Fort Worth finance officials have discovered a problem in the way permit and license fees are collected for alcohol sales and they believe the city has missed out on nearly $600,000 in revenue over the past several years as a result.
And now Fort Worth is going after the businesses to pay up. The city, though, is admitting it is partly to blame and will allow businesses to set up interest-free payment plans for one year. Many have already paid in full, according to a city report.
City examiners found 233 businesses not in compliance with fees totaling $581,342. So far, the city has collected or set up payment plans with 156 businesses that owed $252,153. The remaining 77 businesses owe $291,684, the city said. But, the city estimates about $58,000 may never be collected because some businesses have closed or are in bankruptcy. The largest total of uncollected fees is $14,625 from one company.
$581,342Amount owed by Fort Worth businesses in unpaid alcoholic beverage sales permit fees
All stores, bars and restaurants that serve alcohol must have a city permit in addition to a Texas Alcoholic Beverage Commission permit. Depending on the type of permit, the city can charge half the amount that is charged by the state. Not all Texas cities charge a permit fee.
In this fiscal year, Fort Worth budgeted collecting $3.8 million in fees from new and renewing businesses handling alcohol. The city said it processed 1,309 permits in the past 12 months.
The finding came during internal financial reviews that have been looking into the city’s revenue processes and how it can better collect fees. One of the areas examined was how the city collects local fees owed in connection with state-issued permits for alcoholic beverage sales, the report said.
The problem stems from an incomplete billing process and a lack of education of city employees and the businesses. Until now, the city’s computer systems lacked information that needed to be provided — and the amount that needed to be collected — to business representatives when they came into city offices with an application.
Some city employees were aware of the permit fee, while others were not. Moreover, the city’s computer systems didn’t capture all the necessary data from the businesses that was needed to generate renewal bills. The city, though, in a report placed some of the blame on the businesses, stating it was also their responsibility to know they owed the fee.
Councilman Cary Moon said it is “poor business practice” to say it is the responsibility of the business to know what city fees it is responsible for.
“I don’t see it being their fault because we didn’t have the billing cycle in place to collect the information and bill them for that permit,” Moon said. “I see it is city government fault.”
Aaron Bovos, the city’s chief financial officer, admits the city didn’t have the best processes in place, but said things have improved.
The city beefed up its website with information about the permits and fees, established ways to cross-check information with the Tarrant County tax assessor-collector’s office where businesses are required to register and with the TABC, and will educate employees in several city offices on the process, Bovos said.
“Our processes were in need of much improvement,” Bovos said. “We share some accountability and responsibility in how these licenses and permits were issued and administered. I don’t want to leave anyone with the impression that these businesses are delinquent and that the responsibility solely rests with them as a result of their status.”
Councilman Dennis Shingleton said, “Several of my restaurant constituents were affected by this. They were able ... to go through a process of repayment. Hopefully this won’t happen again.”