By CECILIA FOX
Record Herald Writer
Courtesy of the Record Herald; Printed 12.23.12
TIPP CITY – An income tax ordinance, statewide income tax uniformity, and a new income tax collection policy were all on the agenda at the Tipp City Council study session Dec. 17.
Council discussed an ordinance updating and codifying the City’s income tax regulations, but it was ultimately tabled for further review and discussion.
“I think this requires just a little bit more study. I’m not trying to put the brakes on anything, but I’d like the opportunity to look at this,” Councilman Joe Gibson said.
The ordinance, which was on the agenda for first reading, includes some changes to the regulations, but it also adds the regulations to the city’s Code of Ordinances. Currently, the code directs residents seeking tax information to a different document. This can create issues because there is no specific code section to cite when court action is necessary.
Some of the changes include correcting some of the language to make the regulations easier to read, increasing the maximum fine for noncompliance from $500 to $1,000, and allowing the city to pass the extra costs of pursuing compliance (collection agency, court fees, and certified letters) on to the delinquent tax filer. It would also allow Tax Administrator Steve Cross to waive late filing fees under special circumstances and to waive penalties up to $100 with the approval of the finance director.
“There really are no significant changes,” Finance Director John Green said.
Gibson called the changes “major surgery,” saying that more time is needed to consider the ordinance. City Manager Jon Crusey disagreed, echoing the finance director’s statement that the changes are minor. Before the city can take any action against delinquent tax filers, the ordinance must be approved.
But Crusey assured Council that tabling the ordinance would not cause too much of a delay in the city’s pursuit of delinquent taxes. It will be on the agenda again in January to allow the council more time to review.
Council also discussed a new policy for collecting delinquent income taxes.
At the last meeting, Green proposed several changes to the city’s income tax regulations. He suggested that, once a delinquent account has been identified, the city should send out a collection letter. If that individual does not respond to the first letter, another will be sent.
After that, an administrative subpoena will be issued. If the individual still does not respond, a third, certified collection letter will be sent. Failure to respond to all of the previous steps will result in court action. In addition to these steps, the City may also use the services of a collection agency and periodically implement a tax amnesty program.
Tax centralization
Also on the topic of income tax collection, Council discussed House Bill 601. Introduced by State Representatives Cheryl Grossman and Michael Henne, this bill aims to make Ohio more business friendly by implementing municipal income tax uniformity. However, Tipp City officials and the Ohio Municipal League feel that the bill is unfriendly to municipalities and will result in lost revenues.
According to the finance director, one of the key provisions of the bill is that municipalities must repeal their current income tax code and adopt the state income tax code.
“They’re creating the framework for a centralized collection policy,” Crusey said, which the city has opposed in the past. “This is not friendly to local governments.”
The bill also requires a five-year net operating loss (NOL) carry-forward, which means that losses in one year can be used to offset gains in a future year. Currently, Tipp City does not permit net operating loss carry-forwards. According to Green, a one-year NOL would have cost the city approximately $50,000 in 2012.
House Bill 601 would also make it prohibitively difficult to audit a tax return and make corrections or assessments.
Gibson called the bill the “latest in a series of centralization attempts” and Mayor Dee Gillis said it was unfair to the residents of Tipp City. The council agreed that they would be in favor of a resolution opposing the bill.
Main Street reconstruction
It won’t just be the utilities underneath downtown Main Street that get an upgrade next year, Council has decided that all of Main Street between First Street and the railroad tracks will be getting a facelift. Given the extensive curb and sidewalk demolition required to replace the downtown utilities, the city has determined that it would be more economical to completely reconstruct Main Street. Council approved a resolution amending the Downtown Utilities Replacement Project design contract with Choice One Engineering to include the design for the reconstruction for an additional $78,462.
In addition to replacing the water, sanitary sewer, and storm sewer lines, the project will now include new curbs, gutters, and sidewalks, as well as new trees, trash cans, and benches. The project will also include new street lights and traffic signals.
“It’s better to get it all done in one shot,” Councilman Bryan Budding said.
Since the downtown traffic signals will be replaced, Council also authorized conducting a study to see if the Fourth Street traffic signal is really necessary. Beginning in January, the light will be bagged for 90 days.
The entire project is being funded with a compilation of money from Ohio Public Works Commission grants and loans, and Tipp’s water, sewer, electric and capital improvement funds.
In other business, Council approved the issuance of bond anticipation notes for several upcoming construction projects including the Main Street lift station improvements, water line replacement on Walnut Street, and the rehabilitation of the Harmony Drive water tower.
They also authorized city administration to move ahead with the nuisance abatement at 113 Miles Ave, per the discussion Dec. 3. There’s a couch, some tires, and a lot of garbage in the yard and the city is going to clean it up.
According to Crusey and Assistant City Manager Brad Vath, the owner, Rocky Hornbeck, is nowhere to be found. Crusey said several letters from the city were returned “not deliverable as addressed” and “unable to forward.”
The utilities were shut off last April and it is apparently vacant. The cost of the abatement will be filed as a lien on the property.
Two other ordinances, one amending the sign code and another concerning fire station parking, were tabled to allow time for the Planning Board to review them.
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