Transcript Building a Strong Government Collection Program that Works! Michael Vogl, Collection Manager, City of San Diego.

Building a Strong
Government Collection Program
that Works!
Michael Vogl, Collection Manager, City of San Diego
Why have a Collection Program?





Maximize revenue
Motivate public to pay on time
Centralize collection activities/reduce duplication
of collection efforts
Reduce collection related costs
Improve reporting on delinquent amounts and
tracking of collection performance
1. Getting Started!
Identify What Receivables You
Have:





Taxes (Business Tax, TOT)
Services (Water, Sewer, library)
Risk (Property damage, medical cost recovery)
Enforcement (Parking cites, administrative
violations)
Permits/inspections
Other receivables



Returned checks
Emergency response cost recovery
Damaged trees
* Identifying additional penalties, damages, and other
add-ons increases revenue and elevates the
consequences of non-payment.
Authority and Organization

Create Authority:



City Charter, Resolution, Ordinance
Administrative regulation, Policy
Organizational considerations



Centralized or decentralized?
General fund or internal service fund?
In-house collectors or External Collection Agency?
Actual Performance Comparison
City Collections Staff vs. Private Collection Agency
City Staff
Referral
Gross Revenue
Less Expenses:
Agency Fee
$
City Staff (PE/NPE)
Net Revenue to City
$1,200,000
$ 33,000
Private Agency
$1,200,000
$
5,500
$
0
$
(10,000)
(679)
$
$
23,000
$
0
4,821
Staffing and Compliance

Staffing




Private sector collection experience
Clearly identified roles and responsibilities
Well thought out performance plans and goals
Legal Compliance


Fair Debt Collection Practices Act (FDCPA)
Robbins-Rosenthal Act
2. How to Get Results!
Create the Right Perception
Develop Support

Educate


Council members and or Council staff
Department front-line staff



Conflicts in missions
Debtors will attempt to circumvent collection staff
Partner


Department management
Key stakeholders
Set High Expectations

Set annual and monthly goals for staff







Collections and Productivity
Quality and Compliance
Customer Service
Track performance at various levels
Communicate expectations and results regularly
Reward success
Address poor performers
Collection Program
Annual Revenue History
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
90
19
92
19
94
19
96
19
98
19
00
20
02
20
04
20
05
20
Create and Escalate Consequences
of Non-payment






Stop providing service
Send collection letters, make telephone calls
Credit reporting
File liens, suspend driver’s license, impound car
State tax refund interception
Legal action
The Motivation Game



Consequences should be communicated in
letters, notices, and telephone calls
If the debtor still does not comply, you must
follow through with these consequences
Spread responsibility to individuals vs. business
entities
Credit Reporting





Government receivables can be credit reported
Must attempt to notify debtor of derogatory
reporting
Information reported must be accurate
Requires resources to investigate and respond to
disputes
Especially effective when interest rates are low
State Tax Refund Interception




Limited to certain types of accounts
Must have social security number
Special limitations on parking citations
Requires minimal resources
Legal Action

Small Claims Court


$5,000 per case jurisdictional limit
City Attorney



Higher jurisdictional cases
Parking citation judgments
Conversion of criminal restitution order to civil
judgment
Make it Easy to Pay!

Offer a wide variety of payment options






Mail, walk-in, telephone, service center
Cash, check, credit and debit card
Internet
Post-dated check plan
Time extensions/payment plans
Settlement authority
3. Maximize Benefit
and Minimize Cost!
Focus Resources on Collections!

Collectors





Skiptracing
Making and receiving phone calls
Minimize specialization
Must be aggressive
Supervisors




Minimizing complaints/Improving service
Handling complex cases
Training and re-training
General supervision

Accounts




Target accounts with higher payback and likelihood of
successful collection
Eliminate old or likely uncollectible work from collector
workload
Implement a collection fee and or interest charge on
collection accounts
Automate notice series
Treasurer’s Collections Program
Cost/Revenue Comparison
REVENUE
COST
FY 1993
$4,900,000
$ 956,000
FY 2004
$16,100,000
$3,700,000
Revenue vs. Cost
$4.35 to $1
4. Leverage Technology!
Automation





Collection system
Electronic interfaces to billing systems and data
providers
Telephone system
Voice logging/recording
Document imaging
Access to a Wide Variety of Data
Sources




Department of Motor Vehicles
Agency databases
NCOA, phone directory
New internet tools

Accurint
5. Provide Excellent Customer
Service and Maintain a Positive
Agency Perception!
Customer Service




Staff should provide accurate information in a
pleasant professional manner regardless of the
debtor’s behavior
Listen and Respond timely to requests and
inquiries
Be aware of tone and body language (sarcasm)
Use “We,” “This office,” and “Our system” rather
than “I”




Inform rather than threaten
Voice logging/recording
External collection agencies will not provide the
service expected from government agencies
Educate the media


Stories on collection efforts educate the public on
consequences of late payment
Stories generally result in telephone calls and
payments