City government officials in Paterson, N.J. have hired a collection agency to help pursue more than $7 million in unpaid municipal court fines.
Professional Account Management, under the proposal, would receive 22 percent of what it collects an the city would gain the rest. The Paterson City Council is scheduled to vote Tuesday whether to hire the Milwaukee-based collection agency.
Four other companies applied for the job, including three at the rate proposed by Professional Account Management and one that offered to take just 20 percent of the collections.
Paterson’s court collections have been on the decline, dropping from $5,038,000 in fiscal year 2011 to $4,054,000 in 2012. Some of that is a result of a reduction in summonses being issued, officials said.
The targets of the company will be people who have not paid parking tickets, criminal fines, moving violations and other penalties that are long overdue.
The only recourse local courts had against deadbeats for many years was suspending driver’s licenses or stopping individuals from renewing their vehicle registrations, officials said. But in January 2011, a new law went into effect that allowed local courts to hire collection agencies.
The city currently faces a $8.5 million gap in its proposed 2013 budget. (That’s the difference between the maximum 3.6 percent city tax increase allowed by state law and the 9.9 percent increase that now exists in the preliminary budget.) Officials are hopeful that the collection agency will be able to certify that it will be able to take in a certain amount of money so that the revenue could be anticipated in this year’s budget.