FISCAL NOTE

Date Requested: March 06, 2017
Time Requested: 11:58 AM
Agency: Public Defender Services
CBD Number: Version: Bill Number: Resolution Number:
3002 Introduced SB521
CBD Subject: Courts


FUND(S):

0226

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


     The process for payment of court-appointed counsel’s claims for fees and reimbursement of expenses would be changed. The approval of the vouchers submitted by court-appointed counsel is currently the function of the court that appointed the counsel. In Fiscal Year 2016, the courts approved 36,728 vouchers representing claims for payment and reimbursement of expenses in the amount of $25,787,233.03. Public Defender Services, Annual Report, Fiscal Year 2016 (“AR”), p. 9. The vouchers are then transmitted together with the court’s order approving payment to Public Defender Services (“PDS” or the “agency”), which processes the vouchers for payment by the Office of the State Auditor.
    
     The reality is that the state’s 74 circuit court judges are asked to review and scrutinize, on average, 497 vouchers in a year. With the busy dockets of such judges, the reality is that vouchers are, for the most part, cursorily reviewed.
    
     Under this system, court-appointed counsel have submitted since January 1, 2013, claims for payment of legal services that, on 236 dates, exceeded 24 hours in a day. Moreover, the agency’s annual reports set forth a substantial number of attorneys who are consistently reporting hours on an annual basis that are simply unattainable.
    
     The legislation would transfer the “approval” function from the circuit courts to PDS. The agency estimates, conservatively, that the transfer would result in a reduction of expenditures from general revenue in an annual amount of $1,054,110.73, although the actual savings might be as much as two and one-half million dollars.
    
     The legislation also authorizes establishment of conflict public defender corporations in judicial circuits to handle cases that the existing public defender corporations cannot. Currently, private counsel are appointed to handle cases which cannot be handled by the existing public defender corporation due to a conflict of interest or an excessive caseload. The agency estimates that the establishment of such corporations in the more populated judicial circuits would result in a reduction of expenditures from general revenue in an amount of $895,733.70.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost -1,949,844 0 -1,949,844
Personal Services 142,260 0 142,260
Current Expenses 8,832 0 8,832
Repairs and Alterations 0 0 0
Assets 0 0 0
Other -2,100,936 0 -2,100,936
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


     A year of 2,200 billable hours on court-appointed matters means that the attorney is fully engaged in court-appointed work and is working extended hours on a daily basis every day of the year. Restated, the attorney could not be conceivably engaged in a private practice or could not be performing other services as a mental hygiene commissioner or a family law court guardian ad litem. The agency has identified 35 attorneys who billed more than 2200 billable hours in Fiscal Year 2016. AR, pp. 218 – 221.
    
     Using the fact that, on average, 84.55% of an attorney’s time is spent on out of court matters at the $45 hourly rate of compensation and the remaining percentage is spent on in-court matters at the $65 hourly rate of compensation, a 2,200 hour billable year yields compensation in the amount of $105,798. AR, p. 238. This monetary amount further emphasizes that a 2,200 hour year is at the outer boundaries of reasonableness.
    
     The agency believes that its “approval” of vouchers would limit the 35 attorneys who exceeded 2,200 hours to the more realistic level of 2,200 hours, if not less. The agency acknowledges that the hours reported in FY2016 are submitted at a culmination of a case which may span more than a one year period. Nonetheless, the agency has verified that, for these attorneys, the figures in FY2016 represent consistent levels of billing over a period of years. Accordingly, the amount billed in FY2016 is, in fact, a representation of the purported hours spent in one year on indigent defense.
    
     With the addition of two attorneys and with the authority to approve the vouchers rather than relying on the circuit court’s review, the agency has the means to determine an attorneys’ level of billings and has the means to examine closely the vouchers submitted by the attorneys on an entry by entry basis.
    
     The 35 attorneys billed, collectively, 25,061.4 hours in excess of a 2,200 billable hour year. Using the percentages of out of court time and in-court time set forth above, the total reduction in compensation upon the elimination of this excessive billing would be $1,205,202.73.
    
     Again, this estimate is based only upon the reduction of hours for the 38 identified attorneys with over 2,200 billable hours. Over 600 attorneys throughout the state accept court-appointed work and reported, collectively, the performance of 483,595.07 hours of services in Fiscal Year 20176. AR, p. 238. The hours for the 35 attorneys that are expected to be reduced represents 24.56% of the total hours reported by these attorneys. If the agency’s scrutiny of the vouchers for all the appointed counsel results in a commensurate reduction, then the total reduction in expenditures of general revenue would be, based upon the percentages of in-court and out of court work set forth above, $5,711,694.95. While it is unrealistic to expect that every voucher would be reduced by this amount, it is nonetheless realistic to expect that one-half or a comparable percentage of vouchers would be reduced, resulting in a savings of approximately $2,500,000.
    
     The two additional personnel required by the agency would result in increased administrative costs to the agency in the amount of $142,260, assuming a salary of $50,000 for each attorney. The extra cost of office space is estimated to be $8,832.
    
     The resulting decreases in the expenditure of general revenue would be, therefore, $1,054,110.73, if the information regarding the 35 attorneys is used, or almost $2,300,000 if reductions for the entire pool of attorneys are considered.
    
     With respect to the establishment of conflict public defender corporations, the agency’s data indicate that, in the judicial circuits which encompass Wheeling, Charleston, Huntington, and Martinsburg, the courts made appointments in 6,493 cases due to a conflict of interests in these matters on the part of the existing public defender corporation. AR, pp. 43 – 46. If a conflict corporation existed to serve these circuits, then the agency assumes that one half of the cases, i.e, 3,246 cases, could be assigned to the conflict corporations.
    
     The agency has calculated that the average cost per case when handled by a public defender corporation is $562.65 and the average cost per case when handled by a private attorney appointed by the court is $838.50. AR, p. 238. Accordingly, a savings per case of $275.95 is realized when handled by a public defender corporation. AR, p. 238.
    
     If the conflict public defender corporations were created and were assigned to 3,246 cases as discussed, the resulting savings would be the amount of $895,733.70.
    



Memorandum


     The legislation also provides for the potential execution of contracts for legal services in certain situations that would pay an established amount for the handling of matters rather than the payment of an hourly rate. The contracts would be executed only as the opportunities arose to do so and only if a savings could in fact be realized without a diminution in the quality of legal services being provided. Accordingly, no estimate can be made about the amount of such savings to the state.



    Person submitting Fiscal Note: Dana F. Eddy
    Email Address: Dana.F.Eddy@wv.gov