The Salt Lake Police Department is investigating the city's business licensing division on complaints of possible criminal misconduct, as well as lax enforcement of penalties for businesses that don't pay license fees on time.
City government officials, however, say the probe isn't expected to result in criminal charges and won't yield any surprises about licensing practices.But sources said the city could be losing as much as $500,000 to $1 million annually.
Mayor palmer Depaulis said somewhat "squishy" allegations were reported to him. The complaints included inappropriate money collections and inaccurate record-keeping.
Lt. Ken Thirsk of the police department's internal affairs division confirmed the existence of the investigation. "I was assigned the case on Jan. 27, and I should be wrapping it up shortly."
Thirsk will report his findings to City Attorney Roger Cutler, who has ordered Thirsk not to comment on the nature of the investigation.
"The question did not included late-penalty dismissals. The issue that was sent (to the police) was if there was any criminal misconduct." Cutler said.
The attorney said he has had preliminary reports about the investigation, indication that there is no evidenct of criminal activity.
The licensin ordinance, which slaps delinquent businesses with late penalties of up to 50 percent of the license fee, is not always enforced. For example, the Tri-Arc Hotel, which owed the city $7,000 by Jan 1., didn't sent the money until May 26. Under the ordinance, the hotel should have paid a 50 percent fine, or $3,500. But the city waived the fee for reasons unspecified.
Cutlere said he has never been asked for an opinion as to wheter the city's licensing ordinance allows forgiving late fee penalities.
City Treasurer Buzz Hunt, who is responsible for the licensing division, said claims about larege sums of lost revenue are greatly exaggerated. For the past three years, the city has only collected approximately $2.5 million annually in total business license fees.
Hunt said he hasn't been questioned by Thirsk. "I don't think the investigation has uncovered any misconduct, although I haven't seen the report," he said. "And I don't know that the police department has any expertise in management auditing."
Hunt said the city's business licensing division has had problems in the past. "I think there are some management issues related to licensing that I've been improving some things," he said.
But there are only two enforement officers, and a total of six employees, in the business licensing division, handling the applications of some 12,000 city's businesses. One enforement position was lost to budget cuts, Hunt said, while the other position willl be transferred to the city's building and housing division, through the code enforcement program.
"We know there are businesses out ther without licenses. But having two people out there walking the streets is an archaic way of enforcing the licenses."
Hunt said tighter controls are being implemented, such as an improved way to track bounced checks as well as an updated computer management system for enforcement.
"Businesses in the city, like businesses throughtout the state, are having cash-flow problems. Our approach has been - and will continue to be - to work with them," Hunt said.
The city's business licensing policies are convoluted and include more thatn 200 different regulatory fees. Until the City approved license increases last year amounting to about a 20 percent hike, the fees hadn't been raised for decades.
"There was an eclectic collection of fees imposed for legitimate reasons over decades," Hunt said.