Title
Collections - Parking & Municipal Violation Tickets - Approval
History
The Village issues parking and municipal violation tickets on a daily basis. Upon issuance of the ticket, the violator has ten (10) days to pay the ticket or request a hearing. If a hearing is requested, a hearing date is provided. If the violator is found liable, they have 30 days to pay the fine. For parking tickets, if the fine remains unpaid after 30 days, the fine amount is increased to $250 and a final determination letter is sent to the violator. If the fine remains unpaid after 60 days, a debt collection letter is sent to the violator stating that the Village can file suit in the Circuit Court or send the amount due to a collection agency if not paid within 30 days. The process is the same for municipal violation tickets, although the amounts may vary.
Since expiration of our collections contract with our existing collections company, unpaid tickets were not sent to a collection agency; instead, the police department is conducting the collections process. Due to the number of outstanding parking and municipal violation tickets and the fact that collections is not a core function of the police department, staff recommends the outsourcing of collections to Municipal Collections of America, Inc. (MCA).
MCA is a newly formed collection agency that is in the process of acquiring Receivables Management, Inc. (RMI). RMI has worked with the Village of Orland Park since 1996, collecting unpaid parking citations as an exclusive subcontractor of Municipal Collection Services, Inc. MCA has 25 professional employees who have been entrusted to handle the collection needs of over 70 Chicago area municipalities, including 37 of the 42 members of the South Suburban Mayors and Managers Association. When performing under the RMI contract with the Village, the collection recovery rate was approximately 48% since 1996. MCA would receive 35% of all amounts collected, which is 5% less than the standard collection take.
Staff recommends that the Village Board authorize entering into the attached contract with MCA to collect all outstanding parking and municipal violations tickets once the Village has gone thru the hearing and subsequent notification process. The Police Department will continue to manage the process up to the point of sending the unpaid ticket information to MCA. Once the outstanding ticket information is sent to MCA, responsibility will shift to the Finance Department to work with MCA thru receipt and/or write off of the amount due to the Village.
On June 6, 2011, this item was reviewed and approved by the Finance Committee and referred to the Board for approval.
Financial Impact
As of May 31, 2011, the total outstanding collectible parking ticket fines amounted to approximately $4,257,000 and the total outstanding collectible municipal violation fines dating back to the mid 1990s amounted to approximately $1,217,000. Although the likelihood of collecting all outstanding amounts is negligible, the Village will received 65% of all amounts collected. If ¼ of the outstanding amounts were collected, this would be additional revenue to the Village of approximately $890,000.
Recommended Action/Motion
I move to approve entering into a one (1) year contract, with the option to renew for four (4) additional one (1) year terms, with Municipal Collections of America, Inc. for the collection of past due parking and municipal violation tickets.