More than $200,000 in unpaid federal payroll taxes have landed the city of Itta Bena deeper in a financial hole.
The Internal Revenue Service placed a lien on the city’s assets Tuesday, giving the federal government the power to seize city property if the tax debt remains unpaid.
Between January 2012 and March 2013, the city failed to pay Medicare, Social Security and income tax withholding due to the government from municipal employees’ paychecks.
Itta Bena Mayor Thelma Collins, who took office in July 2013, said she first learned of the payroll tax issues and the lien when she was on her way back from the Mississippi Municipal League conference on June 25.
Collins said the Itta Bena city clerk, LaCheronda Spivey, had been in discussions with the IRS about the unpaid taxes but had avoided telling the mayor about the problems.
Spivey “just said she didn’t want to bother me with it,” Collins said. “I was just not informed about it.”
Spivey, who has served as clerk for the past eight years and handled the city’s payroll during the period for which the taxes went unpaid, declined comment Thursday.
Asked if Spivey would retain her position in light of the lien, Collins said the Board of Aldermen would decide. The board is next scheduled to meet Tuesday for a budget hearing at City Hall.
Mildred Miller, the alderwoman for Ward 1, declined to comment. Phone calls and messages left for other aldermen were not returned Thursday.
Ward 4 Alderman Danny Kelly resigned from the board during its meeting Tuesday night. Collins said Kelly didn’t give a reason for his resignation in his letter, which he turned in without comment before leaving the meeting.
Kelly could not be reached for comment.
Collins said the tax lien adds to the city’s towering debts, which also include unpaid electricity bills to the Municipal Energy Agency of Mississippi (MEAM), a six-city electricity cooperative, dating back several years.
“The city is in serious trouble,” Collins said. “We’re going through some very trying times.”
The payroll taxes went unpaid over a 15-month period during the administration of the previous mayor, Walter Parker.
Collins said the unpaid taxes were the latest of the financial problems during Parker’s tenure to be discovered. The city has not had a completed financial audit since 2010 after its accounting firm stopped being paid. Meanwhile, the city’s payments to the Mississippi Public Employees’ Retirement System (PERS) have been so irregular and frequently delayed that, according to Collins, the city is now required to send those payments by cashier’s check.
“All of this took place before I came on board, and I’m just trying to figure it out,” Collins said. “It’s like a puzzle.”
Parker declined to address the city’s payroll tax issues Thursday, saying, “I’m not really aware of what you’re talking about, and I’m certainly not going to comment on it.”
Asked further about other financial issues stemming from his time in office, Parker responded, “What part of ‘no comment’ don’t you understand?”
When Collins, a 69-year-old former teacher, was sworn in as mayor of the town of about 2,000 residents on July 1, 2013, she told the Commonwealth that the city owed nearly $500,000 to MEAM, more than $7,000 to the Leflore County Solid Waste Department, $15,568 to PERS and $15,000 to the Greenwood accounting firm of Taylor, Powell, Wilson and Hartford, which had previously conducted the city’s annual audits.
Collins, who has served two other non-consecutive stints as mayor, said the city has been making progress toward paying down those debts, but the debts have not been paid down as regularly or as quickly as she hoped because of persistent financial shortfalls.
Recently, MEAM dispatched its own team of auditors to Itta Bena to examine the city’s books and “try to find out what was going on,” Collins said.
Meanwhile, the city’s own financial audits for the years 2011-2013 have not yet been completed.
Without a current audit, Collins said, she’s been unable to apply for grants to address the city’s crumbling infrastructure, which includes a faulty sewer system.
“My hands are tied. I can’t get a grant, I can’t get anything without a current audit,” she said.
Collins said she hoped to have the city’s financial situation straightened back out before she completes her term.
“I do believe that we’ll be able to get it right,” Collins said. “It’s so much bigger than me; it’s so much bigger than any human being. Only God can get us out of this.”
• Contact Bryn Stole at 581-7235 or bstole@gwcommonwealth.com.
