Cities hope to keep court fee revenue

City councils in four small Washington County cities called special meetings this month hoping to keep their court fine revenue from being put in the back of a line.

Council members in Elkins, Farmington, Lincoln and Greenland approved last week, or will review this week, ordinances allowing for installment payments collected from court fees to be split equally by the state and their cities. The fees come from cases, such as misdemeanor criminal charges, handled at their district or municipal courts.

Prairie Grove’s City Council passed a similar ordinance during its meeting this month. Lincoln will review its ordinance this week.

Meanwhile, a state fund used to pay the salaries of court reporters and trial assistants is nearly broke, state officials said. Revenue for that fund comes from the payments people make on district or municipal court costs.

The four city councils approved their ordinances in hopes they would be grandfathered into expected legislation next year to change what gets paid first when a person makes monthly payments on restitution, court costs and fines, according to officials from those cities.

When making monthly $50 payments for example, a person found guilty of a misdemeanor crime at a municipal or district court, such as a careless driving charge, must first pay a $5 installment fee, then restitution for the victim from the car accident, followed by court costs and fines.

For years, some small cities in the county have split equally with the state the installment revenue received from court costs and fines, once restitution is paid. State law allows that 50/50 allotment, however the cities never formalized the split through city ordinance, said the Farmington court clerk.

Revenue from court fines stay within the city to help pay for police departments and municipal courts. Court costs are fees collected by the courts and forwarded to the state’s Administration of Justice Fund. Some revenue from court costs also make their way back to cities.

The five city councils, along with Washington County officials, caught wind of expected state legislation next year that could remove a city or county’s ability to split installment revenue with the state, unless they pass ordinances by the end of the year. Some city councils received minutes from a meeting between the Arkansas Judicial Council and the Arkansas District Judges Council.

The minutes show the judges council unanimously endorsed several changes to state law, including removing a city’s and county’s ability to split revenue equally. The minutes also say the organizations would support grandfathering in cities who pass ordinances by Dec. 31.

“It would absolutely kill my Police Department and my court if that split goes away,” said Chuck Wood, Lincoln city manager.

Revenue from court fines makes up between 20 and 30 percent of Lincoln’s police budget, he said.

In Little Rock, Circuit Judge Vann Smith, president of the judicial council — which consists of all judges of the circuit court and Court of Appeals, Justices of the Supreme Court, retired justices and judges — said the council hasn’t voted on any type of legislative change and will review in January the changes suggested by the district judges council.

“I can’t speak for the council,” Smith said. “I think some of the things the district judges proposed we’ll adopt.”

Most of the revenue from court costs make their way to the state’s Administration of Justice Fund which is nearly broke, said Brandon Sharp, state budget administrator at the Department of Finance and Administration.

“The fund for the last two years has not been supporting itself,” Sharp said. “We have seen a significant drop off over the collection of the last two years. So we have had to implement an 18 percent cut on all appropriations.”

The fund’s balance was $10.3 million at the start of the state’s fiscal 2011, $5.8 million at start of fiscal 2012 and $2.7 million at the start of fiscal 2013 in July, Sharp said.

The decline comes from a combination of fewer misdemeanor citations being issues and more appropriations from that fund by the state Legislature for agencies such as the law schools in Little Rock and Fayetteville, the State Crime Lab, the State Police Retirement Fund and almost two dozen other categories, according to a February report from the state Division of Legislative Audit.

The fund, during fiscal 2011, brought in $39 million and had $43.5 million in expenditures leaving the $5.8 million balance, according to the report.

The big crisis is the state’s inability to make the payroll for the 122 court recorders and 122 trial assistants next year, Sharp said. The state spent $8.7 million for court recorders and $6.7 million for trial assistants in 2011, according to the report.

“The governor and attorney general have provided one-time funds for the last year to support those groups to continue making payroll,” Sharp said.

Gov. Mike Beebe, however, said he would only provide his one-time funds if the Legislature worked to rescue the justice fund, Sharp said.

The minutes from the meeting between the judicial council and the director of the Administrative Office of the Courts, say court costs should be paid in full before victim restitution. Payments would then go to fines for city revenue.

“I’ve been a court clerk for 30-some-odd years,” said Jimmy Story, Farmington finance director. “It would have a huge impact because we’re small. People tend to make two or three payments then quit making payments.”

The city wouldn’t get a dime if people quit making payments on fines and costs if the law is changed so costs would be paid in full before restitution and fines, he said.

In Farmington, the city brought in $96,947 in combined fines and court costs. Story said the state sends back $1,426 per month from court cost revenue.

The Sprindale District Court doesn’t split revenue, said District Judge Earnest Cate. Springdale first applies payment money to victims, then court costs, then fines, he said. The legislative proposals won’t affect his court much, he said.

“I think victim restitution should always be paid first,” Cate said. “That’s the way we do it and I hope they keep it the same.”

Fayetteville doesn’t have the necessary software to equally split payments with the state and county, said Dena Stockalper, chief clerk.

In Prairie Grove, the best case scenario is for the court to pay itself, said Mayor Sonny Hudson. By putting fines at the end of the line, paying for court operations would burden his city’s general fund.

“It could be months before a city could get a penny of that revenue after the state gets its share,” Hudson said. “If we don’t get anything out of that, then it’s an expense.”

Web refer:

To find the state Division of Legislative Audit report detailing the financial status of the Administration of Justice Fund go to www.nwaonline.com/documents