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HomeMy WebLinkAboutTB Minutes 1995-04-03 OF 1P TOWN OF ITHACA Agenda # 21 44- � 26 EAST SENECA STREET , ITHACA , N . Y . 14850 CLERK 273- 1721 HIGHWAY 273- 1656 PARKS 273-8035 ENGINEERING 273- 1747 PLANNING 273-1747 ZONING 273-1783 FAX (607) 273- 1704 _ TO : MEMBERS OF THE TOWN BOARD FROM : BETTY F . POOLE , DEPUTY RECEIVER OF TAXES DATE : APRIL 3 , 1995 RE : SOLID WASTE FEE INCLUDED ON PROPERTY TAX BILLS I have been asked to review and give a cost estimate regarding some of the more prominent issues relative to the possibility of Tompkins Country incorporating the Solid Waste Fee on , the real property taxes . As I understand it , the County has several scenarios which they wish to propose to the Towns three of which are the following : 11 Incorporating the fee on the property tax bills with separate accounting procedures unnecessary and would be included in the total tax warrant . 2 . rro generate two separate bills , . a property tax bill and a solid waste bill , with the Town collecting both and a separate accounting procedure . 3 . Incorporate the solid waste fee on the tax bill as a fee with separate accounting procedures . First is the legality of Towns collecting fees for the County Treasurer , Section 922 of the Real Property Tax Law is the statutory authority for mailing tax bills by all collecting officers . That statute states that : " the collecting officer shall mail to each owner of real property listed on the tax roll a SWF ANALYSIS 4 / 3 / 95 statement showing the amount of taxes due on his property - - " . Section 102 ( 20 ) of the RPTL provides that the term " tax " for the purposes of the RPTL means a charge imposed upon real property by or on behalf of the county or town " but does not include a special ad valorem levy or a special assessment " except that for levy and collection purposes , special ad valorem levies are included . It appears that the inclusion of the fee is not authorized by Section 922 however this would depend on the nature of the solid waste fee . Is it a charge imposed on real property or is it a service charge .) If in fact it is a service charge or other consumer or governmental charge . then it is clearly not a tax Special legislation would be warranted before a Tax Collector / Receiver of Taxes would have the legal authority to collect " County Fees " . Second is the accountability to the County for the collection of these " fees " . The present software package for the taxes is not sufficient to accommodate the added accounting responsibilities which would be needed . The process would and/ or , could require additional software to conform to the separate accounting procedures required . If an additional program is not needed then surely the present tax program would need to be modified in an effort to adapt: it to the additional record keeping requirements . The cost implications to the Towns , if either a modification to the existing program or a new and separate program is dictated , are not known . This could be a considerable expense to the Towns . Another question is do all of the collectors / receivers have the 2 SWF ANALYSIS 4 / 3 / 95 necessary equipment to manage these additional programs ? Would the County be willing to absorb some of these costs ? Would the collectors / receivers be required to maintain a separate interest bearing checking account and remit to the County separate returns for the taxes and the solid waste fee ? Who would be permitted to retain the interest on the account ? Third , is customer service . If the law allows a taxpayer to refuse to pay the fee , word would circulate that an option to omit the Solid Waste Fee from their tax payment is available . This would require bills to be adjusted , a corrected bill calculating installment amounts , service charges , interest and penalties , adjustments tc the warrant , adjustments on the computer program , would need to be performed manually . This would present not only an accounting nightmare but an extremely time consuming process . Town employees would need to deal with taxpayers , complaints and questions . and would be unable to answer them . At present even with the delinquent solid waste fees levied on the tax bills , taxpayers are extremely dissatisfied when they are referred to the T . C . Budget and Finance Office to have their questions answered . Also , if payments were received near the end of the month which exclude the solid waste fee , the payments would need to be returned for the correct amount . The payments would not be received until the following month and would not include the penalty which would be due . The collector/ receiver is obligated to assess the appropriate penalties if the payments are received after the penalty free 3 SWF ANALYSIS 4 / 3 / 95 period thus subjecting the taxpayer and / or escrow agent to additional penalties and interest pursuant to Real Property Tax Law . This would result in a number of disgruntled taxpayers . ( Note : 750 of` our payments are received January 30 and 31st . ) Fourth , in an effort to maintain the high quality of customer service we pride ourselves in , there is no doubt which ever form the County wishes to implement , additional personnel would be needed to facilitate the added duties and responsibilities - of the tax collection. process . Given the separate accounting procedures which would be required , one could estimate that the work load could double requiring on additional person , at 37 . 5 hours per week for at least 10 - days in December and for the months of January and r February . If temporary services were to be utilized , at a rate of $ 8 . 00 per hour , this could result in a cost to the Town of approximately $ 3 , 000 for administrative support alone . Additional cost of envelopes at approximately $ 50 . 00 / 500 , postage at $ 160 . 00 / 500 and other supplies . ( Note : The Town of Ithaca mails approximately 4 , 900 tax bills per year ) In addition , training would need to be provided for the added person in an effort to insure they would be informed adequately regarding the tax collection process . This would decrease existing staff temporarily for training purposes . Another implication would be additional space needed to house this individual . As you well know space is a rare commodity in our present facility . Concerns :regarding the calculation of the interest and 4 SWF ANALYSIS 4 / 3 / 95 penalties are very apparent . It is our understanding that if the Solid Waste Fee is not a levy , different penalties would apply for late payments adding confusion to the situation . The County ' s practice is if the Solid Waste Fee is paid in the month of January , there is no penalty . If paid in February , a 6 % penalty is assessed and an additional to per month thereafter . The calculation for penalties on the property tax bills is without penalty if paid in the month of January , if paid in February a 11 penalty is assessed and an additional to per month thereafter . This would mean the tax collectors / receivers would need to calculate the penalty on the tax portion of the bill at the Real Property Tax rate of to per month , calculate the penalty on the Solid Waste Fee at the present rate of 601 for February and an additional 1 % every month thereafter , then add the two to arrive at an amount due for any given month . Also , I would be concerned with the implications this would have on the installment option . Judging from past experience , the taxpayers seem confused with the amount to pay for the first installment now . This would only add to the confusion if they elected the installment option and omitted the Solid Waste Fee , not to mention if the payment was received near the deadline to make the installment payment . I could only imagine the chaos which could occur . I am sure the County would not be willing to forgo the 6 % penalty on the Solid Waste Fee in view of the fact the interest assessed for late payments on the Solid Waste Fee as opposed to the property taxes is 5 % more per month . What are the 5 SWF ANALYSIS 4 / 3 / 95 alternatives ? We would be remiss if we were not concerned with the fact this scenario could prove to be disastrous not only for the receivers but for the taxpayers as well . If the Towns ultimately collect the " fees " , how would compensation to the Towns be figured ? This issue would need to be evaluated in an effort to make it cost effective and equitable for all . One would need to keep in mind the " conservative " cost estimates pre ::) ented here regarding additional administrative support , postage , supplies , computer , software and / or program modifications , when negotiating any type of agreement relating to compensation . The concerns noted above regarding the legality of collecting the fees , the accounting responsibilities , the extraordinary costs which could be incurred by the Towns and most importantly maintaining the high quality of customer service are valid issues which every Town should be aware of when considering County ' s proposal . I ' m sure there are more issues which have not been addressed as we have no way of predicting other circumstances which might occur . I hope this will provide you with some insight as to what the Town could be faced with and to assist you in making a determination as to whether or not the Solid Waste Fee should be applied to the real property taxes . If you should have any questions , please contact me . 6