 |
MINUTES
SPECIAL JOINT MEETING OF THE
BOARD OF COUNCILMEN AND THE
BOARD OF FINANCE
SEPTEMBER 20, 2007
A SPECIAL JOINT MEETING of the Board of Councilmen and the Board of Finance was held on Thursday, September 20, 2007 in the Council Chambers in regard to the Tax Collector’s Performance.
Those in attendance included Mayor Ryan J. Bingham, City Councilors Thomas C. Jerram, Rick E. Dalla Valle, Andrew J. Slaiby, and Marie P. Soliani, members of the Board of Finance Daniel Farley, Bruce Cornish, Mark Bushka, Thomas Scoville, and James Zeller, Corp. Counsel Ernestine Yuille Weaver, Tax Collector Robert Crovo and Attorney John Logan representing Mr. Crovo. Councilmen James F. McKenna, and Drake L. Waldron were absent.
Mayor Bingham called the meeting to order at 6:35 p.m.
TAX COLLECTOR PERFORMANCE #050
On a motion by Councilor Jerram, seconded by Councilor Slaiby, a discussion in regard to the item on the agenda, Executive Session - Tax Collector Performance, took place.
Mayor Bingham stated that Tax Collector Robert Crovo preferred holding the meeting in open session. Attorney John Logan pointed out, that pursuant to the terms of the contract under paragraph #7, that sets forth the evaluation and performance, is between the Tax Collector and the Board of Finance. Anybody may be present in the room, but it’s the Board of Finance that is performing the evaluation.
Corporation Counsel Weaver said even though paragraph #7 refers specifically to the Board of Finance, some of the issues that may be discussed may concern various other contractual issues as a result of the performance, and the City Council as well as the Board of Finance is a contracted party with the Tax Collector.
Atty. Logan indicated that Paragraph #7 specifically states the Board of Finance, and although it could have easily been written to include the Board of Councilmen, it doesn’t. They were prepared to engage in a discussion and review with the Board of Finance as called for under the terms of the agreement between the city and Mr. Crovo. They are asking for open session, if for nothing else, to make certain the public has a right to hear, and to the extent that there are issues and answers and facts that may bear upon members of the Council, and the decision they need to make in their respective offices, they’re welcomed to stay and listen as the public shall, but just for the record, from the perspective of what the agreement between the city and Mr. Crovo calls for, it’s not open to questions, it’s very, very clear.
Councilor Jerram rescinded his motion.
Councilor Jerram amended his motion to exclude the Executive Session from the motion. Councilor Slaiby amended his second. A discussion took place.
Mayor Bingham suggested that everyone wanting to speak signify so by raising their hand in order to have a clear record of the meeting.
Atty. John Logan introduced himself as Mr. Crovo’s attorney.
Mayor Bingham asked the board if anyone had any questions on the materials they had been sent.
As a point of reference, Councilor Dalla Valle indicated that the Board of Finance has already performed their performance review, so this meeting will not be the yearly performance review that has already been completed before the contract was resigned. He asked the Board of Finance if his statement was correct, that they had already conducted their yearly review.
Board of Finance member Bruce Cornish said he thought it had occurred; however, he believed he was out of town at the time.
Mr. Farley indicated yes.
Councilor Dalla Valle said that being prior to the contract being awarded, he objected to the nature of this meeting going forward with the Finance Board alone, reviewing the performance which had already been reviewed.
Mayor Bingham said they clearly disagreed with Attorney Logan. Therefore, they were moving forward as a joint meeting. The motion was on the floor.
Atty. Logan said it wasn’t clear to him that they were going forward, and he was happy to have them open the meeting in terms of the performance review which he expected that that would be pursuant to the terms of the contract, restricted to the Board of Finance. He pointed out that on Monday he forwarded by FAX a letter to Corporation Counsel, wherein he quoted the provisions of paragraph #7 and indicated that he was unaware of any other contract provisions regarding the city’s review of Mr. Crovo’s performance as Tax Collector and indicated, that despite the fact that there had already been a review with the Board of Finance on that criteria, they were more than happy to come here to engage in additional discussion with the Board of Finance of that review, and that’s been the position
they had since Monday of this week.
Mayor Bingham asked Atty. Logan if they were unwilling to answer questions from both boards, but were willing only to answer questions from the Board of Finance at this point?
Atty. Logan said that’s what the contract called for. The problem with willingness and unwillingness is really not a fair characterization. There’s a process, and he has respect for the process that was created in the contract; to provide for the board that would have the responsibility to perform the evaluation of Mr. Crovo, and that process was that the Board of Finance be the chosen board to do so. It is patently clear, and he sits next to his client ready to engage in that review and discussion with the Board of Finance as called for in the contract despite the fact that there’s already been a review.
Atty. Logan asked if the Council was unwilling to let the Board of Finance perform the review. Unless they themselves are able to do the questioning, he didn’t see a reason why that had to take place. They have a board discharging the responsibilities given to it under a contract, and he wanted to adhere to the terms of the contract, lest he waive provisions of the contract, and he didn’t want to waive the provisions of the contract.
Councilor Soliani asked if a performance evaluation had been done on the
Tax Collector by the Board of Finance and would the Board of Councilmen have a copy.
Corp. Counsel Weaver said she believed the Board of Councilmen get a copy of the report, but it’s done as scheduled and they’ve had no issues with the performance reviews.
Councilor Soliani asked when the last evaluation was done.
Corp. Counsel Weaver said she believed it was in May.
Atty. Logan agreed. Again, he stated that they were willing to engage in that discussion with the Board of Finance and answer questions in open session.
Mayor Bingham asked Corporation Counsel Weaver how they should move forward from here.
Councilor Dalla Valle stated that, in the three terms he’s been a member of the Board of Councilmen, they have never received a copy of the performance ratings conducted by the Board of Finance. Secondly, if the meeting was to be conducted in public, he wanted to make the public aware of just what that performance consists of. It consists of the Tax Collector giving the city 100%, showing that he has a letter of credit, that he has a bond. He saw that as a performance in a monetary form only. He didn’t see that as a performance review. They’re faced with issues that have arisen since the performance was done and, as the governing body of the city, they are entitled to at least participate in any discussions that may take place concerning this matter. As a point of
reference, he stated that the contract is being held to a T tonight when, during his term, the contract provisions have been violated over and over again. In his opinion, they were suitable and selective contract negotiations.
#340 Corporation Counsel Weaver said Councilor Dalla Valle was correct in that the criteria that the Board of Finance does examine is very objective and that is 100% collection, are the bonds in place, there are a list of criteria and those have been met, but it is not a subjective study. As far as the other issues that you’re addressing regarding the contract as a whole, she believed those issues are relevant to the purpose of this discussion as they affect performance, and performance as they are looking at it is not specifically as it is stated within the contract, but as performance as it is stated within the statutes, they can look at the performance of an individual.
Corporation Counsel Weaver understood one of Atty. Logan’s positions is that Mr. Crovo is not a city official, but he is performing the function of a city official as a Tax Collector, and as such, this board does have the right to consider his performance and that’s the action they need to go forward with.
Atty. Logan referred once again to paragraph #7. What they were talking about is Mr. Crovo’s performance as a Tax Collector. He believed that was the motion raised. He found it difficult to, other than the fact that they want to walk away from the verbiage of the contract...(sentence unfinished.)
Corporation Counsel Weaver said she didn’t think they were trying to do that; they were attempting to talk about some of the allegations that have been brought forth regarding Mr. Crovo’s performance and how they affect the people of Torrington, and this body needs to address it in order to air out that issue. This is the opportunity to do that. They are happy that Mr. Crovo was willing to come to speak to this body to give us the facts and to state his opinions.
Atty. Logan stated, that as he wrote to Corporation Counsel Weaver on Monday, Mr. Crovo was willing to meet and talk to the Board of Finance, per the terms of the contract. They didn’t try to come in here to trap you; they gave you advance warning in writing on Monday that that was their intention and invited, if there was dispute as to that, to get back to him and he is staying in the same position as before and those questions the city want’s raised. They’re not saying they want to duck, they’re saying they want to address them with the Board of Finance. The body that’s supposed to do the job, per the contract, is the Board of Finance.
Corporation Counsel Weaver indicated that they were not limiting themselves to the a criteria.
Atty. Logan was not saying they should limit themselves to the a criteria, he put in his letter that he was more than happy to discuss other issues, and he made that clear as well.
Mayor Bingham noted that they will move forward. He asked Atty. Logan if he would continue with them.
Atty. Logan said “Absolutely.”
Mayor Bingham noted that they will move on to questions from boards, individuals with regard to some of the things they’ve read, concerns they may have with regard to Mr. Crovo’s performance.
Councilman Dalla Valle stated that #6 of the contract states: the city, agents, servants, and employees deserve the right to inspect tapes, books, or other records of Mr. Crovo upon reasonable notice and reasonable times. He personally, at a public meeting, requested documents from Mr. Crovo’s office in late 2006, which were never given to him to this date. This was in violation of #6 of his contract.
In regard to #9 it says that Mr. Crovo will provide real time, two face interface between the Tax Collector’s computer system, the Assessor’s Office Administrative computer system and the city’s financial computer system. At Mr. Crovo’s direction, in late 2002 or 2003, that access was shut off and not turned back on again until early 2007, which was a request through your office to have it turned back on. That is approximately four years which was in direct violation of Item #9 of the current contract.
Councilor Dalla Valle said, “One of the most important things I’d like to bring up tonight is, apparently under the system that we’re running in the city with the municipal private collector versus a municipal, being the only municipality in the State of Connecticut doing so, there is some thought given to from the Tax Collector’s Office, that because of that, they don’t fall under state statutes and I think that needs to be clarified this evening. That regardless of private, municipal, whatever a collector is, they are still governed by our State Statutes and I’m prepared this evening to go through several of those statutes that have not been followed by the current Tax Collector”. To preface that, he said the City of Torrington cannot in any fashion, for any reason,
supercede a State Statute. They can put things in contracts that will change some of the things; not change, but maybe just add a little twist to a statute, but they can’t change a statute, they can’t allow a statute to be broken or not adhered to and there are several instances.....first of all, are there suspense files being kept by Mr. Crovo’s office?
Mayor Bingham asked Councilor Dalla Valle if he was asking a question.
Atty. Logan said it sounded like a speech.
Councilor Dalla Valle said he was at this point asking a question. #1. Are suspense files being kept in Mr. Crovo’s office?
Mr. Crovo said a suspense file is when a tax is no longer considered by the Tax Collector to be collectable. It’s still a tax that is collectable, it may be a Motor Vehicle that’s four years old and can’t find the person who owns the motor vehicle. Now in a regular town, that Tax Collector, and again I never worked in a regular town, a town other than with a municipal collector, I believe the collector would go through and suspend certain things that he deemed uncollectible, so that then when the Board of Finance and the Council do budgets and things, they could say “Well, how much is due to the city?” Well, we’ve got $3 million due, but in my opinion, your never going to get $500,000.00 of it because I can’t find John, I can’t find Mary, I can’t find Ted, we
can’t find them so we suspend it. In Torrington’s case, you get 100% of your taxes; you asked me for $68 million, I collect it for you. So there’s no budgetary reason to do that. There’s no reason to suspend anything, so in Torrington, we don’t suspend because frankly, I’m still looking for it whether it’s four years old or eight years old, up until the statute permits, which is fifteen years. By the time I’m through here, it’ll be twelve years, so I basically will never suspend anything. Now, if I were to do the job again and get into my sixteenth year, I would look back at the first year and suspend everything. In terms of the City of Torrington, you have no suspension because you collect everything. I then go back and that’s my record to collect it and I’m still trying to collect it. Do I know that the older it gets, I might not collect it? Of course. The
older it gets the harder it gets to collect. No, I do not have a suspense file, I don’t know why the city would want one.
Councilor Dalla Valle said the answer was no, he doesn’t have a suspense file and the story was well versed and it was a very good learning experience from what we thought. It still doesn’t answer the question that we have, so let me make this question a little more specific. He indicated that he knew what a suspense file was, but his question should probably have been more specific. In regard to deceased people, and the tax is no longer collected, by state statute we’re not allowed to go back to their heirs to collect this money. That’s the suspense file he was referring to. Is there a suspense file in the city for people who are deceased that we know we’re not going to collect the money from, and are we able to go after their relatives in lieu of not getting the money
from someone who is deceased? He agreed with the first part of Mr. Crovo’s answer that we can’t figure out a suspense file in respect that he brought forward, but then there’s a deceased person is when there should be a suspense file built at that point. Is that file being kept, per state statute?
Atty. Logan indicated that the taxes Councilor Dalla Valle was referring to would be personal property taxes, and to that extent they’re personal to the individual who owned the property in question. As such, it would be their estate that would owe whatever taxes there would be and he didn’t know of any law, upon the estate being fully presented and probated, that would allow the heirs to be responsible for any of the debts of the deceased. Once again, there would be no need for a suspense file under these circumstances. It makes no sense.
Mayor Bingham asked if anyone else other than Councilor Dalla Valle had questions or statements?
Councilor Dalla Valle continued. He asked if computer access was shut off?
Atty. Logan said apparently the answer is yes, it was shut off. It was always accessible to the city but it wasn’t accessed by the city. It is open, and as he already indicated, it’s not only open but it’s now in compliance with the contract, and they were the ones who actually suggested to the Corporation Counsel that it be expanded. Their suggestion was that there be monitors and computers set up in some public access area of the town hall (he didn’t think Mr. Crovo had the room for it) there could be a place set up for public access in this town hall that would be directly tied to that interface to allow members of the public or elected officials as they see fit to get the real time information directly off the computer as they see fit. It’s available and it will
remain available as they move forward.
Mayor Bingham said they should go into some of the recommendations. He suggested talking about moving forward. Everyone was aware of what has occurred, and he suggested they look toward tomorrow. One of those very important details is having a public terminal, having clear access to files and such. In moving forward, they would like to look into weighing options through a professional, the benefits of a municipal versus a private Tax Collector. He didn’t think they were present to talk about those benefits ( the cons) of having a private Tax Collector, but that’s a key recommendation that they have to do and he hoped Mr. Crovo and Atty. Logan would be amenable to that.
Atty. Logan indicated that this city has a special legislative enactment that permits it to be the only private municipal Tax Collector of the 169 communities in the State of Connecticut. To that extent, this city is always in a position to be able to, at the conclusion of any contract, request its legislators to alter that arrangement and go to a purely public Tax Collector system. He could engage them in a discussion of what he thought the pros and cons of that are, probably some of which his client would kick him under the table on, because he thought there were some real benefits to the community to have a public Tax Collector, but he thought there were also some extraordinary benefits to having a private collector system. That’s a policy analysis and he could certainly try to help them
understand whatever it is they don’t understand, but people he sees sitting in this room all have the ability to perform that analysis independently.
#840 Mayor Bingham said their recommendation would be to hire a forensic auditor and clearly go through Mr. Crovo’s records, private and public, to understand better what the benefits financially are for an individual or a city to collect taxes.
Atty. Logan said he thought what they would find is that there will always be kind of a bridge between the private and the public aspects of it because of the way it works and he didn’t know how they would ever be able to accommodate the city on that request without really reaching through to Mr. Crovo’s own private finances. For example, of everybody sitting in this room tonight, he would dare say that there’s only one person that has pledged his or her entire asset base, and a significant asset base which is required in order to be able to do this, to the performance of his or her job. If Mr. Crovo actually were to see a massive change in the economy right now with interest rate shifts, he’d lose his shirt because the town would make sure they got paid and those people who have
guaranteed that payment and made those payments, those financing institutions would be able to come after Mr. Crovo and take every last asset he owns because they’re all pledged assets. So there’s a divide of what it costs Mr. Crovo that is purely on the private side that never reaches the public because of the way the contracts are written, and that necessarily has to be so. In terms of pure analysis, you’ll have what are the taxes that are paid, you already have that, what is the interest that is collected, you already have that, what is the grand list, you already have that, what is the uncollectible portion, you already have that; that’s all part of the computer program interface with the city. In terms of whether or not there’s additional dollars that Mr. Crovo makes based upon the differential between what is collected in interest from the city and what he pays as interest on his borrowings, that’s going to require that he
give out his own private financial information, and certainly, we can’t do. But, if you’re looking to figure out the pros and the cons of having a private versus a public Tax Collector, all you need to look at is what the public Tax Collector gives you in terms of guaranteed dollars and what has a private Tax Collector actually collected. All those numbers are there, every dollar that comes in, every interest that comes in, every penalty that’s paid, every dollar that comes through, whether it goes to the city or to Mr. Crovo himself because he’s already paid the city, all those numbers are already part of the accounting which your accountants would be able to look at.
Mayor Bingham said “So, if we were to hire a forensic auditor to audit the books of the Tax Collector, you would be o.k. with that?”
Atty. Logan said to audit the information that’s part of the interface that shows everything that has to do with the transactions in the Tax Collector’s Office, you have it already, you don’t need Mr. Crovo’s permission. If there’s something you think is not in there, let him know what it is and let him talk to Mr. Crovo about it, but he doesn’t want to give Mayor Bingham a blanket statement because you literally, at some point in time, get to Mr. Crovo’s private checkbook. There’s a point in time where it crosses the line. He asked Mr. Crovo who paid his employees and he said he does. To the extent the Mayor is asking information of what are the expenses of running a Tax Collector’s Office, help, staff, the computer software and hardware,
things of that sort, those would all be expenses the city would have to take on. Give him a list of those things, your forensic accountant would probably know what parts of the gaps they’re missing and they might be able to assist him with that. Atty. Logan imagined Mayor Bingham could also get that answer from any comparable size municipality and they have buying powers that he doesn’t have, and they may even be able to get it more cheaply.
Mayor Bingham said that’s kind of what they want, in going forward. In light of some of the situations that have come forward, it’s understanding what exactly it takes to run a Tax Collection Office, both privately and publicly; what the differences are, what the pros and the cons are. They need to weigh those options and obviously they can all have their feelings, but he thought real dollars and cents make a lot more sense to move forward. To understand that, he didn’t think they have the professional time in this room to be able to do that audit.
Councilor Soliani asked if the city needed permission from Mr. Crovo to order a forensic audit. She wasn’t clear as to whether or not Atty. Logan said.
Mayor Bingham said apparently not, but there’s a percentage in there.....in a municipal tax collection system, everything is public, but, when things cross over from Rob Crovo, LLC to Rob Crovo as a Tax Collector for the City of Torrington, there’s some gray area. In terms of how much he’s paying his staff, what it costs to run an office, also in terms of what he makes in selling some of the properties that he buys, those are all benefits that a municipality could take advantage of.
#1050 Atty. Logan said, in regard to what Mr. Crovo makes if he sells, it was his understanding that the tax sale system, at a tax sale, the most the Tax Collector can bid on a piece of property is the amount of the outstanding tax due and owed. If there is a profit to be made on 100 Main Street (fictitious) which is being sold at a tax sale, in light of the fact that nobody is bidding on this property other than the Tax Collector, and he bids his own bid for $5,000.00 and the property is worth $10,000.00, and he buys it and subsequently turns around and sells it for $5,000.00, that’s not a profit of the Tax Collector, that’s the profit of Rob Crovo. Anybody, you, me or the next person, can come in and bid $5,001.00 and he’s prohibited from bidding $5,001.00
because the tax bill is $5,000.00. So anybody could come in to do that. However, to the extent that there’s tax sales, all of those records are public, and part of the information you would be able to lay your hands on, through the interface and the documents that are already in existence.
Mr. Crovo said it was erroneously reported that he had an unfair advantage at a tax sale, in bidding on a property that may have had a higher assessed value than what the taxes were. He stated that he’s the only person in the world that has an unfair disadvantage in that the highest bid he can make is taxes due. You could then bid one dollar over and you get the property. So could anyone else in this room, in the City of Torrington, State of Connecticut, etc. The Tax Collector has no advantage on any properties. None, he’s at a disadvantage on it. He said “When I go to a tax sale, nothing makes me happier than he owes him $20,000.00, bids $20,000.00 and it’s gone, it’s done, it’s a wash. I’ve got my money, it’s over.
I don’t want properties, I don’t want the liability from those properties.”
(A little on the light side, Atty. Logan said he was in favor of liability; he makes a living that way.)
In terms of the Tax Office, Atty. Logan said he didn’t review it because he didn’t know what the questions were going to be, but he was going to imagine that Mr. Crovo’s personnel records and wages to his personnel are private, unlike they may be if somebody was a public employee. He would imagine that he may either pay more or pay less than what the going fare would be for municipal employees. He doesn’t know what collective bargaining would call for as opposed to what Mr. Crovo is able to do. He doesn’t know what benefits might adhere to a public employee, that don’t necessarily adhere to a private employee. He said “There would obviously be some analysis that you would require, I think, to probably fill some gaps in, not through Mr. Crovo, but
probably through a similarly sized and situated public municipality”.
#1180 Mayor Bingham said he thought the other benefit of doing an audit of Tax Collection in the City of Torrington, not just asking Naugatuck what they do, is to understand better as a municipality, somebody who is collecting taxpayer dollars, what the nuances of the department, Torrington’s department, what it actually does on a daily basis, what it collects, all the ins and outs, to better define whether or not we go with another private Tax Collector, or in the future, go to a public Tax Collector. He thought it behooved the city to understand all those things in Torrington. He could call CCM and get a study as to how much we pay X, Y, and Z town, but at the same time, he thought they would understand better going forward into another contract what the advantages and
disadvantages of being a private Tax Collector. So, if it’s behooving to the City of Torrington to go to another private Tax Collector, so they understand in their negotiations with a possibly new Tax Collector, whether or not they could amend the contract to have less of a percentage on the city‘s money collected, so on and so forth.
Atty. Logan said he thought that was all appropriate information to gather and that’s an analysis he imagined the city probably should and would go through every four years because it’s an option. You should look at all the options on the table. He thought there will always be a reticent because if you go from private to public, you’re going to have that brief down time of cash flow revenue because you’re not going to have what all the other municipalities have built up those past due taxes, you’re not going to have that money coming in, you’re only going to have from that point going forward.
Mayor Bingham said, definitely over the last year and eight months he has become very familiar with the difficulties in switching over from private to public Tax Collector, and they most certainly can’t do it overnight. He’s certain most of the people here know that as well, but he thought they needed to look to tomorrow, they need to see with the technology that exists today as opposed to 1930, is it appropriate for the City of Torrington to have a municipal or private tax collection system. To do that they need very detailed audited reports, and it was his understanding that Mr. Crovo would be willing to do that.
Atty. Logan said he thought they’ve already done that, and, if there’s something the city needs beyond what’s part of the flow of information the city already has, let him know and they’ll certainly look at it.
Mr. Bushka noted that, in the traditional tax collection system, the external auditor that audits the city also audits the Tax Collector itself. Does Mr. Crovo have any interaction with the current external auditors of the city at all?
Mr. Crovo said yes. As a matter of fact, they were in his office today and asked questions and he answered them all. As far as he knew, they’ve never had anything that came up on any audits whatsoever; if anyone knows anything, he doesn’t know, he was never informed that they failed 5-b ever, never, zero.
Mr. Bushka asked if they looked at all his bank statements.
Mr. Crovo said they looked at a lot of different things. He deferred to Susan Boland who could answer every single question, although he didn’t think it was appropriate for her to get involved tonight, but he believed they’ll even take a particular account and look at that transaction. They’re spotty and sporadic.
Atty. Logan said “Random”.
Mr. Crovo said from what he knows, yes they are (looking at all his bank statements). They were in his office today, so he knows they do that. To the extent of it, whether they would do it more in a different tax office or less, like Winsted, that he didn’t know, but he knows they are a part of the audit.
Mr. Bushka noted that a forensic auditor was mentioned. He stated that there may be certain procedures that are already being done by outside auditors, and we could confer with them before we decide on the scope.
Mr. Scoville asked what our timing constraints were. It was his belief that it would have to occur right away.
Mayor Bingham said he intended on doing it right away. At least they could move forward with creating a scope of work.
Mr. Scoville said “That might be a way to facilitate that”.
Councilor Dalla Valle said he had a couple more questions in reference to the tax sales that Atty. Logan and Mr. Crovo referred to. He thought he read somewhere in the State Statutes that the Tax Collector couldn’t bid on a property if there was another bidder. Was that correct?
(Someone) said “No”.
Councilor Dalla Valle said “Not correct”.
Atty. Logan said he didn’t have the statutes in front of him. If Councilor Dalla Valle was asking what a statute says, he suggested that .....(sentence unfinished.)
Councilor Dalla Valle said “I was asking you if a Tax Collector....sentence unfinished.)”
Atty. Logan said he appreciated that, but he didn’t have the statute in front of him and he asked to let him take a look at it and see what it says.
Councilor Dalla Valle said he didn’t see it there, that’s why he said he thought he’d read it someplace, and that’s why he was asking the question.
Atty. Logan said he read through the statutes and he doesn’t recall something; he recalls the statutes saying the Tax Collector can bid up to the amount of the taxes and nothing more. That’s his understanding. There are times that the Tax Collector, as they saw from the sales that were performed, did not bid. The bids came in and the bids were below the amount of the outstanding taxes and those bids were the prevailing bids, so obviously, in those circumstances, the Tax Collector is not bidding the amount of his tax. But, his understanding is that the Tax Collector has the right to bid up to the amount of the outstanding taxes, including any and all interest, delinquencies, and other costs per statute, but not a dollar more.
Councilor Dalla Valle requested getting a copy of that State Statute through the Tax Collector’s Office.
Atty. Logan indicated that he had a Corporation Counsel.
Councilor Dalla Valle asked if there were monthly reports given to the Treasurer, per state statute.
Mr. Crovo indicated that he actually does daily reports and their report would give you all the information you would want on a day-to-day basis, and again, you have to understand that the laws are strictly written for municipalities that use public collectors. In a lot of those offices, the Tax Collector will give over the money to the Treasurer on a weekly basis, or even a monthly basis, where we hand in money every day. So, every day we give you all that information. Not only do we give it to you again, since I came here in 1999, you’ve always had that information through your own computer system.
Atty. Logan said he understood Councilor Dalla Valle’s premise that the statutes are the statutes, but he thought what they were finding is that, for example, where monthly reports are called for, that doesn’t work for this city because that would actually theoretically may allow Mr. Crovo to be in a situation where he could hang onto some money and collect some overnight interest for some periods of time and the city very appropriately demanded in their contracts that Mr. Crovo hand it over on a daily basis so the benefit is to the city, not the Tax Collector. Other than, whether or not there’s an addition that’s done at the conclusion of the 30 or 31 day period, I think that you get it already.
Councilor Dalla Valle asked the most important question, “Does Mr. Crovo believe that he does not fall under State Statute being a private collector?” That’s one of the most important questions he thought needed to be answered tonight because, as Atty. Logan just stated, that it doesn’t work for Torrington. That means it didn’t just state that by Ct. State Statute and by laws that have actually..., and by challenges to the Statute, that it’s clear and it clearly states that a municipality is a creature of a state and has no inherent power of its own, which means that if it doesn’t fit for Torrington, the State Statute doesn’t care and the Public Act that Atty. Logan was referring to earlier of1923, that says that we have a private collector, the differences
in there are very clear and the only difference is in the exceptions to any general statutes are A: compensation, B: the duty to fund the taxes on the grand list on the day that said taxes become delinquent and begin to accrue interest, C: the fact that principal and interest accrued on the delinquent taxes funded by the Tax Collector are payable to a Tax Collector’s account and D: upon leaving office, the Tax Collector returns all the powers and obligations of a Tax Collector as to the delinquent taxes and funds and collects for his own account. Those are the only exceptions to any State Statutes and they don’t get in the way of State Statutes, they don’t alter them, change them, no place in there does it give the private collector the power to go against any State Statutes. My question is “Does Mr. Crovo, as a Tax Collector, believe that he does not have to follow all State Statutes in the daily operations of the Tax Office, being a private
collector?”
Councilor Jerram said he thought they discussed this at the City Council meeting the other night, as it was discussed this evening, the State Statutes set the guidelines that we have to work through, but through our agreements, we can make the Statutes or the agreement more strict than what the Statute calls for. So, if the Statute calls for a thirty day reporting period, aren’t we being more strict by having a daily reporting period?
Corporation Counsel say yes we are.
#1585 Councilor Jerram said so then we can, in theory, be within the constraints of the law.
Councilor Dalla Valle said if that was the only statute he was referring to, which it is not. The question is on the table.
Atty. Logan said the problem of showing up today and being asked the question of that importance and not having the ability to be able to do a legal analysis that I would like to be able to do for my client, is I’m sitting here looking at the Charter and the Charter says that so much as the following Special Acts are re-stated in Title 7 of this Charter relating to the Tax Collector, they are to remain in full force and effect and are not repealed by this Charter. And it goes on to say CT. Special Acts 1923, the number and the section, 1931 the number and the section, 1935 the number and the section, 1943 the number and the section, 1927 the number and the section, that’s five Special Acts and an entire Chapter of the CT. General Statutes, and I haven’t performed that analysis. I may very
well come to the conclusion that it would be absolutely ridiculous to have a private Tax Collector comply with this provision, and it would not only be ridiculous, but it would ignore to the detriment of the city were he to comply with this provision, and that’s the reason it would be ridiculous. I haven’t done it, or I may do that entire analysis and say “Mr. Dalla Valle, the answer to your question is ‘yes’.” I just haven’t done it and, and it’s kind of like my law school exam, you didn’t tell me what it was, what the question was going to be. If that was the question, I think I could have prepared for it in advance.
Mayor Bingham said “That being said, would you?”
Atty. Logan said he would be happy to but, with all due respect, it’s a city Councilman asking for a legal opinion. I think that goes to the Corporation Counsel, and I would certainly analyze it myself, but I already know that when it comes to my opinion and Ms. Weaver’s opinion, I’m going to lose 9 out of 10 times. I gave myself a 10% chance. But, to the extent that that’s the case, I think that’s the analysis that she’s more than capable of going through and she may come to the exact same conclusion as me, I don’t know, but I would be more than happy to work with her, discuss it with her, and perform that analysis. It’s a legitimate question and it’s deserving of an answer.
Mr. Zeller asked Atty. Logan if he felt Mr. Crovo has complied with our statutes up to this point in time?
Atty. Logan said, clearly, with the exception of what has been so publicly pointed out as far as the errors in not sending the monies to the court from the tax sales, he was unaware of any other provisions that have not been complied with. But, that clearly was in error. It clearly needed to be rectified, it was rectified. As a matter of fact, when one was pointed out, they discovered the other three and the rest of the story. He would never say that that was compliance with the statutes, compliance was required there, it was not had at that juncture, but it has been rectified.
Mr. Zeller asked if he knew of any other instances he could think of, off hand,
that we might not be in there right now?
Mr. Crovo said no, other than kinds of things that could be interpreted like the suspense thing, where he said no because he thought in most towns, that’s a budgetary reason that they do that. So, in those kinds of cases...(sentence unfinished.)
Atty. Logan said he guessed there’s always the possibility, was the number transposed, did a staff person not put something in the computer. There’s always possibilities of those things, and there’s obviously accountings that take place that try to oversee that, so there are things that we have found over time. You know mistakes that have been made that have been quickly remedied because somebody input the wrong number. That, I’m sure, is part of every Tax Collector’s Office in the state, but in terms of not having to comply with the statutes, other than the kinds of things we talked about where the design of the statute was to provide you information on a monthly basis that you get on a daily basis, that’s the kind of stuff I would want to analyze.
Mr. Zeller said part of the reason he’s asking that question, is that in some context you can see where some of the taxpayer’s can look at it and say there’s something going on behind the scenes, there’s probably statutes in place for the purpose of shining a little bit of sun on some of these instances where there’s money going back and forth. Do you have a good accounting for when it’s a public Tax Collector versus a city employee doing it, and I’m just trying to get an idea right now if there’s anything else you can think of at this time.
Atty. Logan said he wanted to answer his question and he didn’t know if he was necessarily going to do it, but understand this; there’s a series of statutes within the Chapter that are designed and written with a thought in mind. That thought is, not all the taxes come in on a timely basis from the taxpayers, and to that extent and we have a Tax Collector, they want to see where they’re at, at some point in time. There’s a lot of “take the pulse” of the finances of the community statutes, report back to the finance body of the town and let us know “What does it look like, Mr. Tax Collector? What’s happening?” In our case, that doesn’t happen, because you’re paid right up front and so the questions of how much you are going to get in
the taxes, which is befuddling other legislative bodies throughout the other 168 municipalities doesn’t befuddle this body, and as a result, those statutes while there, while requiring information, are requiring information for purposes that the statutes weren’t designed for.
Mr. Zeller said he appreciated that. What he was also looking at is from the context of, and it’s been presented appropriately, that a lot of times we’re looking at 100% tax revenue, there’s certain criteria in the contract, and that’s sort of where the analysis ends, and realistically maybe it should be going a little bit beyond that, in particularly when we’re taking a look at what money is flowing into the city, how is it staying there, are there people that are overpaying taxes then they’re not being reimbursed, is it a customary policy to do that, are there things that we should be doing as a city body beyond knowing that we receive 100% of the taxes that are due just to make sure that this is operating above board and as we would expect it would be. That’s not to
cast any sort of aspersions, because it’s not. There is some digging I guess that has to go on, and maybe that’s why the Mayor is taking a look at doing some forensic accounting, but just to get beyond the fact that we’re getting 100% of the taxes; it’s taking a look at the manner in which it’s collected, how it’s collected, how the interest is accrued, is it properly accruing, because once we get 100% of the taxes, we’re not really looking at those other things.
Atty. Logan said certainly the interest rate is the interest rate per the statute. Certainly the payments that are being made into the town, whether or not those payments alternately become Mr. Crovo’s or the city’s, are all part of the stream of information that flows from the Tax Office, and you already have access to. I think all of that’s there for you to be able to perform your type of accounting and analysis, and whatever conclusions you derive from that, which may be go public, stay private, or as the Mayor pointed out, stay private but let’s change the price tag on how this contract works and see whether there’s enough benefit that we can find a ready, willing, and able Tax Collector on the private side to do it at a better rate for the city. All of those are very legitimate
policy questions and he thought that information was all there.
Mr. Scoville said what came to mind for him was public access. Are there state statutes regarding public access and were they possibly violated, unknowingly, and have we since corrected those?
Atty. Logan said again, he was looking at his colleague because he didn’t know the answer to Mr. Scoville’s question. His analysis is one of two things. Either Mr. Crovo himself is under the Freedom of Information Act or he’s not under the Freedom of Information Act, but the flow of information that is called for in terms of the contract is provided to the city and the city is under the Freedom of Information Act, clearly. So, the stream of information is there, who actually has to respond to that stream of information is unclear because there’s language in the Freedom of Information Act about a private contractor performing a public duty and when a contract amount exceeds $2.5 million that there has to be a provision within the contract that allows that free flow of information to
the public agency, which in this case is the city, and that the city has to respond to the FOI. So, the short answer is that no matter what, the city has the information and that is subject to the city’s FOI. The other question is whether or not an independent FOI to Mr. Crovo for that same information would have to be complied with. He didn’t know the answer to that one either, but it’s an interesting question.
Corporation Counsel said she believed the information under 12-139 is supposed to be open to inspection.
Atty. Logan said it was certainly open to inspection, there’s no question about it.; But, since it’s flowing to the city, he thought it’s there, it’s not “No, we’re not going to let you look in the drawers, it’s here’s the computer line that feeds it all to you, to the extent it’s open for inspection, it’s there, but it’s a private contractor performing the public service, as it’s been pointed out more than once tonight.” There is a statute within the Freedom of Information Act that actually addresses that, when it is a private individual performing the public function and the contract amount is more than $2.5 million. It has to be given to the agency, and in this particular case it’s the city, and they do that.
Mr. Bushka noted that Mr. Crovo said he makes daily deposits to the Treasurer.
Mr. Crovo said, the Treasurer, he believed, is a part time person, he brings his deposit into the Comptroller’s Office every day.
Mr. Bushka asked if Mr. Crovo gave them a report with the deposit and if so, how much detail: taxes, interest, liens, by list year?
Mr. Crovo said he brings it into the Comptroller’s Office, (He wanted to be clear on everything he answered here), every day. He said “It shows what the deposit was, deposit slips are readily available if they want that, because you never get everything I deposit because parts of it are mine. Every day, parts of it are mine. Back taxes, interest, lien fees; all that part is mine. Every day you have that. I have no problem with you, again, you have it every day and may I say, for the first time in the history of the Tax Office, I mean, in the 60's and 70's it was on index cards. I suppose you could go in and look at what the Tax Collector’s index cards were, and then when computer age came, until I came, to the best of my knowledge, you had no access to it at all.
When I came in 1999, they asked me to have the same computer system that the city had and I complied totally with it, and I’ve been hooked up to the city since the day I started. And I again believe that I’m the first Tax Collector in the computer age that did that. Before, you had absolutely no access, none, zero, as far as I know. If someone in this room knows different, please speak because you’ll educate me. But, we’ve had the free flow of information with you since day one.”
Mr. Cornish inquired about the reconciliations of the daily deposits, the amount to the city and the amount that is Mr. Crovo’s for the back taxes, etc, all that reconciliation is stored and on record?
Mr. Crovo said “It shows it there”. He stated that he always asked the Comptroller if there’s anything she wants. In fact, they have a new computer system now, as people may or may not know, and she brought stuff down and told Ms. Proulx that this was new, so if there’s anything she wants, please let him know because it’s a new format. He’s done that since 1999 with Ms. Proulx. He’s never denied her anything.
Councilor Dalla Valle said he had one last question to both boards. Will there be any disciplinary action taken against Mr. Crovo for his violation of the contract, shutting off the computer access to the Assessor and to the rest of the city.
Corporation Counsel Weaver stated that the access has been turned back on. It was her understanding that the interface had always been present. There was an event that occurred in 2003 which resulted in the system being turned off. When she made the request that the system be turned back on, the interface was connected immediately. She did not see there being a problem with the communication in that sense, therefore she would not recommend any disciplinary action.
Mayor Bingham asked if everyone understood the recommendations going forward.
Councilor Dalla Valle asked about the notification of overpayments? Is that something they would consider having Mr. Crovo do on a continual basis versus just that one time that it was done?
Mayor Bingham said his thought was absolutely.
Mr. Crovo said he told Mayor Bingham and the boards in March of every year, he’ll wind up the computer, send out a statement to everyone who has an overpayment due. He did it last year, he will continue to do that, as he told the Mayor he would.
Mayor Bingham said “Great”.
Atty. Logan said if Mayor Bingham needed a letter of agreement on that, that’s fine, just forward it to him and he’ll look it over.
Corporation Counsel Weaver said that would be good. She thanked Atty. Logan.
Mayor Bingham noted that, obviously, they do have the capabilities to do it on their own if it were in fact not complied with. They obviously could send the letters themselves, but he thought it would be more accurate and more up-to-date....(sentence unfinished.)
Atty. Logan noted that it was on Mr. Crovo’s expense and it makes it clear that he’s doing everything in his power to comply.
Councilor Dalla Valle thanked Atty. Logan.
Councilor Jerram said “ The ability to access by any individuals the terminals that would be available, they could see that before March of every year.”
Mayor Bingham stated that it was important to go that next step further for those who don’t make a daily trip to city hall.
Atty. Logan said he didn’t know who the city’s IT people are, but at this point in time, he didn’t know why that couldn’t be in some sort of format that could be accessed through the city’s Web Site. It seemed to him that the city was in a position where it could really crank up a whole bunch of stuff in terms of information.
#2290 Mayor Bingham said part of the Public Act system, but the first recommendation, he thought part of that would be moving forward and seeing what the opportunities are with public access. That’s obviously the goal of the city on a number of fashions, including the Assessor’s Office as other pieces of data. It would seem fitting to do that as well.
Councilor Jerram asked if the city knows the average collection rate for taxes.
Mr. Crovo said, on a yearly basis, he runs about 96.9% from July 1 to June 30, and to be honest, he hasn’t done the analysis in the last couple of years and he thinks it’s lower now. As of August 31st of this year, which is August 31st of last year, in the current year, people were past due $270,000.00 more than they were the year before, so that collection rate is going lower on a year-to-date basis, and he did it from August to August versus June 30 to June 30 in that case, and it’s a particularly good year to do that analysis because you did not raise taxes so there wasn’t a huge elevation of taxes that would create.....so, it’s pretty good apples to apples. Being $270,000.00 off, he thought it was a significant number in that case. He stated that
$40,000.00 could be the checks that come in tomorrow and it would not be significant, but he thought $270,000.00 is. So he thought maybe he was at 96%.
As a point of reference, Councilor Dalla Valle stated that OPM says the average statewide is 98.3%. Yes, every municipality is different, there’s no question, but statewide average is 98.3%.
Atty. Logan asked “Collection in the current year or collection overall?”
Mr. Crovo said he thought that was an overall figure which is a different animal. He was talking money year-to-date, without interest, collected. He believed the 98.3% is the number collected with interest and penalties, which is clearly 1.7% lower than you would get with interest and stuff coming in from back years, you’re talking, he didn’t know, $2 million.
Mayor Bingham said “It is important in going forward to note that, if it’s an average, certain municipalities making over 100% and I think that, in going forward, the analysis needs to be such that we’re understanding that we need to weight the pros and the cons and understanding, also going forward, if there’s a possibility of getting more than 100%. Obviously, we don’t want to make money on the taxes, but, at the same time, I think the city would rather see it than....(sentence unfinished.)”
Atty. Logan said he thought the offer was, if the city decided to go to a public collector and you’re looking for somebody with some good experience, Mr. Crovo would be ready to put his hat in the ring.
Mr. Bushka noted that Torrington has the luxury of 100% collection; other towns say “Here’s our grand list; here’s our mill rate”. Then they have to estimate an uncollected percentage, they have to base their budget on 96 or 97% collection rate, which is what every other town in the state has to do, which we don’t, and if they’re off by 1%, that could be a significant amount of shortfall in tax revenue for any given year.
Mr. Scoville stated that the 100% private tax collection is always cited as a reason in our solid bond rating too.
Mayor Bingham said those were all valid points to make. They all recognize that they can’t change the system tonight and that they recognize in going forward that they do put a magnifying glass to that understanding of what goes on, what goes in, X, Y, and Z going forward and in making the best important decision on how we collect our taxes.
Mayor Bingham said he and both boards appreciated the fact that Mr. Crovo and Atty. Logan met with them with all this information. He thought the information went a long way for everyone present.
Atty. Logan thanked Mayor Bingham for the opportunity to speak in a public forum, because, obviously, when a mistake has been made and it hits the public and goes through the cycle of the press on numerous occasions, it becomes to sound like it’s multiple issues and Mr. Crovo was apologetic as could be when this came to light and immediately rectified the situation. But they wanted to make clear that all of the rest of it, the information that’s out there, Mr. Crovo has been doing a very good job as the Tax Collector for the city, he has concordat himself with all the provisions in terms of payments to be made in a timely fashion, and there is a security here, and there was private tax collections in other communities in this state that went on, on a trial basis, and he didn’t need to
tell the members of these various boards that some of those communities faced some serious problems in that. You don’t face that with Mr. Crovo because he does the job and he does it diligently with the able assistance of some very good staff individuals. He thanked Mayor Bingham, the City Council and the Board of Finance for the opportunity to get some of this stuff out in open air.
ADJOURNMENT #2547
On a motion by Councilor Jerram, seconded by Councilor Slaiby, the special meeting was adjourned.
JOLINE LeBLANC
ASST. CITY CLERK
| |
