LOUISVILLE, Ky. (WDRB) — Since tolling began on three Ohio River bridges in late 2016, RiverLink operators have struggled to collect tolls and late fees from drivers who don’t pay.
Data show Kentucky and Indiana are missing out on millions of dollars each month that could be used to maintain the crossings and help cover future work, such as replacing the aging Kennedy Bridge.
But a new plan will pursue toll violators through a collections agency, a first for the 5 1/2-year-old system that connects Louisville and Clark County, Ind., and bills drivers without RiverLink accounts based on photos of their license plates.
State leaders chose Perdue, Brandon, Fielder, Collins & Mott LLP, of Amarillo, Texas, in August to lead a collections effort that is scheduled to start by September 2023. The law firm, which specializes in collecting government debt, will try to recoup money that’s owed by drivers who haven’t paid even after receiving multiple notices.
And it’s not an inconsequential amount: A WDRB News analysis of publicly available data found that $212.7 million in unpaid tolls and fees from May 2017 through December 2021 would have been sent to collections during that time.
That amounts to about two years’ worth of actual toll collections. During the 2020 and 2021 fiscal years, for example, the states received nearly $208 million from drivers using the bridges.
Without a dedicated company pursuing transactions that went unpaid after four months and otherwise would have gone to collections, only about 10% is being recovered, according to Kentucky and Indiana.
There is not yet a target for how much Perdue Brandon expects to recoup once it begins its work next year. But the money that’s ultimately brought in will be in addition to toll collections that failed to meet projections during the first two years of the COVID-19 pandemic before rebounding to slightly exceed predictions during the most recent fiscal year.
Kentucky and Indiana split revenues from tolls, which are set to be in place until at least 2054.
The decision to hire a debt collector came, in part, after seeing how other toll systems operate, said Scott Manning, deputy chief of staff of the Indiana Department of Transportation.
“One of the consistent themes that we saw was that having a collections partner as part of the overall management team was something that provided benefit in making sure that we do make good on collecting those tolls and capturing that revenue from all users,” he said.
Scott Manning, Indiana Department of Transportation Deputy Chief of Staff (WDRB photo).
While Perdue Brandon is tasked with collecting on all debts, including those from people with a pre-paid RiverLink account, the clear focus is on drivers who don’t respond to multiple notices sent by mail.
Under rules approved by both states, a $5 late fee is charged if the first mailed invoice isn’t returned within a month. An extra $25 fee is added if the bill isn’t settled within another month.
If that third invoice isn’t paid, a $30 fee is added to a fourth letter identified as a “collections notice.”
At that point, Kentucky and Indiana drivers face vehicle registration holds if they don’t pay, an enforcement tool approved by both states’ legislatures. But residents of other states aren’t subject to those sanctions, and, despite the “collections” stamp, RiverLink’s oversight board hasn’t used a debt collector to go after those scofflaws.
Enter Perdue Brandon, which represents more than 2,000 governments and collects unpaid tolls and fees, delinquent property taxes and other debt, according to its website.
The Louisville-southern Indiana toll system will be the company’s first outside Texas, where it has done collections since 2013 for six jurisdictions, said Elizabeth Wiehle Wang, a partner in the law firm and the RiverLink project manager.
She said the company’s previous work has used “dynamic contact campaigns” that include phone calls, emails, letters and text messages that are spread out based on the needs of each toll road.
Wiehle Wang said she wasn’t able to share much detail about Perdue Brandon’s approach to RiverLink. She also said there haven’t yet been discussions about a collections target, which is required under the contract.
“Right now, we’re at the infancy stage of figuring out the implementation of the exact operations we’re going to do,” she said.
But some aspects of the work are described in contract documents posted online.
Drivers who owe at least $60 in late fees, in addition to their unpaid tolls, face having their accounts sent to the collections agency, those documents show.
Perdue Brandon won’t be asked to report unpaid tolls to drivers’ credit reports. The company’s contract also keeps it from taking legal action against drivers who don’t pay without first getting the approval of the Kentucky-Indiana Joint Board, the top oversight panel for RiverLink.
Manning said the possibility of filing lawsuits is “something that would be a longer-term discussion and not something that will be happening in the short term.”
Perdue Brandon will pursue an estimated $3 million per month, according to contract documents. It will be paid 13% of all tolls and fees it collects, Amanda Spencer, the Kentucky Transportation Cabinet’s innovative finance manager, told the joint board in August.
Manning also said it’s too early to say exactly how the company will try to get violators to pay.
“But we know, right off the bat, phone calls is one of those,” he said. “But there are other options, whether they be direct mail or text messaging — several different methods using modern technology to sort of meet people where they’re at.”
‘Best practice’ for toll roads
Adding a collections agency comes at a time of key changes in how the RiverLink bridges are being managed.
Electronic Transaction Consultants of Richardson, Texas, was chosen by the states last year to oversee RiverLink invoicing and standard toll collection by 2023. The joint board selected Tennessee-based TransCore in August to add, operate and maintain cameras, scanners and other equipment that track vehicles.
Using a collections agency was not part of RiverLink’s initial rollout in late 2016, although a 2019 “risk assessment report” commissioned by the states recommended selling some outstanding toll debt to private firms.
However, that approach would have let Kentucky and Indiana get a small upfront payment. But none of the tolls were collected, RiverLink spokesman Ed Green said in a statement.
By choosing a collections agency, “a greater portion of the outstanding tolls remain in the system,” Green said.
Using a collections agency has become a “best practice” for toll road operators to track down both in-state and out-of-state violators, said Mark F. Muriello, policy and government affairs director for the International Bridge, Tunnel & Turnpike Association.
“I can’t think of any cases where it hasn’t served a positive effect and a benefit to the agency in terms of better collection,” he said.
Reciprocal pacts fail to materialize
The RiverLink system debuted in December 2016 on the Interstate 65 Lincoln and Kennedy bridges between Jeffersonville, Indiana, and Louisville, and the Lewis and Clark bridge connecting eastern Jefferson County and Utica, Indiana.
But for a decade now, Kentucky and Indiana officials have weighed how to collect tolls from drivers who don’t live in either state.
An initial agreement between the states, signed in October 2012, suggested that a toll policy for the bridges could include “reciprocity,” or regional pacts that give states the ability to go after out-of-state drivers who dodge tolls.
Those arrangements typically let a driver’s home state use registration or other enforcement tools to help partner states recoup tolls and fees owed there — and vice versa.
Kentucky and Indiana leaders told WDRB in 2014 they were working toward those goals. Mike Hancock, Kentucky’s then-transportation secretary and current deputy secretary, said the agreements were an “ultimate goal,” while the former director of the Indiana Finance Authority, Kendra York, said her state was in the “beginning stages of those conversations” with other states.
In May 2016, the Kentucky-Indiana Joint Board approved tolling policies for the newly named RiverLink system in which they agreed to pursue those agreements with other states.
But by the spring of 2019, more than two years after tolling began, discussions about those agreements weren’t happening, although a Kentucky official warned that “we haven’t pursued all of our options yet,” WDRB reported.
And by that summer, consultant HNTB Corp.’s report recommended that the states investigate reciprocal pacts with Tennessee, Illinois, Michigan, Ohio and Florida.
In a statement, RiverLink spokesman Green said project leaders “did have informal conversations with agencies” but he did not elaborate. Instead of the agreements, he said the focus is now on a nationwide effort focusing on uncollected toll revenue.
Muriello, the International Bridge, Tunnel & Turnpike Association official, is the co-chair of the Lost Revenue Task Force, which is evaluating issues that range from poor images of license plates to states not providing billing addresses for drivers.
One subcommittee, Muriello said, is looking into toll reciprocity agreements among states.
There are examples of compacts among states, such as one between New Hampshire, Maine and Massachusetts. New York and Massachusetts also have a similar agreement, while Maryland legislators have urged their state to enter into a pact with Pennsylvania.
“I think there’s going to be kind of interest in these other states now trying to do those types of agreements as well,” Muriello said. “And hopefully, you begin to build these pockets of reciprocity that … kind of reap some meaningful benefits in terms of collections.”
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