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City seeks taxes from for-profit business

CHARLESTON, W.Va. -- A for-profit business owned by the Chesapeake Volunteer Fire Department has failed to pay the town any business and occupation taxes since it was opened in 2004, and the company could ultimately end up in court.

The town's attorney is drafting a letter to Communication Services Inc., a radio business owned by the VFD, informing its officials of the matter, Mayor Damron Bradshaw said.

"We are proceeding toward collection," he said.

The town could ultimately end up suing the company to recoup the taxes, Chesapeake Attorney Robin Louderback said. 

The town is currently working to establish just how much the business owes, he said.

Already known is the fact that the company has received thousands of dollars from the Kanawha County Commission for services and merchandise, according to figures provided by the commission.

The county has paid the company about $606,000 for services and merchandise since 2004, according to the figures.

Those services include installing and maintaining the county's emergency siren system, which is used to notify residents of pending crises.

The county paid Communication Services Inc. about $246,000 for siren upgrades and maintenance in March 2007, according to the figures provided by the county.

In October, Kanawha commissioners awarded a contract to purchase 55 radios to a Putnam County company over Communication Services Inc, despite the fact the Chesapeake company submitted the low bid. They cited issues with the department's financial record keeping.

Commissioner Dave Hardy has stated he will never again vote to award the Chesapeake company a county contract because of the financial problems.

The VFD's finances have come under scrutiny recently by state and county officials.

Hardy questioned the VFD's record keeping in the past and questioned where the line between the nonprofit fire department and the for-profit business began.

He also expressed concerns over the company receiving benefits that come with being owned by a nonprofit.

Commissioners withheld about $20,000 from the department because of the agency's failure to provide financial records. The county instead opted to pay those funds directly to vendors.

The state also has withheld about $12,000 in funds collected from a 0.5 percent insurance surcharge on all property and casualty insurance premiums sold in the state. Those funds are collected and distributed to all fire departments in West Virginia.

The letter from Chesapeake will be sent to the company in the next few weeks, Louderback said.

The town could end up suing the business in magistrate court if the amount owed is less than $5,000. If the amount is more, the lawsuit would go to Kanawha Circuit Court, Louderback said.

The mayor wants the tax revenue.  

"I think they ought to pay it (B&O)," Bradshaw said.

The city also could revoke the company's business license, he said. 

The city is attempting to determine just how much money the company owes.

The company is required to pay $1 for every $100 of its gross proceeds, said Sue Hatfield, city clerk. Communication Services Inc. was established in 2004, according to records provided by Chesapeake.

Chesapeake Fire Chief P.J. Johnson said he was unaware that the company owed any back B&O taxes to the town. He doesn't supervise the business, he said.

"If we owe it, we should pay it," Johnson said of the back taxes.

He referred all other questions about the back taxes to his father, Steve Johnson, who is the president of the VFD's board, which oversees the company.

Steve Johnson did not return calls seeking comment.

Hardy was not surprised that the company was in arrears. 

"I support the mayor's efforts to revoke their business license," he said.

Town officials are working on a strategy to collect the taxes, Louderback said. She will look at the processes in place for collection in other cities around Kanawha County.

Contact writer Paul Fallon at paul.fallon@dailymail.com or 304-348-4817. Follow him at www.twitter.com/PaulBFallon. 

 


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