Travis County Commssioners Court
August 19, 2003
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Item 37
37. Consider options and alternatives in the collection of fines and fees, and take appropriate action.
>> judge, I -- -- I basically brought this up because of the fact that we were looking at a -- I need the auditor and all of the other folks that -- that are involved with this and have been contacted, if y'all don't mind coming to the table I surely would appreciate it. I was looking at -- at all the fines and fees that have been laying around here, around Travis County for quite some time. I had a chance to visit with susan fatara's office, don, I guess those same folks have talked with you, Commissioner Daugherty. On this particular item. But the -- the question, the problem is that we had -- that we had a long-term fines and fees that have been sitting around here with Travis County for -- for quite some time forks a number of years. And -- for a number of years. Everyone here should have received some backup in regards to this. So if I can have a representative from the county auditor's please to come up to the table.
>> [indiscernible]
>> pardon me?
>> [indiscernible] is on her way down, Commissioner. She was in the middle of another meeting, had to go up and get her back. She's going do to -- to be down here in one second.
>> until she get here, there was information that -- that was shared with each and every one of you. As far as -- as far as fines and fees, uncollectable amounts of money over a long period of time. Here in Travis County, I guess 20 years or more. Of course that basically equated to millions of dollars. If you can share the information that you shared with Commissioner Daugherty and I get the Commissioners court, also. Could you basically walk through this particularly with me, briefly, the outstanding uncollectables, I guess, amounts of money, fines and fees and also those particular amounts of money that -- that are -- v not been collected to the different departments such as the -- as the district clerk, others within that particular -- could you basically walk us real briefly through this.
>> sure. Did you want to start with tax receivables.
>> especially the long term. A little more than $15 million. So that would be the one that -- that I would be interested in. So could you walk us through that to see how -- how we -- we had the total amount of $15 million of, go through that first, and then the others we can look at as far as the departments that --
>> okay.
>> okay, thanks.
>> what we did on this is our office handles the financial recording of it. But the reason that the operating offices were invited to attend to address this is that they are the ones that are familiar with what they can do and what they are doing and so the tax office, programs they are on their way over, to discuss that. But she can discuss the numbers, but -- but more than that, yeah, here's dusty. Come on up.
>> come on up on the table.
>> [indiscernible]
>> there's a schedule, in your packet, looks like that. It focuses on the [indiscernible] receivables. What we have on the schedule, we show not only the property taxes, the penalty and interest and enforcement fees, we call that all tax related receivables. We have a gross receivable of -- take all of those three and 37 million. The allowance for uncollectables is 10 million on that. And dusty you may want to explain how you come up with your uncollectable. We get these numbers from the tax office. To come up with the adjusted gross receivable, which is 26.8 million. We broke down that receivable into two pieces. What's called the allowance for long-term collections, that is what the county is going to receive, but it will probably be -- [indiscernible] 2005 and the part that is the net accounts receivable, the 11.4 million is what we are assuming is going to be received the rest of this year and in fy '04.
>> I'm available for questions, if you have questions. I really don't know what the agenda item is. Is that if you don't mind, my name is on this as well. This is a real simple thing for me. We have untold amounts of dollars that we have not been able to collect a number of them for -- for years past.
>> that is correct.
>> and, especially in the add volume lore recommend tax arrest -- ad valorem tax that we do collect most of our dollars, the fines and fees we have difficulty doing, that's the reason we have a fines and fees task force that we are looking at doing and getting to help us. The reason that I was anxious to put my name on this is that I think we ought to have a very special rule that says if something is greater than -- pick it, two years, that we haven't been able to collect it, then I'm interested in going out for an r.f.p. To find out is there somebody that wants to go out there and do that business. Because we know, you know, if you have been in the retail business, you have taken checks before, if you don't collect a check, I mean, a hot check within 90 days, well, you know, I mean, every day that it gets older than that, you might as well forget it. It's not worth you trying to get the mope. Effectively what we have here now. I realize some of these numbers are staggering, we look at 37 million but we also understand or I understand at least some of this goes way back. This is nothing more, as far as I'm concerned, than this court looking at some sort of a policy that says after 24 months or whatever the court would choose to buy off oh, where we would say we will put out an r.f.p. And we will find who wants to go after and to collect those things at whatever fee. Something out of whatever we would get is more than what we are getting at this stage. And, you know, it's difficult enough for this county to take care and stay on top of what I would call current and what I call current is probably anything within 90 -- I guess you could probably get me to 180 days, but I will guarantee if you haven't gotten money after six months, most like the people aren't at the address where you have them registered then I think that we expend more personal -- personnel power tying to go after those for -- than what we are going to get. So that's the -- I mean, I don't want anybody to read anything into this. This is not tricky. This is just saying let's find something that says if you haven't collected by this time, let's find a mechanism to say somebody -- there are some companies that will go after dollars and wherever they are owed us.
>> along with that,cy really need an explanation of why we don't have the money. But an example, the district clerk, we have over two million that has not been collected. Also -- [indiscernible] -- [indiscernible] the list goes on. Taxes are -- we have over $15 million that's been -- on our books in Travis County for a number of years. Long-term uncollectibles that go far back. If I was a bounty hunter, there was a bounty out there with this kind of money on it, I think that I would be pretty anxious to try to go and collect it. That's why I'm looking at. The -- really in essence if I was going to total all of this -- all of this -- total all of these figures up, we are talking about something a little less than $20 million, we are talking over $19 million of filing fees that for whatever reason may not be collectable, some of it may be collectable. I talked with john and I would like to -- if any of you have any comments that you would like to say, please step up to the table on this, because I don't want to miss an opportunity to get into -- from -- input from all of you that have money that we haven't collected as far as fines and fees. But the point is if there is anything that prohibits Travis County from looking into a possibility, an r.f.p., Not costing the county any money, or any person that would like to -- an egg -- an agency or firm trying to go out and collect this $19 million, if you are looking at here as far as '05, anybody prohibit that maybe for a fee --
>> are you saying could the county issue an r.f.p. To allow the individual who collected the funds to retain a portion of the funds collected ?
>> yes.
>> I think that's a possibility.
>> that is a possibility? And I guessworking with the purchasing -- purchasing agent I guess that would still have to go through a purchasing type of scenario as far as getting an r.f.p.
>> the purchasing office is set up for that function.
>> okay.
>> and I don't know if there are companies here in -- in Travis County or outside of Travis County that do these kinds of things. 50% of zero or zero, 50% of something is something. As hard as times are as far as us trying to balance the budget, the effective tax rate have gone up beyond the current tax rate of this year's budget. It appears to me that we need to try to get as many dollars on the table as possible to offset some of these things. This was some of the -- some of the recommendations that were brought by some of my colleagues and we have looked into the budget and figured out a way to try to reduce the tax rate, reduce the effective tax rate. It is coming down. I think this is maybe a long-term process, but I think that it's still just as effective if we can collect revenue up to -- fines and fees that are owed Travis County talenting a little over 19 million here. I want to hear what each one of you have to say if you think that it's appropriate at this time as far as your department that has this outstanding fines and fees that could still be collected. I think by doing nothing, you know, nothing ventured, nothing gained. But I think if there's a possibility for us to do something like this, someone out there may be interested in trying to collect $19 million that's owed to Travis County, they may still be interested like that. I think I would still like to hear from each individual department if you would have something that you would like to say in this particular regard as far as this particular initiative as far as trying to recapture money owed to Travis County and you got something to say, I would like to --
>> I would like to ask one question. We do centralized collections in which the moneys that you see here is just for Travis County only, that makes up probably less than 25% of what would be out there. Currently we collect it's all for one, one for all. If you collect a dollar, it's pro rated amongst the people that were on that tax bill. I'm assuming that you would have to have the approval of all of the other 70 something taxing jurisdictions that they would either be a willing to pay out or is Travis County willing to pay the total amount out of the collections that would be coming to them or this collector whomever it is, to collect the other moneys, I'm kind of lost, centralized --
>> seems to me come one a master interlocal, talking about all -- all money, right.
>> we are not talking about tax money, though, are we? [multiple voices] I thought it was just fines and fees.
>> a lot more than fines and phis.
>> okay. But I then even on taxes where other jurisdictions are involved, come up with an interlocal that I think would say basically we are going to initiate a new pilot trying to collect some of this old debt and if -- it will cost us, what we want to do is prorate the expenses the say way we would prorate whatever. My guess is that we are not collecting any of it right now, they would take pretty much the same perspective that we are. I think if we say look, this is money that really we have not been collecting anyway, I think we can collect more of it this way but it will cost a little bit, I think that they will agree with that. But the point is that we can do an interlocal with them, right, scwon?
>> certainly.
>> we --
>> certainly not stating that today. They are paying perhaps a rate for this to be done.
>> because their -- their interlocal that's we have right now is presumed that the county attorney is going to be collecting it at no fee.
>> yeah.
>> why don't we just take a minute per department up to a full minute. Maybe describing in your view what steps we can take at this time to collect some of this old outstanding debt.
>> that's what we are talking about right.
>> yes.
>> uh-huh.
>> we may want to put a definition on what we call old. I mean, is that 12 months?
>> judge, Commissioners I'm cecila burke the director of -- nult [multiple voices]
>> i've been in the collections business for a long time, taxes for many years and now child support. Commissioner Daugherty is absolutely correct. The older the receivable, the harder it is to collect. And you know we collect quite a few fees at domestic relations, our annual fee, of course, presents us the biggest problem. The small fee we send out bills, we send out delinquent bills, but we don't really have any statutory authority to enforce that fee by contempt. We did get legislation passed this past session, barbara cilly and I worked on that is correct it's not effective until September first. I would highly support turning my delinquent collections over to a private firm or centralized collections or whatever within the county to collect those delinquent fees. I would welcome that.
>> you support that?
>> pardon?
>> did I understand you to say that you would support that.
>> absolutely. I don't have the staff to devote full-time to it.
>> I understand.
>> if they could be turned over on to somebody else to collect, I think that it would be a lot easier, plus, you know, our fees are assessed against families who are involved in family hitation, there's a lot of emotion that goes with it. I think turning the delinquent fees over to a third party would help us tremendously. I think that it would up our collections are fees.
>> okay, thank you.
>> cecila when you say, this is not a dr meeting, but it is so interested I mean whenever you start looking at like your numbers. I don't know that, you know, percentage of collections, you know, against your dro budget is necessarily anything that means anything to me. You mean, because I don't know what that needs to be. Whenever I look at the top of the page, it says 2002 you collected $44,000 -- $404,000. I don't know. Is that $404,000 out of what was the total amount that should have been collected or -- I mean, whenever I read that, you know, in order to do the child support service that it costs one dollar a month per parent? I mean, I hope you're not billing that because the envelope and the stamp costs you more than the buck that you get if you got it all. I mean --
>> we bill it once a year.
>> so it's once --
>> we bill $12.
>> so you bill $12. And what percentage --
>> of people pay?
>> of people pay the $12 fee.
>> probably about 30%.
>> you only -- we only have 30% of the people that pay and they get a $12 a year bill from us?
>> that is correct. And our collection rate on that has gone down. The attorney general's office is getting ready, they have legislation passed they are going to be charging a $3 a month fee plus a $25 annual fee that they are taking off the top out of the child support. So that's -- you know, that's competition for us. It's getting harder and harder to collect. Our other fees, like attorney fees or guardian ad litem fees, first off they are much more substantial fees, it's pretty easy to set up for court and say we are taking you in for contempt of court, they can't pay fast enough. But this $12 fee, it's a fairly insubstantial amount of money per parent. You are right, the cost to collect it has to -- you can't spend a lot of money to collect this.
>> well, that's true. And what it really tells me is why even collect a buck a year, you are spending more money trying to get that $12 -- I mean.
>> a month.
>> which is that's absurd. That we would go through that -- go through that process.
>> that's something that we are considering. The code allows us to go up to $36 a year. We may want to consider either increasing that fee or just doing away with it.
>> if we can't collect is it a year, I can only imagine that we don't have a chinaman's chance of collecting $36 a year. So --
>> that's meant a positive way. [laughter]
>> I realize that you are not the one that's out there trying to get it. Somebody has got to come in -- don't you have to come into -- at least once during this process? I mean to stop.
>> not necessarily.
>> so you don't have to -- you all don't have to personally interface with somebody on this. Because I would say would you mind bringing four quarters with ya when you come?
>> it -- in a normal divorce, we may never see these parents at all. You know, their attorney may bring down the data sheet, we get a copy of the order from the district clerk's office, set up in our system, start sending out the bills for child support for the fees, we may never, ever talk to these people, they may never come to dro, they may never call.
>> if we are going to fine you, I have said this before, if we are going to fine you and don't have a mechanism by which to collect, I think that we are putting a person there to go through the process knowing that we are going to collect less than 30%, sometimes less than 10% and so we really ought to look at, even though there are some statutorilily, you know, mandated things that we are supposed to do, I mean, we have really got to rethink, you know, some of our fines and fees, if that is the case. I mean, I just --
>> you know, we have been discuss thank with the juvenile board the same issues about our whole entire fee structure and how we collect them and what do we -- what do we spend to collect.
>> eats? In terms of the fee that's we collect on behalf of the state of Texas, they pay the check, we get to withhold an amount and send the rest on to the state or send the full amount and reimbursed back to us. Unless you get something that's part of the order that when somebody is writing that child support check, it's an amount higher than we get to withhold and then you send on the rest through the registry, we are not going to have any authority or clout to be able to get things -- I am intrigued by what exactly is the change in state law come September that may give us more clout. What is that?
>> we will be able to enforce this fee by contempt of court.
>> what does that mean in -- in reality if.
>> it means that you could use all of the remedies that you use to collect child support. That would be wage withholding, jail time, suspension of your driver's license or your hunting and fishing license or your professional license or any of the remedies that you have available for the collection of child support.
>> 70% better get alert.
>> that's correct.
>> next. Thank you.
>> thank you.
>> they are looking at me. I'm michelle brinkman in the district clerk's office. We have been reviewing the outstanding court costs, if we would like to go with some sort of contractual arrangement where we would give up a portion of our fee his, we could collect fees even on civil that go to the state of Texas. So we would have to include them in any discussions that would be held on any kind of agreement where they would be able to lower their amount of fee because it's enough that I don't think we could absorb the entire amount of their proportionate share that you would pay to a vendor. Lots of the cases, the lion's share of the case that's we have on civil debt are delinquent in paying their court costs are tied to delinquent tax collection. It's not just the Travis County taxes, but there's also a lot of old state of Texas tax cases prior to about 1990, the state was required to file a lawsuit in district court here in Travis County in order to collect any kind of delinquent tax. This could be sales take it could be lick tacks, all kinds of things. When we looked at the data a lot of delinquent tax, delinquent court costs fell into the arena of court costs owed on tax collection cases back before 1990, since 1990 ad valorem or property tax cases that are outstanding about -- I think 35% of the receivables that we have in civil tie to these types of cases. In some of them the next largest group had to do with bond forfeiture cases that are outstanding or perhaps were taken to judgment but the person is still a fugitive from justice and as long as they are a fugitive from justice and most likely there's even an arrest warrant outsiding on the folks, we are not very likely to collect because we can't even get ahold of the person to put them in jail or to prosecute their criminal case. That's the next largest. We also have quite a few in the area of what you call seizure and forfeiture. When I tell you that sometimes we get lawsuits that say the state of Texas versus the 1998 corvette, that is in fact a seizure and forfeiture case where the government is able to go in and take over property or money that they identified that was use understand criminal activity and bring it into the government coffers in an effort to prosecute and fight crime. We have quite a few cases, in that vein. I don't even know who to charge to collect those court costs from those cases because there is no person out there. It had to do with a piece of property or money.
>> what do you recommend [indiscernible]
>> I'm sorry, sir.
>> what do you mean to try to collect some of this old debt, anything?
>> well, I think -- what we are willing to do is to go through the cases and identify those that you might have a pretty good shot at being able to contract out the collection and turn it over to somebody else. Other cases like the seizure forfeiture, bond forfeiture cases, we would probably not be putting in the pool of debt that we would contract out simply because we don't even have a minimal information as to how to locate the people in order to do the debt collection. There's some things that we have done ourselves, we have been billing on a -- 40 court costs, started that I believe in March, we have sent out about tee cycles of billings, we are able to bring in some money just by sending out the bills. I would recommend on those cases we first -- we have a two step process where we first make the effort of contacting them with the bill and see if they pay. In other words, we are going to cherry pick what can be cherry picked and then if there's no payment made on those, rfer those out. Has we think is likely for contracting, what we would recommend that we not even put in the contract. One of the concerns that I have about putting really hard to collect cases in the contract is that you are going to go out on r.f.p. If they see that they are really hard to collect and involve a lot of work, they might escalate the -- the cost or the percentage of the whole group of it as to what they would charge the county and -- and it may not be worth including --
>> [multiple voices]
>> 90%, 10%, something --
>> something. We want something back in return. Right now that's over 2 million that we are talking about here.
>> if you would want to include them, we can certainly include them or perhaps put them in a separate category so they could, you know, bid and -- in some sort of sliding scale structure.
>> I have a question in terms of process related to what -- how we are trying to scope something that we are seeking. I know over the city of Austin in terms of trying to get some of their municipal court fines and fees, same kind of thick. What they have is the ability to add on so that the full costs of this collection service is added on to the person at the end. The city of Austin is getting the full amount that they are owed. So I'm a little concerned when I hear things about this takes it off the top or some lesser amount. As michelle correctly stated, a lot of these things are tied in that we are one of many paiees along the way. Believe me the state of Texas is going to get 100% of their money in terms of we have to remit things that belong to the state of Texas. We don't get to say, well, you can send me five percent of yours. So I want to make sure whatever we talk about is that these things are added on costs that go to the person that fully owes the money and I onthat in terms of discussions that i've had of people saying i've got a nifty idea. They say we have to have a good data dump. I'm like what if we don't have a data dump. They are like we wouldn't touch this thing. They have no intention of going through paper. I know that we have done a lot of good work to try to get our records to a point that we actually would have a data dump that we could turn over to somebody. But what -- that seemed to be essential. They weren't going to go through old paper at all. That wasn't even --
>> I don't think that the state is going to have any more problems with this than we are. I mean, get on the phone and say, you know what, we current -- we are not collecting this mope. If we are the ones that are supposed to be collecting it and sending you all the mope. With you can't collect it. We are going to sit down and deal with somebody that is willing to go and take this. I think that you can find and put pencils on this --
>> state law usually has to be real specific believe me on property tax collections, et cetera, things that are authorized to do or not. We are. I'm very proud that we're the one county in the state of Texas that does in-house collections on property taxes and if you will look at the numbers, we collect 99% where others say this they are just as good as doing it because they write off old uncollected debt after five years. They write it off. So they can up their percentages to make it look good. Dusty, now by law, cannot ever say that a delinquent tax that is owed ever is written off. Ever.
>> next, now it's 10 minutes until 12 wrks he need to take one or two more items before noon. Let's take two more, try to figure out what the next step is. So this meeting will be productive, yes, sir. What recommendations do you have about collecting this old debt?
>> casey [indiscernible] Austin Travis County e.m.s. Financial manager and john is going to update you about what our current plans are and what we are currently doing.
>> good morning, Commissioners. In terms of the old debt the basic rose that the e.m.s. Follows is once we have exhausted everything that we can do in house, such as aggressive pursuing of insurance, we actually contract with two delinquent collection agencies, at 120 days we turn the accounts over to one of two companies, it's a split contract, we split two years ago, basically to generate competition between the two vendors. At that point they pursue through their whatever means the normal progression, letter writing. If it's not successful, they basically put a flag on a person's credit report. 80's negative rating there that stay there's for up to seven years. If a person never files for a loan, credit card, loan, refinances a mortgage, the negative credit report never comes into play. Currently we have out of our approximately $7 million in receivables, 80% at collections. That is 10 years worth of receivables, but 80% of it is at collection agencies.
>> so you are trying to work the old debt basically.
>> right.
>> where do we go from here. We have various departments that are affected clearly. What I'm hearing is they are ready to receive any innovative, creative idea, but there are various rules that come into play for various departments, other governmental entities, state of Texas, et cetera. And if we assume that nobody in the private sector will do this work for free, then we have to figure out a way to pay them. And a percentage of what is collected makes as much sense to me than anything else.
>> yes.
>> where do we go from here? Back on it next week. I don't see any way of getting around a working group. There's a task force looking at criminal fees and fines old and new. This seems to be more of a civil nature. But they do differently.
>> should we wrap this into the fines and fees task force.
>> I would love to see it go to a task force, come up with bullet point recommendations about what more can we do. Because the concept is wonderful, it's just beyond our desire we need to get very specific about what can we do, what shouldn't we do, what do we have authority to do and who has the authority to do it.
>> Commissioner Davis, do you --
>> I don't think they would work. I can think of a thousand reasons. Who is on that task force now? I wouldn't do that because I really think that we are talking about something a whole lot different. There's no way to get this done without a top manager in each of these affected departments being engaged. What I would do is put together another task force that just looks at the old stuff because it seems to me that a little research has to be done, what are the other governmental ents tees doing, what seems to be working, what is not working. Who is available is know on some of this especially the real property stuff, there are law firms that do nothing but this, my guess is that they would be interested -- that's not to say somebody won't be interested. I see basically a working group where we get top people from different departments, sitting down with you all, maybe Commissioner Davis, maybe bringing in -- bringing in somebody from the auditor's office has already been working on it. Yes.
>> so people like that doing it.
>> I --
>> I'm actually looking at waiting another couple of years, but this other task force just looking at criminal fines and fees, old and new, will be working the better part of '04 I think to try to -- to --
>> Commissioner Daugherty, you mind sitting on a task force with me.
>> not at all.
>> I think that's what we should do, judge, I think that it's a good recommendation.
>> okay.
>> because it need to be separate in my mind.
>> why don't we ask the departments here today and those who are affected to designate a top manager or the appointed or elected official who will serve on this working group. Let Commissioners Davis and daughterty know and if the rest of the court can help we will be happy to do it, right if.
>> is is that in the form of a motion.
>> I guess just directions. I think it ought to be brought back to the Commissioners court for a supreme blessing. Also so we will know who is on the task force.
>> john [multiple voices]
>> somebody available in the office to give some legal --
>> two weeks enough time.
>> I think that's --
>> two weeks is fine.
>> we will have it back on.
>> thank you all very much. Some of you came prepared to make elaborate presentations, we regret we didn't get to you today. Bring those to the first meeting of the working group. We will give you that opportunity. Now, moving quickly to two or three simple items. First, second?
>> is that the two weeks from today?
>> September 2nd.
Last Modified: Tuesday, August 20, 2003 8:52 AM