Vendor wanted payback from deadbeat city

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Philadelphia City Hall

BACK IN JUNE the DoALL Company of Wheeling, Ill., shipped an industrial bandsaw to the city's Water Department office at 4300 Ford Road. It sent a bill in July, thinking the city would pay in 30 days or less, as promised.

Seven months later DoALL was still waiting to be paid $14,135 for the machinery, accessories and shipping. In frustration, late last week DoALL attorney Charley Thomson starting faxing Council members and others to ask why the city doesn't pay its bills promptly, why it is a municipal deadbeat.

The letter calmly outlined the problem, but anyone with an eye for it could tell that while Thomson was typing, he had duct tape wrapped around his head to keep it from exploding.

"We've been told payment is delayed because of a tax issue between our company and the city" but no one "has been able to tell us what the issue may be, or the dollar amount," Thomson wrote.

After I obtained a copy of his fax, I spoke to Thomson on Monday.

All he knew, he told me, was that the city put a tax hold on payment because DoALL seemingly owed the city money. Located in suburban Chicago, the family-owned business had a presence here in Frankford until it moved in 1995.

"They should send us an invoice and we'll pay it," Thomson told me, adding that he was unable to get answers as to how much was owed and why. That ignited a sublime mixture of exasperation and frustration.

I wasn't the only one to get involved on Monday. First deputy city controller Bill Rubin cut through the red tape and confusion to assure Thomson the check would be mailed next week. Until Rubin got involved, it seems no one had the knowledge, interest or authority to act.

"From Aug. 1 all the way through there wasn't anybody who said anything to the controller's office or revenue - or none that we're aware of," Rubin told me.

Well, maybe not the controller's office, but Thomson produced emails, copies of letters and phone logs listing DoALL attempts to shake the city out of its stupor starting in October. DoALL started with the Water Department, which received the bandsaw. Maintenance Supervisor James Kirn emailed Thomson that he forwarded the bill to the Finance Department.

The Finance Department put the hold on payment not because back taxes were due, but because of a peculiarity within the city tax structure, it was later learned. Before the city would pay, it needed to be assured that no one from DoALL did any work installing the bandsaw in the city. If someone had, the worker would be liable for the city wage tax for any days worked here.

That's what Rubin was able to figure out. Once DoALL told the city it just delivered the bandsaw and nothing more, payment was authorized.

"It might be easier to collect from a person in Venezuela than from the city of Philadelphia," Thomson said.

That's unfair.

To Venezuela.

During the state budget crisis in 2009 - stop me if you heard this one - the city suspended payments to many of its vendors to avoid running out of cash.

Things have improved since then, but are far from perfect.

Dun & Bradstreet produces a credit-worthiness trend chart with marks from 0 to 100. The score is based on promptness of payment, with 70 being an "industry benchmark," meaning a passing grade.

For the past six months Philadelphia's score has been in the low 60s, barely passing.

How much of that poor rating is due to bureaucratic complexity or incompetence? And what is the city doing about it?

 


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