The city of Atlanta may have lost as much as $15 million after failing to collect garbage fees from residents for the past two years. Before county tax commissioner Arthur Ferdinand handed garbage billing responsibilities back to the city in 1999, Atlanta's sanitation fees appeared on residents' Fulton County tax bills.
Until 1999, Atlanta had not been responsible for its own sanitation fee collection for more than 30 years, according to Ferdinand.
Previous tax commissioners did not challenge the system, but when Ferdinand took office in 1997, he decided to change it, he says.
"Sanitary fees do not belong on a tax bill," he says. "It was hurting people."
Atlanta's trash fee woes began long before 1998, according to Ferdinand, who says that when he became tax commissioner, the city already had lost $21 million in delinquent sanitation fees.
After an elderly woman complained she lost her house for not paying the yearly bill, Ferdinand investigated the fee collection system.
Studying a sample of about 30 bills from elderly residents, Ferdinand says he found that 1 percent of the charges were county taxes, 16 percent were city taxes and 83 percent were city sanitation fees.
"It primarily was a sanitation bill masked as a tax bill," Ferdinand says.
And, because of Georgia tax laws, when elderly or low-income residents could not pay, they could potentially lose their property because the fee was part of a tax bill, he added.
"In America, no one loses their home because they can't pay a phone bill or a water bill," he says. "Nobody should lose their home because they cannot pay a sanitation bill - it didn't make any sense."
After meetings with his staff and city officials, Ferdinand decided the county no longer would include city sanitation fees in its tax bills. So the city took over collection in 1999.
A December 16, 2000 story in the Atlanta Journal-Constitution stated that the city had failed to collect $30 million in garbage fees. However, in a faxed statement to Waste Age from public information officer Sheila Jack, the Atlanta finance department said the amount is closer to $15 million, but even that amount is "overstated."
"When the city inherited the sanitation services collection process from the county tax commissioner in 1999, we discovered there were accounts that should not have received bills or were being billed at overstated or inaccurate amounts," the fax stated. "The process of reviewing these accounts to distinguish between inaccurate bills and legitimate delinquencies will result in a significant reduction in both the billable amount and delinquent amounts."
Two years ago, when the city took over billing responsibilities from the county, the city finance department reorganized its treasury operations and hired new accounts receivable staff to investigate each bill, according to the fax.
In addition to investing in technology, the department is establishing "enforcement mechanisms" to collect on legitimately delinquent accounts. And, the department will work more closely with city real estate firms to ensure that residents are more quickly notified of fee changes.
Garbage fee delinquency is not unique to Atlanta. When a Missouri auditor looked at garbage accounts in the city of Pine Lawn, Mo., last spring, he found that hundreds of residents owed approximately $600,000 in collection fees, according to Pine Lawn's city hall. Pine Lawn residents pay $36 per quarter for trash service from Superior of St. Louis, which includes three pickups per week. Those who do not pay are subject to penalties and interest, the article stated.
After studying the problem, Pine Lawn's board of aldermen decided to waive interest and penalties for residents who paid in-full during a 90-day grace period that began on Nov. 14, 2000. As of press time, response to the grace period has been encouraging, according to a city official. Many Pine Lawn residents have paid on delinquent accounts dating back as far as 1992.
To collect fees in Atlanta, Ferdinand suggests the city could create a monthly billing system, similar to other utilities' systems, so residents do not have to pay for garbage collection in one lump sum.
"That way, people could budget for it," he says. "It's a utility bill - [the city] shouldn't be looking to tax laws to bully people into paying fees."