County Collection Efforts Reap Big Dividends
The collection of fines and fees is fast becoming a preferred method of increasing county revenues without increasing taxes. In addition, such programs bring the added benefit of improved compliance with court orders.
Counties can opt to set up an in-house collections program or can hire a law firm to handle their county’s collections.
Michelle Howell, client relations manager for McCreary, Veselka, Bragg & Allen, P.C., described fine and fee collection as the “sleeping giant.” In the past few years, more jurisdictions have come on board because of the potential revenue impact.
Experts estimate that counties can recover anywhere from 5 percent to 50 percent in court fines and fees. Some counties report even higher percentages.
In 2003, some $400 million in fines and fees went uncollected in Texas, said Russ Duncan, assistant collections specialist in the Office of Court Administration, which provides training/support to courts. Broken down, that would mean every county could have $1.5 million, each city $450,000, each court $149,000, and each judge $129,000.
Currently, 43 counties have their own in-house collection programs, developed with assistance from the Office of Court Administration. Countless others work with law firms to handle collections for their county.
When beginning an in-house program, counties should go through an evaluation process, Duncan said. That involves determining how much potential revenue is out there, developing a plan, and then making it work.
Every county is different, he said, and must consider their needs and their abilities in creating a program.
Montgomery County is no stranger to collections, having developed a program in 1997. Commissioner Ed Chance said the county realized it was missing out on some $1 million to $1.5 million in fines and fees.
The program was needed, he said, because the county essentially had no accounts receivable, or no one physically collecting fines and fees. Having someone working with the courts to make payment arrangements is quite beneficial, he said.
Nadine Jenkins, director of collections for Montgomery County and president of the Governmental Collectors Association of Texas, said the county’s program has evolved over the years. What began as a means for judicial collections now has expanded to handle receivables for any county department, such as road damage and convention center rental fees.
The collections department also handles the county’s alarm program, which was designed to lower the number of false alarms through a fine system, and the county’s failure-to-appear program, which denies driver’s license renewal to citizens with outstanding fees.
Jenkins originally was the lone staff person in the department, but now has a staff of 10, including a warrant officer and collectors, to handle the 2,500 or more cases annually. The collections pay for the operation of the department and pump some $2.5 million into county coffers each year.
“Collections is the smartest thing any governmental entity can do,” Jenkins said. “Taxpayers have a right to know court fees assessed are coming in.”
Cooke County is in the midst of a six-month pilot collections program. The program is looking at collecting current fees, as well as old fees. In fact, in the first month, the county collected on a 30-year-old case.
Bill Freeman, Cooke County judge, said the county, after attending a seminar on collections, became interested in setting up its own program to increase compliance with court orders and to collect lost revenue.
“As tax dollars shrink, we had an active desire to collect what was owed,” Freeman said.
Each month, the revenues are growing, he said. With continued success, the commissioners court likely will fund the program for the rest of the year.
The program also is a boon to the court staff, Freeman said, because they don’t have to act as financial officers. The judge determines the fine, and the compliance officer follows up.
Melissa Williamson, court compliance officer for Cooke County, said those who have committed crimes have an obligation to pay fines as part of their punishment.
“If we stay on them, eventually they’ll step up and do what they need to do,” Williamson said.
Having staff dedicated to collections is a plus and relieves that burden from the county clerk’s office.
“We’re here to help them,” she added.
Williamson called collections “diligent work” as every lead must be followed to track someone down. To be effective, Williamson said a county needs access to the Internet for search engines and computer access to files.
“A county has no way to lose with compliance or collections,” Williamson said. “Taxpayers gain a better view of the county because they see the county taking care of its responsibility.”
El Paso County began its program in 1998 and handles only current cases.
Ricardo Rocha, collections manager in El Paso County, said his staff of 13 handles about 200 people daily. Of those, about 88 percent set up a payment plan for paying their fines and fees.
Rocha said open lines of communication are necessary to make a county’s program work.
“The pipeline of information must flow both ways for success,” Rocha said.
Many counties do not want to dedicate staff to an in-house program or don’t have funds to support such a program. Or a county may simply choose to put this task in someone else’s hands. In these instances, a county contracts with a law firm to collect delinquent fines and fees.
According to state law, a 30 percent fee can be assessed on a fine or fee, which is the firm’s payment for collection.
The first step in setting up a program with a law firm is to make sure a county has export software that will allow the transfer of data from the court to the law firm. Acquiring software may require some expense for the county.
Once software is in place, a law firm usually will work with court personnel to integrate court policy and law firm procedures. Howell said this task of training court staff to work with a collections firm generally involves education because the concept often is new to a court.
Most programs, similar to those in-house, involve letter writing and phone calling to reach a defendant.
Mike Darlow, a partner in the Houston office of Perdue, Brandon, Fielder, Collins, & Mott, said in many cases a defendant just failed to respond, and the collections program aims to “coax them” to settle, whether by paying the fine or by going before a judge to be declared indigent or allowed to do community service.
One difficulty in collecting fines and fees, he said, is trying to find a defendant. In many cases, they may not be local residents. Perhaps they received a speeding ticket on a trip through the county. Still others fail to update their driver’s licenses and are hard to track down.
Once programs are in place, the county’s involvement generally involves transfer of data and receipt of payments. Some firms also work with constables to serve warrants to those who fail to fulfill their obligation to the court, should a county opt to arrest them.
William A. Thompson Jr., Lamb County judge, said his county recently signed a contract with a law firm to collect fines and fees as a matter of necessity.
“Rural counties need every dollar owed to us,” he said. With so many unfunded mandates, counties have to capture all monies available just to maintain operations, he added.
Collections, Thompson said, are a matter of fairness.
“Those who pay are discriminated against if we don’t collect from all who owe money to the county,” Thompson said.
Lamb County, like Bell County, didn’t want to spend any of its own money to collect fines and fees. That prompted their decisions to hire out.
Tim Brown, Bell County commissioner, said his county has had a program in place for several years. He urged other counties not to dismiss this potential revenue stream; unpaid fines and fees probably are worth going after.
The experts agree that a collections program – whether in- or out-of-house – is a good idea for any governmental body.
Jay Garrett, partner and director of fines and fees for Linebarger Goggan, Blair & Sampson, LLP, said a county can reduce the backlog of cases that clog a court’s docket in addition to bringing in revenue.
Duncan said, “If you do anything, you’ll get results. No one backs out once they get started.”