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Mark C. Poloncarz, Comptroller
06/25/09
POLONCARZ COMMENTS ON DELINQUENT TAX PAYMENTS BY HOTEL OWNER

Comptroller Commends County Action in Securing Hundreds of Thousands of Taxes due for Two Decades

Erie County Comptroller Mark Poloncarz today commented on an agreement between the County and a long-time debtor to recover $310,000 in delinquent Hotel Occupancy Taxes ("Tax") due and owing to the County since the early 1990s.

In May 2007, the Comptroller issued an Audit of the Tax which found that one hotel operator then referred to as "Beta" failed to remit more than $500,000 in taxes to the County. Beta repeatedly failed to comply with the terms of three (3) separate payment agreements with the County, the first of which dated back to 1993.

In the case of Beta, whose principal is James Cosentino,* under prior county administrations little had been done prior to the start of the Audit to address this default – a management failure Poloncarz criticized in 2007. Following the Comptroller's Audit, Poloncarz initiated discussions with the Department of Law and Mr. Cosentino to collect the past due taxes. Following meetings, Mr. Cosentino agreed to and made several payments to the County in mid-2007 totaling approximately $150,000 but then later failed to make required payments in late 2007 and throughout 2008 and 2009.

Throughout 2008 and 2009, the Comptroller and County Attorney Cheryl Green worked in concert together to exert pressure on the debtor to compel payment. Those efforts culminated in this settlement which the Department of Law's outside counsel is preparing. Under the terms of the settlement, Mr. Cosentino will pay $150,000 upon the execution of the agreement and $160,000 within six months thereafter.

Poloncarz said, "I am pleased that we have been able to secure an equitable settlement and will recover these taxes due to the County, assuming the two payments are made. The hotel operator collected taxes from its guests for years and deliberately failed to remit the tax to the County. For far too long, no one took action to force payment until my 2007 Audit finally broke the logjam."

Poloncarz also acknowledged and thanked the County Attorney for her efforts and those of former Assistant County Attorney James Tuppen for pursuing this payment. "My office is always ready, willing and able to assist other County departments in collection matters, as we are charged with most revenue recovery powers under the County's Charter. This settlement demonstrates that collaboration between my office and the county administration benefits our taxpayers." He added, "I would like to specifically thank Jim Tuppen and Cheryl Green for their diligent work on this matter."

* Following the Comptroller's Audit, and using language proposed by him, the Erie County Legislature and the Erie County Executive amended Local Law No. 12-1974, the local law which established and regulates the Tax. Under the terms of the law, County officials were previously prohibited from releasing identifying information about hotel establishments or owner/operators. As such, the Comptroller's Audit was forced to identify hotels through pseudonyms (i.e. Beta). The amended law now allows violators to be identified.