Collection Programs Boost County Coffers
As former president of the Governmental Collectors Association of Texas, Nadine Jenkins is an expert when it comes to fine and fee collection. As founder and current president of the National Governmental Collectors Association (NGCA), Jenkins has learned just how good Texas is doing.
“When compared to other states, Texas is ahead of the game where fine and fee collection is concerned,” said Jenkins, director of collections for Montgomery County.
Jenkins used to be a one-woman office. Today she directs a staff of 14 including a warrant specialist and collectors to handle the 8,700-plus annual cases in Montgomery County. Since the implementation of Montgomery County’s in-house collections program some 13 years ago, the county has noted a continual increase in collections. In fact, 2009 saw a boost of more than 25 percent.
“Each year, that number gets higher and higher,” Jenkins said. For example, total money collected from Oct. 1, 2008, through April 5, 2009, was $1,096,476.15. The total collected ending April 5, 2010, jumped to $1,438,380.53
Regarding specific departments, Montgomery County’s collection percentages include the following:
v District Court – 90 percent
v County Court – 83 percent
v Justice Court – 84 percent
v Juveniles – 86 percent
“This is with the recession occurring, so we have adapted or modified how we do our plans to the economic downturn,” Jenkins said. “This demonstrates that people do have the ability to pay.” The collections pay for the operation of the department, and efforts have pumped approximately $13 million into county coffers since the program’s inception in 1997. A cost analysis has identified that for every $1.00 spent, Montgomery County makes $17.50, or it costs $.06 of every $1.00 to fund the collection effort.
Montgomery County’s success has drawn attention from other states. In fact, the county has assisted counterparts from Louisiana, Michigan and Washington, D.C., who came to the county seat of Conroe to learn more about the Montgomery County Collections Program.
Jenkins said Texas’ overall success is due in part to a state statute mandating collection for certain counties.
The 79th Texas Legislature addressed county collections back in 2005 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.
As of March 2010, 77 of the 78 mandated cities and counties have fully or partially implemented a collections program, resulting in approximately $67,553,479 million in additional state revenue and approximately $202,660,439 million in additional local revenue for fiscal year 2009, according to the Office of Court Administration (OCA) of the Texas Judicial System.
Estimated Additional Revenue
Collection Improvement Program
For Required Counties and Cities
The estimated additional revenue data for the period 2006 through 2009 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 moving toward full compliance,” said Jim Lehman, collections program manager with the OCA, “and we’re very optimistic that we’ll see the results continue to grow.”
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.”
Jenkins cited the OCA as a “great resource” in developing a successful in-house program.
Once the U.S. Census is complete, Lehman expects some 15 new entities to fall under the collection statute.
“As the state grows and cities and counties grow, they then become part of the mandatory program,” he explained.
“Lubbock County is always looking for innovative ways to enhance our criminal and civil justice court system,” said Pct. 1 Justice of the Peace James Hansen.
About a year ago, the Lubbock County Commissioners Court elected to outsource collection cases to McCreary, Veselka, Bragg & Allen, P.C. The firm currently collects for two justice of the peace courts and for the district and county courts. According to state law, a 30 percent fee can be assessed on a fine or fee, which is the firm’s payment for collection.
Hansen served on the initial committee tasked with researching the possibility of outsourcing.
“My particular research area led me to contact approximately 50 Texas counties of small, large and medium populations,” said Hansen, who spoke with justices of the peace about their experience with collections firms.
“We use the OMNI program, an in-house collections office, and McCreary for our collections, as well as some in-court protocols I have established in my last 20 years as judge,” Hansen said.
Since McCreary came onboard, “I estimate they have brought in just under $90,000 for my court,” Hansen said. “They have collected more than double that for our other justice of the peace court in Lubbock.”
Hansen said Lubbock County has realized numerous benefits to outsourcing its collections.
“For the most part, the program is non-invasive,” he explained. “The biggest benefit is that they often collect the fines in full, or by payments, meaning my clerks have not had to expend paperwork time or hours on the telephone or in person in those cases.”
When it comes to the decision to outsource, Hansen recommended establishing a list of objectives and a committee assigned to research those objectives. He also advised contacting commissioners and judges who are clients of various firms to help decide which firm best fits the county’s needs.
Deaf Smith County began using Perdue Brandon Fielder Collins & Mott‚ LLP, in 2007, said Justice of the Peace Karen Foster.
“Since that time, we have cleared numerous cases averaging 40 cases per month,” Foster said. “We are not a large community, and this helps us out tremendously.”
Nacogdoches County has an in-house collections office that sets up collection plans, said Pct. 1 Justice of the Peace Kerry Williamson. The county contracted with Graves Humphries Stahl, Ltd., (GHS) to pursue the county’s delinquent cases.
“Previously, we had to do our own delinquent notices, or pre-warrant notices, out of our offices,” Williamson explained. “Now GHS sends out those notices for us, which saves us money on postage and materials. It also saves us a great deal of time.”
GHS also sent out notices for the most recent State Warrant Roundup, Williamson said. The county cleared up 81 cases in warrant status in 2009 during the roundup’s three-week period. In 2010 GHS sent out notices, and that number jumped to 151 cleared cases.
Val Verde County noted the outstanding debt in its justice of the peace courts and decided to do something about it, said Pct. 2 Justice of the Peace Joey Gonzalez. The county outsourced collections to Linebarger Goggan Blair & Sampson LLP in 2008. During the last fiscal year, Linebarger has collected $75,000 to $100,000 for the county.
“Every commissioners court needs to assess their own situation and maximize their collection numbers,” Gonzalez said. “If a county entity cannot commit to collect in-house, perhaps they should consider outsourcing.”
By Julie Anderson