Title
IOC Local Debt Recovery Program - Approval
History
Public Act 097-0632, signed into law in December 2011, created the Local Debt Recovery Program that allows the Illinois Office of the Comptroller (IOC) to enter into Intergovernmental Agreements with units of local government to assist in the collection of unpaid debts due to the local government. Prior to the IOC issuing a state tax refund, commercial payment, state payroll check, or lottery check, the amount owed to the local government, plus an administrative fee, will be deducted from the payment and deposited in the Comptroller's Local Debt Recovery Trust Fund. The debtor will be provided with written notice of the action and has 60 days to protest the deduction. If no protest is made or the protest is denied, the amount owed is transferred to the local government.
In February 2012, when the IOC launched this program, the Village submitted a test file of over 19,000 outstanding parking tickets that the IOC matched against income tax refunds, commerical payments, state payroll checks and lottery payments. Please see the attached for the results of this analysis. In summary, approximately 2,800 of the records submitted matched against payments made to the debtors, providing an offset amount (amount that would have been paid to the Village) of approximately $472,000.
Staff recently attended a two day training seminar offered by the IOC on the program requirements and implementation process. One of the requirements for implementation is the approval of the attached Intergovernmental Agreement between the Village and IOC. Once the Board approves the IGA, implementation will begin. As part of the implementation process, staff will determine which categories of debts due to the Village that we will submit for possible collection. Categories that we can submit include outstanding parking tickets, red light violations, water bills, and miscellaneous accounts receivable that have not been liened. Once a debt is submitted to the IOC, the debt remains outstanding for a period not to exceed 7 years (from the initial date of issuance of the debt).
Staff is requesting that the Board approve this IGA so that implementation can occur well in advance of the next income tax refund season.
On July 2, 2012, this item was reviewed and approved by the Finance Committee and referred to the Board for approval.
Financial Impact
As noted above, based on the initial analysis, the Village may be able to recover a significant portion of outstanding debts owed to the Village.
Recommended Action/Motion
I move to approve the Intergovernmental Agreement By and Between the Illinois Office of the Comptroller and the Village of Orland Park Regarding Access to the Comptroller's Local Debt Recovery Program.