Concerns and recommendations for Little Compton tax collection came through loud and clear in a February 17, 2017 Budget Committee memo to the Town Council, Town Administrator, Town Solicitor and RI Attorney General Peter Kilmartin, The memo stated: “We cannot continue to have a tax collection system in place that is unable to clearly and confidently report actual collected taxes, delinquent taxes, penalties, interest, etc. These are critical components to preparing an effective municipal budget on both the revenue and the expense side of the process, and these are absolutely important to maintaining the public trust”.
The Budget Committee is recommending the following steps be undertaken by the Town Council, in coordination with the Town of Little Compton Town Administrator and the Town of Little Compton Solicitor:
- RI GL 44-5-8.1 Interpretation, Guidance, and Compliance: We recommend that the Town consult with the Attorney General’s office to clarify interpretation of the statutes that govern municipal tax collection practices to include appropriate penalty and interest assessment and waiver processes. If necessary, corrective actions to comply with statutes should be taken immediately. A copy of this letter is being sent to the RI Attorney General’s office under separate cover requesting clarification on the statute.
- Average 5-year Collection Rate: While our Town has generally enjoyed a rate of collection between 93% and 97%, our budgets have historically assumed 100% collection rates. The Town of Little Compton Budget Committee can no longer accept this assumed rate of collection during budget preparation. We request that the Town Administrator work with the Town Treasurer and Tax Collector to develop an average annual rate of collection for Property, Auto, and Tangible Asset taxes, including the collection of delinquent Property, Auto, and Tangible Asset taxes so that the LC BudCom can utilize this assumed collection rate as a projection when developing future budgets for the town and proposing a levy that accurately reflects collection rates.
- Changes to Town Charter: It appears that the current structure and operations of the Town of Little Compton Treasurer and Tax Collector are inadequate to consistently maintain the standards and accountability necessary to promote confidence in collections, documentation, or reporting. To address this issue, we recommend that the Town Council sponsor changes to the Town Charter and/or local ordinances to convert the Town Treasurer and Tax Collector role to a Council-appointed position under the direct supervision of Town Administrator.
- Standardization/Codification of Tax Collection Practices: In the same spirit as Recommendation 3 above, we are also recommending that tax collection, assessment, abatement, waiver, notification, and communication processes be established and codified so that the Treasurer and Tax Collector’s Office, and Tax Assessor’s Office have standardized reference guidance for acceptable practices.
Within the past 12 years, interest and penalties totaling over $160,000 have been waived, without any required documentation or explanations. Hundreds of thousands of dollars in delinquent property, motor vehicle and tangible taxes are still outstanding despite efforts within the last 3 months to collect these taxes via letters issued to delinquent tax payers. The town will most likely have to dip into the General Fund by over $150,000 to balance the FY2016/2017 budget. The Budget Committee will most likely recommend a good increase in taxes for the FY2017/2018 budget. The Financial Town Meeting is Tuesday, May 23…perhaps the Town Council will address and implement the Budget Committee recommended processes that are “absolutely important to maintaining the public trust”.