by Jon Baliles
City Hall has spent the last few months trying to fix the meals tax fiasco where they were charging restaurants thousands and tens of thousands of dollars in penalties and interest that accrued that the restaurants never knew about and the city never made any attempt to contact them that the bills were ballooning. At first it was just a handful of complainers, according to Richmond’s Chief Administrative Officer (CAO) but then it was acknowledged it was 500 and then finally the Auditor discovered there were 673 affected accounts.
So the city began to stem the bleeding and started resolving the situation — they refunded some restaurants that had paid a lot of money just to stop the interest from continuing to accumulate, and others had the charges the city said were owed wiped out. Anything to stop the buffet of media stories and bad press.
City Council moved faster and passed legislation in February that requires the city administration to only apply payments to the month of which they are submitted. They city had been following the worst practice of taking a portion of a payment and applying it to a delinquent account balance that the restaurant owner never knew about because they weren’t notified; they were unknowingly constantly in arrears while the interest and penalties continued to grow. That’s why some restaurants had balances of $37,000, $68,000 and $180,000 outstanding.
But the legislation that Council passed also included making the administration notify accounts if they had a credit on their account. The fixing of the fiasco and reimbursement of the erroneously billed accounts and wiping out of phantom balances began after the passing of the legislation because City Hall needed this issue to disappear ASAP because they didn’t want the other shoe to drop — the shoe that might show possible credits on accounts. Continue reading