HomeMy WebLinkAboutIR 9918 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9918
To the Mayor and Members of the City Council August 9, 2016
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*a SUBJECT: COLLECTION PROJECT: LOCAL FEE FOR ALCOHOL BEVERAGE
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Background
Over the course of the last few years, the Financial Management Services Department ("FMS")
has been systematically reviewing the City's revenue processes and attempting to recover unpaid
balances by working to make improvements in communication practices and collections efforts.
In addition, the Internal Audit Department recently completed an audit of alcohol beverage
permit/license fees and will have an audit report forthcoming to the Mayor and Council.
An area of concern that has been identified by both FMS and Internal Audit relates to the
collection of local fees that are owed in connection with state-issued permits and licenses for
alcoholic beverage sales. Specifically, several state permittees and licensees have stopped
paying the local fee for one or more of their permits/licenses. In addition, a number of state
permittees and licensees have never registered with the City and therefore have never paid a
local fee. Several of these businesses have amassed a substantial outstanding balance.
Current Efforts to Collect Past Due Revenues
At the beginning of the FMS review process, 229 businesses in the City were identified as not
current in their payments for local fees associated with their alcohol beverage licenses/permits. In
an effort to ensure these entities become current, but do so in a manner that eases the burden of
doing so, staff is offering permittees and licensees with the option of a time-payment
arrangement, without interest, for up to one year.
Since our initial review date, delinquencies have been resolved for 150 businesses. Resolutions
include payment in full, commencement of a payment plan, and receivable adjustments for
businesses that have ceased to operate or filed for bankruptcy (to date, less than ten percent of
the total identified unpaid balance has been subject to adjustment/closure). As of July 29, 2016,
our records indicate 79 businesses remain in a not current status. FMS will continue to work with
these businesses and identify ways in which we can assist them in becoming current.
New Applicants
Although the permittees and licensees are the ones who are ultimately responsible for
determining all of the laws that apply to their businesses and ensuring that they comply with those
laws, staff has worked to identify areas in which the City can improve its processes and better
educate and inform businesses of their obligations regarding these fees.
An initial information/education improvement that FMS is pursuing is getting information added to
the City's website so that all potential permits and fees that might apply to businesses involved in
the sales or handling of alcohol within the City of Fort Worth can be easily found in a single
location.
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9918
To the Mayor and Members of the City Council August 9, 2016
r� Page 2 of 2
�i
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*a SUBJECT: COLLECTION PROJECT: LOCAL FEE FOR ALCOHOL BEVERAGE
?CL PERMIT/LICENSE
Improving the Collection Processes
As noted above, one goal of FMS's ongoing review is improving the City's collections processes.
With regard to these local fees, past collection efforts consisted primarily of system-generated
notices being sent to permittees/licensees (i) when their renewal date was approaching; (ii) when
the renewal date occurred; and (iii) after the renewal date had passed. Given the failure rate of
bars and restaurants, particularly in the first couple of years of operation, the limited follow-up
might have been attributable to an understandable desire to minimize use of the City's limited
resources in pursuing fees owed by entities that may no longer be in business.
Going forward, FMS staff has identified a minimal-cost option that will help staff focus its
collection efforts on ongoing businesses by comparing the City's local records to those of the
state. At least once per quarter, the Revenue and Collections office of FMS will obtain a listing
from the Texas Alcoholic Beverage Commission ("TABC") of all permittees/licensees in the City of
Fort Worth and of each entity's permits and licenses. Staff will cross-reference that list to the
City's records to ensure that all state-registered entities and permits/licenses are (i) included in
the City's records and (ii) current on their local fees. In addition, staff will coordinate with the
TABC and ensure that noncompliant entities are reported in a timely fashion since failure to pay
local fees is a misdemeanor subject to a fine and also grounds for the TABC to cancel a permit or
license.
If you have any questions, please contact Aaron Bovos, Chief Financial Officer, at 817-392-8517.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS