Traffic Revenue Takes A Nosedive

by Mark Scaramella, March 14, 2012

Say you’re an average Mendo driver and you get ticketed for running a red light combined with lesser offense like not signaling or bad wipers.

If you don’t go to traffic school your total fine would be a whopping $1070 including fines, bail, penalties, and a surcharge, plus a court operation assessment and a conviction assessment.

With traffic school the total would be reduced to a still whopping $636.

Failure to pay these fines and their suspicious add-ons will cost you another $400. And failure to fork over can get your driver’s license suspended, tax refunds snagged, wages garnished, bank accounts levied, warrants issued for your arrest, and dunned unto the grave by collection agencies.

Base fines for single violations:

Speeding, 1 to 15 miles over the limit, $214.

Speeding, 16 to 25 miles over the limit, $328

Failure to prove insurance: $796.

Failure to notify DMV of address change within ten days: $214.

Run a stop sign: $214.

Run a red light: $436.

Pass a school bus with flashing lights: $616.

Driving while using cellphone: $148 (first offense), $256 additional offenses.

Headset covering both ears: $178.

No seatbelt: $148.

And hundreds of dollars are added to these “base” fines.

Collections, however, are running way behind lately, causing the state to enact a highly touted six-month amnesty program for chronic non-payers, which runs from January to June of this year.

But to qualify for the amnesty — you pay 50% of the total fine and fees — that reduced amount must be paid in full in one lump payment. And the payment has to have been due before 2009 with multiple strings attached, such as you can't have paid anything since the end of 2008, or owe restitution, or possess outstanding misdemeanor or felony warrants, and your original offense had to have been a basic traffic violation only.

Millions of tickets are issued in California each year, perhaps as many as 25 million annually, almost one ticket for every resident every year. By population, Mendocino County's share could be as high as 50,000 tickets annually. But since Sonoma County says they get upwards of 40,000 tickets a year, Mendo could be as low as 10,000 tickets a year. Either way, it’s a lot of money. At, say, a minimum of $200 per ticket, that’s somewhere between $2 million and $10 million in total revenue from ticketed Mendo drivers, maybe more.

Most of the traffic fine money extracted every year from California drivers goes to the Court system — $180,000 a year in judges' lavish pay and emoluments, multi-million dollar courthouse boondoggles, court operations and so on. A much smaller portion of the annual take finds its way into the County’s general fund, but it's still an amount not to be sneezed at that cash-strapped Mendo sorely needs.

Or was. Until recently, Mendo’s Court Collections office generated more than a $1 million a year revenue windfall to the General Fund, a cool $1 million more than the cost to recover it for Mendocino County.

But a few weeks ago, the CEO’s budget office discovered that collections for this fiscal year (July 2011-June 2012) were going to be far short of the expected and budgeted $1 million-plus.

From the February 28 Mendocino County Board of Supervisors agenda packet: “Summary Of Request: Report and discuss mid-year budget report for Court Collections Budget Unit 2012 showing an overall shortfall estimated at $429,982. Discuss various impacts to the budget including: reduced traffic infraction filings; traffic school reductions; increase in delinquent accounts (non-payers); amnesty program initial response; Franchise Tax Board reduced revenue collections; and staffing shortages.”

“At the start of the fiscal year in July we had eight employees in court elections,” Treasurer Tax-Collector Shari Schapmire told the Supervisors. “We had a collections manager, a collections supervisor, and six revenue recovery specialists that we call ‘collectors.’ In August we had a collector resign to take a position in Sonoma County. We decided not to fill that position; we thought we could absorb those duties with existing staff. In September another collector resigned her position. At that point we decided we had to fill one position and the CEO approved that request. So we started the recruitment process in September of 2011. In October the situation became more complicated when my Assistant Treasurer-Tax collector retired. I promoted Julie Forrester here [nodding to the attractive young woman to Ms. Schapmire’s left]. She had been the Collections Administrator for about 13 years. When I promoted her to our office that left another vacancy. Then in November we had another collector resign to pursue other opportunities. So we went to the CEO’s office with a second request to fill a revenue recovery specialist trainee position. There were delays in filling that position; there didn’t appear to be a rush. It has been four or five years since any of those positions has been filled. But we did not expect that we would have 77 applicants for this trainee position. We intended to hire two of those to fill two of the open of the four open positions. The Human Resources department has been filtering through those 77 applications since September. They did written questions. They did an oral board that took three days. A couple of weeks ago we interviewed prospective applicants and we are in the process now of doing background checks. With everything that's going on we then found out from the CEO’s office that we would have a revenue shortfall of $400,000-$500,000. So now we are in a holding pattern to see what happens today.”

Board Chair John McCowen noted, “There is no action before us today to fill any positions.”

Schapmire: “I want to fill at least two positions, but I do not want to turn around and lay these people off. I want to know today where everybody stands to see how much support there is for the process and I hope that you will support us moving forward to fill those positions.”

McCowen: “So far I have not heard where failure to fill the position is what's causing the revenue shortfall. I think there were a number of other factors mentioned at the last meeting and mentioned again today and explained in the paperwork here about why the revenues dropped off. It's not yet clear to me how filling more positions will generate additional revenue.”

Julie Forrester: “Traffic infraction filings in the court system have declined. There was a 19% decrease in fiscal year 10/11 [last year] and we expect another 12% decrease (this year) in traffic infraction filings. Traffic infraction filings are what create the main base fine revenue that goes into the core collections budget.

Supervisor John Pinches: “You said 19% reduction in 10/11 and you're projecting a 12% reduction this year. Is that above the 19%?”

Forrester: “Yes.”

Pinches: “So totally it's about 33-35%?”

Forrester: “Yes.”

Pinches: “That's the problem right there.”

Forrester: “Yes. That's the number one large item — the reduction in baseline revenue which pays the maintenance of effort each year which is due to the state which is seen in our expenditures as well. With that reduction in the traffic infraction filings there is less for us to collect based on less filings. In addition, more debtors are electing not to take traffic school. When a person opts for traffic school 88% of the fine goes to the County's baseline revenue. If they do not select it, it's only 31%. So we see less revenue from traffic infractions and we can also see almost $240,000 less in traffic school fines and fees specifically. So of the $481,000 shortfall, $240,000 of that is from Traffic School. Traffic School is not an option that we handle in Court Collections. That is specifically a court function. This department is a blend, a collaborative effort between the Court and the County. Traffic School functions are performed by the court. So we have less filings and less people opting for traffic school. We also have fewer accounts in open payment plan status. We also have fewer debtors who are actively paying each month. We estimate a 10% decrease this fiscal year in the number of open and active payment plans that we have. We feel that is a reflection of the debtor's ability to pay. When debtors have lost their jobs or are losing their homes, their traffic citation is not their most important thing to pay. It becomes low on their list of priorities. This is related to the Franchise Tax Board which can issue wage garnishments and accordingly we are seeing a 15% reduction in Franchise Tax Board collections as well this is clear. They are having difficulty collecting as well. With the job losses in California there will be fewer wage garnishments. We had been hoping that the amnesty program that has been running from January through June would be enough to bring us back to regular revenue levels. But during 2011 the guidelines for the amnesty program have evolved to the point where it has imposed so many restrictions that people who we thought would be eligible for amnesty became ineligible. That program is not what we had hoped it would be to bring our revenue levels up from 10/11 to the normal level for this budget year. On top of that we have had the staffing shortages; we have lost one person per month since September. Although the infraction filings are down over the last year and a half, we have completed the transition of Juvenile Hall and Juvenile Probation accounts from the Probation Department to the Court Collections department so we have not seen a decrease in the workload [in Court Collections]; the workload levels are about equal because we have taken on this function from the Probation Department. So there is an increase in revenue in the Probation Department budget. Short staffing also means we are not sending as many accounts to the Franchise Tax Board for collections. The staffing shortages reduces our ability to follow up on collections. So the short staffing does impact the amount we can collect. It's important to fill those jobs to meet the current projections, or we might be seeing even less. I would like to thank the Court Collection staff for handling the workload and the stress and the counter activity during these difficult times.”

Schapmire: “We had no idea that there would be 77 applicants and that it would take three or four months to go through them. Probation has seen a significant increase in revenue due to Collections work. That covers our maintenance of effort but we don't get the credit for the revenue above that — Court Collections typically makes money, but I would say next year we will be down from $1 million or so to about $700,000. Next year our revenue projection needs to be decreased.”

Pinches: “I don't see where hiring more people will solve the problem of fewer filings. This needs to be a bigger discussion. I can see in prior years where your revenues were $1 million-plus and now it's decreasing by a significant amount. You mentioned something about the Probation Department getting some of revenue, but that doesn't address the big picture. We can't sustain this budget shortfall. This is a new situation. It's nobody's fault, the income just went down. That's just the way it is. We have to live with the reality. We have to adjust. I don't know if it means adjusting the program or what it takes. But I'm looking for a plan, not just to accept this report and everybody go away. This problem isn't going away. We need to have a plan of Court Collections combined with whatever, how in the future — like you say, normally it's made money. We have to get this on a sustainable basis. We can’t absorb a half million dollar general fund deficit every year. We need a plan. I don't know if it involves staff reductions or different ways you do business. Maybe not worrying about small fines. But we have to come up with a plan so that there is at least a zero net county cost to the general fund.”

Schapmire: “We are sustainable; we are making money for the general fund, we’re just making less money. Instead of making $1 million or more, we’re making $700,000 or something like that. Certainly in the future we need to lower those revenue projections. What's happened is not in our control. We cannot keep putting in $1 million. We can put in maybe $700,000. We are contributing to the General Fund. Probation has seen an increase in their budget based upon the collections we have achieved. But those dollars go into the Probation Department, not into our department.”

Pinches: “That has to be accounted for or adjusted. I would just like to see a plan the next time this comes forward. Obviously we have to eat this this year because it has come upon us all of a sudden.”

McCowen: “I think we just heard that the plan is to put the revenue projection in line with reality. The reality has shifted this fiscal year.”

CEO Carmel Angelo: “We will come up with a plan to resolve this. We are looking at other models and if any of them could work we will come back with that as we build next year’s budget. We know that hiring staff will not solve the $400,000 shortfall; it could help somewhat, but it will not resolve it. Hiring could help mitigate some of this. But as we look into the next year or two we may not be hiring and we may be looking at layoffs. We are looking at that but we may not be talking about that next year. The last few months we have been rebuilding staff for some of the programs, the state and federal funded programs, but we have not been rebuilding the basic General Fund funded services which have not been restored back to their original size. Here we had over 70 people applying for two trainee positions and that's with just two people in Human Resources. It took three full days in Human Resources to handle all those initial applications. We need to be looking at filling positions in our general government areas so that we can deal with filling these positions that are serving the public. At this point we have approved hiring two new people based upon the comments you heard today.”

McCowen: “The basic problem is we are not getting the revenues that we projected. That results in a deficit from what was projected. It sounds like we still need to hire additional personnel to make sure that we at least get the $700,000. We are not getting the $1.1 million because of these various factors you have cited. It's pretty obvious when court filings are down and the fees are the way they are, and people are not signing up for traffic school and we don't have the payment schedules. Initially I was not in favor of approving hiring more people. But I think it's clear now that we at least need to hire the people necessary to sustain the system. Plus some of the staff is generating revenue from Probation and, wherever it’s reflected, that revenue is still a net gain to the county.”

Pinches: “We can accept this report today but are we going to get a plan at budget time in the next few months, in two or three months?

McCowen: “We should get regular reports on the issue through the Treasurer and the CEO so the board is kept informed.”

The Board voted 5-0 to accept Schapmire’s report.

But they still haven’t dealt with the substantial new budget shortfall this year of at least $400k-$500k which could be even higher with the addition of two new collections staffers on the payroll.

Payments may be down, but it’s not clear why filings are down. Better driving is an unlikely explanation. The Courts can keep jacking up the fees, and the cops can ticket drivers all they want, but if us perps don’t (or can’t) pay, local government budgets from the traditional traffic citation cash cow take a big hit.

And if the separate Court budget is taking a comparably-sized hit from reduced traffic citations and filings, even the Their Honors might have to… Nah. Not them. They'll get theirs plus a new courthouse they don't really need, complete with indoor parking and a little elevator carrying Their Honors up to their over-large chambers. The only time they'll even see the rabble that pays for their luxuries is in the total security of their courtrooms, with the rabble explaining why they can't pay a $2,000 traffic ticket and buy food at the same time.

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