit usually gets mitigated by the good decision making that is made up here each and every week we meet,” McDermott said. “We made many, many different changes and alterations to last year’s budget in order to come back out in the black.”
In other business, council discussed several possible fixes for the City’s problems with collecting delinquent taxes. Since the recent investigation of the tax department revealed issues with the city’s record-keeping, the department has prepared a new plan for pursuing delinquent and unpaid taxes.
Council authorized the investigation in June and heard the results from the city’s auditing firm, Clark, Schaefer, Hackett & Co., in October. The investigation revealed that the city has a record keeping problem and that there is definite room for improvement in the way the city. Finance Director John Green presented council with several possible solutions to the department’s problems, including hiring a collection agency and implementing a tax amnesty program.
The proposed six step plan begins with updating current tax information and identifying which accounts have delinquencies or unpaid tax balances that are still within the statute of limitations. This part of the process, if approved, is expected to take until May of next year.
The second step is a period of tax amnesty, which will allow residents who have missing tax returns or unpaid taxes to settle their accounts without facing any penalties or paying any late fees. During the tax amnesty period, those who owe the city will be notified by mail and they will only have to pay what they owe plus any interest.
“Amnesty is a good way to ease into these changes,” said Kessler.
According to Green, cities like Kettering and Huber Heights have recently had success with their tax amnesty programs.
The next step would be to close any accounts that have delinquent filings beyond the five-year retention period and to write off any tax, penalty, interest and late fee balances that are beyond the three-year statute of limitations. Then a second notice will be sent to taxpayers with missing returns or unpaid taxes that outline the consequences of non-compliance.
The fourth step will be to send an administrative subpoena via certified mail to all those taxpayers that have still not complied. An administrative subpoena, much like a court subpoena, requires that the taxpayer appear before the tax supervisor with all their tax records. If the taxpayer still has not complied, the city will take them to court.
The sixth and final step toward improving collections is to contract with a collection agency. The agency will compare the city’s database with the IRS database to see who is filing federal returns using a Tipp City address, but not filing their Tipp City returns. The collection agency will then pursue delinquent filings and taxes. The Central Collections Agency, a division of the Cleveland taxation department, is large enough that they have access to the IRS database and their fee is five percent of the taxes and penalties collected.
McDermott said he liked being able to bounce Tipp records off of the IRS database. Other council members also expressed interest in the six-step plan, although it will still have to be formally approved before the first step can be taken.
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