Lombard considers joining state program to collect debts

In an effort to avoid a future budget deficit, Lombard is considering joining the state's local debt recovery program.

The program, created in 2012, is used by more than 260 government units across Illinois to collect delinquent debts, such as parking tickets, fines for property code violations and other fees.

Local governments submit debts they want the state to collect that are less than 7 years old, greater than $10 and not involved in litigation. The Illinois Office of the Comptroller then withholds money owed to debtors from tax refunds, lottery payouts or payroll checks to pay for the unpaid debts.

Debtors have 60 days to protest the withholding of funds. If no protest in made during that period, the amount owed is transferred to the local government. The debtor also pays an administrative fee to the comptroller's office.

Village Manager Scott Niehaus said a lot of other towns already have enrolled in the program because it operates at no charge to them and it "comes down to a matter of fairness."

"Imagine if we, as a government, need to reduce our service levels or increase some other revenue form or tax, while we have people that were assessed a ticket or fine that haven't paid," he said. "Someone who technically broke the law and is supposed to pay us a ticket gets off while the law-abiding citizens that live here end up having to pay more in some other tax, or have their service levels reduced."

Niehaus added, however, that even if the village participates, that doesn't mean it will get all the money it is owed, since some people don't have a tax return or any other money coming to them from the state.

Still, he believes it is a good option to pursue to prepare for matching revenues with expenses.

"It takes very little time and money to administer," he said. "All we do is take a data file every month or every three months to the comptroller. We get a check from the state when someone has money coming to them from the state that the state can grab."

Unlike a collection agency, the local debt recovery program does not report delinquent payments to credit agencies, which means outstanding debts can be collected without causing damage to residents' credit ratings.

The village's finance committee currently is reviewing what outstanding tickets it would like to see included in the program. It is estimated the village can recover about $40,000 in fiscal year 2016 if it enrolls.

Niehaus anticipates the village board could vote on an intergovernmental agreement with the Illinois Office of the Comptroller in the first quarter of next year.

The finance committee is scheduled to review other revenue options early next year, including various forms of amusement taxes. Committee members also are taking a look at where cuts could be made with service levels and expenses, because to balance the budget in the future "there's got to be some give and take," Niehaus said.