OUTSOURCING OR SELLING COUNTY DEBT

Board of County Commissioners · 2026-07-21 · report

This is a legislative report on the feasibility of outsourcing or selling County debt, in response to Resolution R-785-25. As of July 29, 2025, the outstanding debt for County Departments was about $525 million. Of that, almost $41 million gross (8%) could be considered for sale to third-party collection agencies or receivables buyers. The report recommends the Board consider the sale of a portion, not its totality, of the outstanding debt portfolio. The other 92% is not recommended. The report was accepted by the Board of County Commissioners on 7/21/2026. The report notes that the outstanding balance of Jackson Health System was not included. The report states that CCS has almost $17 million average annual collections on recurring balance. The report also notes that the average age of the receivables in the active inventory managed by CCS ranges from 4 years to 30 years. The report was introduced on 6/15/2026 by the Mayor. The report is in response to Resolution R-785-25, sponsored by Commissioner Danielle Cohen Higgins, and adopted by the Board on July 16, 2025. The report states that the County has previous experience with awarding contracts to Outside Collections Agencies in 2003. The report mentions potential legal risks under the Fair Debt Collection Practices Act (FDCPA) and the Florida Consumer Collection Practices Act (FCCPA). The report also notes concerns about HIPAA compliance for ambulance-related billing. The report states that the sale of the debt may provide short term cash flow, but would sever access to historical and real-time data, undermining the County's ability to support constituents directly. The report states that historically, prior attempts to use outside collection agencies resulted in limited success. The report recommends that if the County intends to assign or sell code enforcement liens, the County should retain the ability to recall an assignment, and prohibit or condition the foreclosure of assigned liens. The report states that foreclosures cannot occur before the expiration of the one-year deadline. The report states that the sale of these receivables will also affect the departments that include these collections in their Budget. The report states that the County currently reimburses the Clerk of the Court and Comptroller for hearing officers and their staff for the code enforcement appeal process. The report states that the sale of these receivables could jeopardize these funding streams. The report states that CCS will continue to refine its internal collection process. The report states that the originating Departments must also agree on the salability of the account balance. The report states that the outstanding balance fluctuates as new accounts are referred to CCS and existing portfolio outstanding balances are collected. The report states that even though it is legal to sell citations, as a practical matter, it is not for our constituents' or County's best interest. The report states that the majority of the balances due have a compliance component, which must be met even if payment is recovered, to fully eliminate the citation. The report states that there are other considerations such as the protection of data under HIPAA. The report states that outsourcing collections could expose the County to additional legal risks under the FDCPA. The report states that in selling of receivables, we lose the ability to personally assist our constituents. The report states that CCS evaluates hardship cases, manages lien placement and releases, and processes estate, foreclosure, and tax surplus claims. The report states that the County's Collection efforts support economically sensitive programs such as low-income housing assistance, second and low-interest mortgage relief, and the County's Infill program. The report states that CCS also handles billing and rebilling for insurance claims. The report states that CCS provides data analysis and trend reporting to departments and policymakers. The report states that CCS's access and knowledge to multiple internal systems allows for accurate validation and tailored support for constituents. The report states that at times, while reviewing debt(s) owed, we must close it due to untimely billing, incorrect information, new property owners, verification of compliance prior to the violation, etc. The report states that this allows for companion citations to be closed when constituent has complied and paid the citation. The report states that the likelihood of collecting decreases as the receivables age. The report states that third-party agencies may work on a contingency basis, based on size and/or age of the amounts, while others may provide a flat contingency for all debt purchased. The report states that the rates may increase based on smaller amount accounts, as well as accounts that have aged. The report states that the pool of contractors in 2003 included Linebarger Goggan Blair & Sampson LLP (Linebarger Attorneys at Law, LLP), Alliance One Receivables Management, Inc., Professional Bureau of Collections of Maryland, Inc., Collectco, Inc. and Penn Credit Corp, among others. The report states that currently, some of the same providers are still in the market, along with others. The report states that under Florida law, Section 8CC-7(c ) of the Code provides that any person, firm, corporation or legal entity, other than the present owner of the property involved, who pays any such unsatisfied [code enforcement] lien shall be entitled to receive an assignment of the lien held by the County and shall be subrogated to the rights of the County. The report states that a review of chapter 162, Florida Statute (Fla. Stat.) also reveals no prohibition on the sale of the liens. The report states that the Fourth District Court of Appeal, in Cnty. Collection Services, Inc. v. Charnock, 789 So. 2d 1109, 1110 (Fla. 4th DCA 2001), held that Palm Beach County does have the power to assign such [lot clearing and code enforcement] liens. The report states that the County Attorney's Office recommends, if the County intends to assign or sell code enforcement liens, the County should retain the ability to recall an assignment (and/or cancel the assigned lien), including the cancelation or voiding of the underlying citations, and likewise, to prohibit or condition the foreclosure of assigned liens. The report states that Section 8CC-7(d) provides that after one (1) year from the filing of any such lien which remains unpaid, Miami-Dade County may foreclose or otherwise execute on the lien. The report states that the FDCPA, 15 U.S.C. 1692 and Florida Consumer Collection Practices Act, Chapter 559, Part VI of the Florida Statutes (FCCPA) do not normally apply to governmental entities based on explicit provisions in the respective Acts. The report states that the Acts do not contemplate the government's assignment of debt to a private debt collector. The report states that if the code enforcement liens are assigned to a third-party debt collector, it is unknown whether a court would find that the government is, when using a private debt collector, still exempt from the Acts. The report states that the use of a third-party (private) debt collector may subject the County to regulation by the aforementioned Acts. The report states that CCS has almost $17 million average annual collections on recurring balance, to include surcharges on citations, such as the $10 Technology Fund fee. The report states that the sale of these receivables will also affect the departments that include these collections in their Budget, specifically but not limited to code enforcement departments. The report states that the sale of the debt may provide short term cash flow, but would sever access to historical and real-time data. The report states that internal flexibility in managing hearings, late appeals, hardship relief, and settlements would be lost. The report states that HIPAA compliance is also a concern for ambulance-related billing. The report states that this report will be placed on the next available Board agenda pursuant to rule 5.06 (j) of the Board's Rules of Procedure. The report states that for further information, contact Ofelia Tamayo, Director, Internal Compliance Department, at (786) 469-5922.