Revenue Recovery Program: developing a governmental collections unit.(Best Practices)

At a time when economic situations are rapidly changing, governments are searching for better ways to do business. In Johnson County, Kansas, the Treasurer's Revenue Recovery Program--known as the Collections Unit--emphasizes performance by reducing outstanding account balances, streamlining processes, increasing collaboration, and inspiring a new approach for local government. The program exemplifies government's desire to create "communities of choice "while at the same time maintaining fiscal responsibility.

The collections industry which recovers revenue for both the public and private sectors, is built on the concept that collecting outstanding accounts allows organizations to avoid raising prices to cover losses. Often, the measures needed to collect a debt are simple: quick action, consistency, and a willingness to work with a customer. The Johnson County Treasurer's Department has a long-standing history of collecting property taxes for the state, county, cities and schools, along with special assessments and wastewater charges. But through automation, new technologies, and improved business processes, the department has been able to refine its techniques and achieve better results.

Organizations often outsource collections to private collection agencies because of insufficient resources or financial constraints. The Johnson County Treasurer's Department took this approach in 2001 and soon began to consider simply taking over the function internally Staff was spending a considerable amount of time helping the collection agency, researching or providing other assistance because information resided in multiple systems that the outside agency could not connect to. It also became apparent that the tone of a collection agency was geared toward collecting outstanding credit card debt and might not be the best approach for a government entity. In addition, the agency charged between 20 and 50 percent of the amount recovered, based on the type of action taken. Moreover, it seemed likely that the department would have an advantage over an outside agency in collecting delinquent accounts, since a large percentage of customers are reoccurring and will eventually end up at the motor vehicle office or another county department to do business.

As is usually the case, the Treasurer's Department was not the only county agency dealing with outstanding accounts. To create a successful collection effort for all county departments, the Treasurer's Department spearheaded the Collections Unit project in 2005, in conjunction with finance officers from the county's utility billing department, along with representatives from legal services, the sheriff's office, budget and financial planning, and the county manager. It was felt that bringing together experts from various departments could alleviate concerns and create synergies. The initial goal was to address outstanding utility accounts, delinquent taxes, and insufficient fund checks. The Board of County Commissioners approved the program and recommended an accelerated implementation date. The concept was well-received, not only because of the revenue recovery aspect, but also because multiple county departments were working together to tackle a problem they were not able to solve individually.

The Johnson County Collections Unit operates much like an outside collection agency An agreement outlines the services the unit will provide, identifying policies, procedures, and business requirements. County departments turn over accounts that are 90 days or more past due, and once account information is received--on a daily or monthly basis--the Collections Unit begins the process of attempting to collect through mailings, phone calls, and potential legal action. A portion of the amount collected goes toward offsetting the costs incurred by the unit.

THE TECHNOLOGY BEHIND THE SYSTEM

Johnson County's Collections Unit Revenue Recovery System is hosted by the county's Information Technology Systems Department, although the Treasurer's Department maintains and enhances the application software supporting the system. The Collections Unit database is updated each night with account and payment information. A reconciliation report shows differences between the collections unit and wastewater systems. The nightly process also changes the collection status of affected accounts, resulting in automatically generated correspondence. The collection status is based on the age of the account and the method of collection that can be used at that time. For example, a motor vehicle insufficient fund check goes through the following status changes: electronic "representment" by a vendor, 30 days; department letter, the next 15 days; collections unit letter, the next 15 days; sheriff's office tag removal, the next 45 days; district attorney letter, the next 45 days; cancellation with the State of Kansas, the next 15 days; and, finally, district attorney prosecution, if evidence and witnesses are available.