Leachville owes IRS $411,018.71

Wednesday, June 14, 2006
Leachville Mayor Ralph Wells welcomes Bruce Wilson to city council. (Town Crier photo/Nan Snider)

Leachville City Council met three times last week in an effort to come up with a feasible pay back solution for the city's Internal Revenue Service indebtedness totaling $411,018.71.

During the regular scheduled council meeting on Monday night, June 5, the council spoke to their city attorney Mike Bearden, in an effort to formulate a plan to resolve the indebtedness issue.

"The city owes $411,018.71 in penalties and interest, and $227,400 in tax only," Bearden said. "You can borrow the money and pay back all at once, or try to work out a one time offer. The question is how much you can afford to pay."

"Were taxes held out of the city employees' payroll?" Alderman Tommy Stone asked.

"Yes," Bearden said. "But no money changed hands. Taxes were to be retained by the city. The clerk (Teresa Austin) showed the money was held out but the check was never sent in to the state."

"This is dishonest," Alderman Bill Hetler said.

"This is fraudulent and dishonest acts," Alderman Anna Beth Thomas said.

"We could not see where the money was used for her benefit, which would be classified as theft," Bearden said. "We collected all the money taken for her benefit at the time she quit. There were extra pay checks, etc., and it was fraud, but she paid the money back. The question is, do you want to see the girl in jail, or do you want to get your money back?"

The council all agreed that they wanted the money back.

"If she goes to jail you are not going to get your money back," Bearden said.

"This falls in the category of misappropriation of funds," Alderman Mark Wheeler said.

"We got the money back that she took illegally," Bearden said.

"Has the credit card use been paid back?" Stone asked.

"Yes, to the best of my knowledge," Bearden said.

"The missing $8,000 is not documented as paid, nor the $5,000." Hetler said.

"I told her she could pay it back, or I would put her in jail," Bearden said.

"We have to find out what kind of figure amount we can offer to settle with the IRS," Wells said. "I see it on T.V. all the time, where a reasonable offer is made and they accept it."

The council reviewed different funds and monies available to make a lump sum offer.

The council met on Thursday night, June 8, and had a working meeting to see how much ready funding they had to use for an offer.

A special called council meeting took place on Friday, June 9, and the council voted to advise tax advisor Frank Heath that the city no longer needed his services. Bearden was given the authority to speak on behalf of the city to the IRS on the tax issue. Bearden was requested to contact the Arkansas Fidelity Bond Trust Fund for explanation of the coverage concerning the wording in the policy "fraud and dishonest acts." Also the council wants a representative of the fund to speak to them at the earliest convenience about the coverage. Bearden was asked to contact the tax advocate in Marion Berry's office to ask for assistance with the city's situation. Bearden is to keep the council informed of any communications with all concerned parties.

In other business during the June 5 regular meeting:

*After a short executive session the council selected Dr. Bruce Wilson to serve out the term left by the resignation of Teresa Johnson.

*Several businessmen were at the meeting and spoke as to the need to hire a fourth policeman to fill the vacancy left by the resignation of Keith Evans. After a lengthy discussion, the council agreed to fill the position as soon as possible.

"The people here tonight have convinced me we need to have the fourth policeman," Alderman Bill Hetler said. "I have been concerned about us trying to cut back and pay our debts."

"I'm willing to listen to anyone who can solve this problem," Alderman Anna Beth Thomas said.

*The council rejected the two bids received on refurbishing the cities water storage tanks, and seek information on more reasonable estimates. One bid was from Caldwell Tanks for $639,700 and another from Phoenix Fabrications for $579,959.

Mayor Wells reported on a recent "God and Country" meeting at Cardwell sponsored by Trinity Church.

"More than 1,500 people turned out when they had this at Cardwell," Wells said." They are planning a meeting at the city park on June 24, Saturday from 10 a.m. until 7-8 p.m. The program is free and will include food and drinks. It is youth orientated, and should be a good thing."

*The council voted to purchase a new computer system package, which will include two computers for accounting purposes. One will be used by Rebecca Clowers in the water department and one by Ruth Ann Keith, city recorder. The cost for both will be $7,000, to be paid out of Water Department funds. Both employees will receive training together.

*The council voted 4-1 to set all Privilege License fees at $50, across the board. Bearden will review existing ordinance and bring back any need for changes to the council at the July meeting. Bobby Crites voted against the changes.

*Bearden presented the revised Employee Handbook to committee chairman Mark Wheeler, for review before the council votes on approval.

The next regularly scheduled council meeting will be on July 3, beginning at 7 p.m. at city hall.

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