County and municipal real estate tax bills were not mailed to Hazle Township property owners this week after it emerged that newly elected tax collector Ryan DeCosmo hasn’t been properly bonded.
Bonds protect taxing bodies and property owners if real estate tax payments are lost or stolen.
DeCosmo turned in a bond issued to his father and previous tax collector, Michael DeCosmo, who currently serves as Luzerne County Democratic Party chairman.
County Controller Michelle Bednar released an audit Friday concluding the bond is invalid, saying state law requires bonds to be issued in an elected collector’s own name.
Other county officials said they believed the matter will be resolved as soon as possible, and that township residents will not suffer as a result.
Ryan DeCosmo could not immediately be reached for comment Friday.
Michael DeCosmo said his bond costs the three taxing bodies approximately $10,000 combined annually, and a bond for his son would cost about three or four times more based on Ryan’s age, mortgage, student loans and income. Michael DeCosmo is approaching his mid-60s, and his son is in his 30s.
He said three attorneys — county Chief Solicitor Romilda Crocamo, county Manager C. David Pedri and Chris Slusser, the solicitor for both Hazle Township and the Hazleton Area School District — concluded it would be permissible for his son to submit a bond in the father’s name while the son continued to shop around for a better price.
DeCosmo said the township can temporarily appoint him as tax collector if there’s a concern, because his family is trying to help taxpayers and not force taxing bodies to pay more for his son to hold the seat.
He said he was “shocked and outraged” over the audit.
“I think this is a political ploy on Bednar’s part,” Michael DeCosmo said. “Michele Bednar has been upset with me as county chair and others in the party since the person she supported for county council in the May primary — Dave Popiak — was defeated.”
Bednar said her review was not personal.
“I was put in office to do my job,” she said. “The law is black and white. The elected tax collector needs to be bonded in the tax collector’s name.”
‘A slight delay’
Hints of a problem surfaced Friday afternoon, when the county treasurer’s office issued its annual release about the mailing of 2018 county/municipal tax bills.
The release said Hazle Township tax bills will be delayed approximately two weeks but did not state a reason.
In a follow-up call, Laura Beers, the county treasurer’s office manager and tax administrator, said the reason was a bonding issue, but she referred further questions to the county solicitor.
Crocamo said the county did not receive a bond from Ryan DeCosmo and that she expects the matter will be remedied in two weeks.
The tax bills mailed this week will have a Feb. 12 issue date and can be paid at a 2 percent discount through April 11, the county’s release said. A 10 percent penalty will be added for those paid after June 11, it said.
Rebate and penalty dates for Hazle Township property owners will be announced when the municipality’s tax bills are mailed, county officials said.
“There’s a slight delay. It’s going to be resolved,” Crocamo said, stressing township residents won’t lose the opportunity to pay taxes at discounted rates.
Elected collectors have until March 15 to file a bond in the county Clerk of Courts office under the law, Bednar said. Municipalities can appoint another collector if the elected one fails to furnish a bond, the law states.
Hazle Township Supervisor Chairman Jim Montone said Friday he is reviewing the matter with solicitor Slusser.
Bednar’s audit, posted at www.luzernecounty.org, cites a section of state law that says the elected collector “shall enter into one surety bond to the Commonwealth for all taxes to be collected by him.”
“This statute clearly states that it is the tax collector who is to be bonded, not a substitute. To further prove this point, the deputy tax collector (if one is appointed) falls under the umbrella of the tax collector’s bond,” the audit says, referencing another section of state law.
Taxes can’t be printed in an elected collector’s name without a valid bond, Bednar said, adding that she publicly released the audit and personally delivered a letter summarizing her findings to all three taxing bodies Friday because other tax bills are in the mail.
Bednar posted the audit to the website shortly after 4 p.m.
Pedri signed the audit around noon Friday, handwriting that county management reserves the right to respond within 14 days.
Delayed collection in Hazle Township has a greater impact on the county because the municipality has the largest tax base of all 76 county municipalities, assessment records show.
With a current tax base of $1.48 billion, the township moved into the top spot with the highest overall assessment in 2016, ending Wilkes-Barre’s historic reign at the head of the pack. In comparison, Wilkes-Barre’s tax base is currently $1.4 billion, records show.
Bednar’s audit, which also was prepared by internal auditor Mark Majikes, said tax collectors must be bonded due to the risk involved with collecting money. A bond is a “legal promise” a personal or corporate surety will accept responsibility and cover a taxing district for losses of the collector.
“In simpler terms, this means if a tax collector is not bonded, that person cannot be the tax collector,” the audit said.
According to the audit, collectors in all municipalities except Hanover Township must be bonded for one-third, or 33.33 percent of the maximum taxes that can be paid in a year. The bonding requirement is at least 50 percent of the total taxes in Hanover because it is ranked a first-class township, the audit said.
For example, the $1.48 billion tax base for Hazle Township equates to a maximum of approximately $24.63 million in school, county and local taxes that could be collected based on their current tax rates. That means the elected collector would have to be bonded for about $8 million.
The school district typically pays around 59.5 percent of the bond premium, while the shares are 36 percent for the county and 4.5 percent for the township, records show.
Bednar said she opted to audit the bonds now because 2018 is the beginning of a new four-year term for many tax collectors.
The audit found no insufficient bonding for other collectors.
This isn’t the first time bills were delayed due to a bonding issue.
The county omitted Lake Township from its mailing in 2010 because then-collector Donna Kocher had not obtained a bond due to her credit report. Kocher later resigned, saying she didn’t want to saddle taxpayers with the additional expense of a bond for her at a higher premium.
The county treasurer’s office collects county taxes in all four cities — Wilkes-Barre, Pittston, Nanticoke and Hazleton — and both county and municipal taxes in Newport Township. The three home rule municipalities — Kingston and Wilkes-Barre and Kingston townships — collect county taxes on their own. Elected collectors receive county taxes in the remaining 68 municipalities.