I have received the independent investigative report dated December 5, 2023, from Troutman

Pepper Hamilton Sanders LLP & Acuitas, Inc., outlining some of the findings relative to the
investigation of the Revenue Division in the Finance Department of CCG. While no evidence of
malfeasance was discovered in the investigative report, I offer the following responses to the
investigative findings and recommendations. Each section below addresses the areas outlined in
your report.

RESPONSE TO FINDINGS

A. What is the cause of the backlog ?

Finding -

Compounding factors that caused the backlog

o Staffing shortages and insufficient training
o Inefficient processes and procedures and system limitations
o Extensions of the business license renewal deadline
o Failure to send courtesy delinquency notices to businesses or enforce delinquencies
o Increase in number of businesses requiring licenses
o Failure by all levels of management to timely recognize, report, or address the backlog
Response -

• As referenced in the Business License Processing Executive Summary Report presented to

Council on October 31, 2023, extension of renewal deadlines, staffing challenges, software
issues, and delayed courtesy delinquent notices were all contributing factors to the license
processing backlog as specified in detail within the Executive Summary Report. The report
addresses many of the issues denoted as findings. Therefore, a copy of the Executive Summary
Report is included herein as “Exhibit A”.
• It is misleading to assert that there is no formalized training as most job training within the
Revenue Division, and likely many departments throughout the city, occurs on the job. On-the-
job or hands-on training is an effective method of training as it provides an active learning
approach where employees gain job knowledge and experience through practice. It also boosts
expected learning outcomes for employees.
• While all processes are not documented in written form, there are written
procedures/processes/training documents to assist employees in their active learning
experience while also serving as reference guides to accompany notes from the employee and
collaboration with co-workers when trying to understand important processing concepts or
perform everyday job functions.
• There are some established processes that have been in place for a very long time. With that, it
is recognized that there may be a need to update some established processes and/or written
materials to, i.e., update internal processes relative to the change in the bank’s lockbox system
or conform to the new software system for the benefit of new team members (existing
employees were trained on the new software system during system implementation in 2021).
 • It is also inaccurately stated that Finance did not make the City’s I.T. department aware of
software issues until August 2023. There were multiple emails, instant messages and
conversations that took place with different members of the City’s I.T. Department over the last
few years concerning system issues and/or enhancements needed to move forward with
automation to improve efficiency regarding license processing.
• As previously referenced in the Executive Summary Report presented to Council on October
31,2023, business license processing is a function of the Revenue Division of the Finance
Department. The division had reported to management they were delayed in processing
business license renewals beginning during the pandemic. The division did not report to
management the extent of the delay or the negligence of not following established enforcement
protocol for businesses who did not renew their license.

B. How many licenses are backlogged?

Finding –

• Total renewals: 56,920 business licenses / 3,480 alcoholic beverage licenses

• Late renewals: 4,056 business licenses / 1,691 alcoholic beverage licenses

– Increase in late renewals:
• Late business licenses increased from 4% in 2016 through 2019 to 8% in 2020, 22% in
2021, and 10% in 2022
• Late alcoholic beverage licenses increased from 25% in 2017 to 79% in 2023

• Delinquent licenses: 24,896 business licenses / 532 alcoholic beverage licenses

– Calculation method: Acuitas identified the last license year in which each business had a
valid license renewal and assumed a delinquency for each subsequent year through 2023 or
the year in which Occupational Tax Division (OTD) designated the business as closed,
whichever was earlier
– Increase in delinquencies:
• Delinquent business licenses increased from 13% in 2017 to 44% in 2022
• Delinquent alcoholic beverage licenses increased from 2% in 2017 to 20% in 2022

Response –

Total/Late Renewals:

• Over the specified period, 60,400 licenses were processed (56,920 occupation tax + 3,480
alcohol) which represent 15,193 business accounts with 823 of those accounts having alcohol
license privileges.
• The 4,056 license renewals categorized as late represent 2,846 business license accounts. Of the
2,846 businesses, 373 (or 13%) of those business accounts are closed.
• Current operating procedure is to close a business license account in the licensing system when
the business has submitted final tax return information to include, if applicable, any final
payments due.
• While some businesses do not renew each year by the required due date, it is inaccurate to
assume that a license issuance date after the license year is indicative of a “financial loss”.
• The assessment of penalties and interest for delinquent businesses likely outweighs estimated
time value of money calculations.
• Per city code, the late renewal filing penalty is 10% for business and alcohol licenses.
• Also in any given year, the minimum rate of penalties and interest for business license renewals
received after the required due date is at least 11.5%.
• Interest continues to accrue at a rate of 1.5% per month for each subsequent month the
occupation tax remains unpaid.
• If a business remits their occupation taxes before the required due date, there is no additional
anticipated revenue regardless of when the license is issued.
• Per city code, penalties and interest are assessed only if the business fails to pay on time, not
based upon when the license is issued.
• If it is determined that additional monies are due because of incorrect tax calculations, then
penalties and interest may apply to the additional amount due.
• In addition to the main contributing factors of the backlog, processing delays may also be the
result of a “problem letter” being sent to a business for corrective action. The mailed
correspondence outlines what is required to complete business license processing.
• Therefore, the late processing of renewals is likely the result of the most recent backlog and the
failure of some businesses to submit timely renewals.

Delinquent Renewals:

• The 24,896 license renewals categorized as delinquent represent 8,771 business license
accounts. Of those 8,771 business accounts, 2,550 (29%) are closed, 838 (10%) were renewed,
809 (9%) are located outside of Muscogee county, and 731 (8%) are either pending processing
and/or designated as a “problem” case.
• It is misleading to assert that license renewals are delinquent in each subsequent year simply
because a license was issued in a prior year. Often, 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.
• Often, there may be a time lag between account closure notification and the cessation of
business operations.
• Nevertheless, current procedure is to close a business license account in the licensing system
when the business has submitted final tax return information to include, if applicable, any final
payments due.
• Therefore, it is inaccurate to assume that any additional monies are due to the city or that a
“financial loss” has occurred once a business license account has been processed as closed in
the licensing system.
 • O.C.G.A 48-2-49 (c) advises that in the case of fraud or if the taxpayer fails to file a return, there
is no time limit to collect taxes. Therefore, any perceived revenue losses would not be from any
statute of limitations.
• However, the ability to collect taxes does not negate the fact that the city is always at risk of not
receiving tax revenue from defunct businesses.
• Nevertheless, the city will continue to pursue occupation tax revenue by continuing
enforcement efforts to include issuance of court citations to compel licensing compliance.
• While difficult to quantify, it is inaccurate to assume that the number of businesses within
Muscogee County increases simply because a license is issued. There are scenarios that would
result in a new/duplicate license being issued for the same business and/or business location
over a period of time. For example, if a business changes its business type i.e. sole
proprietorship to LLC , a new business license and/or new account number would be
issued/established. A new alcohol license would be issued if the location licensee changes as
well.
• Utilization of prior licensing systems may impact the status of licenses and/or accounts in the
current system prior to April 2021. For example, in older versions of the current software it was
not necessary to expire a license when closing a business license account. One could perform
either function, expire the license or close the account, to achieve the same result. However, in
the new system, both the license and the account status need to be updated to properly close
an account.
• Further research needs to be conducted to clean up records that may be improperly classified as
active accounts.

C. What is the cost of the backlog?

Finding -

The estimated financial loss is the difference in the time value of money between the years the renewals
were due and the years they were issued

Late renewals –estimated financial loss

Business licenses: $165,000 / Alcoholic beverage licenses: $67,500

Calculation for business licenses

$5,705,000 (time value of estimated revenue if issued timely) –$5,540,000 (time value of estimated
revenue from late renewals) = $165,000

Calculation for alcoholic beverage licenses

$2,895,000 (time value of estimated revenue if issued timely) –$2,827,500 (time value of estimated
revenue from late renewals)= $67,500

Delinquent renewals – estimated financial loss

• Business licenses: $3,532,000 (Average Actual Gross Receipts) / $6,496,000 (Average Estimated Cost)
This represents the time value loss for active businesses and permanent revenue loss for closed
businesses
The current estimated value of the total revenue the City should have collected from active business
delinquent renewals is approximately $20,101,000 (Average Actual Gross Receipts) / $26,978,000
(Average Estimated Cost)

• Alcoholic beverage licenses: $183,000 (Average Estimated Cost)

This represents the time value loss for active businesses and permanent revenue loss for closed
businesses
The current estimated value of the total revenue the City should have collected from active businesses
with delinquent alcoholic beverage license renewals is approximately $736,000

Response -

• The assessment of penalties and interest for delinquent businesses likely outweighs estimated
time value of money calculations.
• Per city code, the late renewal filing penalty is 10% for business and alcohol licenses.
• Also in any given year, the minimum rate of penalties and interest for business license renewals
received after the required due date is at least 11.5%.
• Interest continues to accrue at a rate of 1.5% per month for each subsequent month the
occupation tax remains unpaid.
• O.C.G.A 48-2-49 (c) states that in the case of fraud or if the taxpayer fails to file a return, there
is no time limit to assess taxes. With that, any perceived revenue losses would not be from any
statute of limitations.
• However, the ability to collect does not negate the fact that the city is always at risk of not
receiving final tax revenue from defunct businesses.
• In addition, since occupation taxes are a derived income tax based on the economic activity and
earnings of a business, the city cannot accurately determine what the gross receipts would be
for a particular business in the preceding or ensuing year. It would be both inaccurate and
misleading to make such assumptions.
• It is also an inaccurate and overly broad approach to assume that all businesses will pay an equal
amount of taxes.
• Based on reported gross receipts for 2016 and 2022, 61% and 69% of businesses reported gross
receipts of less than $100,000 respectively as denoted in Exhibit B.
• Based on reported gross receipts for 2016 and 2022, approximately 75% of all businesses
reported receipts based on a tax rate of $3.21 or less per thousand as listed in Exhibit C.
• Of the 61% of businesses who reported up to $100,000 in gross receipt in 2016, approximately
77% of those businesses will have a computed tax of less than $321 as referenced in Exhibit D.
• Of the 69% of businesses who reported up to $100,000 in gross receipt in 2022, approximately
80% of those businesses will have a computed tax of $321 or less as referenced in Exhibit D.
D. Additional Investigation

Finding -

Alleged retaliation against whistleblowers

• Allegations determined to be unfounded

Inspections and Code enforcement of business and alcoholic beverage licenses

• OTD failed to submit delinquent business license list to Inspections and Code in 2020, 2021, and
2022 OTD sent delinquency list to Inspections and Code in September 2023

• Allegations that Revenue Management was inappropriately calling off enforcement action
requests sent to Inspections and Code Findings: Inspections and Code defers to Revenue
Management statements about whether enforcement is required
• Emails between OTD staff, Inspections and Code, and Revenue Management raise questions
about whether Revenue Management provides accurate information to Inspections and Code

Inconsistent waiver of penalties and interest

• Allegations that the Revenue Manager and Occupational Tax Supervisor waive penalties and
interest for business owners who contest such fees in person, are persistent and vocal by phone, or
who involve senior management within the Columbus Consolidated Government on their behalf
• Investigation revealed No clear written policy governing criteria for waiver, approvals required, or
substantiation or documentation required
• Widespread confusion about who within the City actually has authority to waive penalties and
interest

• Likely that penalties and interest are being waived inconsistently

Accounting Issues –recommend disclosure to the City’s external auditor for evaluation
• Uncollectable ambulance charges remaining on the Collections’ system

• Practice of reclassifying as revenue payments received for licenses not yet issued at end of fiscal
year

Response –

• To help alleviate confusion, one person from occupation tax has been designated to send
enforcement requests after the designee has verified with all team members that enforcement
action is required.
• City code dictates the application of penalties and interest. Therefore, application should not be
inconsistent. However, management will follow up with staff to ensure consistency with the
application of penalties and interest when a taxpayer has failed to remit timely payment.
• It is also a policy decision to physically close out ambulance receivables in the financial system
because once a receivable is closed, it cannot be re-opened, and payment cannot be posted if
received after closure. The process of recording ambulance revenue and bad debt was discussed
extensively with external auditors several years ago. Changes were made at that time to ensure
that there are no material misstatements relative to ambulance revenue, receivables, and bad
debt. As reported previously, the lockbox process has also been discussed with our external
auditors, Mauldin & Jenkins, and they have reaffirmed that revenue is being properly recorded
as part of the city’s fiscal year end close out process.
RESPONSE TO RECOMMENDATIONS

Recommendation #1:

• Comprehensively review and overhaul policies and procedures related to the issuance of licenses
and the collection and treatment of license revenue.

Response #1:

• It is recognized that there is a need to update some established processes and/or written
materials to, i.e., update internal processes relative to the change in the bank’s lockbox system
or conform to the new software system for the benefit of new team members. Updating and/or
revising established procedures will be an ongoing process as part of operational process
improvement efforts. Also, revenue reporting requirements have been and will continue to be
discussed with the City’s external auditors. Revenues are being properly recorded in all material
aspects in accordance with generally accepted accounting principles and accounting standards
mandated by the Governmental Accounting Standards Board (GASB). However, we will continue
to evaluate internal reporting needs that may assist with future informational requests and
compliance efforts.

Recommendation #2:

• Increase automation and synchronization of systems used to process licenses.

Response #2:

• Information Technology (I.T.) and Finance staff have been moving toward automation of the
licensing and permitting process since April 2021. Several discussions have occurred with
different members of the City’s I.T. Department over the years concerning system issues and/or
enhancements needed to move forward with automation. Because of those continued
discussions, another software system upgrade was recently implemented in January 2024. This
upgrade puts this city one step closer toward gaining automation efficiencies with processing
taxes, licenses, and permits. The collective plan is to move forward with online processing for
some taxes and permits by the end of the second quarter in 2024 with the goal of online license
renewals before the next occupation tax renewal season.

Recommendation #3:

• Increase monitoring and enforcement of late and delinquent licenses, including revising the
system for detecting, monitoring, and following up on delinquent excise taxes.

Response #3:

• The need for streamlined and consistent communication between Finance and Code
Enforcement is recognized. Additional processes and procedures are being developed that will
hopefully increase enforcement efforts. In addition, restructuring of the Revenue Division is
being considered. Again with the recent software system upgrade, the plan is to move forward
 with online processing for some excise taxes by the end of second quarter in 2024 with the
ultimate goal of online license renewals before the next renewal season.

Recommendation #4:

• Increase attention to employee retention and training.

Response #4:

• Attracting and retaining individuals with the key competencies and skills necessary for business
continuity is sometimes challenging when coupled with other limitations such as budget
constraints. Although the city implemented a new pay plan in 2023, pay is still a determining
factor when it comes to talent pool selections. Also, on-the-job or hands-on training is the
preferred training method as it provides an active learning approach where employees gain job
knowledge and experience through practice. It also boosts expected learning outcomes for
employees. While all processes are not documented in written form, there are written
procedures/processes/training documents to assist employees in their active learning
experience while also serving as reference guides to accompany notes from the employee and
collaboration with co-workers when trying to understand important processing concepts or
perform everyday job functions. However, management will work to develop a written training
plan to help ensure that important concepts are being discussed with new employees.

Recommendation #5:

• Comprehensively review and overhaul the handling of mail.

Response #5:

• There are standard practices for handling and processing mail to include cataloging returned
mail in the licensing software. However, inconsistent staffing levels and inexperienced staff have
reduced efficiency with some day-to-day functions. With sufficient staffing, more attention can
be devoted to handling and cataloging mail daily. Reinforcement of the existing policies will also
be monitored on a continuous basis to ensure compliance. Forms have been modified to
encourage the use of the bank’s lockbox for renewal payments.

Recommendation #6:

• Increase payment tracking, controls, separation of duties, and security.

Response #6:

• We will continue to evaluate internal reporting needs that may assist with future informational requests
and compliance efforts. Unfortunately, it is not feasible to fully segregate all the cash-related duties since
employees who process licenses and accept payments is unavoidable. However, there are safeguards and
compensating controls in place to help mitigate the risk of misappropriating cash. These controls have
built in redundancies for daily balancing protocols to minimize the risk of mishandling funds. The vault is
locked throughout the day with a few designated employees having entry access to it.
 Exhibit A

Executive Summary – Business Licensing Processing

 Executive
Summary
Report -
Business
License
Processing

OCTOBER 30, 2023

Columbus Consolidated Government

1
Executive Summary
I. Introduction

Council has requested executive management to provide a summary report to advise

what is happening in the Finance Department/Occupational Taxes and Business License
Department to include: the status, the management failures, and the systematic
problems that have occurred and are reoccurring. The practices and authorizations of
citations and/or the delinquency notices that have been directed at the businesses.
Who issued and authorized those notices? Why the businesses that were delinquent
were not contacted, and why there were delays in those collections.

II. Overview

Business license processing is a function of the Revenue Division of the Finance

Department. The division had reported to management they were delayed in
processing business license renewals beginning during the pandemic. The division did
not report to management the extent of the delay or the negligence of not following
established enforcement protocol for businesses who did not renew. This was
discovered by management after a referral from Council at the request of Deputy City
Manager Pam Hodge to the Finance Director and Revenue Division Manager for reports
and information. Since that time, immediate action has been taken to address the
known issues. An overview of licensing processes, issues, timelines, and actions taken
corresponding to delays with processing licenses are outlined in this report.

III. Processes

All businesses operating in Muscogee County are required to have a business license
and renew annually by April 1st. Businesses can renew in 1 of 3 ways: In person at 3111
Citizens Way, by mail to the office or by mail to the lockbox. There are standard
documents that are required for all businesses while some specific trades require
additional documentation for licensure. These documents are required by either local,
state, or federal law. Standard documents include an Occupation Tax return, E-Verify

2
affidavit, S.A.V.E. affidavit, and Request/Renewal Application. If any of the forms are
not included, the request/renewal submission is deemed to be incomplete and is
unable to be processed.

In-person renewals are handled as a priority. When a customer is not in-person,

generally, mailed license renewals are processed in the order in which they are
received. If a license renewal cannot be processed, a “problem letter” is sent to the
business outlining the missing or corrected documents required.

Around August/September, a courtesy delinquent notice is sent to all businesses who

have not renewed their license. This includes those businesses that did not respond to
a “problem letter”. If a business does not come into compliance, a delinquent list is
generated for Code Enforcement. Code Enforcement should visit each business
location and either issue a warning to comply or a citation for operating without a
business license OR determine the business is no longer in operation. Code
Enforcement does not have any jurisdiction outside of Muscogee County and are
unable to issue any warnings/citations for non-compliance outside of the county. Out
of county businesses would only receive the courtesy delinquent notice. Preparation
for the next business license renewal cycle begins in January with license renewal
packets being mailed out around January/February. While January/February is the
typical window for mailing renewal packets, it should be noted that 2023 license
renewal packets were mailed on March 8, 2023, not only because of the issues listed in
this report but there was also some uncertainty if a mandatory address change for the
business license lockbox would be imposed by the bank at that time.

IV. Issues

To date, staff has reported that the issues surrounding the delay in processing business
licenses are due to the extension of the renewal deadline for 4 years (2020, 2021, and
2022 from April 1st to June 1st and 2023 from April 1st to May 1st), 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.

3
 1) Extension of Renewal Deadlines

Extensions in the renewal due date for the past 4 years (2020, 2021, 2022 & 2023) have
negatively impacted business license processing. Historically, businesses tend to wait
until or close to the deadline, which is normally April 1st, to submit their license
renewals. Processing thousands of licenses may typically take 4-5 months to complete.
Thus extending the deadline creates a shorter window for staff to finish current
renewals before preparation for the next renewal cycle begins. It should also be noted
that alcohol license renewals operate on a different renewal schedule than business
license renewals. Preparation for alcohol license renewals begins in the August -
September timeframe. Staff must secure appropriate documentation to initiate the
coordination of the alcohol license renewal process among several departments before
a license can be issued. Due to time constraints and the level of effort associated with
processing alcohol renewals, staff that may have been previously assisting with
processing business license renewals must now shift focus to processing alcohol license
renewals.

2) Staffing Shortages/Turnover

Finance, like most departments, has always been tasked with providing more services
with fewer resources. In addition to license processing, other responsibilities of the
Revenue Division in the Finance Department include the following:

Occupational Tax Section - Insurance, Business, and Alcohol License Processing,

Hotel/Motel and STVR Tax Collections, Vehicle Excise Tax Collections, Mixed Drink Tax,
Wine Tax, and Beer Tax Collections, Franchise Fees, Special Event Alcohol Permits

Billing and Collection Section - Ambulance Billing and Collections, Lease Revenue,
Landfill Billing and Collections, Demolition and Lot Clearing Liens & Collections,
Hazardous Materials Permits

4
There are 6 approved/budgeted positions in the Occupational Tax Section (excluding
the Revenue Division Manager). From January 2020 to October 2023, the vacancy rate
by position is as follows:
• Licensing & Tax Supervisor – 30%
• Revenue Auditor – 28%
• Revenue Auditor – 26%
• Licensing & Tax Clerk – 48%
• Licensing & Tax Clerk – 0%
• Licensing & Tax Clerk – 0%
As shown above, multiple positions were vacant between 26% to 48% of the referenced
time frame. With that, inconsistent staffing levels and inexperienced staff has reduced
efficiency in all facets of the license renewal process. In addition to retention issues,
COVID-19 exposure/quarantine guidelines have had some impact to the normal annual
processes as well. Staffing shortages also created some challenges with performing
simple routine tasks such as answering/returning calls, filing, and processing mail. The
bulk of license renewals are received via mail so processing the mail timely is critical
because checks may be enclosed. Because of retention issues, staff were unable to
timely process all checks received in the office which caused some checks to become
stale dated. However, many of the stale dated checks were replaced and processed. It
should be noted that no fraud or theft has been discovered regarding these checks. In
addition, year after year, occupation tax revenue deposits have increased from $15
million in FY2019 to over $18 million in FY2023.

5
However, non-compliance with the city’s cash handling policies regarding timely
deposits has been addressed and reinforced. Temporary staffing has also been
authorized in the Revenue Division to help perform the above referenced routine tasks
to meet policy requirements and to allow more experienced staff to focus on
processing renewals.

3) Software Issues

To gain efficiency with online license and tax remittance processing, the need to
undergo a software system upgrade was necessary. The new business licensing
software was implemented in April 2021. Although the migration to the new cloud-
based system was successful, it has not been without its share of challenges.
Productivity has decreased post-migration due to system performance issues such as
extensive buffering and requiring more steps to complete processing of a license. It
now takes approximately 20 - 25 minutes to process a standard license renewal
whereas with the old system, it could be completed in roughly half the time.
Information Technology and Finance staff are engaged in discussions with the software
vendor to address system performance issues and determine next steps to realize
expected automation efficiencies.

4) Courtesy Non-Compliance Notices

As part of annual processes, the Revenue Division of the Finance Department typically
sends a courtesy delinquent notice to businesses who have failed to submit license
renewals for the current year. It was discovered by management in August 2023 that
Revenue Division staff failed to timely issue courtesy delinquent notices and
subsequently turn over delinquent accounts to Inspections & Codes Department, Code
Enforcement Division for enforcement. Since discovery, courtesy delinquent notices for
license years 2020, 2021, 2022, and 2023 were mailed in August 2023. Unfortunately
due to miscommunication, some businesses inadvertently received delinquent notices.
These businesses were those who were pending processing and/or were processed
between the time the notices were generated and mailed. The delinquent business
license list was turned over to Code Enforcement on September 13, 2023. The
enforcement of delinquent business licenses is currently the responsibility of the

6
Inspection & Codes Department. The Special Enforcement Division of the Public Works
Department was moved to the Inspections & Codes Department in September 2017.
Prior to this move, the business license enforcement was handled by the Special
Enforcement Division in the Public Works Department with 6 Special Enforcement
Officers. After consolidation, the former Inspections & Codes Director assigned
delinquent business license enforcement to 1 Sign Inspector. In July 2020, the current
director of the Inspections & Codes Department was appointed who acknowledges that
he did not receive a full delinquent business license report for enforcement until
September 13, 2023. The current director has assigned all 9 Code Enforcement Officers
to handle the delinquent business license enforcement in their assigned area of
Muscogee County. With enforcement, past due occupation tax revenue will be
collected with penalty and interest. While enforcement of the validating licensure lies
with the city, it is also the responsibility of the business to comply. Businesses are
required to close out their business license account if they are no longer in business or
notify the city when they have changed locations. Often, 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. Thus causing the city
to receive hundreds of pieces of returned mail annually and forcing the city to spend
unnecessary resources to validate if the business is still operational in its specified
location.

V. Timeline of Events

• 7/25/2023 – Councilor Thomas requested a report on Business Licenses.

• 7/27/2023 – DCM Hodge sent an email request to Finance Director Angelica
Alexander and Revenue Manager Yvonne Ivey requesting an update on the status
of business licenses for 2022 and 2023. How many were renewed for each year?
How many businesses with licenses in 2020 and 2021 have not renewed? How
many licenses are pending for 2022 and 2023? We are getting a lot of questions
about the status/delay for issuing of business licenses which was mentioned
during the City Council meeting this past Tuesday. We need to be prepared to

7
 document the status. The City Manager will be requesting a meeting soon.
• 8/7/2023 – Initial delinquent lists for 2020, 2021, 2022 and 2023 provided.
• City Manager Updates – 8/7/2023, 8/10/2023, 8/14/2023, 8/22/2023, 9/5/2023,
9/11/20123, 9/19/2023, 9/25/2023, 10/4/2023, 10/11/2023, 10/17/2023,
10/24/2023, 10/30/2023. These updates provide status of the processed and
delinquent accounts.
• 8/22/2023 – Response to referral provided.
o We are working on completing 2023 renewals as it typically takes about 4-
5 months to complete license renewals after the annual renewal date of
4/1. This year the renewal date was extended to 5/1 which pushes back the
processing period because many businesses wait until the deadline and
renew by mail. We have approximately 700+ renewals pending based on
what has been received. Thus far, we have processed 4,677 renewals YTD.
• 8/22/2023 – City Manager was denied the opportunity to provide an update to
Council on Business License Issues. On 8/14/23, the City Manager provided a
written Interim Report from the Finance Director to the Mayor. The City
Manager wanted to brief members of the Council at the next Council meeting.
The Mayor advised the City Manager that one member of Council indicated he
did not want to hear from the City Manager because there is an investigation
going on. That Council member indicated he had six votes to not hear from the
City Manager. The City Manager did not go forward with the update based on
this information.

VI. Action Items

In Summary, staff are continuing to work through the license renewal and delinquent
license processes. Temporary staffing has been authorized by the City Manager to assist
with the backlog of license processing. Per the established protocol, courtesy
delinquent notices for 2020, 2021, 2022 and 2023 were mailed. The delinquent
business license list was turned over to Code Enforcement on September 13, 2023, and

8
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 in Muscogee County. Finance will continue to work overtime
to complete pending license renewals. Code Enforcement has been authorized to work
overtime to work through the delinquent list as well.

Active processed licenses to date are as follows:

2020 = 7,892
2021 = 7,933
2022 = 7,387
2023 = 6,791

The delinquent business license report received on September 13, 2023, included
delinquent business licenses for the following license years 2020, 2021, 2022, 2023:
2020 = 874
2021 = 836
2022 = 1,084
2023 = 763
Total = 3,557

A summary of the action taken on the report to date is below:

• Out of county delinquent licenses = 459
• Pending processing in Revenue Division = 448
• Closed or Renewed Business received from the Revenue Division (removed from
the list) = 113
• Code Enforcement Officer verified Out of Business = 224
• Code Enforcement Officer issued Warning and/or Citation = 117
• Balance of Delinquent Business Licenses = 2,196

Actions Items Completed:

1) Delinquent notices were mailed for license years 2020, 2021, 2022, and
2023 in August 2023.
2) Delinquent business list was turned over to Code Enforcement on
September 13, 2023.
9
Actions Items in Process:
3) Completion of the license processing for those businesses that
submitted their renewal application.
4) Follow up with business that submitted an incomplete renewal
application thus receiving a “problem letter”.
5) Continue enforcement for businesses that have not renewed and are
illegally operating without a business license.
6) Establish/update operational procedures and reporting requirements
for all processes, if needed.
7) Continue to research to determine any revenue impact.

Other Actions To Be Determined (TBD)

8) Restructuring of the Revenue Division of the Finance Department will
be considered, if appropriate.
9) Continue discussions with current software vendor regarding upgrade
for permitting and licensing system.
10) Review Revenue Division failure to follow established protocols.

10
 Exhibit B

Reported Gross Receipts - 2016

Reported Gross Receipts # of % of Businesses $ Value of Gross % of $ Value

(2016) Businesses Receipts

$0 to $100,000 4,351 61.3% $71,150,913.46 1.3%

$100,001 to $350,000 929 13.1% $187,735,578.32 3.4%
$350,001 to $700,000 567 8.7% $317,177,810.54 5.7%
$700,001 to $1,500,000 552 7.1% $543,620,755.87 9.8%
$1,500,001 to $3,000,000 355 5.0% $745,945,970.64 13.4%
$3,000,001 to $6,000,000 180 2.5% $769,559,561.88 13.8%
$6,000,001 to $12,000,000 104 1.5% $858,301,521.54 15.4%
$12,000,001 to $24,000,000 33 0.5% $569,716,487.64 10.2%
$24,000,001 to $35,999,999 10 0.1% $292,121,530.08 5.2%
Greater than $36,000,000 17 0.2% $1,213,830,909.77 21.8%
7,098 100.0% $5,569,161,039.74 100.0%

Reported Gross Receipts - 2022

Reported Gross Receipts # of % of Businesses $ Value of Gross % of $ Value

(2022) Businesses Receipts

$0 to $100,000 4,555 69.2% $51,381,588.31 1.0%

$100,001 to $350,000 649 9.9% $132,985,413.24 2.6%
$350,001 to $700,000 402 6.1% $204,543,893.01 4.0%
$700,001 to $1,500,000 398 6.0% $410,346,804.29 8.1%
$1,500,001 to $3,000,000 302 4.6% $633,078,932.91 12.4%
$3,000,001 to $6,000,000 132 2.0% $540,763,266.66 10.6%
$6,000,001 to $12,000,000 90 1.4% $764,931,028.57 15.0%
$12,000,001 to $24,000,000 23 0.3% $365,255,890.72 7.2%
$24,000,001 to $35,999,999 7 0.1% $215,352,844.91 4.2%
Greater than $36,000,000 23 0.3% $1,776,028,147.70 34.9%
6,581 100.0% $5,094,667,810.32 100.0%
 Exhibit C

Occupation Tax Rate Classification Per Reported Receipts - 2016

Occupation Tax Rate Class 2016 % of Cumulative

Tax Class I - $1.00 per thousand of taxable gross receipt 186 2.62% 2.62%
Tax Class II - $1.82 per thousand of taxable gross receipt 549 7.73% 10.35%
Tax Class III - $2.52 per thousand of taxable gross receipt 3,019 42.53% 52.88%
Tax Class IV - $3.21 per thousand of taxable gross receipt 1,618 22.80% 75.68%
Tax Class V - $3.91 per thousand of taxable gross receipt 952 13.41% 89.09%
Tax Class VI - $4.61 per thousand of taxable gross receipt 126 1.78% 90.87%
Tax Class VII - $5.31 per thousand of taxable gross receipt 83 1.17% 92.04%
Tax Class VIII - $6.00 per thousand of taxable gross receipt 59 0.83% 92.87%
Professional Option 506 7.13% 100.00%
7,098 100.00%

Occupation Tax Rate Classification Per Reported Receipts - 2022

Occupation Tax Rate Class 2022 % of Cumulative

Tax Class I - $1.00 per thousand of taxable gross receipt 181 2.75% 2.75%
Tax Class II - $1.82 per thousand of taxable gross receipt 490 7.45% 10.20%
Tax Class III - $2.52 per thousand of taxable gross receipt 2,678 40.70% 50.90%
Tax Class IV - $3.21 per thousand of taxable gross receipt 1,552 23.58% 74.48%
Tax Class V - $3.91 per thousand of taxable gross receipt 791 12.02% 86.50%
Tax Class VI - $4.61 per thousand of taxable gross receipt 93 1.41% 87.91%
Tax Class VII - $5.31 per thousand of taxable gross receipt 75 1.14% 89.05%
Tax Class VIII - $6.00 per thousand of taxable gross receipt 68 1.03% 90.08%
Professional Option 653 9.92% 100.00%
6,581 100.00%
 Exhibit D

Reported Taxable Gross Receipts Based on Tax Rate - 2016

Reported Gross Receipts # of % of Businesses % of Businesses in Tax % of Businesses in Tax

(2016) Businesses Rate I – IV ($1.00 - Class V – VIII ($3.91 -
$3.21 per thousand) $6.00 per thousand)
$0 to $100,000 4,351 61.3% 77.2% 22.8%
$100,001 to $350,000 929 13.1% 84.4% 15.6%
$350,001 to $700,000 567 8.7% 89.1% 10.9%
$700,001 to $1,500,000 552 7.1% 87.9% 12.1%
$1,500,001 to $3,000,000 355 5.0% 94.1% 5.9%
$3,000,001 to $6,000,000 180 2.5% 86.1% 13.9%
$6,000,001 to $12,000,000 104 1.5% 86.5% 13.5%
$12,000,001 to $24,000,000 33 0.5% 81.8% 18.2%
$24,000,001 to $35,999,999 10 0.1% 90.0% 10.0%
Greater than $36,000,000 17 0.2% 94.1% 5.9%
7,098 100.0%

Reported Taxable Gross Receipts Based on Tax Rate - 2022

Reported Gross Receipts # of % of Businesses % of Businesses in Tax % of Businesses in Tax

(2022) Businesses Rate I – IV ($1.00 - Class V – VIII ($3.91 -
$3.21 per thousand) $6.00 per thousand)
$0 to $100,000 4,555 69.2% 79.8% 20.2%
$100,001 to $350,000 649 9.9% 83.8% 16.2%
$350,001 to $700,000 402 6.1% 88.6% 11.4%
$700,001 to $1,500,000 398 6.0% 91.2% 8.8%
$1,500,001 to $3,000,000 302 4.6% 91.1% 8.9%
$3,000,001 to $6,000,000 132 2.0% 90.2% 9.8%
$6,000,001 to $12,000,000 90 1.4% 91.1% 8.9%
$12,000,001 to $24,000,000 23 0.3% 91.3% 8.7%
$24,000,001 to $35,999,999 7 0.1% 71.4% 28.6%
Greater than $36,000,000 23 0.3% 95.7% 4.3%
6,581 100.0%