Council voted to retain Robert S. Segal, CPA PA of High Point to perform what was termed an “expense reduction and revenue enhancement program.”

City of Roxboro Finance Director Jimmy Overton explained to council that, through the program, the Segal firm will research revenue paid to the city from utility companies for possible errors. If Segal’s audit finds errors, the city stands to collect any unpaid revenues.

Overton explained that the program will not cost the city any money up front. In fact, he said, the accounting company works on commission. The commission fee, Overton added, is steep at 50 percent, however, the remaining 50 percent the city would receive if unpaid monies are found would be money the city doesn’t currently have.

“I do think there is additional revenue out there that we could obtain,” Overton said. “My recommendation is to hire them to try and get some additional revenue.”

Overton explained that cities should be concerned about how utility companies determine gross receipts within municipal boundaries.

He added that cities with a history of annexation should be concerned since any utility customer that is not properly coded within the city’s boundaries results in a loss of revenue for the city.

“In fact, the lost municipal revenues is approximately equal to three percent of the utility company sales to each miscoded business, industrial and residential customer,” Segal wrote in a memo to Overton.

Segal explained in his memo that utility companies, such as natural gas and electric companies, are required to “collect a utility franchise tax, based on the company’s taxable gross receipts.

“The utility companies remit the tax to the North Carolina Department of Revenue with a report of their gross receipts from sales within each municipality,” Segal added. “The Department of Revenue then distributes to those municipalities the franchise tax on sales within that jurisdiction. The key is having those sales properly coded to the municipality.”

Overton emphasized that Segal only receives payment on “additional revenue we receive.

“They get paid only if we receive payment,” Overton added.

The audit to be performed by Segal will include a review of books, records and maps used by the utility companies for coding purposes within the City of Roxboro, Overton said.

“It sounds like we’ve got everything to gain and nothing to lose,” Councilman Sandy Stigall commented after voting in approval of Councilwoman Merilyn Newell’s motion to hire Segal.