Machesney Park hires company to search for delinquent dollars
By Bob Balgemann
REPORTER
It has worked for the cities of Rockford and Belvidere, to the tune of more than $140,000. And now the village of Machesney Park is hoping for the some success.
Azavar Government Solutions Inc., out of Chicago, since 2005 has helped many municipalities recover delinquent revenue through audits of a vast array of governmental agreements, taxes and fees.
Now that company has been hired by the village to do the same thing here.
Village Administrator Tim Savage and Budget and Human Resources Manager Michelle Johannsen worked up the proposal that went before the administration and finance committee, before being approved by the village board Jan. 22 as part of the consent agenda.
They explained the village relies heavily on revenue streams that depend on proper reporting and calculations by various utility companies and the state of Illinois. Among the revenue sources are sales tax, local use tax, franchise fees, cable franchise fees and others.
“We are committed to maximizing municipal revenues and maintaining a high standard of financial management,” the administrators stated in the report. “And therefore we met with Azavar Government Solutions Inc. to discuss their revenue review services that could be applied to the various revenue streams collected by the village.”
The village, founded in 1981, has a small staff and was established on the foundation of our sourcing. Given that, staff believed it would be best to utilize the resources and expertise of Azavar in this area.
It is a very detailed and technically complex task to cross-check the vast quantities of data and ensure the accurate remittance of fees and taxes, as well as obtaining a favorable response from the various providers, the administrators stated.
“Azavar seems well equipped to accomplish this task,” they stated. “Azavar began business in 2005 and has conducted more than 500 audits and worked with over 150 municipalities, recovering millions of dollars of revenues for governments.”
Material on the Azavar website states the city of Rockford received $75,000 in funding it was owed due to overpaying service providers and billing errors on behalf of the city’s major electric and telecommunications providers.
The city of Belvidere hired Azavar early in 2018 and so far, it will receive $56,469.05 in back franchise fees through a settlement with Comcast that was approved by the city council on Jan. 7.
After being hired Azavar audited each of the city’s franchise agreements, the utility tax, locally administered taxes or fees and sales taxes, according to Becky Tobin, budget and finance director. Its officials also reviewed the city’s gas, electric and telecommunications agreements and bills, looking for errors that might have been made. They looked at taxes and fees to be sure they had been properly paid or collected.
A resolution approved by the Machesney Park Village Board authorized execution of a contingent fee professional agreement with the Chicago-based company. It stated there would be no up-front fees or costs and that Azavar only would collect a fee if it found an error and received lost revenues for the village.
Machesney Park signed the agreement with two other municipalities and the contingent fee was reduced to 40 percent for the company and 60 percent for the village for 36 months. After that time period the village would retain 100 percent of the found dollars.
Belvidere’s agreement calls for it to receive 55 percent of the found revenue, with 45 percent going to Azavar.
The resolution approved by Machesney Park also authorized execution of an agreement with the law firm of Cozen O’Connor, with an office in Chicago, to assist Azavar and the village in resolving matters during the revenue review, as necessary. The firm has offices in 27 cities across two continents, with a staff of more than 700 lawyers.