Pickerington Council plans to hire a company to collect taxes and will no longer use an in-house tax staff.
Council members passed the first reading to hire Regional Income Tax Agency (RITA) at the Dec. 2 meeting.
Currently Pickerington handles its own tax collection, but if the other two readings pass, the city will outsource the job to RITA.
Although RITA keeps 3 percent of the money it collects, the venture will save Pickerington money because there will no longer be an in-house tax staff.
In addition RITA more aggressively pursues delinquent taxpayers, Council member Brian Sauer said.
"They have the ability to access the IRS records to collect against everyone in the city," Sauer said. "Currently we don’t have the ability to do that."
The potential savings of $45,000 to $55,000 will not be realized immediately because the current tax staff will remain employed by Pickerington in different capacities.
Although those capacities have not been determined, they will likely fill positions left vacant as a result of the hiring freeze, Sauer said.
The savings will materialize in the future when the hiring freeze lifts and the city has fewer positions to fill, Sauer said.
Council member Brian Wisniewski opposes hiring RITA because of the alleged poor customer service record he said the company has and that he suspects the promised savings to be "all smoke and mirrors."
Wisniewski said an accountant told him that one client "received a tax refund and two weeks later RITA (contacted that person) to say he had never paid."
"I’ve worked with lots of outsourcing-type companies and they promise a lot and deliver very little," Wisniewski said. "Once you start asking outside their contract they nickel and dime you to death and the potential savings does not materialize."
Wisniewski said the city would have to cut more from the already slashed budget to pay RITA.
In addition there would be overlap during the first six months in which the city tax department will remain intact while RITA transfers the residents information into its computers.
"Another third party administrator will have your information out there," Wisniewski said.
But Sauer said from him point of view, service won’t be impacted.
"The city will still have a tax administrator and RITA will send representatives to the city to help with income tax questions," Sauer said. "They have a customer service line as well as a Web site."
In other business, Violet Festival president Greg Chamblin asked the council to reconsider cutting its contribution to the summer event.
The proposed income tax increase on the November ballot failed and left the city scrambling to cut the budget to avoid falling behind on debt payments.
Council member Jeff Fix explained to Chamblin why funds for the festival was among the first items to go.
"Understanding things may change, it is difficult to spend money on the things we love to do when we cannot afford to put enough police on the street, or to pave the streets, or pay down our debt," Fix said. "Hopefully in 2010 things will change."
Chamblin will attend the next finance committee meeting with numbers proving that the Violet Festival brings money into the city, he said.
Good weather enabled the Violet Festival to make money last summer, therefore it will be held in 2009, Chamblin said.
"We had four beautiful days," Chamblin said. "We won’t always be so lucky."