A Suffolk auditor has found that Verizon owes the county $386,133 because it failed to pay part of the monthly 35 cent per customer surcharge on phone bills that help pay for town and county emergency 911 operations, said Comptroller Joseph Sawicki.
The review, covering the period from 2005 to 2013, found the company underpaid the county because it improperly added a 3 percent "incollectible adjustment" beyond the 2 percent administrative fee permitted by law.
"This 35 cent charge is critical to funding the county's E-911 system," Sawicki said. "All other phone carriers have acted in good faith to collect the tax money for the county." He said there are about 50 companies that collect the charge for the county and none has tried to use a similar loophole. The review of Verizon records came after the comptroller examined all E-911 fees last year and found the company had "erroneously" calculated its payments. Verizon in all has paid $12.04 million in E-911 fees over the eight years.
Frank Bayer, executive director of auditing services in a Nov. 22 letter, said, "We are unable to find any mechanism . . . that permits . . . a service provider to base . . . E-911 surcharges on billings adjusted for an uncollectible account factor as well as the administrative fee." He added the company could not provide "any names or addresses and amounts of unpaid surcharges."
Mark Scovic, Verizon's corporate finance manager in Irving, Texas, disputed the comptroller's claims in a Jan. 9 letter, saying since the company is "just a bill and collect agent, Verizon should only be required to pay what is truly collected from customers." He also claimed that it be "overly burdensome" to provide a list of nonpayers and what they owe and the county should accept the company's overall bad debt estimates.
Scovic added the statute of limitations only allows the county to collect for the past three years. He said the company forwarded a partial payment of $106,270 for the past three years because the company is unable to produce a list.
However, he said it is "questionable that Suffolk has suffered any harm" and it is "doubtful" the county itself could recoup payments, given the small amount of the monthly charges."We sincerely hope the county is satisfied with the enclosed payment and that this issue will now be considered closed."
Sawicki, however, sent a third demand for payment last week for the remaining $279,862, saying there is no time limit on recovering tax money. "I'm optimistic when Verizon realizes their error they will make full payment," he said.