How O'Fallon, Illinois Recovered $250K Annually From Missing Utility Taxes

An Additional $250K Each Year

Thousands of address errors and a stubborn utility provider was costing this Southern Illinois community big.

Located just outside St. Louis, O’Fallon, Illinois is one of the fastest growing communities in the region. It’s all due to the expansion of Interstate 64 in the ‘90s. As commuters into St. Louis and nearby Scott Air Force Base discovered O’Fallon’s safe streets and quiet way of life, the demand for homes escalated. Builders responded by developing dozens of subdivisions throughout the area featuring bucolic names such as Hearthstone, Oak Tree Estates, and Quail Meadow.

As O’Fallon’s civic leaders helped shepherd and shape the growth of this community, the demand for infrastructure and capital development were significant and local-government coffers were low. For such a rapidly growing city filled with new residents and businesses, the amount of tax dollars flowing to the city didn’t add up.

Its finance team suspected that the issue had to do with incorrect records and lack of transparency. Read on to find out how O’Fallon recruited help to find—and fix—these challenges.

A Common Challenge Uncommonly Difficult to Solve

O’Fallon’s problem is not uncommon: a city, due to its proximity to transit, highways, or a major employer, annexes land to support the development of new housing. But tax records aren’t updated with the new addresses so local governments get the short end of the stick. When local governments investigate, payers stonewall them—especially utility companies.

Further complicating this issue is that local governments of all sizes tend to run such lean operations that they lack the staff and staff time to conduct comprehensive revenue reviews that identify remittance issues, work with recalcitrant payers, and reclaim revenues owed the municipality. Utility companies are growing larger and larger through mergers, and their law departments have followed suit. It’s virtually impossible for a municipality to take on a major utility, get effective answers, and secure the revenues it is rightfully owed. Since that’s exactly who O’Fallon needed to take on, it had an extra incentive to team up with a seasoned firm with deep experience navigating major utility companies.

Finding an Experienced Partner

Enter Azavar. O’Fallon’s municipal leaders decided that partnering with a private firm was a smart approach. With more than 25 years of experience helping 400+ communities across America take control over their local finances, our firm was an ideal partner for O’Fallon.

Our team of local-government revenue experts needed to act quickly as legislation passed by the State of Illinois limited the city’s window to claw back missing tax revenues.

An added bonus? Because Azavar works on a contingency-fee basis and only collects payment if we find funds. O’Fallon didn’t need to front the costs of an expensive consultant without any idea if the city would see a dime.

A Careful Approach

We got to work on behalf of O’Fallon by first conducting a comprehensive revenue review to uncover the extent of its utility-tax remittance issues. Utility companies like Ameren don’t make this easy and rarely share data. However, by applying proprietary geocoding software to quickly pore through vast quantities of taxpayer data, we uncovered more than 2,600 incorrectly coded addresses that had not been remitting taxes—sometimes for years, before annexation into the city’s boundaries.

Ultimately, these addresses added up to an additional $250,000 in revenues each year for O’Fallon.

More than Money

Our team worked diligently to correct these errors in utility provider Ameren’s database. Going forth, Azavar helped O’Fallon shape a protocol for making sure that addresses acquired through annexation are appropriately recorded with utility providers, ensuring correct assessment and remittance of tax payments in the future.

Through O’Fallon’s partnership with Azavar, it is experiencing additional benefits beyond an extra quarter of a million dollars each year. The comprehensive review has connected O’Fallon leaders with rich data that puts it at an advantage as it renegotiates each utility’s franchise fees

Plus, local leaders are able to clearly demonstrate how diligent they are being with public funds, turning over every rock before passing additional fees, fines, or levies while still providing exemplary service to residents and businesses. As a reflection of the City's fiscal responsibility, rating firm Standard and Poor's raised O’Fallon’s bond rating to an extremely strong AA.

What About You?

If your community has dealt with rapid expansion or annexation, you might be in the same position as O’Fallon. Partner to Azavar to discover any errors in your address coding, utility rolls, or franchise fees. As the local-government revenue experts, we bring deep expertise to the table. And with our contingency-only fee model, it never hurts to check.

Contact our team today to learn how your community can benefit from Azavar’s 360-Degree Revenue Cloud, a complete look at potential sources of revenue leaks.