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HomeMy WebLinkAboutItem 04 - Municipal Court Fines and FeesMEMO TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROGER NELSON, CITY MANAGE MEETING DATE: FEBRUARY 5, 2002 SUBJECT: COLLECTION OF OVERDUE MUNICIPAL COURT FINES AND FEES RECOMMENDATION: City Council to consider approving an ordinance adopting a 30% fee for the collection of delinquent court fees and fines and authorizing the City Manager to contract with the firm of Linebarger Heard Goggan Blair Graham Pena Sampson, L.L.P. FUNDING SOURCE: Pursuant to authorizing legislation (Article 103.0031 of the Code of Criminal Procedure) this ordinance will establish a 30% add-on to Municipal Courts fines and fees which are older than 60 days and which will pay all the costs of collection incurred in this contract. BACKGROUND: Staff was recently advised of a change in State Law (Article 103.0031 of the Code of Criminal Procedure) which now allows a municipality to add on an additional 30% to Municipal Court fines and fees which are more than 60 days past due. This fee may be used to compensate a private attorney or private vendor for provision of collection services. In the past such collection fees would have been taken out of the fine or fee which was assessed by the court. Grapevine court has a high number of traffic citations due to the high volume of traffic flowing though the community on state highways and through DFW Airport. Many of the individuals receiving citations are not from Grapevine and live out of the area or out of state. Consequently, collection of overdue fines and fees is extremely difficult in many instances. The Municipal Court follows normal practices for notification of individuals and the Police Department has an extremely active warrant officer program, yet a high number of individuals ignore the court, avoid arrest, and "walk the ticket" without paying the fines. January 31, 2002 (4:30PM) Staff believes that there is a significant amount of revenue which could be collected and has looked at agencies which can perform this service for the City to supplement its effort. The Linebarger law firm specializes in collection of municipal court fines and fees and other government receivables. They have a superior reputation in the collection business and come highly recommended by other governmental entities. They are also authorized to make collections in all 50 states. This should help our receivables from out of state individuals. Since they specialize in collections, they are set up for electronic transfer of data from our court to the law office, which means no additional workload for City staff to be involved in the process. The necessary data is simply transmitted from the court to the appropriate place. All fines received from individuals will be sent to the City, including the 30% add on fee. The City will then keep 100% of its fine or fee and send the add on to the Linebarger law firm. If the City does not get paid, Linebarger does not get paid. The firm only collects on those citations that are paid to the City. The firm has recommended that our contract with them be made effective April 1, 2002. Staff believes that this service will be an important positive supplement to our current collection efforts. Staff recommends approval. WAG/cjc MC-collectionagm January 31, 2002 (3:34PM) LINEBARGER BLAIR PEN"A U SAMPSON', LLP The law firm of Linebarger Goggan Blair Pena & Sampson, LLP has assembled a highly qualified group of experienced attorneys and professional collection teams whose practice is dedicated solely to collecting government receivables. We collect hundreds of millions of dollars for our clients each year. • More than 25 years' experience in collecting government receivables • Over 650 dedicated professionals, including over 70 attorneys. • 32 offices, including Austin, Dallas, Houston, Jacksonville, Knoxville, Los Angeles, Memphis, New Orleans, Philadelphia, and San Antonio. • Annually file over 45,000 lawsuits, mail over 5,000,000 demand letters and make thousands of collection calls resulting in greater revenue for our clients. • Customized collection programs which are aggressive but fair. • Nationwide bankruptcy representation. • Industry leader in computer systems and software support. Since 1976, our sole focus has been collecting government receivables. We currently serve over 1,600 clients: ➢ Cities, Counties, Schools, Special Districts, and Appraisal Districts; School Property Value Appeals; ➢ Department of U.S. Treasury (we collect for all agencies except the IRS and Department of Education); $50 billion in debt owed to the United States government; ➢ Current Tax Offices. 1 4) Professional Services We offer turn -key collection programs ➢ Civil Trial Litigation and full-service legal representation to ➢ Complex Delinquent Tax governmental entities. Litigation ➢ Tax Sales, Seizures, & Post Comprehensive Collection Programs Judgment Enforcement ➢ Tax Resale Programs ➢ Court Fees & Fines ➢ Community-based Educational ➢ Parking Violations Programs ➢ Delinquent Property Taxes ➢ Taxpayer Assistance Miscellaneous Liens ➢ Property Value Appeals Services ➢ Student Loans for School Districts ➢ Federal Government ➢ Legislative Involvement Delinquencies ➢ Tax Law Publications • Legal & Support Programs ➢ Appraisal District Representation ➢ Bankruptcy Representation Registered Collection Firm The hallmark of our collection program is customer service. We are licensed and/or authorized to collect debts in all 50 states and U.S. territories or commonwealths. We can also pursue collections in Caribbean nations, Canada, and foreign countries. 2 i10 RIAZ��. .1 The Linebarger Law Firm believes that a successful collection program must be multi -faceted, flexible and tailored to each client's specific needs. Our collection services commence immediately following the approval of our work plan by a client. Our goal is to maximize the collection of delinquent fees and fines. We monitor our work plan on a continuous basis and modify it as necessary to meet that goal. WORK PLAN HIGHLIGHTS: • Load the client's referral information into the collection database. • Conduct a computerized search through the Acollaid skip -tracing database, using our customized Columbia Ultimate Business System (CUBS) collection software, to confirm or update the address and phone number of defendants prior to our first mailing. This increases the likelihood of contacting the debtor by mail or telephone on our very first attempt. • Send a firmly worded collection notice to all debtors which instructs them on payment procedures and warns that failure to pay their delinquencies will result in our recommendation to our client that it use all possible enforcement mechanisms to collect the amounts owed. + Send a series of stronger, follow- up letters to those individuals who do not pay or respond as required. • Research all returned mail to locate debtors. Using on-line and traditional research tools, our trained unit of researchers identifies correct telephone numbers and addresses to be used to contact defendants. • Contact all accounts with valid phone numbers personally. After the second notice mailing, our telephone collectors will make repeated efforts to personally contact defendants to secure payment. The Linebarger Law Firm has a professional collection staff that works days, nights, and weekends. Our predictive dialer allows us to contact thousands of defendants each day. We always have multi-lingual collectors available to assist debtors with limited abilities to communicate in English. • Maintain a detailed activity and payment history on every account. • Apply all appropriate legal and ethical enforcement mechanisms. + Establish a regular schedule, approved by the client, and provide detailed management reports on our collection activities. • Identify uncollectibles and return those accounts to the client with appropriate documentation. Our clients can be assured that the collection strategies and techniques used by the Linebarger Law Firm will be legal, ethical, and totally professional in manner. While many government debts generally do not fall within the definition of "consumer debt" as defined by the Fair Debt Collection Practices Act, our law firm adheres to the guidelines set out by the Act, with respect to the manner in which we contact and converse with debtors. Furthermore, all information supplied to our firm is kept strictly confidential. Only persons directly involved in our collection program or authorized in writing by the client have access to the fees and fines data. A flow chart offering an overview of our collection process is shown below (see Figure 1). Figure 1. COLLECTION PrE120C.041-FOSS OVERVIEW Collection Collection Collection r�b 0 The Linebarger Law Firm has invested millions in advanced collection technologies to assist our attorneys and paralegals in their daily collection efforts. Over 80 programmers and technical personnel support our information technology collection operations. We use the Columbia Ultimate Business System (CUBS) in tandem with our predictive dialer to design and manage collection call programs that are tailored to your needs. CUBS is fully integrated with our proprietary mailing, litigation, and bankruptcy software to offer you a truly comprehensive collection program, from basic mailings to full legal enforcement actions where appropriate. We have customized this software to improve its efficiency in skip tracing operations. Our customized CUBS system assures uniformity in dealing with all debtors as well as adherence to all applicable laws. Our collection efforts are structured to your needs. Our collection team will discuss your particular collection goals prior to initiating any collection action on your behalf. • Personalized work plans for maximizing your collections. • Advanced telephone collection software (CUBS and predictive dialer) for managing your call campaigns and making thousands of collection calls. • Dedicated call center (800 number) staffed by trained bilingual professional collectors. • Customized collection letters that get the debtor's attention. • Nationwide skip-tracing/locator service. • Regular performance reports. • Proprietary data processing technology for managing all aspects of your collection program. (9 Client Benefits The Linebarger Law Firm's comprehensive collection programs and litigation services allow you to focus on managing your government operations while maintaining control over our collection activities. Our mission is to generate the maximum revenue possible with the least administrative burden to you. Benefits to Our Clients • Increase your court revenue with no collection costs. • Improve your courts and law enforcement operations' efficiency. + Add the resources of a respected national law firm with hundreds of professional collection personnel to your staff without raising taxes or using tax dollars. • Reduce your backlog of outstanding court fees & fines. 0 MCLENNAN COUNTY McLennan County served as our pilot project for fees and fines collection services. Our success on behalf of McLennan County has prompted us to launch a statewide Court Fees and Fines Collection Services Program. The graph shows the total dollars collected by the Linebarger Law Firm on delinquent accounts referred to the firm for the Years 1999, 2000, and 2001. SOURCE: MCLENNAN COUNTY AUDITOR REPORTS In 1999, our first year of representing the County, our joint efforts increased collections by more than 29% over the previous year's collections by the courts alone:- We have collected over $1 million in additional revenue for the McLennan County J.P. Courts over the last two and a half years. CITY OF HOUSTON PARKING & TRAFFIC VIOLATIONS Houston awarded our law firm a contract to collect delinquent parking and traffic violations in the fall of 2000. While new delinquent accounts are now turned over daily to the Linebarger Law Firm for collection, roughly 90% of the $157 million debt owed to Houston as of March 1, 2001, was more than 240 days delinquent, with over $76 million ranging from three to seven years delinquent. The.graph below shows our actual collection results for the City of Houston for delinquent parking and traffic citations. After just six months of collecting on behalf of the City of Houston, the City reported that we had exceeded its seasonally adjusted, five-year collection average by roughly 52%, resulting in an additional $2 million in revenue. JOURCE: CITY OF HOUSTON MUNICIPAL COURT ADMINISTRATION REPORTS In six months, the City of Houston's revenue increased by 52% over its historical collection target. 11 Professional Recognition Equal Employment Opportunities Accepting the 20001 U.S. Mayors' Conference — Award of Excellence are (left to right) the Linebarger Law Firm Partners Steve Blair & DeMetris Sampson and Mayor Ron Kirk, City of Dallas. The Linebarger Law Firm is committed to providing ownership and career opportunities for minorities and women within our law firm as well as supporting Minority and Women Business Enterprises (MCWBE). We believe it is important that our organization be as diversified as the governments that we represent. We are proud of our record of hiring an ethnically and gender diverse workforce, and we continue to promote new opportunities for women and minorities throughout our law firm. 10 CONTRACT FOR COURT FEES AND FINES COLLECTION SERVICES STATE OF TEXAS COUNTY OF TARRANT THIS CONTRACT is made and entered into by and between the CITY OF GRAPEVINE, acting herein by and through its governing body, hereinafter styled First Party, and LINEBARGER HEARD GOGGAN BLAIR GRAHAM PENA & SAMPSON, LLP, hereinafter styled Second Party. First Party agrees to employ and does hereby employ Second Party to enforce the collection of delinquent court fees and fines pursuant to the terms and conditions described in this contract. This contract supercedes all prior oral and written agreements between the parties, and can only be amended if done so in writing and signed by all parties. Furthermore, this contract cannot be transferred or assigned by either party without the written consent of all parties. First Party agrees to refer all delinquent accounts by electronic or magnetic medium, in the specified format, to Second Party for collection, on or about the first (1s) and fifteenth (15th ) of each month. An account is considered delinquent when not paid within sixty (60) days of the scheduled appearance date (if the defendant failed to appear), or any granted extension, or from the date of conviction or judgment, or other court specified due date. First Party will provide Second Party with copies of, or access to, the information and documentation necessary to collect the fees and fines that are subject to this contract. Should it become necessary for Second Party to provide computer hardware, software, programming services and/or in-house personnel to First Party, in order for this contract to be performed, a separate agreement and fee structure shall be negotiated and agreed to in writing by both parties hereto. Second Party is to refer all payments and correspondence directly to the courts that have assessed or levied the fees and fines being collected pursuant to this contract. Second Party reserves the right to return all accounts not collected within one (1) year of referral by First Party, as well as any accounts identified as being, in bankruptcy. Upon return of these accounts, neither party will have any obligation to the other party to this contract. 0 IV. Second Party shall indemnify and hold First Party harmless from and against all liabilities, losses and/or costs arising from claims for damages, or suits for losses or damages, including reasonable costs and attorney's fees, which may arise as a result of Second Party's performance of the services described in this contract. The indemnity provision of this contract shall have no application to any claim or demand which results from the sole negligence or fault of First Party, its officers, agents, employees or contractors. And furthermore, in the event of joint and/or shared negligence or fault of First Party and Second Party, responsibility and indemnity, if any, shall be apportioned in accordance with Texas law and without waiving any defenses of either party. The provisions of this paragraph are intended for the sole benefit of the parties hereto and are not intended to create or grant any right, contractual or otherwise, to any other persons or entities. V. First Party agrees to pay to Second Party, on all accounts referred to Second Party for collection, a thirty -percent (30%) fee, in accordance with Article 103.0031 of the Texas Code of Criminal Procedure, as compensation for legal and collection services provided pursuant to this contract. In the event that an account is not covered by such statute, First Party agrees to pay Second Party as compensation thirty -percent (30%) of the total amount collected on all such accounts referred to Second Party for collection. All compensation shall become the property of Second Party at the time of payment. First Party shall pay over said funds on a monthly basis by check or wire transfer. First Party agrees to pay the fee payable under this contract no later than the 30th day following the end of the calendar month within which the fee is paid to First Party. VI. The initial term of this contract is two years, beginning April 1, 2002, and shall thereafter continue on a month-to-month basis. First Party reserves the option to extend the initial term of the contract for two additional two-year periods, with the contract thereafter continuing on a month-to-month basis. Either party may, without cause, terminate this contract at the end of the initial contract term or thereafter by giving the other party written notice of termination. During the initial term of this contract either party shall have the right to terminate the same prior to its expiration; provided however, that the party giving notice shall grant the receiving party a period of thirty (30) days, from the date of written notice, the opportunity to attempt to cure any unsatisfactory terms, acts, omissions or conditions. Should the party receiving notice be found not to have remedied the unsatisfactory terms, acts, omissions or conditions to the satisfaction of the party giving, notice, the party giving, notice may terminate the contract. IN The effective date of any termination by First Party shall be six (6) months from the date the notice of termination is received in writing by Second Party; said six (6) month period being deemed adequate for the purpose of Second Party in winding down its affairs with regards to work in progress. In the case of termination by Second Party, the effective date of termination shall be thirty (30) days from the date notice of termination is received. First Party is entitled, but is not required, to refer additional accounts to Second Party after notice of termination has been received by Second Party. In any event, Second Party shall be entitled to payment of its fee, pursuant to Paragraph V. of this contract, for all amounts collected on referred accounts during the six (6) month "winding down" period. At the end of that period, all accounts shall be returned to First Party by Second Party. VII. For purposes of sending notice under the terms of this contract, all notices from First Party shall be sent to Second Party by certified United States mail, or delivered by hand or by courier, and addressed as follows: Linebarger Heard Goggan Blair Graham Pena & Sampson, LLP Attention: Director of Client Services P.O. Box 17428 Austin, Texas 78760 or 1949 South IH '35 Austin, Texas 78741 VIII. This contract is made and is to be interpreted under the laws of the State of Texas. In the event that any provision(s) of this contract shall for any reason be held invalid, illegal or unenforceable, the invalidity, illegality or unenforceability of that provision(s) shall not affect any other provision(s) of this contract, and it shall further be construed as if the invalid, illegal or unenforceable provision(s) had never been a part of this contract. KI In consideration of the terms and compensation herein stated, Second Party hereby accepts said employment and undertakes performance of said contract as set - forth above. This contact is executed on behalf of First Party by the presiding officer of its governing body who is authorized to execute this instrument by order heretofore passed and duly recorded in its minutes. This contract may be executed in any number of counterparts, and each counterpart shall be deemed an original for all purposes. Signed facsimiles shall be binding and enforceable. 2002. WITNESS the signatures of all parties hereto this, the of February, CITY OF GRAPEVINE In Roger Nelson City Manager LINEBARGER HEARD GOGGAN BLAIR GRAHAM PENA & SAMPSON, LLP AN 0 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, ADOPTING A THIRTY PERCENT FEE FOR THE COLLECTION OF DELINQUENT COURT FEES AND FINES AND AUTHORIZING THE CITY MANAGER TO CONTRACT WITH THE FIRM OF LINEBARGER HEARD GOGGAN BLAIR GRAHAM PENA & SAMPSON, L.L.P. PROVIDING A SEVERABILITY CLAUSE; DECLARING AN EMERGENCY AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City of Grapevine is authorized by the Code of Criminal Procedure to assess a thirty percent (30%) collection fee on Municipal Court fines and costs which are more than sixty (60) days past due; and WHEREAS, the City of Grapevine deems it to be in the best interest of its citizens to contract for the collection of said past due Municipal Court fees and costs and to assess a thirty percent (30%) fee for the collection of same. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS: Section 1. That all matters stated in the preamble are found to be true and correct and are incorporated into this ordinance as if copied in their entirety. Section 2. A thirty percent (30%) fee is hereby assessed on each debt or account receivable, such as fines, fees, restitution, and other debts or costs, other than forfeited bonds, ordered to be paid by the Municipal Court. Section 3. The City Manager, or his designee, is authorized to execute a contract for the collection of past due Municipal Court fines and fees with the firm of Linebarger Heard Goggan Blair Graham Pena & Sampson, L.L.P. Section 4. That all ordinances or any part thereof in conflict with the terms of this ordinance shall be and hereby are deemed repealed and of no force or effect; provided, however, that the ordinance or ordinances under which the cases currently filed and pending in the Municipal Court of the City of Grapevine, Texas, shall be deemed repealed only when all such cases filed and pending under such ordinance or ordinances have been disposed of by a final conviction or a finding not guilty or nolo contendere, or dismissal. Section 5. If any section, article, paragraph, sentence, clause, phrase or word in this ordinance, or application thereto, any person or circumstance is held invalid or unconstitutional by a Court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of the ordinance despite such invalidity, which remaining portions shall remain in full force and effect. Section 6. The fact that the present ordinances and regulations of the City of Grapevine, Texas, are inadequate to properly safeguard the health, safety, morals, peace and general welfare of the public creates an emergency which requires that this ordinance become effective from and after the date of its passage, and it is accordingly so ordained. PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAPEVINE, TEXAS, on this the day of 2002. WILLIAM D. TATE, MAYOR ATTEST: LINDA HUFF, CITY SECRETARY APPROVED AS TO FORM AND LEGALITY: CITY ATTORNEY