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News : Delco Files Suit Against 19 Telecoms
Middletown, DE, June 1, 2015 -- Delaware County is accusing 19 telephone agencies of violating state law for failing to collect and remit $41 million in 911 call fees. A lawsuit was filed Monday.
"We have a responsibility to our taxpayers (to ensure) that the laws are fair and enforced," said Mario Civera, county council chairman.
Attorney Joshua Wolson with Dilworth Paxson, filed the dispute in county court, claiming companies such as Verizon, Comcast, AT&T, CenturyLink Communications and Earthlink Business avoided billing, collecting and remitting emergency call service fees back to the county per state law.
The companies in question are accused of "misrepresenting" landline totals to provide discounts to its commercial customers. Recouping six years worth of claimed lost revenue might avoid significant property tax increases.
Officials said the underbilling practice is used as a competitive marketing ploy to provide discounts to large companies, but taxpayers ultimately pay the bill price, covering a gap in costs through property tax revenue.
In Delaware County’s case, 71 percent of active and voice-over IP lines are not billed for 911 fees. Out of roughly 811,698 active phone lines in the county only 230,881 lines have a $1 per line per month 911 surcharge. It translates to a $6.9 million difference in funding under the current law.
The county used $7 million in 2014 general fund dollars to operate the emergency call center. To cover growing costs, the county requested $9.4 million in E-911 funding from Pennsylvania Emergency Management Agency, with an expected response to fall $4 million short of the submission.
Civera said the county has "clear evidence" to prove $41.4 million in uncollected fees are owed to the county.
"The county and the taxpayers should not have to supplement that gap," said county councilman John McBlain.
Pennsylvania’s law currently enforces a $1 per line per month charge to fund emergency center operations. Legislators and emergency service experts say the $1 fee falls under a 25-year-old legislation that’s failing to match growing financial demands of technology.
One lawmaker questioned
"I would assume that if PEMA truly believed that the telecommunications companies were not paying or collecting the proper amount . . . PEMA would have demanded an audit," said state Rep. Steve Barrar, R-160 of Upper Chichester.
He said it’s possible these companies confused the discount rate offered under current law with nonpayment of surcharges.
Barrar pushed legislation to modernize the current law while establishing a flat $1.65 charge. The bill made its way through the House and onto the Senate with little opposition from House Democrats.
The fee increase is expected to bring in an additional $326 million per year for the commonwealth. It’s the funding formula that has many concerned about the future distribution of wireless 911 fees. Unlike landline fees collected and sent directly to the county, wireless fees bypass the local government and head straight to PEMA for distribution.
Amendments are striking the E-911 bill in Harrisburg to ensure counties in dire need of additional funding for emergency center operations have a fair stake in its distribution.
So far, the Senate has yet to pass the legislation on to Gov. Tom Wolf.
One amendment provides PEMA expanded power to perform audits, something county officials felt was absent enough in the oversight process to take action.
Roger Schneider, founder and president of Phone Recovery Services, a phone data analysis agency based in Alabama, was tasked with looking at countywide phone records and bills to determine how many lines are charged a fee. He said the unlawful discounts to businesses often cause an increase in property taxes to help a governing body fund emergency call center operations.
The company is working on a contingency basis and won’t charge the county unless the surcharges are acquired.
McBlain expects the lawsuit to end with a positive balance in the county’s emergency services budget and predicts a future decrease in tax dollars as a result.
Posted by Veronica Silva Cusi, news correspondent
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About Delaware County:
Delaware County, colloquially referred to as Delco, is a county located in the U.S. state of Pennsylvania. With a 2010 census population of 558,979, it is the fifth most populous county in Pennsylvania, and the third most compact.
Published: Wednesday, June 3, 2015