23,500 get letters on delinquent taxes
On Monday, the day Mayor Scott Avedisian released his proposed $288.8 million budget, 23,500 Warwick taxpayers started receiving letters stating that they owed back taxes and indicating that unless payments are made by May 31 they could expect additional interest costs.
And no sooner were the unsigned letters received did the phones at City Hall start ringing and people lined up outside the Tax Collector’s office to get an explanation. Many were carrying proof they had paid their taxes and were outraged by the inconvenience.
Yesterday, Avedisian had an explanation and an apology.
“This should have been worded differently,” the mayor said of the letter, which listed the amount due and an account number but not the date of the late or missing payment or the amount of the interest penalty.
Rather than assuming the taxpayer was at fault and charging an amount, Avedisian said the letter should have stated there appeared to be a discrepancy in the tax records and asked taxpayers to call and clarify the matter.
“The intent was good,” he said of the letter, “but the execution wasn’t so good.”
The timing was also poor. With several people in the collector’s office on vacation, including David Olsen, city treasurer who is also acting tax collector, the office is shorthanded to handle the cascade of calls. In addition, due to computer conversions scheduled to start today and continue through the weekend, personnel won’t be able to access tax records.
“I guess they’re all wrong,” City Council President Donna Travis said of the letters. She said she has received numerous calls. “People are mad. It’s crazy.”
She said it would have been “common sense” not to mail the letters, even if they were right, at just the point that the city computer system is going through transition.
Ward 8 Councilman Joseph Gallucci was one of the thousands to get a letter. He’s paid his taxes on time and immediately assumed there had been a mistake. He called the city and had the matter corrected.
So, what has happened? How could so many taxpayers be charged interest on late tax payments?
Avedisian explained that the interest charges go back as much as three years and pre-date the point last year when the city implemented a lock box system that implements the deposit of tax and utility payments within two days of receipt. Before the lock box, check payments were being deposited as much as a month after being received.
Those payments were recorded at the time the check was deposited, not when it was received. When the city scanned payments, computers picked up the date of deposit and computed the late charge, although the delay was the city’s fault.
In addition, the city has eliminated an undocumented grace period of allowing people to pay their quarterly without penalty until the end of the month in which they are due. No notice was given that the grace period was being eliminated.
Taxpayers who have faithfully paid their tax bills on time for the past five years are entitled to having the interest penalty waived. That’s been of consolation to some, but as council members are discovering, most taxpayers aren’t aware of the provision.
“I didn’t get this many calls over the airport,” Ward 3 Councilwoman Camille Vella-Wilkinson said yesterday.
“Because of the past practice, taxpayers believe there is a grace period – how do you change a practice in the middle of a billing cycle?”
Gallucci further noted senior and veterans’ exemptions, which the city may not have applied, could result in unfair interest penalties. In some cases, taxpayers have waited for the city to apply the exemption only to be charged a late fee once it is in place. In one case where it was concluded payment had been lost, the taxpayer was penalized when he issued a new check.
When Ward 5 Councilman Ed Ladouceur started receiving calls, he visited the tax collector’s office and talked with people lined up with the letters.
“There were a lot of angry people,” he said.
Ladouceur said he personally assisted an elderly couple that had a letter to pay $4,800. He informed them of the penalty waiver and accompanied them to the counter.
“We need to figure out a better way to do business. I need some answers on this thing,” he said.
Ward 4 Councilman Joseph Solomon also said he got an earful.
“That’s an error on the city side,” he said of the letters.
“What was the cost of sending out improper letters?” he asked. “That’s not good management.”
Avedisian said personnel in the assessor’s office have been temporarily assigned to the tax collector’s office to cope with the influx of calls and counter visitors. He said a number of taxpayers acknowledged they had missed payments or were late with payments. And he urged those questioning the letter to call.