CITY GOVERNMENT Council OKs outside agency for income tax collection

City council sent a message of displeasure to the CIC.
By DAVID SKOLNICK
VINDICATOR STAFF WRITER
YOUNGSTOWN -- City council gave approval to the board of control to have an outside agency collect city income taxes.
Hiring the Regional Income Tax Agency to handle the city's income tax collection rather than city employees should generate about $300,000 in new revenue for Youngstown in its first year, said city Finance Director David Bozanich.
The board of control, of which Bozanich is a member, is expected to approve a contract with RITA sometime next month after negotiations are finalized.
RITA would hire three city employees from the income tax department as well as two other people for a Youngstown office at 20 Federal Place on West Federal Street, agency officials said.
The agency, created in 1971 by a regional council of governments, provides income tax collection services to 116 communities in Ohio, including Girard, Campbell and Wellsville.
RITA would charge Youngstown a fee of about 2.5 percent of the income tax it collects, said Rick J. Carbone, its executive director. Youngstown would be the most populated city in Ohio to join RITA, he said.
The agency has the expertise, experience and technology to do a better job than the city in collecting money from delinquent city taxpayers or those who don't pay at all, Bozanich said.
The city would sign a one-year contract with RITA that could be renewed annually.
State Sen. Robert F. Hagan, the Democratic mayoral nominee, wrote Mayor George M. McKelvey last week urging the city not to sign a deal with RITA.
Hagan said communities are leaving RITA because of significant cost increases for the agency's services. He also said that as the city's next mayor, he didn't want to be saddled with a "long-term contract."
Without mentioning Hagan's name, McKelvey said some people are mistaken in thinking the city is signing a long-term deal.
Shaky alliance
Also at Wednesday's meeting, council complained about its arrangement with the Youngstown Central Area Community Improvement Corp., a quasi-governmental agency in charge of downtown redevelopment.
Several council members complained that the CIC is conducting business through its property and executive committees and has canceled many meetings of its full committee. A majority of council serves on the full CIC committee. The full CIC committee hasn't met since April, but is scheduled to meet Tuesday.
Council voted 5-2 on Wednesday against approving legislation by an emergency measure to have the city and the CIC file an application to have a company seek money from the Clean Ohio Fund for demolition and environmental remediation at the future site of the $5.2 million Youngstown Technology Center. Instead, council gave the legislation a first reading.
Councilman Rufus Hudson, D-2nd and a CIC member, said he is "sick and tired" of the CIC profiting from downtown development and the city getting nothing, particularly because Youngstown gave the initial money needed to create the agency.
"I might as well resign" as a CIC member, he said. "I might as well not be part of it. They cancel every meeting."
McKelvey, also a CIC member, had urged council members to approve the legislation, saying he wouldn't allow any money to be spent for this project until the development agency meets with council to iron out problems. However, that request wasn't honored.
Also at Wednesday's meeting, council approved the Youngstown 2010 Land Use Plan that will be used by Youngstown as its guiding plan for development.
skolnick@vindy.com