The city council in Knoxville, Tenn., is considering Tuesday whether to join the ranks of city's hiring collection agencies to recover unpaid court costs and property taxes.
While most court fees in Knoxville's City Court start at about $100, the total owed to the city per year exceeds $500,000.
The move to hire a collection agency comes at a time when the city budget is stretched. Mayor Madeline Rogero and City Council must find an additional $5 million in the 2012-13 budget because of an underfunded employees pension. A $14.4 million contribution from the city's $180.5 million current operating budget is expected to increase to $20 million in the 2013-14 fiscal year so the pension can meet its promise to retirees.
Jim York, Knoxville's finance director, said it's expected the council will approve the idea at the meeting Tuesday and that a request for proposal will be the next move. An agency could start collecting as soon as this spring, he added. The city currently chases delinquent accounts using internal resources.
York said the idea to consider a third-party collection agency came from a group of University of Tennessee master of business administration students who reviewed the business operations of the city for a class project.