LIBERTY CENTER — A motion to pursue delinquent taxes utilizing Regional Income Tax Authority (RITA) services was narrowly approved by council Thursday.
Village council has recently reviewed correspondence from RITA on the matter, when it was reported 12 people were identified as having outstanding village income tax balances totaling $7.764.15 owed. Half of those listed still live within the village limits.
The options available include that the village could elect to collect on the delinquencies on its own, initiate litigation through RITA or wait to see if any payments are made. If the village were to choose litigation, it would be required to pay legal fees and costs.
After an inquiry was made by the village to RITA, it was learned if RITA pursued litigation, the village is charged for “extraordinary costs,” but these are taken off any received distributions resulting from the taxes being paid instead of the village receiving a billing.
Council Thursday learned this process involves the village setting up a retaining account with $1,500 for those legal fees. When an outstanding balance is paid, money is withheld from those distributions and those legal fees are replenished in that retaining account.
It was reported court costs differ based on locations, but an average cost of $95 per case was provided to council.
In detailing the costs, it was added that RITA utilizes a collection service that charges a rate of 18% of the amount collected. A contingency fee would also be paid on one account because the delinquency is from more than five years ago, but these fees would be paid by the taxpayers in the other cases.
RITA reported its representatives have attempted to contact these people in many different delivery methods, and no response has been received.
A motion was made to carry out the services so the village can enforce its income tax collections. Members Bryan Rogers and Crystal Alexander dissenting, stating they felt these services should be included with the contract paid by the village with RITA and objecting to the fees such as the collection rate.
The two other council members in attendance for Thursday’s virtual session, Chris Schultz and Adam Smith voted in favor. With the motion receiving a 2-2 tie, Mayor Jay Branson broke the tie with a vote in favor of the collections.
“I understand your point, but we need to go after this and collect the money,” Branson said in regard to the dissenting opinion.
In other business, council approved an ordinance to retain Paul Staff as village solicitor. The current contract expires at the end of March, so the ordinance was passed suspending the rules requiring three readings. The new contract is for $7,000, which is the same as previously.
Council also gave second reading to an ordinance amending sanitary sewer rates.
The ordinance is proposed to raise the sanitary sewer rates by 6% this year and 4% next year.
With the timing of requiring three readings and then the increase going into effect 30 days after the final reading, it was estimated the new rate won’t be billed until the end of May for what residents will pay in June if the ordinance is passed. The 2022 increase would then go into effect Jan. 15, and it would be including in the February billing that is paid by residents in March.
The increases are slated to generate $12,000 more annually and were considered after a review of the waste water fund. The village is anticipating the need for multiple projects over the next few years such as walkway replacement at the plant, pump replacement and a mandated phosphorous removal system.
Email comments to firstname.lastname@example.org.