With audit pending, Columbus Council demands report on city business license backlog

With constituents complaining about problems with city business license renewals, Columbus Council has demanded the city manager give them a report on the matter Monday, the day before councilors get a private briefing on an audit of that division.

The issues in the finance department’s revenue division over business licensing are under investigation by the Atlanta law firm Troutman Pepper, which will have representatives at council’s Tuesday’s meeting, councilors said.

The lawyer on the case is Charlie Peeler, formerly the U.S. Attorney for the Middle District of Georgia.

Council at its 9 a.m. meeting is expected to go right into an executive session for an update on that, with the city attorney and city clerk the only staff permitted at the private briefing. City Manager Isaiah Hugley and his deputies have been excluded from closed meetings on the subject.

Councilors on Oct. 24 went a step further, during a five-hour night meeting, as District 7 representative Joanne Cogle told Hugley they wanted him to provide, by close of business Monday, a three-to-five page summary outlining the problems and who’s responsible.

When Hugley said he would have Finance Director Angelica Alexander deliver that report, Cogle objected, saying council wanted it to come from him, not his staff.

A brief debate ensued as Hugley noted council’s to be briefed the next day, and he has been given no update, because he has been excluded from council’s private audit discussions.

“No one has said a word to me,” he said, though he’s the city’s chief operating officer. “As CEO, no one has come to me.”

What had been discussed behind closed doors came into the open as councilors told Hugley and Mayor Skip Henderson about the complaints they’ve been getting, and the answers they’ve been unable to provide the businesses calling them.

“This is happening because councilors were getting phone calls from citizens before we were advised of the issue from the city manager, and we’re kind of wondering, ‘Why did that happen?’” said District 5 Councilor Charmaine Crabb.

A vote on Cogle’s motion was delayed for hours as council decided first to consult Troutman Pepper, to ensure the report would not interfere with the investigation. With the law firm’s OK, the vote came at the end of the meeting, after 10 p.m.

It was 8-2 to seek the city manager’s report.

What happened?

Some business owners have been reluctant to discuss the issue openly, fearing more license trouble, said District 4 Councilor Toyia Tucker. “They were really afraid, so they would not talk,” she said.

Though councilors are advised not to speak publicly about issues discussed in executive session, they can comment on what their constituents say.

Here is how they described the matter:

The license office fell behind on collecting license fees by failing to send out renewal notices. Some businesses had not renewed their licenses for years.

After council voted to audit the city’s finance department, the license office over the summer mailed out a blast of delinquency notices, with penalties for those who hadn’t paid.

Those notices also went to some business owners who already had renewed their licenses. Some had not received the licenses they paid for.

“That’s the general issue,” citywide Councilor Judy Thomas told the Ledger-Enquirer. “They have not gotten their business licenses.” Typically those are renewed by April 1 of each year, she said.

Frustrated business owners started calling councilors, who weren’t sure how to respond, so they want answers before they get the audit update, they said.

“Regardless of the audit, we need to know how we got here,” Tucker told the Ledger-Enquirer, adding another question is, “What’s the end game, so that this doesn’t happen again?”

Said District 2 Councilor Glenn Davis: “There’s a lot of confusion. There’s a lot of chaos. People are in fear. They don’t know what to do.”

The mass mailing was a mistake, he said, as it further alarmed people: “It was not the right thing to do.”

To relieve some of the pressure, council has voted to suspend the interest and penalties charged to delinquent renewals this year.

What about those who already paid?

“If they ask, their money will be refunded,” Thomas said.

Davis said the city charter gives council the authority to demand reports from the administration: “We have a right to do our jobs,” he said.

Cogle cited the charter in calling for the report. Here’s what she asked:

• What is going on in the finance department/occupational taxes/business license departments?

• What is their status; what are the management failures and systemic problems that have occurred and are reoccurring and the practices and authorizations of citations and/or delinquency notices directed at businesses?

• Who issued and authorized those notices; why were businesses who were not delinquent contacted; and why are we delayed in collections?

City manager responds

The Ledger-Enquirer emailed Hugley inquiries Friday about the nature and scope of the issue.

He replied that the revenue division initially reported delays in processing business licenses during the COVID-19 pandemic, when the city extended deadlines past April 1 to ease the burden merchants faced in a difficult economy.

“The division did not report to management the extent of the delay or the negligence of not following the established protocol for enforcement of businesses who did not renew,” he wrote.

The issue came to light July 25, he said: “Since that time, immediate action has been taken to address the known issues.”

Outlining the basic problems, he wrote:

“To date, staff has reported to me that the issues are the delay in processing business licenses due to the extension of the deadline for four years in 2020, 2021, 2022 and 2023 ... staffing shortages and turnover, increased processing time from a software system upgrade as well as failure to timely issue courtesy delinquent notices to businesses who did not renew their business license by the deadline and turn over delinquent accounts to Inspections & Codes Department, Code Enforcement Division for enforcement.”

He said the city hopes to recover the license fees owed:

“With enforcement, past due occupation tax revenue will be collected with penalty and interest. Staff will continue to research to determine any revenue impact. The time period when established protocol was not followed by the Revenue Division was for license years 2020, 2021, and 2022.”

The city has taken “immediate action,” he said: “I have authorized temporary staffing to assist with the backlog of license processing. Per the established protocol, courtesy delinquent notices for 2020, 2021, 2022 and 2023 were mailed.”

A list of those delinquencies was sent to code enforcement officers on Sept. 13, he wrote, so, “they are actively visiting each business location in Muscogee County to confirm if a business is still in operation and if so, issuing a warning and/or citation for operating without a business license.”

The remaining remedial work includes processing all the renewals submitted, following up on incomplete applications, and finding those who are operating illegally, without licenses, he wrote.

He said business owners are responsible for obtaining and renewing their licenses.

“Businesses are also required to close out their business license account if they are no longer in business,” he added. “Historically, businesses do not close out their business license account if they go out of business, move the business outside of Muscogee County, the owner passes away or the business is sold.”

What’s next?

Thomas said councilors expect Hugley to present his report after Tuesday’s executive session.

Does the report become a public record, upon its delivery Monday?

Cogle said she expects it to be made public. City Attorney Clifton Fay said he believes it will be, unless it contains confidential personnel information, an exception to Georgia’s open records act.

The executive briefing will not be a final report on the audit and investigation, which are ongoing, councilors said.

At the end, Troutman Pepper will be tasked not only with pinpointing the problems, but recommending solutions, Thomas said.

“We want to know who is responsible,” she said.