One billion dollars.
That’s how much money people owe to the City of Houston for years of delinquent fines. Houston Mayor Annise Parker asked the city’s legal department to analyze the way the city handles debt collections.
“A lot of that is uncollectable. It’s old, we have no way of finding people, they’ve died, it’s not worth the money to collect. Maybe we collect only 30 cents on the dollar. That’s $300 million.”
Parker says for years the city was never aggressive in its collections process, but that will now change.
City Attorney David Feldman, whose team did the analysis, told councilmembers Houston is the only major city in the nation that does not have an internal collection program.
“Our collection activities are totally decentralized. Our debt tracking systems have no cross-department compatibility whatsoever. In other words, one department doesn’t know what another department is collecting or who their debtors are. The result of it is that we are all over the map. If we can bring this together, we can do a much, much better job.”
The number of big offenders is surprising. For example, UPS owes the city nearly $120,000 in parking fines. FedEx owes a chunk as well. The top red light camera violator is Hertz, with $38,000 in outstanding tickets. There’s even an individual who owes nearly $6,000 in library fees. Feldman says the city will start using the threat of litigation to collect debts.
“If people don’t pay up in response to demand letters and the indebtedness warrants it, we’re going to file lawsuits against them. People need to understand that if we bring a lawsuit, a fine that was X is all of a sudden going to be increased to include both pre- and post-judgement interest as well as attorney’s fees. So I’m hopeful that that’s an incentive for people to pay their delinquent indebtedness to the city as well.”
Of course, most people who owe money to the city don’t owe thousands of dollars. For minor violations, the city will use threats that include disconnecting services, booting vehicles, credit bureau reporting and other punitive measures. They’ve also created a centralized Debt Collection Unit which will allow the city to eventually phase out its collection contracts with outside vendors.