U.S. Municipalities Find Creative Ways to Improve Collections

In the face of decreasing federal support over the last 25 years, cities and towns across the U.S. are taking a closer look at overdue bills. Many are seeking to recoup vital revenue from outstanding parking tickets, fines for overdue library materials, delinquent court fees, and the primary source of cities’ revenues: unpaid municipal taxes.

Kaulkin Ginsberg, the leading strategic advisory firm to the Accounts Receivable Management (ARM) industry, has released an executive brief, Facing the Budget Crunch: Creative Strategies for Municipal Receivables. This review describes the many tactics that local governments are using to improve the effectiveness of their collection practices, for example:

Norfolk, VA, has begun tagging taxpayers’ state income returns for garnishment if the person owes past due parking tickets.

New Haven, CT, has employed a mobile infrared device that scans automobile license plates and checks the owner against a database of debtors in order to collect on various municipal debts. In the first six months of operation, this resulted in 1,800 impounded cars and $1 million in collected fines.

San Francisco, CA, developed a corporate program for companies like UPS that have more than 20 vehicles and a history of parking violations.  The companies are billed monthly for any violations and avoid late fees and vehicle booting.  The program netted more than $1.5 million in fiscal 2006.

Augusta County, VA, utilizes collection agencies to collect on unpaid library fees. This effort has recouped more than $100,000, representing more than half of the county’s annual budget for new library materials.

Portage and Cuyahoga Counties in Ohio place delinquent accounts with a collection agency, but charge the agency’s fees to the debtor; thus the county incurs little out of pocket costs for the program.

This executive brief is available free of charge on the Research section of insideARM.com (requires registration). To download this executive brief, visit www.insidearm.com/go/research, and scroll to the Executive Briefs section.

Kaulkin Ginsberg is the parent company of insideARM.com and Kaulkin Media.