Knoxville looks to hire collection agency for delinquent bills
Jan 21, 2013 (The Knoxville News-Sentinel - McClatchy-Tribune Information Services via COMTEX) --
Most court fees in Knoxville City Court begin at around $100 or so.
Unpaid court fees and property taxes, however, add up to an expense to the city of more than $500,000 a year. This is money that the city hopes to get back.
On Tuesday, City Council will consider in its regular meeting hiring a collection agency to recoup that unpaid money.
"We're going to try to hit the streets with a (request for proposal)," Jim York, Knoxville's finance director, said of the city's course of action following council's expected approval on Tuesday.
An agency could begin collecting as soon as spring, York said.
The move to bring on a collection agency comes at a time when the city budget is stretched year-to-year. Mayor Madeline Rogero and City Council must find an additional $5 million in the 2012-13 budget because of an underfunded employees pension. A $14.4 million contribution from the city's $180.5 million current operating budget is expected to increase to $20 million in the 2013-14 fiscal year so the pension can meet its promise to retirees.
The money must come from somewhere.
Previously the city alone went after delinquent accounts. A collection agency would push harder on those who don't pay.
Collecting more from those who owe money to the city already helps avoid a shakedown for the majority of residents who pay fines and fees on time.
"It lessens the pressure on other sources of revenue if we can collect more from the city court and property tax," York said, "but the second thing is it does, is it's an equity situation. Most people pay their fines and so forth, and you want everyone paying their fines."
As such arrangements are typically structured, the collection agency would likely take its money from the fees and fines it collects from those who owe.
York said the idea came from a group of University of Tennessee master of business administration students who looked at the business operations of the city for a class project.
"We had them take a look at some collections for city court and that (hiring an outside agency) was also a part of their recommendation," York said.
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