Staff recommends the City Council award a contract to Linebarger Goggan Blair & Sampson, LLP, for a period of 12 months with four (4) one year renewals for delinquent court fine collections.

Background

The City’s Financial Management Policy Statements (FMPS) state that the City shall maintain high collection rates for all revenues by monitoring monthly receivables.  The City shall follow an aggressive, consistent, yet reasonable approach to collecting revenues to the fullest extent allowed by law for all delinquent taxpayers and others overdue in payments to the City. Where possible, the City will implement collection improvement programs to improve payment of amounts owed to the City. These programs can include, but are not limited to, inter-local cooperation between government entities and prohibiting receipt of optional services when outstanding balances are due. A robust collections program, including delinquent collections firms, allows the City to maintain one of the lowest tax rates in the state, and ensures that taxpayers don’t subsidize user fees, fines or charges for services that are owed by individuals.

The City’s Financial Management Policy Statements direct that the City should solicit proposals for delinquent collection services at least every five (5) years.  The City last conducted an RFP process in 2014, and the contracts were effective in April 2015.

Request for Proposals

On November 6, 2019, the City solicited proposals for delinquent collections services - including Municipal Court, EMS billing, and Miscellaneous Receivables. The proposals were due on January 9, 2020. The RFP was designed so that a firm could respond to as few as one or as many as three sections without being penalized for not responding to all sections.

There were five responses to the RFP for court collections, and all were deemed to have met the minimum requirements and were evaluated by the committee. A committee of four individuals reviewed the proposals and submitted scores to purchasing for evaluation. 

The following firms submitted proposals for consideration for court collections:

Linebarger Goggan Sampson & Blair LLP (Linebarger) submitted the top-ranked proposal for collection services associated with delinquent municipal court. Fees for these services are set by state statute and are paid by the customer as an addition to the amount owed, so there is no cost to the City for this contract.

Legislative Impacts

The 86th legislative session saw the passage of HB 2826, which requires the Attorney General (AG) review and approval of contingent fee legal services contracts. Upon approval of that type of contract by City Council, staff must submit the contract along with a questionnaire to the AG.  Any reviews, findings, and approvals by the governing body must be completed prior to submission to the AG for review. If no response is received from the AG in 90 days, the contract is deemed approved. However, the bill specifically excludes contracts for collection of delinquent court fines and fees, ad valorem taxes, and bond counsel in connection with the issuance of debt; it does not impact this contract.

Findings

Although contracts for the collection of delinquent court fines are excluded from the AG review and approval of the contract, HB 2826 requires City Council find that the contract for delinquent court fines: (1) is necessary for the efficient collections of delinquent Municipal Court fines, fees, and costs; (2) the City does not possess the necessary staff, computer software/ programming, or experience to internally conduct these collection services and acquiring these will result in substantial expense to the City; and (3) an hourly fee for delinquent collection work would likely exceed the amounts of delinquent fines and fees due. Using a contingent fee arrangement allows the collection costs to be assessed against the debtor and not the City or its taxpayers.

Recommendation

The RFP process and results were reviewed with the Finance/Audit Committee on March 5, 2020. Staff recommends the City Council award a contract to Linebarger for the collections of delinquent Municipal Court fines and fees for a period of 12 months with four (4) one year renewals.