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SALEM -- City council agreed Tuesday to allow the writing off of $32,696 worth of uncollectible income tax accounts.
Council members met in special session via Zoom to get the action done before the end of the year. The write-offs are one of many tasks the income tax department has been working to accomplish before shutting down and handing the keys to the Regional Income Tax Agency.
RITA is taking over the administration and collection of city income taxes beginning Jan. 1, eliminating the tax office at city hall and ending the jobs for tax office employees.
Mayor John Berlin said the income tax department employees are doing a great job getting ready for the transition to RITA and that everyone should be proud of the work they've put in.
"It's been difficult for them considering they only have a couple more days of employment," he said.
The accounts being written off range in size from $6 owed to $7,588 owed and date back as far as 2001 and as recent as 2017, with a mix of individual and business accounts. The total number of write-offs is 121 accounts.
City Treasurer K. Bret Apple pointed out that nearly half of the total amount being written off is from one business that went bankrupt and had many creditors, with city Law Director Brooke Zellers recommending the two accounts be written off.
The company owed $7,588 for tax year 2008 and $7,092 for tax year 2009.
Councilman Sal Salvino asked what the statute of limitations would be for a delinquent tax. Berlin said he was told they can go back three years and said the personnel have been attempting to collect the taxes on some of these back to 2001.
Zellers explained that for criminal charges, the city can only go back three years, but on the civil side to try to collect the money, they can go back further. Many of the amounts owed were too small or the cases too old to prosecute. In some cases, the taxpayer was deceased and in others, could not be found or filed bankruptcy.
"They've reached the end of the rope for these after years of trying," Zellers said.
Salvino asked whether RITA could take care of them, but both Apple and Zellers said RITA doesn't want to go beyond three years and wouldn't have the authority to go back beyond 2017.
Zellers said that he and assistant Law Director Tammie Riley Jones have worked hard with city Income Tax Administrator Fred Pamer and his staff on these cases.
"Mr. Pamer is still taking this job seriously despite the fact that he's leaving it in two days," Zellers said.
In other action that needed done before the end of the year, council also amended the fringe benefits ordinance for non-represented employees and city officials regarding payment for vacations. Council members met in executive session for about half an hour on personnel, presumably related to the ordinance.
"Beginning Dec. 29, 2020, when an employee's employment is terminated, whether voluntarily or non-voluntarily, vacation accrued during the current year, which is normally awarded the following year, will be pro-rated based on the number of days actually worked from the beginning of the year to the employment termination date and be paid out on their final check. The amount pro-rated will be calculated based on the number of vacation days that were previously earned," the ordinance said.
Previously, for example, if someone left halfway through the year, they would have already earned vacation time for the next year, but didn't get paid for it when they left. Now they will.
"We think it's only fair to pay the people for what they've earned," Berlin said.
Employees of the tax office, whose last day is Thursday, will benefit from the ordinance, as will any employee who leaves before January in a year. They'll get paid for vacation time already earned for the next year.
Both ordinances took effect immediately since council approved them with the emergency clause.
Council's next regular meeting will be held Jan. 5.
mgreier@salemnews.net