Two years later, driveway permit billing problem still not fixed, costing Chicago millions: inspector general

Two years after Inspector General Joe Ferguson blew the whistle, the Chicago Department of Transportation is still forfeiting millions of dollars a year by failing to adequately bill and collect permit fees from commercial property owners whose driveways use the public way.

“It is becoming increasingly routine for departments to agree with OIG audits and then not make good on the implementation of recommendations they publicly committed to and, in the process, miss easy opportunities to provide confidence in government operations” and raise revenue, the departing inspector general was quoted as saying.

“Until corrective actions are fully implemented, the city will continue to experience revenue loss. … We urge the department to fully verify the accuracy of its driveway billing data, credit or reimburse corrected accounts, pursue outstanding debt and monitor permits at risk for non-billing or inaccurate billing.”

In July 2019, Ferguson accused CDOT of letting up to $1.5 million a year slip through its fingers by either inaccurately billing or failing to send bills to 6,713 holders of commercial driveway permits.

The inspector general’s audit further accused the department of forfeiting nearly $4 million more in annual revenue by failing to “actively pursue payment” of “at least 11,561 active permits” that were past due.

The “most common reason” for the failure to bill businesses for driveway permit renewal was that the property owner was “either unknown or disputed” and CDOT “had not researched and resolved the ownership question,” Ferguson said.

Since CDOT’s property ownership information was “unreliable,” the Department of Finance did not include delinquent driveway permit fees in the city’s standardized debt collection process, the inspector general said then.

Then-Acting Transportation Commissioner Tom Carney responded to the audit by promising to collaborate with the Department of Information Technology to “migrate driveway data” to a new, more reliable system.

Carney also promised to collaborate with the finance and law departments to “determine the most effective method for collecting” past-due driveway permit fees.

On Thursday, Ferguson released a second follow-up audit. It concluded that all promised fixes had been only partially implemented.

Although CDOT had “dedicated an entry-level staff member to reviewing and correcting driveway permit records,” that same individual was “terminated” in March. As a result, by April, CDOT had reviewed just 300 of 24,000 records as of April, the inspector general wrote.

“CDOT stated it has not yet begun to identify undocumented driveways, but will launch [a] … mobile application in summer 2021 that will allow staff to document such driveways as they are identified,” the follow-up audit states.

“CDOT estimates the remaining corrections will take more than two years.”

As of April, CDOT determined there were 19,333 driveway permits that, together, represented nearly $4.4 million in “unpaid fees,” the report states.

“Despite the creation of the Debt Collection Policy and Procedures, CDOT has not pursued driveway debt collection” and has “not yet incorporated driveway billing debt into the city’s overall collection process.”

CDOT spokesman Mike Claffey had no immediate comment on the second follow-up audit.

Two years ago, Ferguson noted the city transportation department had made and broken repeated promises to “modernize program software” costing the city “millions of dollars of otherwise reliable, predictable revenue.”

He bemoaned “inter-departmental finger-pointing” perpetuating a problem that has cost Chicago taxpayers millions. He called it a “lingering legacy of the historical siloing of City departments wrought by our political machine and patronage history.”

On Thursday, the departing inspector general made no effort to hide his mounting frustration with the slow-pace of corrective action.

“Sometimes, partial fixes yield partial benefits. Unfortunately, that is not the case here, in that fixing a part of the problem does not correlate to inroads to the adverse effects,” Ferguson wrote.

The driveway permit problem “requires a fix to the whole — which requires work, but it is not particularly complicated and is likely to yield immediate benefits to the city’s fiscal health.”