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Business Observer Thursday, Jul. 2, 2009 9 years ago

Clerks vs. courts

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New state laws pit county clerks of court against the judiciary, which got more money by getting the clerks' funds, resulting in higher fees, slower service and plenty of wounds.
by: Jay Brady Government Editor

New state laws pit county clerks of court against the judiciary, which got more money by getting the clerks' funds, resulting in higher fees, slower service and plenty of wounds.


“As a result of this year's legislation, you will note with the stroke of a pen, 240.1 years of experience and knowledge is gone.”

So wrote Sarasota County Clerk of Court Karen Rushing in a recent letter to 12th Judicial Circuit Chief Judge Lee Haworth. The letter lists 24 staff eliminated from the part of her office dedicated to courts. With eight others already given notice, the cuts now amount to 19% of Rushing's court staff.

More than 90% of clerks' budgets are in personnel costs, meaning there is little choice where to cut. But an April 2009 Florida Tax Watch study claims significant inefficiencies exist in the more than a dozen court-related functions clerks' workers handle.

Clerks also have a second budget for county administrative functions that may be cut, too. These operations are not directly affected by a state budget shuffle tied to two new laws putting clerks of court in a tizzy over losing $45.6 million while adding $240.2 million to the State Courts Revenue Trust Fund.

The bottom line, according to Gulf Coast clerks, is that businesses and individuals grappling with court system bureaucracies, particularly those dealing with foreclosures, could face more delays on top of current delays and end up paying more for it.

The eight Gulf Coast counties clerks' offices and courts have their hands full with a backlog of nearly 114,000 foreclosure cases, so the timing is especially bad in clerks' eyes.

Lee County Clerk Charlie Green sees more problems ahead for businesses reliant on final judgments of mortgage foreclosures. With nearly 24,000 on his plate, he cautions that the economic engine tied to real estate will stall further, saying, “... when you put them in a state of limbo there's nothing going to happen.”

An email from Hillsborough County Clerk Pat Frank mirrors Green's concern, stating: “We're understaffed in the departments where business has increased tremendously. Foreclosures is a good example.”

Frank, and what's left of her courts' staff after 67 layoffs, have more than 25,000 active foreclosure cases to process, but she plans to close a satellite office to save money.

Collier County Clerk Dwight Brock has so far avoided layoffs, but has cut out overtime hours, not filled open positions, and implemented 3% across the board pay cuts and one day a month unpaid furloughs equivalent to another 5% cut in staff. Furloughs are also part of clerks' cost-savings strategy in Hillsborough and Sarasota counties and being considered by Manatee's clerk.

On June 23, Brock issued a doomsday memo: “The high level of service that the Clerk's staff provided to the public for many years is now a thing of the past. The Clerk's office will be required to adjust service levels in line with limited financial resources. It will take longer to process cases. There will be lines at the counters.” Brock predicts layoffs this month.

But the courts side have been swamped by the foreclosure tsunami, too. And they also face cutbacks.

With a 628% increase in foreclosures from 2006 through 2008 and a 13% budget cut this year for the 12th Circuit, Judge Haworth is frustrated with what he considers foreclosure mill attorneys' refusal to play by his rules, which he hoped would force banks to lawyers to more strongly consider non-foreclosure options.

He admits, “We're thinking of sanctions of dismissing the (foreclosure) lawsuits. That's going to have profound consequences because we have this very expensive filing fee going into effect.”

Such stories are commonplace around the state and likely more so along the Gulf Coast as a result of foreclosures, funding shortfalls and a legislative shell game designed to keep the courts system whole.

'It's a shell game'
It could have been worse for the clerks had an earlier House bill not been condemned by clerks and their lobbyists.

Part of the compromise legislation calls for a study of the issue, thus setting the table for a second round of debate between the clerks, judges and legislators next year. After the first round of sparring between clerks and judges, refereed by legislators, the new law sets the rules for how the court system will be funded.

For now, the new bills shift final budget authority to the Legislature, leaving the clerks with less power over their budgets. That has resulted in the 18% budget cut now forcing the widespread layoffs. Nearly 300 clerk positions have been cut so far in the Gulf Coast's eight counties.

Very little of the revenues from the new and increased fees goes to the clerks.

Instead, a chunk of state general revenues that were paying for court services has been shifted elsewhere in the state budget and is being supplanted by the increased fee revenue. “We're 100% trust funds now,” says Walt Smith, the 12th Circuit's Trial Courts Administrator. “It's a shell game.”

“We have a flat budget for the courts,” adds Smith, who serves on the state courts' Trial Court Budget Commission looking at these issues. “You won't see any difference in the courts.”

Smith also sees the irony in the fee increases. “We keep making it more and more expensive and people can't use the system anymore, but we raised the fees anyway.” He also notes that the courts got their cuts over three years, so he sympathizes with the clerks. “It's a big change when you're doing it all in one year. If we look at the reality there is definitely a cut in the service levels.”

Chief Judge Haworth, who lobbied for the legislation, is less sympathetic. He says, “Our budget was cut back to 2004 levels. Meanwhile during those periods of austerity, there were clerks who were profligate, some were spending like drunken sailors.”

Confirming Haworth's view is one conclusion of the Tax Watch study: “There are no incentives or requirements for individual clerks to improve cost efficiency. If cost efficiency standards were imposed, cost savings of between $34 million and $140 million could be achieved.”

Cats in a sack
Previously, clerks' budgets were based on the projected revenue increase for each clerk and set by the Clerks of Court Operations Corporation (CCOC), a not-for-profit state corporation. Now, under the new law, each clerk will propose a budget based on four core services and the Legislature will accept, reject or modify the clerks' statewide total budget each year.

There is also now a $451 million statewide budget cap for the clerks' offices, so any extra revenue will now go to the state general fund or trust funds, not to clerks. This new cap is a big drop from last year's $533 million budget, which was reduced in March to $497 million. Only $474 million was actually spent, however, according to Lee County's Green, as clerks heeded early warnings from the CCOC and started making cuts this spring.

How this faceoff came to be has been traced to two main sources, starting at the top with Florida Supreme Court Justice Peggy Quince, who cut her legal teeth in Bradenton and Hillsborough County. Smith says that from Quince's perspective “it was more about an access to justice issue.”

Prodded about the bills' births, Green says, “I think what started this, and I don't disagree with it in principal, the judiciary felt for two or three years that they were underfunded and they probably were. This was a catfight that was started by the Florida Supreme Court.”

Collier's Brock confirms what other clerks told the Business Review, saying, “Part of what the complaint was with the Legislature was that clerks were giving their employees bonuses.”

Several clerks point to Broward County where they had heard that bonuses were being paid out of surplus funds. The Tax Watch study also singles out that county for not remitting prescribed amounts of funds monthly to the
CCOC as directed. Green attests to the problem adding, “There are probably five or six clerk offices around the state that got top heavy.”

That roused the ire of powerful Broward County State Rep. Ellyn Bogdanoff, R-Fort Lauderdale. Bogdanoff sponsored House Bill 1121, the original legislation transformed into the two Senate bills.

Interestingly, the Broward County Clerk is Howard Forman, a Democrat and also the current chairman of the CCOC, the clerks' club now stripped of some budgeting power in no small part due to Bogdanoff's influence.

Lee's Green, who sat on the CCOC Legislative Committee, resigned from the committee and says about the CCOC, “It's another boondoggle.”

Green expresses frustration with a process that forced the clerks into a faceoff with the judiciary instead of a more collaborative working relationship that might have resulted in a better overall outcome. He says, “The panic resulted in a twisted process. We never should have put a cat in a sack with another cat.”

The court's Smith remains hopeful for a reconciliation.

Round 2 begins when the Legislature reconvenes in 2010 with study in hand. Hillsborough's Frank expresses pessimism, “It's going to be another tumultuous legislative session ahead of us.” And the foreclosure avalanche continues.

BY THE NUMBERS
COURT COSTS GOING UP
Here are examples of the increases in court costs, filing fees and service charges from the legislative session.

Current New Percent
Item Rate Rate Increase
CIRCUIT CIVIL FEES
Civil action exceeding $15,000 or other proceeding in court $300 $400 33.3%
Real Property/Foreclosure claims valued = <$50,000 $300 $400 33.3%
Real Property/Foreclosure claims valued $50,001<$250,000 $300 $905 201.7%
Real Property/Foreclosure claims valued >$250,000 $300 $1,905 535.0%
Civil actions where the value of the pleading is <$50,000 $295 $395 33.9%
Civil actions where the value of the pleading is $50,000<$250,000 $295 $900 205.1%
Civil actions where the value of the pleading is =>$250,000 $295 $1,900 544.1%

FAMILY LAW FEES
Delayed birth certificates (including sealing fee) $342 $442 29.2%
Name Change $314 $414 31.8%
Disabilities of nonage; removal (Emancipation) $300 $400 33.3%
Petition for Temporary Custody by Extended Family Member $300 $400 33.3%

PROBATE, GUARDIANSHIP AND TRUST FEES
Summary Administration: Estate valued at $1,000 or more $230 $345 50.0%
Formal Administration $285 $400 40.4%
Opening an estate or guardianship $116 $231 99.1%
Disposition of personal property, without administration $116 $231 99.1%
V.A. Guardianship $120 $235 95.8%
Guardianship of persons only $120 $235 95.8%
Guardianship of persons and property or property only $285 $400 40.4%
Curatorship and Conservatorship $285 $400 40.4%
Petition to determine incapacity $116 $231 99.1%
Trusts $300 $400 33.3%
Source: Hillsborough County Clerk of the Circuit Court

BY THE NUMBERS
COURT COSTS GOING UP
Here are examples of the increases in court costs, filing fees and service charges from the legislative session.

Current New Percent
Item Rate Rate Increase
CIRCUIT CIVIL FEES
Civil action exceeding $15,000 or other proceeding in court $300 $400 33.3%
Real Property/Foreclosure claims valued = <$50,000 $300 $400 33.3%
Real Property/Foreclosure claims valued $50,001<$250,000 $300 $905 201.7%
Real Property/Foreclosure claims valued >$250,000 $300 $1,905 535.0%
Civil actions where the value of the pleading is <$50,000 $295 $395 33.9%
Civil actions where the value of the pleading is $50,000<$250,000 $295 $900 205.1%
Civil actions where the value of the pleading is =>$250,000 $295 $1,900 544.1%

FAMILY LAW FEES
Delayed birth certificates (including sealing fee) $342 $442 29.2%
Name Change $314 $414 31.8%
Disabilities of nonage; removal (Emancipation) $300 $400 33.3%
Petition for Temporary Custody by Extended Family Member $300 $400 33.3%

PROBATE, GUARDIANSHIP AND TRUST FEES
Summary Administration: Estate valued at $1,000 or more $230 $345 50.0%
Formal Administration $285 $400 40.4%
Opening an estate or guardianship $116 $231 99.1%
Disposition of personal property, without administration $116 $231 99.1%
V.A. Guardianship $120 $235 95.8%
Guardianship of persons only $120 $235 95.8%
Guardianship of persons and property or property only $285 $400 40.4%
Curatorship and Conservatorship $285 $400 40.4%
Petition to determine incapacity $116 $231 99.1%
Trusts $300 $400 33.3%
Source: Hillsborough County Clerk of the Circuit Court

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