DeKalb fails to collect millions in business fees

Businesses have stiffed DeKalb County millions of dollars in license fees in recent years, and officials have done little to retrieve the lost revenue, according to two reports by consultants.

In one report, a spot check of 75 businesses in 2007 determined that a third of them were operating without a license. Data indicating that DeKalb had fewer registered businesses per capita than either Cobb or Gwinnett counties led the firm, Capital Principles, to conclude that about a quarter of the businesses in DeKalb were operating without a license — and paying no fees.

Another consultant, e2 Assure, said last year that “DeKalb County is missing a significant amount of revenue every year,” and estimated the loss at between $5 million and $7 million annually.

Both reports were obtained under the Georgia Open Records Act.

The consultant e2 Assure is the same firm that issued an explosive review of the DeKalb Recorders Court last year, claiming that tens of millions of dollars were going uncollected by that agency. Members of e2 Assure presented their business license findings to the transition committee of Burrell Ellis late last year, when he was preparing to take over as county chief executive officer.

At his first state of the county address in February, Ellis pledged to tackle the problem of business licensing.

“We need to determine if a substantial number of businesses operating within our county are not registered and not paying the fees which are due to our county government,” Ellis said during his Feb. 18 address. “My administration will investigate this category of under-collected revenue and take appropriate action.”

License fee revenue could help with DeKalb’s tight finances. The county is spending about $20 million less this year than last year because of budget cuts, and Ellis has eliminated departments and laid off employees. His transition team advised him to retain a consultant to review license collections by his hundredth day in office, which is today.

In a recent interview, Ellis said he hadn’t retained a consultant but was working on a collection incentive — an amnesty for scofflaws followed by steep fines for those who still fail to pay.

The responsibility for enforcing business license collections falls to Mike Bell, the county finance director. Bell, who reports to Ellis, declined comment for this article.

Consultants paint a picture of a business permitting operation in disarray.

In a report issued to county commissioners early last year, Capital Principles, some of whose members went on to form e2 Assure, said the licensing division had “all but stopped” inspections of businesses for over seven years. The firm reported collecting an extra $500,000 in 2007 when it ran a pilot program that identified businesses without licenses and then sent a county inspector to get their money. The firm said it also collected over $2 million in past-due bills that year, and said DeKalb could net between $21 million and $33 million over five years with better procedures.

The bottom line: DeKalb should be collecting nearly $20 million a year from business licenses instead of the roughly $14 million it has been taking in, e2 Assure told Ellis’ transition committee in December.

Bell said in a memo to Ellis’ transition team last year that his staff was handicapped by a computer system that was not designed for their needs. The consultants blamed the county’s computers too, but also said the staff lacked adequate training and management support and spent too little time enforcing permit regulations.

Melissa Slaughter, who lives near DeKalb-Peachtree Airport, said she too has noticed a lack of leg work by the county. She said officials failed to follow up on a taxi stand in her neighborhood that was denied a business license but is still operating.

Officials do not check up on license applicants, said Slaughter, a representative of the Dresden East Civic Association.

“‘Oh sure, you want one — here you go,’” Slaughter said, mocking what she believes to be the county’s attitude. “There’s just no follow up.”