IRS places $315K lien on SBCISD payments to clinic admin

Managing Editor



School district officials confirmed this week that the Internal Revenue Service has placed a lien on San Benito CISD funds owed to the district’s on-site health clinic administrator, who owes the IRS more than $315,000.

SBCISD attorney Tony Torres sent an email to the Board of Trustees on Wednesday informing the board members that the district received levy notices from the IRS regarding Richard Garza, the owner of ISD Managed Care Services Inc. – the Port Isabel-based company that currently serves as the school district’s on-site health clinic provider.

“Said notices require the District to hold all funds and/or turn over all funds which are owed to the taxpayer by the District … to the IRS,” Torres said in the email. “Stated simply, the IRS is claiming a lien for the amount owed to Mr. Garza by the District.” The amount owed, according to Torres, is $315,603.43.

A search on the Texas Comptroller website also found that the “Right to Transact Business in Texas” for ISD Managed Care Services Inc., with its address listed as 5505 S. Expressway 77, Suite 205 in Harlingen, has been forfeited.

In addition, Garza’s recent tax troubles come nearly one year after a levy notice, dated May 2013, was issued to the school district regarding nearly $60,000 in delinquent taxes that he reportedly owed to the IRS. Specifically, the IRS reported that Garza owed $59,900.92 in unpaid taxes, which dated back to June 30, 2012. At that time, the IRS deducted the money from subsequent payments the SBCISD made to Garza, who contended then that the matter had already been “addressed” and argued that a corroborating letter from the IRS would be provided. When asked if Garza provided such a letter, several board members said at the time that they were not aware of the correspondence in question being provided to them or the district.

On Friday, board member Oscar Medrano, who has long been vocal regarding his criticisms of Garza’s IRS woes, addressed the current lien and what it means for the district.

“I’m very concerned, because he owes taxes to the IRS and now it’s going to be up to us to see how we’re going to deal with it,” Medrano said. “I think we should have a special board meeting to see what we’re going to do with Richard Garza and this mess, because it is a mess and we need to find a way to move forward.”

Although Board Secretary June Aguilera said she preferred to hear Garza’s “side of the story” and to speak to Interim Superintendent of Schools Dr. Ismael Cantu before commenting, she did acknowledge that the matter will be addressed by the board.

“It’s definitely something that will be looked into,” Aguilera said. “I know the board has a couple of meetings that will be coming up; maybe we’ll be talking about it very soon, but I know the last time he did pay it (taxes). It just was not told to the board that way.”

Last year, Medrano proposed closing the clinic to seek bids for another provider after learning of Garza’s previous tax delinquency. Fellow trustee Anna Cruz shared Medrano’s concerns then and stressed the need for the clinic to be “secure.” Defending Garza during this time, however, was Glenn Hillyer, the district’s insurance consultant, who argued that the clinic should not close. Garza also said at the time that because he is a third party vendor, the district would not be held responsible for his company’s involvement in tax delinquency claims.

Additionally, SBCISD Business Manager Emma McCall has also said that it’s not uncommon for the district to receive levy notices regarding vendors owing delinquent taxes.

Still, the board voted last summer to give Garza a 60-day termination notice. The notice was short-lived, however, when a 4-3 vote at an August 2013 board meeting again awarded Garza’s company the contract, in which he’s paid a $68,392 monthly base plus additional medical-related expenses, to serve as the district’s on-site health clinic provider – this during a bid selection process in which Medrano, Cruz and trustee Hector Leal represented the opposing votes while Board President Yliana González, Vice President Julian Huerta, Aguilera and trustee Fatima Huerta made up the majority.

After the August 2013 meeting, Medrano questioned the point of the bidding process, alleging a “set up” occurred in which Garza’s company was pre-selected.

Attempts to reach Cantu and Garza for comment were unsuccessful as of presstime Friday.

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