Sept. 23--Payment of almost $21,000 to a utility billing auditing company has some members of the Common Council considering penalties for late or unrecovered utility funds.
The company, Computel Consultants, conducted an audit of utility companies that pay the city a 1 percent utility tax on their earnings at city properties. That audit led to Time Warner Cable giving the city a settlement payment of $52,465.80, but Computel's cut was 40 percent -- $20,987.
Fifth Ward Alderman Richard E. Abbott questioned why the city, rather than Time Warner, should have to pay for the cost of recovering unpaid funds. He suggested the city impose a penalty on unpaid funds to cover an auditor's fees, which are typically 30 to 40 percent of the recovered money.
"Seems kind of ludicrous to me that someone owes us taxes and we hire somebody to collect those taxes and then pay a 40 percent recovery fee," Abbott said. "I don't know why we're absorbing that cost."
Other council members commended the idea, and City Attorney John Ottaviano said he believes the city has the authority to penalize utility companies that fail to pay the tax on time. Ottaviano said he would look further into the matter, and that the city would have to pass a local law to add the penalties.
Finance Director Scott Schrader said billing and other errors commonly cause companies to over- or under-pay their obligations. He pointed to the city's recent issues with abnormally high water bills as an example.
In 2016, the city received about $191,000 in utility tax from Time Warner Cable.
Abbott suggested the lack of a penalty gives utilities little incentive to pay the tax or have a solid accounting system to ensure the payments are accurate.
"There's no rhyme or reason for them to cough up the money as they're supposed to," he said.
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