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ISD says: ‘Shame on us’ Snafu let restaurants duck inspection fees

ISD says: ‘Shame on us’
Snafu let restaurants duck inspection fees
By Richard Weir | Tuesday, March 8, 2011 | http://www.bostonherald.com | Local Coverage

ON THE CASE: The Inspectional Services Department ceased to file paper records of restaurant sales figures until the Herald contacted Boston Corporation Counsel William Sinnott, above.
Photo by Christopher Evans

A cascade of errors in city record-keeping allowed many of Boston’s nearly 1,300 takeout restaurants to avoid paying accurate health inspection fees for four years — potentially costing the Hub hundreds of thousands of dollars, a Herald review found.

“Let me start with something that I don’t usually say to reporters to begin an interview, and that’s ‘thank you.’ You’ve identified a problem,” said Inspectional Services Division Commissioner William Good. “We are going to go back and clean it up.”

Under city ordinance, takeout restaurants that gross $200,000 or less pay $200 in ISD fees, with fees rising to $1,200 for those that gross $3 million or more. But since 2006, the department failed to require businesses to submit documents verifying sales; did not keep paper records when they were submitted; and, in some cases, mailed forms preprinted with a minimum $200 fee owed — even to businesses that had historically paid far more.

“I think it’s a snafu,” Good said. “Shame on us.”

The agency has taken swift action since the Herald began its inquiry, sending out a letter informing takeout eateries that they have to submit a federal or state tax return or a sworn statement from a company official verifying gross sales.

ISD also has launched a sweeping review of its fee collection process — discovering, for example that the company that runs 60 food and beer concession stands at TD Garden had never submitted sales records. As a result, it has been paying minimum fees for years, shortchanging the city $11,000 annually, according to ISD.

“We weren’t asked to” submit the documents until last month, said TD Garden spokeswoman Tricia McCorkle. The city is collecting updated fees, and McCorkle said the company has fully complied with ISD’s requests

In other cases, even million-dollar eateries received the forms preprinted with a $200 fee.

“We should have left it blank, instead of putting the minimum fee and saying you’ve got to correct it if it’s wrong,” Good acknowledged.

The Souper Salad at 3 Center Plaza saw its longtime $700 fee — for gross sales exceeding $1 million — drop to $200.

“To the best of my knowledge, they didn’t ask for (documentation),” said owner Larry Reinstein.

Even when eateries did submit sales figures, paper records weren’t filed after 2007, when ISD switched to a computer system, said Assistant ISD Commissioner Thomas Goodfellow.

“We reviewed them and then recycled them,” Goodfellow said. “It’s a lot of work, doing all that filing. Each year when the bills came in, the clerical staff would spend many hours filing all the forms.”

The filing recommenced after the Herald contacted Boston Corporation Counsel William F. Sinnott to ask whether ISD had violated public records laws by destroying the documents.

“Since your inquiry, the city of Boston Law Department has been in discussion with Inspectional Services,” Sinnott said. “The law department and ISD agree that . . . such documents will be retained and available to the public.”

Article URL: http://www.bostonherald.com/news/regional/view.bg?articleid=1321725

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