Computer system causes lost revenuegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Hazleton tax workers fired over lost revenues
City hires private company to take over collection of taxes. Computer problems also cited as Hazleton reorganizes office.
February 16, 2000
By ANDREW TUTINO Times Leader Staff Writer
HAZLETON -- An investigation into Hazleton's tax office revealed that incompetent employees and problems with the computer system contributed to lost revenue for the cash-strapped city in 1999, city officials said. Three employees in the five-person department have been fired, and another resigned before the probe began to take a job outside government, Mayor Louis Barletta and Director of Administration Sam Monticello said Tuesday.
The City Council passed resolutions Thursday night, hiring the Don Wilkinson Agency to take over operation of the tax office. The company will rent the tax office in City Hall and use its employees to collect and bill residents for taxes. Monticello estimates the city will save about $35,000 per year by privatizing the tax office. The Wilkinson agency will be paid through a percentage system based on how much money it collects in taxes, Monticello said.
Lost revenue projections stand at about $50,000 in one area -- garbage revenue -- but more projections are forthcoming in other areas of collection, Monticello said.
According to a memo sent to the three employees who have been fired, the monthlong probe centered on three areas key to the tax office's existence:
A failure to generate new tax bills in a "timely, efficient and correct manner." A failure to get city auditors the necessary reports needed to complete the 1999 audit.
The inability to get the mailings to correct addresses. "This results in the employees in the tax office being paid for work which they are unable to accomplish," according to the memo.
Monticello said the firings were based mainly on the city's dire need to get the tax system on track this year, and the former tax office workers could not get the job done.
"In spite of the cost savings to the city," Monticello said, "these firings were simply because of the inability of people to get out what was needed.
"As best as I can determine, the (computer) system is not performing all functions it was intended to do," Monticello said. "However, there are also user errors that contributed to the situation. And the simple fact is that we are left with four employees when the other one left, none of which could perform the necessary functions for the city's financial existence."
The administration is predicting the city lost almost $50,000 in garbage revenue last year because of incompetence in the office. That figure is about 10 percent of the projected deficit the city is facing. More projections in lost revenue because of shortcomings in the tax office are forthcoming once the new tax agency sets up shop in the City Hall, Monticello said.
In a memo Barletta attached to his proposed 2000 budget, he wrote that garbage revenue in the 1999 auditor's forecast was $38,244 less than the 1998 audit. "The administration believes this discrepancy is primarily due to property owners that have slipped through the system and have not been billed," the memo said.
In his proposed budget for 2000, Barletta budgeted about $925,000 in garbage revenue, about $49,604 more than what city auditors predicted the city took in 1999. A final audit of all expenditures and revenue is due in March.
Audits, done yearly, are a review of finances, while forecasts contain auditors' predictions based on financial statements.
Since 1997, the city spent more than $180,000 on computer programs and equipment, training and other items that was needed to operate the billing and collection system in the tax office, Monticello said. The computer system was run by a company called Penamation.
With the Wilkinson agency taking control, the system will improve for city residents, Monticello said. Representatives of the Wilkinson agency have promised to extend hours one day during the week, pay $200 per month in rent and make it easier for the administration to deal with complaints, Monticello said.
"This is what the agency does," Monticello said, of the company. "The citizens will benefit because it becomes one stop for taxes and user fees."
The problems in the tax office first circulated in a memo sent by the administration to the City Council on Jan. 21. The administration was already contemplating dismissing the three people in the office because of problems it was uncovering.
The three employees -- Rita Bottley, Rosemary Carelli and John Kosdick -- were sent letters on Feb. 9, informing them that last Friday was their final day of work. Almost immediately, the three filed grievances against Barletta, which he later denied.
Bottley declined to comment before hanging up on a reporter, Carelli did not return a phone call seeking comment and Kosdick does not have a listed number and could not be reached for comment. A business agent of the union that represents the three employees did not return a call seeking comment.
-- Martin Thompson (firstname.lastname@example.org), February 16, 2000