Commission split over outsourcing Niles tax collection

By JORDAN COHEN

news@vindy.com

NILES

The commission overseeing the city’s efforts to get out from under fiscal emergency is split over outsourcing income tax collections and eliminating jobs in the treasurer’s office.

The differences emerged in a joint meeting Wednesday between the Financial Planning and Supervisory Commission and city council during a discussion of the recovery plan developed by Mayor Ralph Infante and approved by council earlier this month. One point lists exploration of the use of the Regional Income Tax Agency for income tax collections. Outsourcing would mean probable elimination of the income tax office and its four employees.

Infante, a commission member, said he is looking into other companies, but argued to keep tax collection in-house. “Don’t go to RITA,” he said. “We should stay where we’re at.”

The mayor got support from commission member John Davis who said that the estimated $10,000 to $14,000 annual savings from using RITA are not worth the problems the dismissals might cause. Davis said outsourcing could ensure defeat of a 0.25 percent increase in the income tax in November, which is critical to the city’s recovery. The tax increase would eventually generate $600,000 annually.

“We might lose the income tax because of the people who lost their jobs (so) what’s the point,” Davis argued.

Two commission members are leaning toward the use of RITA, however. Sharon Hanrahan, commission chairman, told the Vindicator in an e-mail earlier this month, “I’d recommend it based on the numbers and I’m pretty sure so would the state auditors.” Mary Ann Coates, a certified public accountant, said her construction company has worked with RITA to comply with tax collections without any problems.

Davis had questioned the quality of RITA’s customer service noting that the city of Lakewood near Cleveland had dropped the agency for that reason, but Coates defended RITA.

“I’ve been very satisfied with their customer service,” she said after the meeting.

Treasurer Robert Swauger has been ordered by council to recommend whether to keep the tax department or outsource either with RITA or another agency. Swauger, who refused to give one when he presented his figures earlier, “asked to be excused” from Wednesday’s meeting according to council President Robert Marino and did not attend. The treasurer has yet to issue a recommendation.

Swauger has also been ordered to look into the possibility of using CCA, an Ohio agency that conducts tax investigations and goes after delinquencies. CCA is staffed by public employees.

Niles has been in fiscal emergency since a state auditor declaration last October.