Luzerne County municipal officials say they're hopeful a judge's appointment of a receiver for the defunct Centax-Don Wilkinson Agency will finally resolve a delay in distributing millions of dollars in taxes that has caused significant financial stress for communities throughout the county.
Allegheny County Judge Christine Ward on Monday appointed the Pittsburgh law firm of Campbell & Levine to take control of Centax -- a move that will allow the firm to begin work to distribute funds Centax holds in numerous escrow accounts.
Municipalities in Luzerne County and throughout the state have been struggling to pay bills due to significant delays in receiving Earned Income Taxes that were collected by Centax in 2012.
Centax sold its accounts to Berkheimer & Associates in August, but Berkheimer has been hampered in resolving the tax issues because all Centax records and accounts were recently frozen as part of a lawsuit filed in Allegheny Court by the borough of Green Tree, said John DeRemer, a vice president with Berkheimer.
The fact there was a freeze on records and assets definitely impacted the amount of money we could transfer, DeRemer said. It basically put everything on hold.
The appointment of a receiver means those records will now be released, he said.
All the records they had in their system were locked up for the last month or so. That's now been lifted and we expect a resolution will be accelerated, he said.
Paul Keating and Pam Heard, members of the board of the Luzerne County Tax Collection Committee, said they're hopeful the new receiver will act quickly to resolve issues.
Hopefully, this will initiate a smooth and effective transition of Centax over to other tax collectors, said Keating, administrator for the municipality of Kingston.
Heard, finance director for Nanticoke and secretary for the county tax collection committee, estimates Luzerne County municipalities are owed a combined total of roughly $16 million.
Nanticoke has not received about $500,000 it's owed, which forced Heard to take out a tax anticipation note earlier this year. That note is due soon, Heard said, and if the money owed is not received, she will likely have to take out another loan, she said.
Heard said the appointment of a receiver is progress, but she expects it will take some time before all problems are resolved.
It's an accounting nightmare and a cash-flow nightmare, Heard said. I don't see this situation resolving itself any time soon.
DeRemer said Berkheimer is committed to aggressively tackling the problems.
We would hope that, for the most part, to be caught up by the end of the year, but there's no guarantee on that, he said.