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FINANCE / CLAIMS
COMMITTEE ACTIONS
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SEPTEMBER 4, 2002
ATTENDANCE: Bruce Kimmel, Chairman; Matthew Miklave; Ken Baker; Christopher Perone; Douglas Sutton.
STAFF: Jack Miller, Finance Director; Frederic Gilden, Comptroller; Lisa Biagarelli, Tax Collector; Simon Sumberg, Asst. Corporation Counsel
OTHERS: David Davidson, Chairman of Board of Estimate and Taxation.
The Chairman called the meeting to order at 7.40pm.
APPROVAL OF MINUTES
** MR. PERONE MOVED APPROVAL OF THE MINUTES DATED AUGUST 7, 2002, AS CORRECTED.
The following correction was made:
"
Page 2, fourth paragraph, the second line should read "Mr. McKissock said that the taxes would not then continue to accumulate.
**` MOTION PASSED FOUR VOTES IN FAVOR, ONE ABSTENTION (MR. SUTTON).
CLAIMS COMMITTEE: RECEIVE THE MONTHLY CLAIMS REPORT;
REVIEW AND APPROVE CLAIMS AS REQUIRED FOR CLAIMS
REPORT DATED SEPTEMBER 4, 2002
Mr. Kimmel stated that there were no items that exceeded $5,000.00; therefore no action was required. He asked Committee members for any questions or comments. There were none.
DELINQUENT TAX REPORT:
RECEIVE REPORT AND DISCUSS
Ms. Biagarelli stated that she did not have the August figures. She said the July collections were up compared with last July; last year they collected 30%, this year 35.2%. Ms. Biagarelli stated that this is a modest increase and won’t mean anything until they see the August numbers.
Ms. Biagarelli said that regarding the sewer collections through August 22, 2002, they had collected 45% of the adjusted levy; she said the problem is that the adjusted levy is continuing to change which effects the appeal process. Ms. Biagarelli said they are still doing adjustments, they have not been able to send out delinquent notices yet, and this cannot be done until the adjustments are taken care of.
Ms. Biagarelli referred to the report, the Delinquent Taxpayers Report, she had distributed to Committee members in the morning and asked for any questions.
Mr. Kimmel asked if they had any luck. Ms. Biagarelli said they had. There was some discussion about customers included in the report.
Ms. Biagarelli said at the end of July for last year their collection percentage of levy was 98.2%.
Mr. Miklave asked Ms. Biagarelli if she could prepare for the Committee a short memo indicating the triumphs and successes. Ms. Biagarelli said she would supply this in addition to the report.
RECEIVE BOARD OF ESTIMATE AND TAXATION
SPECIAL APPROPRIATIONS
FROM SEPTEMBER 3, 2002 MEETING
Mr. Kimmel referred to the Special Appropriations advertised items and stated that they were all approved. He said they would receive these and pass them onto the Common Council. Mr. Kimmel asked Committee members to review them and for any questions they may have.
Mr. Kimmel commented on retirements. Mr. Miller said they do not budget an amount, there is a contingency to address the unseen. Mr. Miller continued to say that when a position becomes vacant, someone is usually hired at a lower level.
Mr. Kimmel said he was glad that the Historical Commission got approval for repairs to property at Smith Street. He said he thought they would be dealing with the rent issue at a later date.
Mr. Miller said that the Board of Estimate and Taxation had tabled this item until the next meeting to check with the Building Facilities Manager to obtain a second quote.
Mr. Kimmel referred to number 2 on the advertised items, a transfer of money to pay for additional temporary and part-time wage and salary expenses. He asked Mr. Miller to fill them in on the nature of the discussion.
Mr. Miller stated that during the meeting they adopted a policy that required departments to request payment for part-time hours over 19 per week. This way the Comptroller’s Office can process and check individual requests for part time work. Mr. Miller said a notice has been sent out to all departments indicating the hours etc.
Mr. Miklave asked what happens if the Council does not approve this transfer. Mr. Miller said the department would wind up with a deficit, he also suggested that Mr. Miklave talk to the Law Department.
Mr. Miller said that the new policy will prevent departments from transferring monies out of their account when there are not enough funds in there to pay part time workers who have worked more hours than necessary.
Mr. Davidson said there are two issues with respect to this issue. The first is there are a series of special elections that are not budgeted, the second, part-time issue. The Board of Estimate and Taxation requested from the Registrars’ Department an advance notice of any costs for special elections and they have put a stop on the part-time issue.
Mr. Miklave said that he is very glad that the Board of Estimate and Taxation has taken the appropriate steps, his concern was what kind of teeth do we have to enforce those policies. Mr. Miklave said he was disturbed that any department could exceed its budget and once the year is over they can get away with it.
Mr. Kimmel referred to the amount of $39, 599 and asked what part was for special election.
Mr. Davidson replied that there were two special elections. He said the $39,599 was split, $24,000 for special elections and $15,000 on the part-time. He said that was from memory and he could check the figures.
UPDATE ON ITEM FROM NORWALK LAND TRUST
CONCERNING THE NORWALK LAND TRUST ACCEPTING
THREE PARCELS OF LAND OFFERED BY LANDOWNERS
AND TAKEN OFF THE CITY OF NORWALK’S GRAND LIST
Mr. Kimmel said he was curious that none of the landowner’s were present. He said last month there were a variety of questions about this and they asked the Finance and Law departments to come back with some advice.
Mr. Sumberg stated that this issue should be discussed during executive session.
** MR. MIKLAVE MOVED TO AMEND THE AGENDA TO ADD EXECUTIVE SESSION TO DISCUSS LEGAL ADVICE.
** MOTION PASSED UNANIMOUSLY.
EXECUTIVE SESSION TO DISCUSS LEGAL ADVICE FOR THE
NORWALK LAND TRUST
** MR. MIKLAVE MOVED TO GO INTO EXECUTIVE SESSION TO DISCUSS LEGAL ADVISE FOR THE NORWALK LAND TRUST.
** MOTION PASSED UNANIMOUSLY.
The Committee went into Executive Session at 8pm and reconvened into public session at 8.30pm.
Mr. Kimmel discussed whether or not the City has the power to abate these taxes and according to the law department it is not clear; there will be some further investigations.
Mr. Miklave said this presents an interesting opportunity. He said they are dealing with fundamental fairness from a multiplicity of standpoints, what is fundamentally fair to the taxpayer, to our children and the property owner. Mr. Miklave said there are a series of conflicting issues that makes it very difficult to be determine the correct policy. He proposed a motion to table this item.
** MR. MIKLAVE MOVED TO TABLE THE ITEM.
Mr. Kimmel asked Mr. Miklave to withdraw his motion to allow for further discussion.
** MR. MIKLAVE WITHDREW HIS MOTION.
Mr. Kimmel said they are on shaky grounds when it comes to abating taxes. The Law Department has looked into this, and it is not clear what the municipality can and cannot do. He said they discussed the possibility of seizing the land, this is very complicated and sets a difficult precedent. Mr. Kimmel said the owners of the properties are not interested in paying taxes. The other option they discussed was foreclosure; this would be an exercise of futility. Mr. Kimmel said there was also the option of doing nothing. At the moment the property is open space, the issue if it remains that way is what concerns the Norwalk Land Trust and he commended them for trying to find these parcels of land. Mr. Kimmel said that these properties are, at the moment, deemed un-developable, he said he hoped it stays that way. If in the future the properties are developed the City will be in a position to collect any back taxes due. To conclude Mr. Kimmel said there were four options, abatement, which is questionable, seizure, which is questionable, foreclosure that is mostly impossible, and doing nothing. However, no action will be taken until they have more information.
** MR. MIKLAVE MOVED TO TABLE THE ITEM.
** MOTION PASSED UNANIMOUSLY.
BRIEFING AND DISCUSSION ON
TAX COLLECTION SERVICES PROPOSAL
Mr. Kimmel asked Ms. Biagarelli to bring the Committee up to speed. Ms. Biagarelli said they were considering using a collection agency for their suspended accounts, this would only be for motor vehicles and personal property. Ms. Biagarelli said she could see no harm in using a collection agency, she has used them in the past in other towns and they have both their good and bad points. She said that the City has to ensure that if the taxpayer submits information to the agency about the fact they don’t owe, the agency cannot continue to hound them. The agency is able to locate people and get monies owed where the tax department has been unable to, this is due to the fact that the agency reports to the credit bureaus. Ms. Biagarelli said this is particularly effective when people have moved out of the state.
Ms. Biagarelli said there are two agencies in Connecticut; the first is in West Haven, and the other one is through the Connecticut Conference of Municipalities (CCM). She said she would like to use Credit Information Bureau from West Haven and Warwick Rhode Island. They already use this company for address search on return mail and she had already established a good working relationship with them.
Mr. Kimmel said he assumed that other towns used collection agencies and according to the material, the agency say they can claim up to 40%. He asked what this would cost.
Ms. Biagarelli said it was unlikely that they would get 40% with them, as they would only be giving the agency the suspense account. She said any account is worked very hard and it is a long time before going into suspense; this may not be the case in other towns. Ms. Biagarelli said the collection agency only gets paid what they collect.
Mr. Kimmel asked if they would receive a monthly report indicating collections made. Ms. Biagarelli said that depended on the way the City has the system set up; she said they would probably get a report at the end of the month.
Mr. Kimmel asked why a collection agency has not been used in the past. Ms. Biagarelli said her main reservation was based on previous experience and she said they ended up doing more work on the accounts than the agency, so they got rid of them. She said the contract would have to be structured so that the City is able to get out.
Mr. Perone asked about hounding; he also asked to what extent the agencies go to get money owed.
Ms. Biagarelli said they work under certain restrictions, as a credit collection agency they have to work under the Fair Debt Collections Act; she stated that she is not subject to this Act. She said they can only call within certain hours, they are not allowed to call the individual at work and they have to announce why they are calling.
Mr. Miklave said he was extremely skeptical about this because collection agencies are notorious for breaking the law; he said he had clients who have received calls at work more than 10 times a day, they wrongly scandalize peoples’ credit reputations, they hound people at home and follow them around to find out where their bank accounts are. Based on that he did not think the City of Norwalk would want to use a collection agency. Mr. Miklave said the other thing is that not everybody who owes taxes are deadbeat, some people fall on hard times. The list of people who owe taxes are not necessarily lawbreakers. He said before they turn a collection agency onto somebody they don’t know, he would rather have Ms. Biagarelli and her staff call on them first. Finally. Mr. Miklave was concerned about the extra strain it would put on staff, as there are many issues and deadlines connected with using an agency.
Mr. Baker said he had used an a collection agency in the past and his experience was not that bad; he said that a close eye had to be kept on them but it would bring in revenue for the City.
Mr. Sutton asked how the collection agencies went about their business, for example was it just telephone calls.
Ms. Biagarelli said she had been to a collection agency and she said it was mostly letters sent out and telephone calls.
Mr. Perone asked how long was an account delinquent before it goes to a collection agency and how long can they go after somebody.
Ms. Biagarelli said it was the same for her and that is fifteen years. She said the minimum amount of time is a year and a half of being unable to collect taxes before somebody would go into the suspense account.
Mr. Kimmel said this issue would need to be looked into further. He asked for this to be included on next month’s agenda. Mr. Perone agreed with Mr. Kimmel, he said Mr. Miklave had brought up some very good points so it would need further thought.
BRIEFING ON FINANCINGS FOR THE MARITIME GARAGE AND
THE MARITIME CENTER REFINANCING
Mr. Miller said at the next meeting there will be a contract for guaranteed price for the Maritime Center and they anticipated using some state grants. The re-development agency is looking at a bridging loan in the amount of $1,310,000. Mr. Miller said the underlying financial strategy has not changed but on reviewing the financing, the amount authorized is $10,750,000; the total project is estimated to cost approximately $13,000,000.
Mr. Miller said they have an agreement with the developers for them to pay fair market value for the purchase of parcel three and they are entitled to this money a year after completion of the garage. He said they would take those proceeds and apply them to the costs of construction.
Mr. Miklave asked hypothetically, what happens if the state won’t authorize the whole $10,750,000 as requested.
Mr. Miller said there were several options, to float it from the capital fund, to finance it from the city or to issue a revenue note.
Mr. Miler said this project is seen as critical to the development. When talking about financing the garage and even if the worse case scenario was to happen and there are no funds, the prior Council approved this on the basis that it is critical to the project.
Mr. Miklave asked if his worse case scenario came true, would they still be in a position to complete the project by converting to permanent funding without damage to the building plans. Mr. Miller said this is necessary to the redevelopment. Mr. Miklave stated that he was concerned about their debt capacity.
Mr. Miller said that they have every expectation that they will receive the funding.
Mr. Perone said he did not want to a situation where they go further and further into debt. Mr. Miller said the finance has to be authorized by the Common Council. He said the debt will be paid by the parking proceeds.
Mr. Miklave if this was going directly to the Council. Mr. Miller said they wanted to fast track this as much as possible.
** MR. PERONE MADE A MOTION TO ADJOURN
** MOTION PASSED UNANIMOUSLY
The meeting was adjourned at 9.15pm.
Respectfully submitted,
Kate Kye
Telesco Secretarial Services
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