RICHMOND, Va. (WRIC) — Lincoln Saunders, the Chief Administrative Officer for the city of Richmond, spoke before the City Council on Monday to provide further updates on the ongoing meals tax fiasco. During his public update, a council member presented accusations of alleged lacking communication and inaction within the council in previous years.
Saunders was asked to attend a March 4 meeting by the council. Members wanted him to speak on and answer any questions they might have about the City’s plans to address the tens of thousands of dollars in debt several local restaurants have accrued due to receiving incorrect information from City tax auditors.
Multiple restaurant owners have spoken before the City Council in previous weeks, prompting the council to release a statement announcing, among other concerns, their intent to have Saunders provide a public update.
What Saunders had to say about meals tax review efforts
Saunders’ update largely consisted of the points communicated by the City on Feb. 26, including the freeze of penalties and interest on meals tax accounts under review. Saunders reiterated that the manual review of these accounts would take time, but that the City has set a deadline for July 1.
Councilwoman Ellen Robertson, who has previously met with affected restaurant owners, asked Saunders to speak on possible continued failures of the system as the review process is underway. Robertson said she had personally visited the city office handling these reviews and is concerned about their accuracy.
Samuel Veney, co-owner of affected restaurant Philly Vegan, just recently received another letter about his delinquency despite Saunders himself saying his case deserved “additional review” in January.
With Saunders’ staff so inundated with work, Roberston expressed concern about that happening again, or other potential errors that continue to add strain on already-suffering small business owners.
“The admissions, lodging and meals [tax] category is probably, for my dollar, the most complicated tax system we have,” Saunders said, explaining that the 7.5% meals tax is a “trust tax,” or self-reported tax, made in monthly payments.
In answer to Robertson’s question, Saunders said a group of department members are specifically focused on meals tax reviews, allowing them to remain focused while the remaining office staff care for day-to-day needs.
Saunders on RVA Pay and keeping teams focused
Additionally, individuals other than the review team continue to work on the tax system’s interface update, RVA Pay.
With RVA Pay, the online tool meant to bring the highly-outdated tax payment system into the modern age, still in development, Saunders said the City is definitely approaching this review process at a disadvantage. Because of this, getting this online service up and running remains a priority of the City, which has been working on it for several years now.
According to Saunders, the meals tax category has been moved to the front of the line of the RVA Pay rollout schedule. Previously, the real estate tax had been the priority, given it is the City’s largest tax base, but Saunders said this tax category has a higher need.
Saunders said he believes RVA Pay is the best path forward, saying it will allow businesses better transparency, a more accurate understanding of their balances and overall easier access to their accounts, among other much-needed changes.
“We are trying to figure out how we ‘fix the engine while driving,’” Saunders said, referring to a metaphor Robertson used. “The visual that you paint is concerning. So we’re trying to make sure that we don’t create other negative consequences by trying to do both of these things at the same time.”
Saunders added that this is why the City is being transparent in its timeline, as the department understands intimately that this process will not be completed overnight.
Roberston followed up by asking Saunders about plans to make sure business owners who will be expected to use RVA Pay both understand how to use it and can get adequate customer service when needed. Saunders answered that he could provide this explanation at a later meeting.
Allegations of communication breakdowns within the council
Councilwoman Reva M. Trammell asked the council and Saunders about some information she had received. According to Trammell, a previous council member may have known about this meals tax issue since 2020 and reportedly did not resolve it. She wanted to know why this was not shared with the rest of the council.
Saunders initially said he was not sure what Trammell was referring to, asking for more information.
Trammell said she was asked about why action was not taken by the council sooner, with the person who contacted her alleging that a council member or members who may have known about this issue did not act and did not communicate with the rest of the council.
“Any business, no matter if it’s a restaurant or what it is — if they have an issue, it needs to be shared with all of us, especially something that big,” Trammell said, adding that the thought of these business owners being treated poorly or unequally for years disturbed her.
Saunders began to explain that the City conducted two amnesty programs in 2020 and 2021 to assist businesses experiencing hardship. Trammell did not allow him to finish.
“Whatever happened … it was miscommunication out there and it still has not been cleared up,” Trammell said. “And these restaurant owners got hit with high a– taxes, penalties, all of that. And I’m saying — I can’t speak for them, [but] I know I didn’t know about all of it. To me, that’s a problem.”
Trammell acknowledged that perhaps Saunders did not know about this miscommunication within the council. However, she reiterated that the whole of the situation remains unfair for those affected.
Saunders again said that he was not sure he could provide Trammell with the answers she needed at this time without additional context. Trammell said she understood this.
“I just want to know what that council person knew that we all did not know,” she said. “And what was that council person doing with the business person or the restaurant owner … and we all — or maybe you didn’t know, either. To me, there are so many unanswered questions [about what] was going on behind the scenes.”
Council member Ann-Frances Lambert said she was not sure of these details, either, but added that a conversation could be had following the meeting to address these concerns.
“We’ll do our best to keep council members apprised, particularly for businesses in their districts that we’ve gotten to resolution,” Saunders said.
Click here to read all of 8News’ coverage on the Richmond City meals tax fiasco.
