IRS woes for Quincy department head nominee

Quincy City Council Meeting, Kyle Moore and Paul Havermale

A private business managed by the city of Quincy's director of administrative services nominee accumulated almost $750,000 in unpaid taxes to the IRS over a decade.

Federal tax liens filed by the IRS in the Adams County Recorder of Deeds Office show that Alarm Systems Inc. owed $745,698.87 in taxes, interest and penalties between 2001 and 2011.

State corporation records show the company was owned by 3rd Ward Alderman Paul Havermale's father, Stephen Havermale.

Fellow 3rd Ward Alderman and mayor-elect Kyle Moore named Havermale the city's next director of administrative services and purchasing director on Thursday.

A press release from Moore's office said that Paul Havermale worked at Alarm Systems Inc. since 1988 and served as general manager since 1990.

Havermale defended his company's almost decade-long decision to not pay federal withholding taxes, saying that it was a difficult decision made after the company lost a major client coupled with the recession.

â??The reason we got where we were, we were trying to protect the jobs and benefits of our employees,â?? Havermale said. â??The motivation of why that happened was strictly to protect the people. It wasn't to enrich myself. It was to do what I could to keep 18 people employed and to keep their benefits going.â??

The records show that Alarm Systems Inc. made a $76,234.76 payment to the IRS on Oct. 3, 2012.

The unpaid taxes fall under the categories of annual unemployment withholding taxes and Federal Insurance Contributions Act/Social Security taxes.

The Havermales sold Alarm Systems Inc. in the fall of 2012 to Royalty Electric. It still operates, but the company dropped the â??Inc.â?? from its name.

If approved by the city council, Havermale would be responsible for crafting the city's budget, negotiating contracts, purchasing and a slew of other duties related to the city's finances.

That vote is expected to take place at the Monday, May 6 city council meeting.

â??I would hope the record as an alderman will overshadow this,â?? Havermale said.

Moore said Thursday that he was aware of the liens against Alarm Systems Inc., but that he's confident that Havermale still would flourish as the administrative services director.

â??Business owners are often faced with difficult decisions at times. Sometimes they're not the right ones,â?? Moore said. â??He had to make a difficult decision. I have no concern with his ability."

â??Everything we do in the city government has checks and balances. The budget is formed with a team and with budget heads and with the input of the city council.â??

Moore described Havermale as a long-time friend. Havermale also served as the chairman of the campaign finance committee for Moore's election.

Havermale was first elected to the City Council in 2003. In that time he's served on the Finance, Planning & Development committee, the Central Business District Revolving Loan Committee and Adams County Ambulance Board.

Havermale's salary as a city councilman would increase from $5,200 a year as an alderman to $82,000 a year. The position also receives a $300 a month automobile stipend.

Some of Havermale's fellow aldermen said that they were aware of the tax lien issue.

â??I was told that (Alarm Systems Inc.) had some customers who weren't paying and that they had a choice between paying taxes and employees,â?? Democrat and 2nd Ward Alderman Dave Bauer said. â??I had no idea it was that kind of money and that it had been going on that long.â??

Democrat and 2nd Ward Alderman Steve Duesterhaus said that he recently brought his concerns with rumors over the tax issues to Moore.

â??I asked him if there was anything to be concerned about and if he should make this appointment,â?? Duesterhaus said. â??He said that there was a minor issue and that it was being resolved. However, paying taxes is part of making payroll. It's kind of troubling.â??