Economic Climate Adds Urgency to Collection Efforts
County government has been described in a variety of ways:
v An arm of the state…
v The government closest to the people…
v An instrument of public service…
When it comes to the Governmental Collectors Association of Texas (GCAT), county government is defined in one word: business.
“If we are not able to pay for ourselves, then our business is failing,” declared Tia Finney-Davenport, collections manager for Dallas County and president of GCAT. “And right now, that’s where we are.”
Many counties across the Lone Star State are facing dwindling coffers accompanied by rising prices on everything from food and gas to materials and services, “yet we still have to run our local government,” Finney-Davenport maintained. “To do that, we have to collect revenue. And to do that, we have to stay on the cutting edge.” Consequently, a key mission of GCAT is “to bring together everyone who brings in revenue, to expose them to new technology and to educate them.”
For example, collectors are schooled on tactical approaches to use when seeking payment, such as the “strategic pause,” or knowing when to remain quiet during negotiations, and the use of the “repeated recap.”
These are simple techniques that the private sector has been using for years – coaching, development and scripting – that the public sector has not successfully realized, Finney-Davenport stressed.
GCAT, www.govcat.net, isn’t the only one focused on effective collections. Back in 2005, the 79th Texas Legislature addressed county collections via the passage of Senate Bill 1863 requiring counties of 50,000 or more to develop and implement a program to collect court costs, fees and fines imposed in criminal cases to include district, county and justice courts, unless granted a waiver. The recent U.S. Census placed an additional eight counties in the mandated category:
Cherokee
Hardin
Hood
Maverick
Rockwall
Rusk
Van Zandt
Wise
As of March 2011, 77 of the 78 cities and counties mandated under the 2000 Census figures have fully or partially implemented a collections program, with one county receiving a waiver. These programs have yielded approximately $85,206,028 in additional state revenue and approximately $255,618,085 since inception in 2006, according to the Office of Court Administration (OCA) of the Texas Judicial System. Additional state revenue for fiscal year 2010 was $17,652,549, and additional local revenue was $52,957,646.
Estimated Additional Revenue
Generated by Mandatory
Collection Improvement Programs
State
Fiscal Year
State
Local
Total
2006
$5,235,455
$15,706,365
$20,941,820
2007
$21,150,486
$63,451,458
$84,601,944
2008
$21,332,823
$63,998,469
$85,331,292
2009
$19,834,715
$59,504,147
$79,338,862
2010
$17,652,549
$52,957,646
$70,610,195
Total
$85,206,028
$255,618,085
$340,824,113
The estimated additional revenue data for the period 2006 through 2010 for the
required/mandatory cities and counties is based on revenue reported to the Comptroller,
information obtained from the pre-mandatory collection rate determinations conducted by
the Comptroller, and conviction (including deferred adjudications and deferred
dispositions) statistics reported to OCA by the courts or clerks.
Everyone is at or near full implementation, said Jim Lehman, collections program manager with the OCA, “and we are seeing continued growth and improvement.”
The mandated collections programs must:
conform with a model developed by the OCA designed to improve in-house collections through application of best practices; and
improve collection of balances more than 60 days past due, which may be implemented by entering into a contract with a private attorney or public or private vendor.
Affected counties are audited for compliance by the Office of the Texas Comptroller, and counties that do not meet the requirements may lose a percentage of fees collected.
The OCA's Collection Improvement Program is a set of principles and processes for managing cases when defendants are not prepared to pay all court costs, fees, and fines at the point of assessment and when time to pay is requested, Lehman said.
The 10 key elements of the program are:
1. Staff or staff time dedicated to collection activities. This may include county or city employees or contract employees.
2. Expectation that all court costs, fees and fines are generally due at the time of sentencing or pleading.
3. In most cases, defendants unable to pay in full on the day of sentencing or pleading are required to complete an application for extension of time to pay.
4. Application information is verified and evaluated to establish an appropriate payment plan for the defendant.
5. Payment terms are usually strict (e.g., 50 percent of the total amount due must be paid within 48 hours; 80 percent within 30 days; and 100 percent within 60 days).
6. Alternative enforcement options (e.g., community service) are available for those who do not qualify for a payment plan.
7. Defendants are closely monitored for compliance, and action is taken promptly for non-compliance. Actions include telephone contact, letter notification, and possible issuance of warrant.
8. Development and implementation of a plan designed to collect seriously delinquent cases including contracting with a private attorney or a public or private vendor after in-house collection efforts are exhausted.
9. Application of statutorily permitted collection remedies, such as programs for non-renewal of driver’s license or vehicle registration.
10. Issue and serve warrants, as appropriate.
“OCA staff will continue to assist cities and counties interested in developing a Collection Improvement Program on a voluntary basis at no cost to the city or county,” Lehman said. “In fact, this is part of our statutory responsibility.”
Angelina County falls under the state mandate, said Delayne Taylor, director of the Angelina County Collections Department. One tool three of the county’s justice of the peace precincts have used to facilitate efficient collection is third-party payment processing.
Some people work for companies that administer payroll on a bank card, Taylor explained.
“In fact, more and more companies are using this format,” she added, “and more and more people want to pay with their bank card.” Consequently, these JP precincts have contracted with Official Payments to allow for electronic payments of fines and fees.
“Otherwise, we take cash, money orders, or cashier’s checks,” Taylor said, “as personal checks have a tendency to bounce.”
Like Angelina County, Dallas County is under the state mandate and has developed an in-house program; however, some of the Dallas County courts have opted to utilize a private vendor, as well.
Outsourcing Collections
Counties who do not have the manpower or resources to develop an in-house collections department may want to consider outsourcing, Finney-Davenport suggested. According to state law, a 30 percent fee can be assessed on a fine or fee, which is the firm’s payment for collection.
Clay County took this step several years ago, said Justice of the Peace Jim Humphrey. The county has turned its collection efforts over to Perdue Brandon Fielder Collins & Mott‚ LLP.
“Collections became so time consuming,” Humphrey explained. “I have a small county, and we don’t have the time. This has just freed up our staff tremendously. It has been excellent.”
Cameron County began its search for a vendor once the Texas Department of Public Safety did away with their warrant data bank some eight years ago and stopped executing pending warrants on citations that were overdue in court.
“We had an urgent need to look elsewhere,” said Cameron County Pct. 5-1 Justice of the Peace Sallie Gonzalez.
Her precinct utilizes Graves Humphries Stahl, Ltd. (GHS), which has “made this office very up-to-date with regard to collections,” Gonzalez maintained.
The discontinuation of the DPS program also prompted Grimes County Pct. 3 Justice of the Peace John LeFlore to pursue a private vendor.
“This left all of us with no ability to collect from out-of-town addresses,” he explained.
The county approved a contract with McCreary, Veselka, Bragg & Allen, P.C., “and this has increased our collections by a large margin, helping the entire county,” LeFlore underscored.
McLennan County signed a contract with Linebarger Goggan Blair & Sampson, LLP, to collect for all of its county offices, and also noted a countywide benefit.
The increased revenue “has enabled McLennan County to keep taxes lower through the years,” said McLennan County Judge Jim Lewis.
Collect and Keep
When it comes to collections, whether in-house or outsourced, county officials are continually challenged by state efforts to claim a larger share of fines and fees collected on the local level, so much so that the County Judges and Commissioners Association of Texas has passed the following resolution:
County Fees and Fines
WHEREAS, county fees and fines are a traditional source of funding for the support of local law enforcement, county detention facilities, and the court system; and
WHEREAS, counties have no other available sources of revenue except the over-burdened property tax; and
WHEREAS, the State of Texas has invaded these traditional county revenue sources by creating additional fees to be collected at the county level and forwarded to the state comptroller for state purposes;
NOW, THEREFORE, BE IT RESOLVED that the County Judges and Commissioners Association of Texas requests that all fines and fees collected at the county level be retained by the county for local budget needs.
“We have to be pro-active instead of reactive,” Finney-Davenport emphasized. “We can’t just sit back and wait.”
With counties across the state meeting the statutory mandate and stepping up collection efforts voluntarily, more and more fines and fees are finding their way into county coffers. Now if only the state would let them stay there. H – By Julie Anderson