Q&A
Examination of uncollected fines and fees and collection efforts
3:19:12
·
4 min
Council Member Gale A. Brewer inquires about uncollected fines and fees in New York City. Commissioner Preston Niblack provides detailed information on collection rates, processes, and strategies employed by the Department of Finance to address unpaid debts.
- The department achieves a 90% resolution rate on parking debt within 3 years of issuance
- Collection efforts include internal processing for 6 months, followed by referrals to collection agencies
- Collection agencies work on a commission basis, typically 5-10% of collected amounts
- Different types of debt (parking, business taxes, ECB violations) have varying collection success rates
Gale A. Brewer
3:19:12
Okay.
3:19:13
In terms of fines and fees not being paid, you know, this is something that I find challenging in terms of, why should somebody pay when somebody else doesn't.
3:19:23
So my question, of course, in the past, IBO said 2,100,000,000.
3:19:26
I know they're updating it.
3:19:28
So my question to you is, I don't know if it's how much do you pay for collection agencies, what their, success rate is.
3:19:36
Just generally, what do you think the uncollected number is?
3:19:39
I don't know.
3:19:40
23, 22 currently.
3:19:42
And what are we doing to try to address the uncollected people?
Preston Niblack
3:19:48
So there are a number of parts to that question that I wanna answer.
3:19:52
So, the the the IBL report, as I think we discussed earlier, I took some issue with
Gale A. Brewer
3:20:01
Yes.
Preston Niblack
3:20:02
In part because, they were reporting, we we have a 90% resolution on parking debt within the 3 years of issuance.
3:20:10
So we you know, to measure to measure the the resolution rate or the collection rate in less than 3 years is gonna overstate the extent to which we don't collect.
3:20:19
If you look at, calendar year 2022 collections now, the, the percent unpaid is 9%, which is consistent with what we have done historically.
3:20:32
So I I think we do a great job at collections.
3:20:36
Part of the process, includes a referral to outside collection agencies.
3:20:42
We have 3 collection agencies for each type of debt, so parking, business taxes, and ECB.
3:20:49
Deputy commissioner James can tell you, hopefully, how much the contract is for those.
3:20:54
I okay.
3:20:55
Maybe not.
3:20:55
We'll get back to you.
Gale A. Brewer
3:20:57
I would like to know.
3:20:58
Thank you.
Preston Niblack
3:20:58
But they work they work on a commission.
3:21:00
You know, it's an it's an RFP process.
3:21:02
We work on a commission, and, actually, First Deputy Commissioner Scheer knows the answer.
Jeffrey Shear
3:21:08
I don't know No.
3:21:09
Don't.
3:21:10
The the well, I I do the commission rates run somewhere in the neighborhood of 5 to 10%.
3:21:15
We we can get back to you with the with the precise numbers, but that is how we, reimburse them.
3:21:22
So if they don't collect anything, they don't get paid anything.
Preston Niblack
3:21:25
So the the process is we work it internally for 6 months, then it gets usually typically.
3:21:30
If it's a large dollar amount, we'll refer it to our, collections division and our legal affairs collections unit and our legal affairs division, who will then they can execute you know, they can levy bank accounts.
3:21:41
They can do executions with the marshals.
3:21:44
For smaller dollar amounts, it gets referred to sequentially the 3 collection agencies for that particular type, 6 months each.
3:21:52
Whatever's left at the end of that period kind of goes into, you know, the to be visited one day sleepy box.
3:22:01
It it is, after 2 years of collection attempts, you know, the the probability that we're gonna collect goes down fairly substantially.
3:22:12
So I I think compared to other jurisdictions and compared to private efforts, we do a great job, frankly, at at collection.
3:22:21
There's always gonna be a residual amount that is uncollectible, essentially.
3:22:25
And I think that's, you know, what what IBO is measuring there is some measure of that, you know, uncollectible.
Gale A. Brewer
3:22:33
Are there some agencies, not their fault because they're not in charge, but are there some agent, I don't know, that are more likely or less likely to be collected than others?
3:22:41
And IBO doesn't measure all the different agencies either.
Preston Niblack
3:22:44
Yeah.
3:22:44
Yeah.
3:22:45
You know, I'd have to come back to you on that.
3:22:47
I don't know, you know, sort of the agency by agency type, but I'd say parking, we do very well.
3:22:53
Business taxes usually are higher dollar amounts.
3:22:57
It's a little bit more variable, but ECB is is can be harder.
3:23:02
We have some things that we put in some steps that we put in place.
3:23:07
So now, for example, if you have a city contract and you have outstanding ECB violations, your payment's gonna be held up until you resolve those.
3:23:16
So we, you know, we the the collections team has been very innovative in trying to make sure that we are pursuing collections, as, much as we can.
