Several Richmond City Council members made it clear Monday that they want city finance officials to reveal the name of a mystery business that received a $3 million tax refund in March.

The payment included $475,000 in interest doled out at taxpayer expense despite the fact that the refund was a result of the company overpaying its taxes based on self-reported revenues.

“I’m going to do a Freedom of Information Act request so I can get that information,” said Councilwoman Reva Trammell. “To me, I cannot believe that this person did this for three years and y’all did not catch it.”

The comments came during a council meeting Monday — the first since the Richmond Times-Dispatch reported the details of the refund last week.

City finance officials have said they suspect the company overpaid intentionally to take advantage of a state law that requires localities to pay interest on overpayments at the same rate they charge on delinquent accounts, which the city sets at 10 percent to discourage late payments.

City officials have refused to identify the company, citing a state law that makes it a misdemeanor to reveal certain taxpayer information.

And to Trammell’s point, they’ve already denied public records requests aimed at identifying the business, citing the state law. That includes a request already submitted jointly by Trammell and Councilwoman Kim Gray.

“We cannot disclose the name of the taxpayer,” Finance Director John Wack said.

City Attorney Allen Jackson supported Wack. “The law is pretty clear,” he said, noting the city can release the names of delinquent taxpayers or the amount owed by taxpayers, but not both.

Councilman Parker C. Agelasto said he wasn’t convinced. The law is written to prevent disclosure of a business’s income and other activities, he said, and releasing the details of a refund amassed over multiple years would not do that.

Wack was not swayed. “That’s not the guidance I’ve gotten from the attorney,” he said.

Again, Jackson backed him up: “That’s not the way I think anyone would read that provision,” he said. “But it’s an interesting theory.”

Jackson promised to look into it further.

Council members also pressed Wack on what the city could do to avoid making similar payments in the future.

“How do we ensure something like this doesn’t happen again?” asked Councilman Michael Jones.

Councilwoman Cynthia Newbille asked Wack to bring the council a written plan addressing the issue.

Gray wondered whether the city had the authority to audit businesses prior to issuing such payments.

It does and did, Wack said, noting the business had to “provide a significant amount of paperwork” to prove it had overpaid and receive the refund.

But short of a change in state law, there isn’t much the city can do because payments on business license taxes are based on self-reported earnings or estimates of earnings, he said.


In other business, the council approved a slew of budget transfers ahead of the end of the current fiscal year in June. The transfers dedicate an additional $700,000 for alley repairs, $400,000 for grass mowing and $235,000 for a sonar gunshot-detection system.

The ordinance, which is brought forward annually, aims to balance the books based on the city’s latest financial projections before the fiscal year comes to a close.

Despite passing easily, this year’s transfer did raise some questions among the council members about a decision to move $1.5 million from the city’s Police Department.

The move came less than six months after police officials came before the previous council to plead for an additional $1.8 million.

The request, which came during the same fiscal year, was part of a plan to bring in two classes of recruits — a total of 40 — to address a personnel shortage created as city officers leave for higher-paying jobs in neighboring localities.

Police Chief Alfred Durham said Monday that since the issue was last discussed, officers have continued to leave the department. The unfilled positions created the surplus in his department’s budget, he said.

Durham said that with the additional money allocated during the recent budget debate and the 40 recruits in the system, the department is on track to be back up to its sworn strength of 750 officers.

Still, some council members expressed concerns about diverting the money from police.

Jones suggested the money would be better spent equipping the entire force with body cameras, particularly given that an officer who fatally shot a man in the line of duty last week was not equipped with one. “In this litigious society we’re in, with this extra scrutiny that’s on police, why not body cameras?” Jones said.

Durham, whose budget this year prioritized implementing the new gunfire-detection system over body cameras, estimated it would cost an additional $350,000 to complete the roll out of cameras to patrol officers. The city already has 200 in hand and 200 on order.

(804) 649-6178

Twitter: @nedoliver

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