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TMCNet: Lebanon County, Pa., to hire firm to collect most taxes

[July 24, 2008]

Lebanon County, Pa., to hire firm to collect most taxes

(Patriot-News, The (Harrisburg, PA) (KRT) Via Acquire Media NewsEdge) Jul. 23--LEBANON -- With a goal of improved tax collection at a lower cost, the Lebanon County Earned Income Tax Bureau's executive board voted Tuesday night to hire Keystone Municipal Collections of Westmoreland County to provide most of its tax collection services.

Keystone's proposal to collect earned income, local services and school district real estate taxes totaled $500,518, compared with the $958,800 the EIT Bureau projected it would cost to do its own collections. The difference is attributable primarily to Keystone's access to superior technology and to economy of scale, bureau officials have said.

The executive board also selected the Lebanon County treasurer's office to collect municipal real estate and street light, fire hydrant, fire and library taxes. The county treasurer's estimate for collecting the municipal real estate taxes is $88,907, with those bills consolidated with county tax bills.

Both contracts are pending final negotiations.

Keystone, which seeks a three-year contract, proposes to charge 1.4 percent of the EIT money collected, 2 percent of local services taxes, and $1.50 per tax bill for school real estate taxes.

Bureau officials have said the EIT's cost was at least 3 percent to 4 percent for EIT and 30 cents for real estate.

Other offers received were $607,208 from Centax of Bridgeville, and $622,810 from Berkheimer Associates of Bangor.

A subcommittee spent more than 300 hours evaluating the proposals, executive board chairman Gordon Waldhausen said. The group recommended Keystone because of its technology, rates, legal expertise, timely reporting, ability to improve collection rates and willingness to keep a Lebanon County office.

If contracts are signed by Sept. 1, Keystone could start EIT collection Oct. 1; the county treasurer would begin collection Jan. 1; and the current tax bureau operation would cease Jan. 15.

The executive board would continue to exist to oversee the contract and supply bonding, audits and census duties.

"It's a good deal," Ron Fouche, chairman of the North Londonderry Twp. supervisors, said of the Keystone proposal, adding that it is expected to increase collections by 10 percent.

Cherie Grumbine, North Lebanon Twp. manager, said she believes Keystone's services will mean less cost and greater revenue for the township, with good customer service.

Lebanon Mayor Robert Anspach, who previously told the bureau the city might look elsewhere for collection services, said he is open to listening to the proposal. He cautioned the board that state law will require the county commissioners to form a panel with representation from every school district and municipality to oversee countywide EIT collection by 2012.

Howard Kelin, the tax bureau's solicitor, said that panel could take into account what the bureau already has in place.

The EIT Bureau collects about $141.5 million in taxes, including $102 million in school district real estate taxes; $31.9 million in earned income tax; $4.6 million in municipal real estate taxes for 11 municipalities; $1.17 million in local services taxes; and $882,810 in school district per capita taxes.

Since the alleged embezzlement of $811,000 by its former director was discovered in early 2007, the tax bureau has been working to regain financial controls and chart its future.

Options considered included rebuilding the bureau, which would have required computer upgrades and hiring a new director; joining with another government collection agency; or outsourcing to a private firm.

While Keystone is to retain a local office, it is not known how many of the tax bureau's 10 employees will be hired to work there.

To see more of The Patriot-News, or to subscribe to the newspaper, go to http://www.patriot-news.com.

Copyright (c) 2008, The Patriot-News, Harrisburg, Pa.
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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