Concerns over the indemnification clause in a proposed agreement by Berkheimer Associates with Mahoning Township to collect LST taxes for the municipality led to the supervisors voting 4-0 with Supervisor Todd Weaver absent to not accept the agreement.
After the vote against the agreement, supervisors discussed whether to bring the LST tax collection to the municipal office for collection starting next year, but they did not make any decisions and will discuss it further at their meeting later in the month.
"I believe the township doesn't have the insurance coverage in its policy to cover indemnifying Berkheimer," Solicitor Tom Nanovic told the board. He was concerned with several issues in the agreement that Berkheimer did not want to be held liable for, including tax payments and refunds.
Secretary Natalie Haggerty reported that she checked with the township's insurance pool manager H.A. Thomson and they reviewed the agreement as well. She said the agency found the indemnification Berkheimer was requesting was very broad and they would not recommend the board accept the agreement.
"I would like to explore other avenues [of collection], but [I do] not want to enter into an agreement with Berkheimer," said supervisor Bruce Steigerwalt after making a motion to reject the contract.
Fellow supervisor Frank Ruch seconded the motion and the board 4-0 voted to not sign the agreement. After the vote, Ruch made a motion for the township office to collect the tax.
Haggerty said she wasn't sure how much effort would be involved in setting up the tax, but she felt the township could handle collecting it.
"I don't know how to get the word out to businesses, but I know what to do [to collect it]," she said.
She mentioned that the quarterly tax may require having clerk Kerrie Verrastro work a few more hours during the collection periods each quarter.
Steigerwalt questioned whether tax collector Richard Swarcheck was diligent in following up with the forms pointing out that he has been using an old copy of the form from the previous tax collector as Swarcheck had not been including a form in his taxes in recent years. He observed that most of the businesses though probably file the taxes quarterly when they do their payroll reporting.
Ruch also wondered if the amusement tax could be brought into the township office as well observing that the tax comes into the office only to be sent to the tax collector.
Steigerwalt asked Haggerty what the amount of income was that was raised by the LST taxes and he said it was about $60,000. He figured that the tax collector's portion of that amount as 5 percent or about $3,000.
Chairperson John Wieczorek said he thought the $3,000 would probably only cover the expense of collecting it although Ruch said he believed that after setting up the collection, the township would probably save some of the $3,000 in collecting the taxes themselves.
Wieczorek said he wasn't opposed to it, but he just wanted to make sure the township wasn't getting in over its head.
Ruch said he wanted more information about if the township could do it and what it would entail so he decide to withdraw his motion to have the township collect the taxes for now but wanted to research it for the next meeting.