XML FeedsCity council 12/22/09: income tax and MERS
Algazali was absent.
Majewski asked for letters of appreciation to departing council members. Gordon asked for a letter of appreciation thanking the proprietors of Hippo's for holding a yearly Christmas event for special needs children for more than a decade.
Cooper asked to add an intergovernmental agreement to provide Highland Park with income tax services. All voted to add the resolution to the agenda.
Public comment
Bob Zwolak remembered Ray, "Mr. Paczki", of Oaza bakery who promoted Paczki Day in the early days. On the reallocation of assets in MERS, he asked that the council postpone the decision until those affected by the changes could be heard. Other pensions are underfunded, such as the fund for firefighters which is only 40-50% funded. His mother was a widow of a police detective and received his pension, and Zwolak inherited some of that pension from the estate of his mother. He has seen the evolution of the program, and while MERS was seen as a solution at the time it was adopted, it has compounded the city's problems.
The consent agenda passed unanimously.
Follow up:
New business
Reallocation: Cooper explained that funds were to be moved from the AFCME MERS account to funs an account for the pre-MERS retirees. The AFCME account is funded 208%, while the pre-MERS employees are completely unfunded. MERS has agreed to allow the transfer due to the unusual situation. The AFCME account will still be 130% funded after the transfer, but monthly payments to MERS will be reduced $70,000 per month.
Gordon asked Nazarko if this had not already been done 3 1/2 years ago when Crawford was the city manager. Nazarko said he didn't recall the other time, and it wasn't done before.
Shulgon said he wouldn't vote because he is a pensioner. Nazarko said the resolution wouldn't affect benefits, so it would be okay for Shulgon to vote.
Gordon asked if the only financial implications were the savings. Nazarko said she was correct. The resolution passed unanimously.
HP income tax: A page of the contract was missing from the council's packets. Cooper said the missing page laid out the ownership of equipment and software should the agreement end. Allen agreed that Highland Park will own the equipment and software under the language on that page.
Cooper said that Highland Park approached the city to process their income tax because they are behind on their collections. Hamtramck was recommended to them by an audit firm because our collection rate is high. Meetings took place with their city attorney and mayor, and Allen drafted the agreement. The resolution was passed by the council of Highland Park the previous night. They will pay for the equipment, and their income tax employee is to be hired here. The agreement is to take effect immediately. Hamtramck will receive $50,000 to start, plus monthly payments. The agreement is for 5 years, and a $25,000 penalty will be assessed if the agreement is dissolved early by either party.
Ahmed asked if two full-time employees will be hired. Nazarko agreed that another person will be hired in addition to the employee from Highland Park. If the city does a good job, the agreement could last forever. Cooper said that the employee from Highland Park would be hired contingent on the intergovernmental agreement. Klein asked how the city was able to hire these employees at-will, outside of the union. Cooper said that the union refused to accept the new employees, and Klein would have to ask the union why.
Gordon asked if the employees would have benefits. Cooper said they would receive benefits. Gordon asked if Highland park would absorb the entire 1st-year cost of $195,000, and $158,000 thereafter. Cooper agreed that Highland Park would pay the cost, plus roughly $25,000 to give the city a slight profit.
Nazarko said that Highland Park would handle the prosecution of delinquencies, but his department would handle everything else. Klein asked who would supervise the employees. Naqzarko said he would supervise them.
Majewski said sharing services is exactly what cities are supposed to do. Hamtramck is good at collecting, and that has led to this opportunity.
Allen couldn't find the missing page, but said that Highland Park would own the equipment, software, and data if the agreement ends. All voted in favor.
Majewski said that the conversation on income tax started at the MML conference.
Public comment
Abdul brought water bills from Hamtramck, Warren and Detroit. Hamtramck is the most expensive at $7.45 per 100 cubic feet. Warren and Detroit charge $4.99 and $6.25 respectively.
Gordon explained that Hamtramck buys water from Detroit, and that Warren has a separated sewer system.
Klein tried to argue that higher usage had something to do with the higher rates charged per unit, and said that the city tax rate in Warren is 16.9 mills, versus 17.04 mills in Hamtramck. People voted for the additional taxes.
Richard Hyska thanked Shulgon and Klein for their service. Shulgon has served for years on the police department, school board, housing commission, and council, and was a member of the Hamtramck team that won the Little League World Series. He didn't really want to accept the council seat at the time, but did it for the city. Klein was a hard working council member who was involved in getting bus shelters, the Cities of Promise program, the Safe Routes to Schools grants, and took a stand on keeping the Department of Human Services in Hamtramck. He said there are plenty of people who appreciate council's work, despite the "spiteful attacks" they must face at every meeting. Council is just volunteers at $60 per week.
Mickey of Goodson Street said that it snowed the previous weekend, and the icy streets were impassable. Fire routes and other streets were not salted in a timely manner by the new plowing company. The police called for service at 7:30 in the morning, but the company did not start salting streets until 4 p.m.. Platinum had a 10 to 15 minute response time when they were the contractor. He thought that the city council made a bad decision and should reconsider the awarding of the contract.
Cooper said that the contractor was not at fault. He talked with Ladd at the DPW about not salting too much, and they didn't plan to call for plowing until 2" of snow was on the ground. Ladd took that wrong and didn't call for salt at all. Ladd will now call the contractor when the police call him for salt.
Gordon said that Fleming still hadn't been done. She voted against the contract, but the council was assured at the time that it was approved that the plowing company knew the route. Obviously, they don't know the route because they skipped Fleming and salted Commor from Conant to Mound in Detroit. Cooper replied that the city wouldn't pay for that salt, and if he had known about Fleming, he would have called Ladd to make sure it was done.
Gordon said the police department and fire department were plowed last. Cooper didn't know anything about that, but said they were giving the new contractor another chance. He relies on the police department to identify problems.
John Justewicz said the city had the same problem with a contractor two contracts ago. Two inches of snow is the maximum amount of snow that can be melted with salt. One inch compacted without salt makes the streets a skating rink. Someone said the salt trucks had gone into Detroit. Buffalo was not salted at Holbook, though the contractor did dump salt in Detroit on Buffalo north of Caniff all the way to Charles. St Aubin is not a city street from Freezer services to Holbrook either. No one can say how much salt was applied in Detroit. Another time that this happened, the contractor cleared Miller in Detroit, up to an including the mosque parking lot, while Hamtramck was not cleared for a week. Certain streets have businesses. Fifteen to 20 semis use Geimer, and Kowalski's has been applying salt because their trucks have been getting stuck.
Justewicz asked if the snow removal bid covered sidewalks in the business area. Cooper said that the contractor didn't bid on that items. Justewicz asked how the contractor was able to pick and choose parts of the contract. Cooper said the bid specifications allowed it. Justewicz asked how the city compared the bids if all the items weren't bid on. Cooper said all the items were separate. Justewicz replied, "Alright, they were separate items. I'm Polish."
15 comments
What sort of experience do you have with tax software which qualifies you to conclude "Hamtramck's has always been by far the worst."
And yes, the one time my dispute with Hamtramck's Income Tax department actually made it to court, the case was found in my favor. All of my disputes since then have never made it to court - all the employees recognize me on sight now and are pretty quick to fix whatever problem caused them to send yet another threatening letter to me. They always blame the software when I'm in their office.
That said, I have no idea how much of Hamtramck's problems are software or people - I just know they're highly unlikely to do a better job with Highland Park's taxes than they ever have with their own.
I hope it is not the software which causing problem - will be expensive to replace. I think it is the people who are operating the software, who weren't trained properly, or who didn't learn the software properly, or who forgot how to use the software properly, causing problem. The users of the tax software should benefit from another crash course.
If Hamtramck does decide to process/collect taxes for HP, I hope our beloved City Council does not start spending HP's money.
Neighbor
Under the current system, if there are two names on your returns, make sure you submit your taxes with the names in the same order every year. If you reverse the names, the income tax software will not recognize it is you, and threatening letters will be sent. Also, when you file home ownership papers at City Hall, do yourself a favor and file the same papers 20 feet down the hall at the income tax department. If you don't, the city will try to collect income taxes from you for years that you didn't live here. Let's hope the new software eliminates these problems. (I was thinking that Highland Park would surely benefit from Hamtramck-style attempts to collect taxes that are not owed!)
When I spoke to the cashier at the city, she mentioned that even though she was an integral part of the tax collection system, she was never trained on the system. When she expressed this to me, I could tell she was frustrated about being excluded from the training.
What assurances Hamtramck got on the new tax software that it won't cause these problems or create a new set of problems? Vendor supported the current software for 5 years, but no fixes or improvements were made. What assurances do you have that this won't be repeated?
Neighbor - a tax payer who has not had any problem with current tax software
You'd think that experienced city management would be well versed in them.
Also the city really screwed up on the city website RFPs and vendor selection. I've offered free consulting for the RFP on more than one occasion and have been turned down both times.
At one point I suggested a citizen committee to put the website together but never heard anything back about that.
They've wasted thousands of dollars on this, so it's no wonder they're cutting mandated city services.
Then consider yourself fortunate.
How do you not see a problem with the system when I have explained that my notices were sent repeatedly to an address that I haven't occupied in 25 years? I am not writing fiction here. It really happened.
So far the problems I have encountered have included, but not been limited to:
Employees claiming that they only get wage information on residents from the state and never receive tax information from local employers (very false, as I've sent them payroll tax information as an employer many, many times).
Once I actually owed a small amount with my income tax return - I mailed in the return with a check. The check was cashed and the funds properly applied (even though I was in the middle of a court dispute with the city regarding 4 prior tax years), but they claimed to have never received the return. After I pointed out the vast improbability of being able to properly apply a check without the related return, I was told someone there must have lost my return and could I bring them another copy?
I've had the same issue with switched names mentioned above. After the first instance, I was advised to switch them back with my next return, which unsurprisingly resulted in yet another threatening letter.
I can't even begin to describe the vast number of issues I witnessed the one time I actually attended tax court in Hamtramck, including one poor gentleman who was bullied into agreeing to pay Hamtramck income taxes even after repeatedly telling the court that he was a Detroit resident who had never lived in Hamtramck, but did make the mistake of having a post office box in Hamtramck which was the address he'd used with the IRS. I was the only person in tax court that day to leave without agreeing to pay the city more money, and that was only after I told the court my professional credentials. And they still made me come to a second hearing in order for them to dismiss the case.
And this is just the system I am most familiar with - I have no idea what other problems I've overlooked in my years here simply because I don't know enough about those areas. I hate to think about how many residents are paying taxes they don't actually owe because they believe what the city tells them and because they really don't understand tax law.
(Disclaimer - I will readily admit that some of the troubles I have had might be explained due to my willingness to file returns that are slightly more complex than average because of my background. I suspect that I am far from the only Hamtramck resident who is eligible for a tax credit here due to non-resident income taxes paid to Detroit, but I suspect many of my neighbors don't know enough to take advantage of it. And the more complicated a tax return, the more room there is for error.)
What may have further complicated my case is the fact that my wife uses a hyphenated last name. Of course, none of this would have had an adverse effect on a properly maintained and administered program.
Ours is a small city. I doubt that the city mails out thousands of tax notices every year. A little pro-active validity check before mailing (i.e. check income tax record to see if the recipient is indeed a delinquent) should eliminiate erroneous notices.
Neighbor - an estimated tax payer
Thanks. Neighbor
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