A resolution approving a proposed Third Amendatory Agreement between the City and County of Denver and Integral Recoveries, Inc. to amend provisions, extend the term, and to expand the scope of collections. Amends a contract with Integral Recoveries, Inc. to add two years for a new end date of 2-1-2024 and expands the scope of collections to include cases owing less than $300.00. No change to contract amount (COURT-202261912). The last regularly scheduled Council meeting within the 30-day review period is on 4-18-22. The Committee approved filing this item at its meeting on 3-15-22. Pursuant to Council Rule 3.7, Councilmember Torres called this item out at the 3-29-22 meeting for a one-week postponement to 4-4-22.
No items have been called out under bills for final consideration. No items have been called out under pending. No items have been called out. Madam Secretary, please. But the first item on our screens. Councilmember Black, please put Resolution 278 on the floor for adoption. I move that resolution 20 2-0278 be adopted. It has been moved and seconded questions or comments by members of council. I do have my own comments first. And soon there's no one else in the queue. I will go ahead and ask those. Kristen Wood from different courts. I know you're here to answer questions. If you'd like to respond to these points afterwards, feel free. Okay. So this particular bill to 78 was proposing to begin a process of sending debts owed under $300 in Denver court to collections agent that we currently use into role forgive me, integral recoveries. I appreciate Ms. word your responsiveness to all of the questions and I asked a lot after the last meeting, but I remain concerned about how the contract would perpetuate or exacerbate poverty in Denver nationally. Fines and fees disproportionately burden low income people and people of color and make it harder for low income folks to afford basic services and goods. But I think there's still an opportunity before creating a new category of collections referral for us to ensure we have a full picture of who's impacted and what the consequences can be, and if there are more innovative and just ways of addressing fees and fines owned. My areas of concern were that there hadn't been an equity assessment done to identify, benefit and burden scenarios that I didn't know based on the responses. How many cases or what proportion are actually referred to integral for collections? And although fees can be waived for those who are found indigent, it's an onerous process that not everyone had the resources to know how to navigate. As an FBI, the Office of Financial Empowerment in the City is currently applying to join a cohort for cities and counties for Find and Fee Justice Leadership Network. Denver would join nine other jurisdictions in advancing fee and find policy reform, including Seattle, Sacramento, Philadelphia and Dallas. Given this, I think it would be a prime opportunity to allow the Court's time in the Office of Financial Empowerment to come together and address unanswered questions and create a more robust proposal. So I will be voting no this evening. Councilwoman Ortega. You, Madam Chair. No. I didn't want to be in. You. Is your mike on, Councilwoman? Can you hear me now? Yes. Okay, that's better. Sorry. Can you repeat your question? Yes. My question was whether or not this is one of the contracts that came through the Crime Prevention and Control Commission. Not that I'm aware of. It's been the court. Can you pull the mic down, please, and introduce yourself? Kristin Wood, Court Administrator for Denver County Court. And to my knowledge, this contract since my time as court administrator, which is February of 2020, has come through twice before council and it was on the courts, whether it was originally part of the CP. CC we've had this contract since 2009. To my knowledge it did not, but I could confirm that if needed. Okay. I just as as a seated member of that body, I don't remember this one coming through and just wanted to clarify if it is CPUC funded or if it comes out of the general fund for the courts. There is no associated funding with this contract. The city does not pay anything on the front end for this contract. So it's revenue generated from the referrals? Correct. Okay. Got it. Okay. Thank you. I don't have any further questions. Thank you. And we've got Councilwoman Black. Thank you. I read all of the answers that you sent over, so thank you. And then, councilman. Torres an email not too long ago, but. If this bill fails, what does that mean for in its managing the courts? Sure. In its current form, we are expanding the scope to include collections under $300, but it also extends the term of the contract for collections in its entirety. So if this bill fails, it would terminate all collection efforts across the board, even for amounts. Mr. Bailey. $300. And so if that were the case, I would inquire as to whether or not it would be reasonable to proceed with an amended contract to exclude that expansion or if it was reflective of a failure on collections in its entirety. And Councilwoman Torres mentioned this. Cities and counties, fines and fees, workgroup or something. Are you aware of that? The Office of Financial? Yeah. I am not aware of that office. I did correspond with Councilwoman Torres after she sent the email and stated that we would be happy to participate in any study with respect to data that would assist them in their in their assessment with respect to impact. With respect to court customers and how that office could potentially benefit them. We are also happy to provide resource referrals and are you aware of other cities that are eliminating these kinds of fines? I know that there are ongoing studies with respect to fees and fines the state courts in Colorado currently use. I believe there's three different vendors for delinquent accounts where fees and fines are owed with respect to our assessment as a court. It's all defined in statute and ordinance. So any efforts with respect to a study or perhaps reducing or eliminating certain fees and costs, I'm not a part of that are aware of that currently. So if it was the desire of City Council or the Office of Financial Empowerment to eliminate these fines would require changing state statute as well as as part of it. As Denver County Court is a hybrid model of state cases and municipal cases. And so with respect to any type of amendment to what is currently defined, an ordinance would not impact state fees and fines on those types of offenses. And so just to clarify, this bill would continue the contract of collecting fees and fines over 300 and then add the additional task of collecting under $300. That's correct. And so, Councilwoman Torres, is your issue with the fines that are less than $300 or all fines? I would say all fines, but I think the original issue was with those under 300 initially as a new category that we would be sending to collections. And so is your desire to completely stop collections while the Office of Financial Empowerment participates in this program and then go on to change state statute? Well, no, not state statute. I think the Leadership Network for the Office of Financial Empowerment, those cities don't just outright eliminate fees and fines. They assess which ones could potentially be unnecessary, overly burdensome. They do an assessment. It's basically what they do. So it isn't a proposal to eliminate everything, but it is a proposal to involve them in a conversation to have about what an appropriate evolution of sending fees and fines to collections could or should look like. And I'm sorry I have so many questions, but a lot of the information I just got a couple hours ago, but. So all of the money that's collected goes into the general fund that doesn't fund the courts, is that correct? All the the fight, the fines, as Councilwoman Torres pointed out, are punitive in nature for the offense. So some of the the cases that are brought before the court, the only type of punitive outcome they would be, jailable offenses or probationary eligible offenses would be a fine. Other types of surcharges or cost generally go back to the general form or are dispersed out to other agencies for programs, for instance, the drug offender surcharge, a portion of those those costs go back to awareness, education, treatment and are targeted in that in that regard. Okay. I have one final question. Councilman Torres in an email said that people are prevented from renewing their driver's license if they don't pay the fees. I didn't think that was true. Is that true at present time? The there are no driver's licenses that are suspended for nonpayment. There was an outstanding judgment warrant fee that was previously ordered by the court, which, if left unpaid, the DMV could administratively suspend a driver's license. That was since repeal of last legislative session in the in the state. Okay. So that is not that's not an issue. So what if someone owed $147? What you said was the average. What if they never pay the. They're usually purged from the system with respect to collection efforts. Honestly, they're not reported to a credit bureau, and they're certainly not going to be they're not going to receive a higher punitive sentence than that. Fine. With respect to previously going back ten, 15 years, they used to jail people on failure to comply and warrants. And that obviously is not something that is going to serve either a punishment or a rehabilitation effort in any regard. And it doesn't harm someone's credit if we do not report to the credit bureaus. Okay. Thank you. You're welcome. Thank you, Councilman Cashman. Thank you, Madam President. Pro tem. This is to extend the contract with integral for two years, correct? For an end date of February one, 2024, so that this contract end February one of 2022. Are we out of contract? You're correct. So are they not doing collections? They're currently doing collections. So if we vote this down does not mean all of a sudden collection stop. That means we would have to go back to take over. Right. Draw that. Those efforts. Yes. Right. And so would you guess from since they've continued. That we'd had some time to work out, that they'll continue to collect because they make money. And we will then address you will then address a new contract provision to keep them going for some length of time. I guess I think that's the important thing of understanding, whether it's a $300 threshold or collections in its entirety. If it if we were revamping the contract simply to extend the terms, if that was something palatable, then we could certainly do that. Are the reason for expanding it is because we've always collected on delinquent accounts and didn't have a definitive threshold in which we did it right. It was a programing effort in 2020 that we undertook to revamp our collections process with integral. So in the past. They collected all dollar amounts. Correct. Only since 2020 was the three. Were the 300 and below left out. Correct. Okay. Thank you. Welcome. Thank you. Thank you. I'd like to welcome Councilmember Herndon to the meeting. Councilwoman Sawyer. Thanks, Madam President. Pro tem. Thank you for that information. Just a quick clarifying question and I apologize. I read through the email that you sent, but I don't recall seeing this in there. How was the $300 threshold arrived at? So in in city ordinance, there is a flat rate that is assessed depending on the amount owed on the case, $300 and less is a percentage of the balance of what is owed, which took extensive programing efforts by our I.T. department and integral in the interface that we use. And so we decided to hold off on doing that in an effort to revamp our collections process, which we originally revamped it as part of a budget reduction process because the city used to advance an allocation for us to pay integral, to do the collections, to then recover it and recoup it once the costs were paid. Okay. So if we are no longer jailing people who are not paying this fine and we're currently not collecting on anything under $300, have we done any sort of I know that there wasn't any sort of impact analysis done, but are we sure that that $300 threshold, let's say the conversation was on the table, that we were considering no fines at all or some sort of different level of fines, recognizing that there is a an impact to particularly, you know, a lower income or no income group of people when it comes to those fines. Have we? Are we sure $300 is the right number? Have we studied kind of the specifics around that at all? Yeah, but the the court, in all honesty, has not done a study with respect to fines and costs. Our role is simply to assess them based on the offense and what's defined in statute in the ordinance. So an equity study of those cases that owe 300 or less has not been evaluated. Okay. And so that is something that potentially maybe this is a question for Council President Pro Tem Torres is something that potentially the Office of Financial Empowerment could then do to provide more information on whether that $300 threshold is the right way to go. Okay, great. Thank you. Thanks for your thanks for your interest. Yes. Thank you, Councilwoman. So your Councilmember Black, your backup. Okay. I'll go to Councilman Flynn. Thank you, Brian, for your time. Christian. First of all, could you pull the mike down a little closer? Yeah. Okay. Thank you. In your response to the questions from last week, there were two things I want to make sure I understand. Unpaid fines and fees from court judgments are you said, are not reported to credit rating agencies, credit bureaus. They are not. That is true. That is true. So the fact that someone in this category would be subject to collection by integral would not become part of their their credit record. Correct. And then the other thing that I was trying to clarify was about driver's license. Correct. And you said that Colorado statutes were changed so that fines and unpaid fines and fees no longer result in an inability to renew your license. Or is that not true? They won't suspend the license. But can you renew a driver's license if you have unpaid court costs and fees? Not that I'm aware of. No, sir. It was only on outstanding. If you owed an outstanding judgment warrant fee with the DMV, that is what allowed them to administratively suspend a license and what they require payment of in order to renew it. Those are no longer assessed cases. So you can renew a driver's license if you owe, even if you are. On the list here being pursued by integral to pay court fees. Some find you can still renew your license. From the date the legislation passed when that legislation became effective. Yes. Four cases that occurred prior to that date. No. Right. Okay. And what was that? What was the year? What was the session? It was last year. Legislative session. Thank you. You're welcome. Thank you, Madam President. Thank you. Councilman Flynn. Councilwoman Ortega. I think I'm on. Yes. Okay. So I just want to kind of probe a little further into this. You made mention about the state courts and in the role that the courts have in being able to impose a fine. How does that differ from this contract? It doesn't. Okay. So that's. Any any cases that are within county court's jurisdiction, which could include a felony case that has been pled down, a misdemeanor case, which is a state level misdemeanor or a municipal. Okay. So I want to ask first of all, what is the annual amount generally that is collected that comes back to the city? Uh, I can run that information for you. I can tell you in traffic. It is generally around $13 million. Okay for criminal cases with respect to fines, fees and costs, the fines, I would have to run a query to find out the annual average amount on those cases. So if we did not pass this tonight, any of the people that are in the process of. Gathering together the amount of money they owe on their fees, what what happens to them versus new people that come to the door from the time. If if this doesn't go forward. So we have collections investigators on staff who work with individuals. I think when you look at fines and fees and costs that are imposed overall. Part of that is also restitution. Right. I'm going to ask you about that. That part of that is restitution. The fines, fees and costs. If an individual is found indigent at the time of sentencing, those fines, fees and costs are or can be waived based upon a finding of indigency. Our collection staff work with individuals to establish a payment plan so that someone can make a good faith monthly payment. Even if that is a very nominal amount. It's only when they're in noncompliance do those cases get referred to collections. And I believe that is after 90 days when an account is no longer responsive to our collections department that works with the courts. We have three collections staff that that currently work with individuals who have open accounts with the court. And help me understand, is this the only collection contract the courts have or are there others right now? Denver County Court only has this one collections contract. Okay, so if this fails to pass, then all fees that are collected from restitution to traffic fees, etc., etc. all would just come to a halt. Is that correct? With integral recoveries? Yes. Okay. Well, since they're the only one collecting. We do have three internal staff that work with individuals, but not on delinquent accounts. So those collections will still continue with staff, but not with this contract. Right. So what's the percentage difference between what staff generates versus what? This company generates in terms of the outreach to the folks that meet that 90 day collection. And I would have to get the information for internal or internal collection staff. I have the information provided to you by integral recoveries. I think they have over the period of of five years, I think 149,000 cases that have been referred to them with an amount of, I believe it was somewhere around $12 million. With respect to our current ongoing with those that are at our engaging and and meeting their established monthly payment plan, I can certainly query that information for you. Okay. Madam President, pro tem, I'm a little concerned about if council votes this down tonight, not having sort of an interim plan. I think it is important that the Office of Financial Empowerment can look at this and help us, and I would hope that it's looking at all our fines and fees. I have a list going back to I want to say 2011, looking at all the fees that we've collected over time. But I would hope that it's not solely limited to the courts so that we have a way to look at over time which fees or fines have continued to increase and are they disproportionately impacting various segments of our community? And I think that could then inform how we then move forward with this particular contract. What I don't know is if the two years is a one year contract with a one year renewal. Is that how it's written? We're asking for a two year contract so that we can continue our programing efforts to expand to this under $300 amount, which will take some ramp up time. Okay. Thank you. Thank you, Madam President. Pro tem. Thank you, Councilwoman Black. Thank you. So I did have the same question as Councilwoman Ortiz about what percentage is delinquent versus those that are paid on time. And you were also talking about restitution. So that's restitution to victims of crime, correct? Is that correct? And the other penalties you mentioned that they were there were penalties instead of someone going to jail. They are part of the original sentencing disposition on a case, and those vary by the offense level. Some do qualify for probation. Some might face a period of time in jail. Other individuals, the only punitive like a traffic ticket, would be a fine and court costs. That would not be a jailable offense or a probation eligible offense. That is, several municipal municipal offenses also include those where a cost is the actual punitive outcome for disposition in the case. All right. And Councilwoman Torres, I guess this question is for you. If if this bill either passes or fails. Is your intent to work toward and I think you already said this I was clarifying not to totally eliminate fines and, you know, restitution to victims, but to assess people's ability to pay. Yeah, absolutely. Thank you for that question. And I think what's important to note is that this is happening around the country where municipalities are assessing what's the status and why are we assessing particular fines and fees. We just have the courts in front of us today, and that's why I think your fines and fees are before us . But the Office of Financial Empowerment would be doing this as a citywide assessment. And so but if a judge is determining what a penalty is, what gets what? I get where you're going. This would not supersede judicial recommendations. Fees for restitution. This may be just looking at what are we charging as the city for administrative process. I couldn't tell you for sure because they're not part of the cohort yet. And I think that's part of the difficulty here, is that what we're asking about and what's being proposed isn't quite matching up or fully understanding one another. And that's why I feel like this component of the 300 and under proportion just isn't ready for approval. Okay. Thank you. I think whether it passes or not, I think. You and the Office of Financial Empowerment and Others Council woman are taking me to this too. Are interested in really taking a look at fines. And their appropriateness, whether this passes or not? Yeah, absolutely. Okay. Thank you. Thank you. Councilmember Hines. Thank you, Madam President. Pro tem, I I'm wrestling with something that Councilmember Ortega mentioned. I think Councilmember Black mentioned it as well, just about the, um, the extension and whether yet, you know, whether we could do a contract extension. I mean, I guess what I'm thinking we can only deal with what's presented to us and, and the courts are presenting to us a contract extension for something that's already expired. So in some ways, we're. We're we're working with something that is already doesn't have a contingency. So I recognize it's not ideal to not have contingency. We're kind of where we are now with no contingency either way. So tonight we can either vote yes or no. We can't amend it. So at this point, I am I agree with Councilmember Torres. I will vote no. Thank you. Thank you, Councilman Hines. Councilwoman CdeBaca. Your mike, please. Can you hear me? Thank you. Not a question, but just a comment for my colleagues. If you recall the Reimagining Policing Report under strategy two, which was minimizing unnecessary interaction of law enforcement and the criminal legal system. With the community. This is one of the strategies that was. Called out as a. Recommendation from community to partake in this process. That Councilwoman Torres is talking about. And to make sure that we're absolutely not pursuing people for. Fines. Especially below. The $300. So just putting that on record and it is in. Alignment with many of the conversations that have happened in the PCC as well. Thank you. Thank you. No other members in the queue. Ms.. Woods I would just say that Councilman Hines, I think, hit on a point that I had been struggling with, that we're already operating past the due date of the current contract, which means I think this should have probably come to us much sooner so that we could have a dialog in committee about what might be appropriate to do now versus wait until some other conversations with other city partners could be available. Unfortunately, I still don't think this contract is ready for approval. I don't think we lose in asking you to come back with maybe a perforated proposal for contract which separates out the under 300 versus what's currently being assessed. But I don't feel I have the confidence that we know the full impact of what the under 300 given how many individuals are tied up in that particular proportion of fines and fees to approve this. If it does pass, I would like to get your commitment that you'll still work with the Office of Financial Empowerment before any of those cases are referred to integral recoveries. I know you have you do work with them as it is. And if they get past that 90 days delinquent that those get held and not sent over. So I think we're really trying to get in the middle of what could potentially be a really negative impact for residents that we may not necessarily need. So I would just ask you for that. If it does not pass, I would then like to see if the courts would offer a separate separated contract for the two sections. I appreciate. That. Okay. Councilwoman Ortega. I just had one quick question for actually two questions. One. One for the. CORDES How how quickly and I know this involves multiple agencies. Could you turn around if this vote is voted down tonight, how quickly could you turn around an extension with an amendment that would address the $300 threshold? And then if this goes down and we're looking at an extended time frame, I just was going to ask a guy from the mayor's office what would get cut, because we're talking about a sizable impact to either the courts or the general fund if some of that money ends up coming to the general fund as well. I don't know. This is something that you guys have thought about, Skye, but I just wanted to ask that question. So first of all, what would be that turnaround time? If this went down tonight and you all could amend, amend and extend the current contract knowing that you're continuing to function under the existing contract, even though it's expired? Sure, that would be my office. Obviously amending the language and removing that expanded section of that contract. And then it would go to the city attorney's office for review and approval, and then we would file a new resolution with council. Any idea on timing? That's what I'm trying to get. Clarification. I would say. But. And if you can introduce yourself, please. Good evening, Steve. John, Denver City Attorney's Office. Approximately 6 to 8. Weeks. So. So if this. Goes. Mr. Bailey, you've been asked not to have outbursts. You can leave if you're going to continue. Thank you. So if it's 6 to 8 weeks, that means for the interim, this company could not continue to collect anything set. Correct. You're out of contract right now. Okay. But they have been collecting even though they're out. We have not told them to cease. Okay. We would be obligated to do so if this sort of thing. Yeah. If this went down. So we'd be looking at, you know, at least two months before this would come back. And so those are collections that I think the city has counted on in some of these agency funds that we would be losing out on. I think the the policy discussion is an important one. But we also want to make sure that we have the ability to collect, you know, some of these key fees, restitution fees are always part of a court order. Right. It's part of what is being mandated when somebody finally gets their day in court and it's part of their, you know, what they're expected to do to be in compliance. And if this completely negates all of those and there's an expectation that the victim is supposed to be getting something, and now we've just said, nope, that's not happening anymore. I think we're sending a mixed message here. And I'm a little concerned that we're trying to do this without really having something else in place that ensures that we can do that. And if we can do, you know, a contract amendment, an extension that allows the time for this work to happen with the Office of Financial Empowerment, I think that then gives us a clear picture of moving forward into the future with not just our courts, but many of our other agencies that charge fines and fees. And then I think part of that big picture is what is the financial impact to the rest of the city's general fund? You know, we're in great times where we're enjoying the benefit of some federal dollars that we have not had in our coffers. But that's that's not going to last forever. And that's not always been the case in terms of how we are able to conduct business. So I think that all needs to be part of a big picture that we look at moving forward as fines and fees are reviewed across the city. Thank you. Thank you. Thank you so much. Councilman Hines. I'm sorry. Cashman. Thank you. Sorry, colleague. I'm. So trying to clarify that $300. Figure. Was it simply? Pulled out of the air by programmers saying, we have this much time, we can only get to this level. Was was there any philosophical element of that discussion? Why that number? Because this is my first thought was that this is a new element we're adding. But what I'm hearing is it's not. It was done for years and years at that 300 and under level. And because of the programing involved in the new system, you just couldn't get the work done in time. I guess it was it was really during the budget reduction process in 2020 where the ah budgets were to be reduced by a certain percentage. And as we looked at ways in which we could reduce our budget when 10% of it is only operating, we looked at our existing integral contract which required an upfront about a $600,000 a year allocation from the general fund in order to pay integral to do the collections, work on the front end for the general fund to recoup it on the back end. And so that was a decision we made in a in a way that we could revert some money back very, very quickly. So to do that, we really had to re-engineer our entire collections process, which meant a lot of programing because we would no longer be receiving these dollars and depositing them. It would be integral doing that. And so that required a lot of programing. And as you look at the asset recovery fee that is allowed by ordinance, they are flat rate fees for amounts owed up until that $300 amount is a flat rate fee underneath that $300 amount, it is a percentage calculation which required much more time of our programmers to program for all of our current cases. Sure. And so we decided to hold off on that so we could meet our budget reductions in 2020. Okay. A couple of things. When we get contracts like this that have expired. It really stretches our ability to do our job to give important topics the consideration that they deserve. I think the points that Councilmember Torres brings up are extremely valid. That should be looked at. I'm enthusiastic about the study that that's been talked about to see really how all this plays out and what a number would be since it appears 300 was an accidental number. But the thing that I'm kind of mystified by and when you said you would feel obligated to tell them to cease collections , I can't imagine why when it wouldn't be in the best interests of the city and county of Denver and this body. I'm not wanting to put words in my colleague's mouth, but what I'm hearing is that those who are considering voting no on this would like to see a bill. Continuing as integral has been previously doing collecting above $300. I understand and I completely appreciate that and have no problem drafting an amendment amendment mandatory language to exclude the expansion of the scope and only request to extend the term if that is how council felt. I do feel if I had a final if if this bill failed, it would be a formal failure. And that is where I would feel obligated to contact integral recovery services collections. I'm happy, though, to submit a new bill that excludes that expansion request. I would make it clear I want to make it clear that I would think that would be a terrible decision. It would not be what I think anyone on this body would want. I won't see any, say anyone. But as far as I'm concerned, I don't think that's a wise move. But you're in your position and I'm in mine. Thank you. I appreciate all your answers. Thank you. Councilman Cashman, Councilman Hines. Thank you. Council president pro tem. I just for quartz. Just so you know, we have I have personally talked about safety multiple times, bringing expired contracts before us. So this just happens to be a court's contract. But I want to I want you to know that that I'm trying to be consistent and and I've mentioned to safety that and that I also feel uncomfortable working with contracts that have already expired. And some of those, to Councilmember Ortega's point, have had financial impacts. But but I think it's important that we that we notice that that this is something that that the body has voted down multiple times in the past, expired contracts that have financial impacts . So thank you, Council President Pro Tem. Thank you, Councilman Hines. Seeing no one else in the queue. Madam Secretary, roll call on resolution 22, dash 278 black. I see tobacco? No. Clark, I. Think. I. Herndon High? No. Cashman? No. Ortega. I. SAWYER. No. Torres No. Sorry, Madam President. You have five eyes and five knees. Five Eyes Resolution 22 dash to 78 has failed. Madam Secretary, please put the next item on our screens. Mr. Bailey, you can leave Page.