CEDAR RAPIDS — Few motorists are responding to collection notices mailed days before Christmas to thousands of violators who have unpaid tickets — some dating back years — from automated speed and red light cameras.
Cedar Rapids officials report just 4,800, or about 2 percent, of the 221,000 collection notices representing $17 million of debt had been paid as of Feb. 12. Another 70,809 “debtors” were submitted to the state offset program, which garners casino jackpots, lottery winnings, vendor payments and state income tax refunds to collect.
The city will continue to pursue payment from the remainder through collection agencies, Finance Director Casey Drew said by email.
“It is too early in the collection process to gauge how the new initiatives are working,” Drew said.
Typically, Cedar Rapids earns $50 of a $75 ticket, which is the most common penalty, and $25 goes to Gatso USA, the camera vendor. Under the collection initiative, the revenue split is $31.25 for Cedar Rapids, $18.75 for Municipal Collections of America, of Lansing, Ill. and $25 for Gatso.
After a 45-day grace period, a 25 percent late payment penalty kicked in with the extra money going to Cedar Rapids and elevating its share to $50. In the case of the offset program, Cedar Rapids gets $43 per ticket, Municipal Collections gets $18.75, Gatso USA gets $25 and the state offset program gets $7.
City officials estimated the first payments from the offset program won’t come until late March or early April.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Lawmakers have criticized the collection initiative as further evidence the cameras are meant more to earn money than they are to improve safety as city officials contend. The collection initiative has been cited repeatedly in Des Moines as lawmakers make a case for banning traffic cameras. The Senate approved a ban last week, but the House has yet to vote on its version of the bill.
Cities have been able to use the state offset program to collect debt since 2006, and more than 300 cities participate. Last year, the state recovered $48.7 million.
To be eligible, Cedar Rapids was required to make a “good faith effort” to collect the unpaid debt, and the debts had to be at least $50.
Cedar Rapids previously used Harris & Harris LTD. to try to collect the debt but switched to Municipal Collections in September.
Cedar Rapids officials quietly approved a contract with Municipal Collections — which included collection guidelines for the traffic camera tickets, various inspection and permit fees, utilities and other miscellaneous accounts — in August, more than a month before any public discussion and before the City Council approved the collection initiative.
The council voted to approve the Municipal Collections contract as part of its consent agenda in August, and later approved changes to the city code to expand the definition of vehicle owner, establish a 25 percent late payment penalty, and reference use of the state offset program on Oct. 24.
The consent agenda is for items considered non-controversial and routine, and are voted upon without discussion.
The contract with Municipal Collections began Sept. 1, 2017, and runs until Aug. 31, 2020, with a possible three-year renewal period. The total value for the three-year period is not to exceed $500,000, according to city documents.
ARTICLE CONTINUES BELOW ADVERTISEMENT
Thank you for signing up for our e-newsletter!
You should start receiving the e-newsletters within a couple days.
Among other things, the contract requires Municipal Collections to “use all responsible and legal steps” to obtain people’s Social Security numbers and federal tax identification numbers, which are needed for the offset program.
Municipal Collections is also tasked with notifying debtors of them being turned over to the offset program.
l Comments: (319) 339-3177; firstname.lastname@example.org