WILKES-BARRE – The city is considering filing a legal action against the company collecting its earned income tax and will vote to replace Centax/Don Wilkinson Agency next week when a countywide organization meets on the matter, a city solicitor said.
Other companies are ready to take over and could "fairly quickly" resolve the issues, said city attorney Timothy Henry at city council's meeting Thursday night.
Henry said he is a member of the Luzerne County Tax Collection Committee, made up of all municipalities in the county. The committee will meet Wednesday at 6:30 p.m. at Luzerne County Community College in the Educational Center.
The city is owed approximately $1.1 million, and the amount could grow if the problems with Centax are not rectified soon, city officials warned. Already the city's "A" debt rating is in jeopardy of being downgraded by Standard & Poor's Rating Services because of the shortfall in tax collections used to pay debts.
Henry addressed the matter after Karen Ceppa Hirko, an accountant and city resident, questioned council about Centax.
"Is the city going to move legally either as a sole taxing entity or in conjunction with the county board to force Centax to remit what is currently due with penalties?" Hirko asked.
Henry said the city would likely act on its own even though it does not have a contractual relationship with Centax.
"The city is strongly considering and even preparing to file its own action against Centax regardless of what the TCC does," Henry said, adding "We've certainly been damaged."
The city did not vote for Bridgeville-based Centax, which the county hired to handle the collection, reconciliation and disbursement of the earned income tax in accord with state Act 32. Instead it voted to stay with the H.A. Berkheimer Agency, which handled the collection in the past.
Four companies have responded to a request for proposals from the committee, Henry said.
"And my understanding is also that the companies that are interested in replacing Centax think they can have the issue resolved fairly quickly, maybe two weeks, and start getting the money to the communities that need it," he said.
The Centax discussion occurred toward the end of the meeting at which council approved a number of resolutions including:
• Purchase of a 2013 Jeep Grand Cherokee at a cost of $27,482 with Liquid Fuels fund. The vehicle will be used by the city's Department of Public Works.
• A change order in the amount of $5,163 for Brdaric Excavating for asbestos removal in a property to be demolished at 24-26 Cherry St.
• Acceptance of a proposal from the Joyce Insurance Group for an insurance package in the aggregate amount of $645,447.
• A change order in the amount of $10,467 for Popple Construction Inc. for the Intermodal Transportation Facility and Parking Garage.
• An agreement with Premium Builders for $42,689 in repairs to the Hollenback Golf Course clubhouse.