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Late payment nets $18,000 IRS penalty

December 20, 2011

By NATHAN GREGORY
sdnreporter@yahoo.com

At its meeting Tuesday, the Starkville Board of Aldermen passed a motion to approve the city’s claims docket for all departments except the fire department as of Dec. 15. The motion passed by a 4-1 vote, with Ward 6 Alderman Roy A. Perkins opposing. Ward 1 Alderman Ben Carver and Ward 5 Alderman Jeremiah Dumas were absent for the vote.
Part of the docket includes a penalty of approximately $18,000 assessed by the Internal Revenue Service after a deputy clerk neglected to make a payroll tax payment earlier this summer and the matter went unreported until this week.
Starkville Mayor Parker Wiseman said the penalty accrued interest over that time.
“Interest has run on that penalty, and this is time-sensitive because the next filing date that will cause an additional penalty is Dec. 26,” he said.
Ward 2 Alderman Sandra Sistrunk said there must be more internal controls implemented to ensure that no more penalties make their way into future dockets.
“Everybody realizes an error was made. The bigger issue is ... that we did not make this discovery in a timely manner” Sistrunk said. “You will never eliminate human error, but what internal controls are meant to do is discover those errors and minimize those errors.”
Prior to the vote, Perkins said other options besides taxpayer money should be explored and he would therefore vote nay on approving the docket.
“This expense is unnecessary. This expense is wasteful and should have been avoided,” Perkins said. “This expense is inexcusable and unwarranted. There should be more accountability and efficiency.
“Monies of this kind need to be used not to pay penalties, but to cover general expenses of our city. I just cannot handle spending $18,000 on an expense that should not have been before us,” he added. “Even if we had a good rainy-day fund ... we still don’t have the money to be paying a penalty for $18,000.”
The board also 4-2 in favor of approving funding for a new seal and flag design. Also approved in another 4-2 vote was a motion to authorize the purchase of new flags for the city in an amount not to exceed $1,500. Perkins and Ward 7 Alderman Henry Vaughn opposed both votes.
Perkins said he voted against the amendment because the board needs more time to examine options.
“I think we need to proceed cautiously and carefully to make the best informed decision (on designs),” he said.
Wiseman gave a presentation proposing a storm sewer utility enterprise service for the city of Starkville. He said out of 31 areas that need examination, three in particular need special attention to be able to accommodate major storm events. Carver Drive, Maple Drive and Colonial Hills were areas he said would require more funding to have the storm sewers accommodate flooding.
“We are experiencing a trend of positive growth ... Storm sewer issues are directly related to growth over time,” Wiseman said. “We’re putting more stress and strain on our overall system.”
As a solution to the projects costing more than projected revenues over the next 10 years, Wiseman said adding $2.50 to residential utility bills and $5 to business utility bills can help set the potential project in motion.
Sistrunk agreed with Wiseman but said there will always be similar projects that will need to be done.
“There will be an ongoing need in the city as long as there a city here,” she said. “This is something for us to think about as we go into capital improvement.”

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