Do you have any past due accounts that are hard to collect on? The City of Decatur, Georgia, ran across this problem too while trying to collect occupational taxes owed by local attorneys. This presentation was made by the City to participants at the Transforming Local Government conference in Denver, Colorado, on Apr. 23, 2014. It shares insights on using performance measurements to identify problems like this and make process improvements to close the revenue gap.

1. Overcoming Obstacles to
Maximize Revenues
Case Study: How Performance Measures - and
Lawyers - Added to Our Bottom Line
After discovering that occupational tax compliance
was lower for lawyers than for any other profession,
the City of Decatur took significant process
improvement steps. In this interactive session
attendees will learn how to apply performance
measures to their own situation and increase your
bottom line.
Presented by
Russ Madison • Shaun Shabazz • Linda Harris • Peggy Merriss

2. The Strategy
 “Expand and diversify the City’s revenue
base”—2010 Strategic Plan, City of Decatur
 “Pursue delinquent tax accounts on a
regular schedule”—Administrative Services
Department, Strategic Plan, 2010-12
 “The City shall follow an aggressive
policy of collecting revenues”—Decatur
Financial Policies
The delinquent lawyer collections project began
with strategy and related goals…

3. Background
 In addition to collecting real and personal
property taxes, the City of Decatur Revenue
Division collects occupation taxes from
businesses and professionals.
 Each attorney practicing law in Decatur is
required to pay a $400 occupational tax plus a
$25 administrative fee annually.
 Up until 2012, our exact occupation tax
collection rate was unknown, but anecdotally
weak, especially for lawyers.
Attorney occupation taxes

4. Problem Definition
 For property taxes, we knew our exact
collection rates for real and personal taxes and
sanitation fees.
 But we had no good tools prior to 2012 to
assess occupation tax collection rates.
 We could only run a list of delinquent
businesses and professionals and a grand total
owed.
Was there really a problem?

5. Performance Measures Confirmed
the Problem
 In April 2012 we
obtained a new
custom
collections
report from our
vendor.
 It showed that
only 43% of
lawyers had
paid their 2011
tax by their
deadline.
 By the end of
their 90 day
grace period,
only 69% had
paid.

6. Factors Behind the Problem
 Bad data
 Billing errors stemming from lawyers being
a unique tax type in our software
 Unwillingness of some lawyers to pay
 Legitimate reasons for nonpayment
 Miscommunication
 Uncertainty about the consequences for
nonpayment

7. Process Improvements
1. Software reprogramming to produce a
more thorough attorney billing
2. Collaborate more with the City attorney
3. Launch a new communications tool for
reaching lawyers
4. Use more rigorous revenue collections
techniques
5. Measure performance throughout the
billing cycle

8. The Obstacles
 Several lawyers in Decatur and statewide in Georgia
have asserted that they cannot be forced to pay this
tax.
 There has been a long-standing belief among Revenue
staff that “lawyers never pay.”
Real and imagined
 Some lawyers may think
there are no consequences
for nonpayment.
 The obstacles boiled down
to mindset.

9. Changing the Mindset
 Tough ≠ effective. Assume that most
taxpayers have a good faith desire to pay.
 Start out positive.
 But prepare for the worst just in case.

10. Getting Outside Help and Resources
 Partnered with City attorney to
improve communication style
with lawyers, and to confirm
consequences for non-payment.
 Used temporary reassignment of Public Works
employee to assist with data clean-up.
 Worked with software vendor to make custom
report and new setting for improved billing.
The collection
rate data
helped make
the case and
build
momentum

11. Technology
 Some lawyers in our system weren’t even
being billed due to:
• System glitches
• Data entry errors
• Inconsistencies in how charges were added
 Vendor created a new, separate “attorney”
license type in the software to help with
billing and adding penalties and interest

12. Communications: A New Tack
The art of taxation consists in so
plucking the goose as to obtain the
largest amount of feathers with the
least possible amount of hissing
—Jean-Baptiste Colbert, 17th Century French
finance minister

13. Communications: A New Tack
BEFORE AFTE
R

14. Stepping up our collections methods
 Began sending unpaid balance notices
immediately after deadline rather than
waiting till the 90-day grace period ended
 Followed up with monthly reminder notices
and letters for unpaid accounts
 Made phone calls to delinquent law offices
 Conducted site visits
 Personalized contact
 Added penalties and interest

15. Setbacks and Challenges
 We actually experienced a collection rate
decrease by the payment deadline from 43%
in 2012 to 32% in 2013
 Traditional reasons for nonpayment
including, “I never got a bill,” and financial
hardship
 Balancing this project with our primary
focus on property taxes

16. The Results
 The collection rate in 2013 for lawyers’
2012 occupation tax by the end of the 90-
day grace period reached 86 percent
compared to 69 percent the prior year.
 Revenues for this tax type had hovered
around $42-48K the prior three years, but
increased to $72K in 2013.
 Relations with some local attorneys seemed
to improve slightly.

17. Takeaways
 The revenue increase reaffirmed that value
of departmental strategic planning that
took place in 2009
 The project showed the usefulness of
performance measurements in identifying a
specific area for improvement and in
indicating our progress

18. 5 Questions to Consider for
Plucking More Feathers
 Are invoices clear & understandable?
 Do you accept multiple payment methods?
 Is there a consistent system for sending
past due notices?
 Do you add late fees?
 Is returned mail re-sent to a better address
using a skip tracing service?
While setting liens or seizing assets may be suitable
for some tax categories and communities, there
may be gentler opportunities for improvement:

19. Resources
 Council for Electronic Billing & Payment
cebp.nacha.org/
 Skip tracing services: Accurint.com,
Experian.com, CoreLogic.com, & many more
 Data from other
departments (bus-
iness listings, vacant
property registries)
 Your own attorney!

20. Exercise
Overcoming excuses for nonpayment