2012 has the potential to be a make or break year for the city of Blytheville.
Sometime this year, the city will likely enter into an Offer In Compromise with the Internal Revenue Service for the multi-million payroll tax debt.
The IRS defines an offer in compromise (offer) as an agreement between the taxpayer and the IRS that settles a tax debt for less than the full amount owed. The offer program provides eligible taxpayers with a path toward paying off their debt and getting a fresh start.
I don't envy city officials, who will have to make some difficult decisions.
They've made an unpopular one already in calling for a special election that asks for a 15-month, 1-cent tax to pay the debt accumulated under the previous administration. As harsh as this may sound, the reality is the special election gives citizens a say in how it will be repaid. And the taxes will be repaid, costing citizens one way or another.
At the heart of the debate is all the unanswered questions.
The people need answers before they can punch "for" on the ballot. No answers, no 1-cent tax.
Residents deserve to know what happened to the money, who is responsible and the consequences of their actions.
Who knew what, when did they know it, etc.? Hopefully, those answers will be found in the much-anticipated 2010 State Legislative Audit.
Also, hopefully, the IRS will give the city of Blytheville a similar break that it gave Gould, Ark., should the 1-cent tax proposal fail on March 13. The IRS forgave hundreds of thousands in the tax debt that Gould owed.
From what I understand, businesses, individuals and governments are treated differently by the IRS. An area accountant told me recently the IRS typically goes easier on individuals than businesses and slightly harsher on governments than Joe Citizen.
Another issue to keep an eye on this year is the matter with the Arkansas Department of Environmental Quality.
In 2009, the Blytheville City Council agreed to a $2.5 million Milestone Schedule to rehab the sewer system. The work was to be spread out over a five-year period, an average of $500,000 per year.
The revenue source, a $5 fee attached to the water bill, has generated less than $400,000 per year, according to budget figures.
Entering his second year in office, Mayor James Sanders continues to lobby ADEQ for some relief on the $2.5 million project, which stemmed from a consent order the environmental agency slapped on the city.
Yet another issue to contend with will be the 2012 budget. Council members are still hammering out the budget, which must be passed by Feb. 1. No doubt Council members will have to meet regularly on budget matters throughout the year. Not only will they have to find a way to pay the IRS if voters shoot down the temporary 1-cent tax and have come up with a way to catch up on the $2.5 million sewer project should negotiations with ADEQ fail, city officials must find a way to withstand the projected $1 million loss in turnback funds because of the population decline.
There will have to be some tough -- and unpopular -- cuts if the city is to have any semblance of solvency.
And any encouraging future, period.
mbrasfield@blythevillecourier.com