City Investigations Office Probes Complaints
February 2016
By David Zaslawsky
Photography by Robert Fouts
Someone filed a claim against the City of Montgomery after walking across a field that had been mowed and said they got toenail fungus.
That’s a true story and there are others – many others – of dubious claims against the city. Those dubious claims, which in the past would have been paid without questions, are now fiercely contested. There was $1.8 million in claims against the city in 2014 and the city paid out less than $40,000, said Ron Sams, director of the City Investigations office. There were 18 claims of $100,000 and the smallest claim was $219. The claims in 2015 totaled $125.4 million, including one for $120 million and another for $4.5 million as well as one for $124.88.
“A lot of these claims are absolutely outrageous,” said Sams, who retired from the Air Force after serving nearly 37 years.
Someone will trip on the sidewalk and want $100,000 “because basically they skinned their knee or something,” Sams said. “I send my highly qualified police officers out to look at potholes and sidewalks and tennis courts or whatever people want to complain about,” Sams said.
He has four investigators on his staff – two are Montgomery police officers; one is a senior fire investigator; and the other is a former police officer with 17 years of experience. The investigators report only to Sams and the mayor. Sams also can bring in city personnel to help with investigations, including accountants or engineers. The department has senior staff attorney Mickey McInnish and an administrative assistant.
The department collects facts and compiles a report. “We are not in the I-reject-your-claim business,” Sams said. “We are the independent fact finders and we write a report based on the facts that we find.” That report goes to the city’s legal department, which decides to pay a claim or deny it.
“The bottom line is that we’re saving the city money – a lot of money,” said Sams, a senior cabinet member who reports directly to the mayor.
It may not seem cost effective to investigate a $219 claim or a $125 claim, but “the problem is you start paying those over and over and the money adds up very, very quickly,” Sams said. “We don’t do that.”
The staff is salaried and does not incur additional costs for investigating a claim no matter how large or how small. It’s the same with the city’s legal department, which has five attorneys and some claims may take seconds to decide, McInnish said. He cited examples of the city being sued for claims against agencies that are not part of the city or damage from a tree falling that was not owned by the city.
“We have gone down in the number of claims against the city and we are certainly down on paying,” McInnish said. “The approach is, if we owe you money, we are going to try to work something out. If we can’t work it out – that’s what courts are for.”
The department’s efforts are having an impact. As there are fewer outlandish claims being investigated, Sams said. “City employees are being more diligent, knowing that a claim is going to be investigated,” McInnish said.
City Investigations also handles claims against city employees from the public or from other city employees or supervisors. “I don’t have the exact number, but there are a lot of people not working for the city anymore because of our reports,” Sams said. Removing those employees helps protect the city from potential lawsuits, he said. “The mayor looks to us as the keepers of integrity for the city.”
Sams and McInnish are working on a proposal to hire three or four tax revenue investigators for a pilot program. The proposal would split the city into sections or sectors and an investigator would be responsible for that region. They would develop expertise and know all the businesses in that sector.
0City Cracks Down on Businesses Owning Money
February 2016
By David Zaslawsky
One business that had been collecting its 10 percent sales taxes had not paid its share to the city, county and state. For years – a lot of years.
The 3.5 percent of the sales tax that must be paid to the city reached $1.2 million when it was finally collected, according to City of Montgomery senior staff attorney Mickey McInnish. An audit discovered the missing money, he said. Several other businesses owed more than $75,000 to the city for unpaid sales taxes and some left town owing money.
The City Investigations office and legal department go after businesses not paying their sales taxes. The business owner’s name goes on the City Council agenda and if that person does not show up the city closes the business. There are 15 to 25 business owners on the City Council agenda twice a month, McInnish said. Just seeing their name on the agenda is usually enough to get them to pay, he said. The business owner must sign a note for the money that is owed and personally guarantee it. Half of the amount is paid immediately and the balance must be paid in three months.
“Word has spread,” McInnish said. “Instead of having such a large number of businesses that owe a lot of money we have gotten it down to where we try to catch these within a certain amount of time so it doesn’t get to a (large amount) of money being owed,” McInnish said.
The city had collected $3.2 million in unpaid sales taxes and unpaid business licenses in a 3½ year period. It all began when somebody told McInnish that a business owner was not paying his sales taxes to the city. The county gets 2.5 percent of the 10 percent sales tax in Montgomery and the state receives 4 percent.
After informing business owners, the city started bringing those not paying sales taxes to City Council meetings and started a process where “we would close your business down if you did not either pay the sales tax or if you did not make arrangements to pay the sales tax,” McInnish said.
The city also closes a company for not having a business license. A company will receive a letter from the city stating that the business owner will be cited if they don’t get a business license by a specified date. “If they don’t pay, the business owner will be put on the City Council agenda and will be closed down,” McInnish said.
Cracking down on delinquent business owners, the city two years ago began denying a business license to any company owing money to the city. “We collected a ton of money,” McInnish said.
