Finance director wants to strip Arriola's tax collection powers

Metro Finance Director Rich Riebeling wants to strip the Davidson County Clerk’s Office’s power to collect a range of different tax revenue after claiming clerk John Arriola failed to promptly turn over collections to the city.

In a May 1 letter [1], the finance director told Arriola that Mayor Karl Dean’s administration plans to file legislation that would return certain tax collection functions from the county clerk’s office to the finance department, including the collection of tourism-related hotel taxes, wholesale beer and liquor taxes, alcoholic beverage privilege taxes, and certain franchise fees.

“The Department of Finance decided to move in this direction for a number of reasons including the failure of your office to timely post collected funds,” Riebeling wrote. “You may recall the Metro Council ordinance that originally transferred this responsibility to the County Clerk requires a daily remittance to Metro.”

Arriola did not immediately return a call seeking comment.

On Tuesday, Riebeling announced the clerk’s office plan to the Metro Council as a footnote in his presentation of a proposed 53-cent increase on the city’s $4.13 tax rate [2], a tax hike that would help bolster a proposed $1.71 billion budget for the next fiscal year.

Riebeling said the finance department had historically overseen the collections of the various tax revenue at issue until 1996 when it changed hands to the county clerk’s office via enabling state legislation.

“We think it’s important the council move it back to the finance department,” Riebeling said. “This is a lot of money. It’s $40 million that we collect from these various taxes and fees. And over the course of the last several months, there’s been some issues to put it mildly.”

Instead of a daily remittance to Metro’s accounts, Riebeling said it’s taken “several weeks” for those funds to arrive. Riebeling said recent bond payments for Music City Center, for example, were due during the first week of April. But he said it took Arriola until the last minute, March 30, to deliver tourist-targeted tax revenue, which is used to pay off those bonds.

“We weren’t going to go into default,” Riebeling said. “We recovered it, but it created a lot of consternation.”

Transferring the collection of these taxes to the finance department would result in the elimination of two deputy county clerk positions and the associated funding of $157,000. County clerk services to the public –– such as vehicle registration –– would remain untouched. Arriola’s office is facing a 4 percent cut, believed to be the largest among any Metro department in Dean’s proposed budget.

Two council members, Phil Claiborne and Robert Duvall, immediately announced they would be “happy” to sign on as co-sponsors to Riebeling’s legislation.

The council in February approved a non-binding resolution that called for Arriola’s resignation after a Tennessee Comptroller Office report found he had charged $40 wedding fees to couples he married, pocketing what was supposed to be voluntary gratuities.

Davidson County District Attorney General Torry Johnson is said to be reviewing the comptroller’s findings.