The City Council may cancel up to $2 million in back taxes, interest and penalties for its biggest diplomatic property owner because officials have given up on collecting the money.
A proposed resolution for the council’s Tuesday meeting calls for canceling $733,985 of the Republic of Cameroon’s debt at 50 Montgomery Circle based on an April 23 memo from city Finance Commissioner Howard Rattner. Rattner proposes canceling 11 years of unpaid city, county, refuse, school and library taxes from 1999 to 2009.
New Rochelle charges 24 percent interest a year on unpaid taxes, so Cameroon also owes about $1.2 million in interest. As of Wednesday, Cameroon owed $2,050,523.77 , according to the city’s tax records. The city sued Cameroon in 2006 for the back taxes and a judge dismissed the case last year.
“Based on the U.S. District Court dismissal of our case against Cameroun(sic), any legal recovery of outstanding taxes has effectively been eliminated,” Rattner wrote in his memo. “Therefore, we have no choice but to recommend that the City Council adopt a resolution canceling the outstanding taxes shown on the attached schedule.”
Still, Cameroon is not entirely off the hook. Diplomatic homes are exempt from school and city taxes, but they are expected to pay sewer taxes.
City Manager Chuck Strome said in an email Wednesday that Cameroon remitted a payment for all “open sewer taxes”.
As of Wednesday, however, city tax records showed that Cameroon owed $27,622.64 in overdue sewer taxes dating to 2000. Sewer taxes for 2009 and 2010 are marked as paid in the tax records.
In recent weeks, The Journal News repeatedly asked city officials about diplomatic debts. Rattner did indicate that forgiving the debt was a possibility.
Strome explained that city officials did not reveal their intention to do so until after the City Council first received a copy of the May 15 agenda where that item is listed. The agenda becomes public after the council members receive it. A copy of the agenda was emailed confidentially to The Journal News on Tuesday night.
Cameroon’s debts included property taxes because the country’s diplomats abandoned the home, leading the city to remove its diplomatic exemption in 1999, according to a copy of the resolution. The city reinstated the exemption in 2010.
On Tuesday, Sen. Charles Schumer, D-N.Y., called on Secretary of State Hillary Rodham Clinton and Susan Rice, United States’ ambassador to the United Nations, to pressure countries with back taxes in Westchester County to pay up.
Schumer made the demand after reading a Sunday article in The Journal News and on LoHud.com revealing that 16 houses in six Westchester County municipalities owe about $2.2 million in back taxes.
On Wednesday, Schumer said New Rochelle’s cancellation of part of Cameroon’s debt does not negate his call for action.
“There are multiple countries that owe Westchester towns hundreds of thousands of dollars,” Schumer said in an email. “The U.N. and State Department should take this push seriously and not give up on delinquent countries which have refused to pay.”
Ernie Garcia | May9, 2012 | Lohud.com