Thursday, June 30, 2016
By Jordan Cohen
NILES
Mayor Thomas Scarnecchia says he is not ready to outsource the city income-tax department to the Regional Income Tax Agency despite pressure on him to do so.
The mayor on Wednesday told his fellow members of the Financial Planning and Supervision Commission that he plans to give the department “another chance” for one year to improve collections and eliminate delinquencies.
“If they fall short, we will go with RITA,” Scarnecchia said. “They’ll be under a magnifying glass.”
Ohio Auditor Dave Yost, who had strongly criticized the mayor’s refusal to outsource in an interview last month with The Vindicator, attended the meeting but left before the mayor’s announcement.
Auditors say the move to RITA could save the city thousands of dollars.
Scarnecchia noted the short-staffed department has increased its collections by more than $600,000 above this same time period last year.
Quentin Potter, commission chairman, however, appeared skeptical.
Potter said the increase may be the result of changing business collections from quarterly to monthly. He also indicated he was not comfortable with the one-year time frame.
“We need to see improvement within the year, not by the end of it,” he said after the meeting.
Tim Lintner, one of the city’s state-appointed fiscal supervisors, said auditors will be watching the income-tax office “to make sure delinquencies are collected and the city goes after nonfilers.” He said they also will closely scrutinize tax collections from businesses.
Lintner said the general fund is projected to be in the black by more than $252,000 by the end of the year, but warned the figure could easily fall into red ink for two reasons. One is the cost for replacing the broken heating and ventilation systems in city hall that could run as high as $194,000. Another is an “audit adjustment” that Lintner believes will require the city to take even more money out of the general fund to cover expenses improperly paid by revenue-generating accounts.
Earlier this year, an audit adjustment from misappropriated light-department accounts by the administration of previous Mayor Ralph Infante cost the general fund $204,000. Lintner expects something similar to happen again.
“I expect it to be negative based on past history,” he told the commission.
Yost, who spoke at the beginning of the meeting, discussed the city’s struggles, noting that it ranks “33rd from the bottom” on a list of 184 Ohio cities’ fiscal management. Nonetheless, “the state doesn’t want to supervise Niles,” he said.
He cited Ashtabula as a city “that does more with less money and is not in fiscal emergency.” He suggested that Niles, in fiscal emergency since October 2014, should learn by example.
“You can run a town this size with the money you have,” Yost said. “Don’t give up.”