Collection effort pays off

Posted on 18. Aug, 2010 by Collections Recon in Collection News, Press Releases

WARREN – Warren’s debt collection agency has netted nearly $340,000 for city coffers since it started working on delinquent accounts four months ago.

Mayor Michael O’Brien said more than $1.2 million has been turned over to Capital Recovery Systems Inc. for collection, including $1.1 million from Warren Municipal Court alone. Of that, the company so far has collected $330,153 in unpaid court fines and costs.

The court has been using the collections company for several years, and the city began using it earlier this year to collect debt for other departments.

O’Brien said the water department has turned over $109,000 in outstanding bills in the past four months, of which $6,436 has been collected. The health department has turned over $8,300 in unpaid rental inspection fees, of which $642 has been collected.

Capital Recovery Systems Inc. also has collected $5,267 for the income tax department. O’Brien said the city has an agreement with the Central Collection Agency of Cleveland to help Warren boost its income tax collection by comparing city filings with state and federal filings to catch discrepancies.

However, tax administrator Tom Gaffney said the agreement with CCA has nothing to do with the fact that Warren’s income tax collection is about $200,000 ahead of projections for 2010. He said the city and CCA are in the process of exchanging information necessary for the process to take place.

Gaffney said projections are always conservative and the 2010 income tax projection of $15.5 million was $1 million less than the 2009 collection and $5 million less than what was collected in the five-year high of 2006.

He said the projection was made based on the idling of Severstal, elimination of the third shift at General Motors in Lordstown and other manufacturing job losses in 2009. He said Severstal has since reopened and recalled most of its work force while GM has resumed its third shift.

”We have been ahead of projections all year, and I expect it to stay that way through the end of 2010,” Gaffney said.

Despite that fact, Gaffney said he does not anticipate a higher income tax projection for 2011.

”The economy is still so fragile and it’s better to be conservative than over-confident,” he said.

By MARLY KOSINSKI Tribune Chronicle
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Tags: Capital Recovery Systems, collection, debt collection, efforts