FISCAL NOTE
Date Requested: January 31, 2019
Time Requested: 01:14 PM |
| Agency: |
Public Defender Services |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1058 |
Introduced |
SB103 |
|
|---|
| CBD Subject: |
Boards and Commissions, Courts |
|---|
|
FUND(S):
0226
Sources of Revenue:
General Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
Summarize in a clear and concise manner what impact this measure will have on costs and revenues of state government.
The approval of the vouchers submitted by court-appointed counsel is currently the function of the court that appointed the counsel. In Fiscal Year 2017, the courts approved 37,504 vouchers representing claims for payment and reimbursement of expenses in the amount of $26,055,050.97. Public Defender Services, Annual Report, Fiscal Year 2017 (“AR”), p. 8. The vouchers are then transmitted, together with the court’s order approving payment, to Public Defender Services (“PDS” or the “agency”). PDS reviews the vouchers for compliance with the governing statutory provisions and the agency’s and the State Auditor’s guidelines as set forth in the provisions of W. Va. Code §29-21-13a(g).
The legislation would transfer the initial “approval” function from the circuit courts to PDS who would review vouchers and confer with attorneys before court action would be required. Particularly, PDS would review vouchers in relation to other submissions by the counsel, which judges cannot be expected to do. The agency estimates, conservatively, that the transfer would result in a reduction of expenditures from general revenue in an annual amount of $639,720.95 in the specific instances of known overbilling and an additional annual amount of $560,000.00 from the review of all vouchers.
The legislation would also change the rates of compensation for legal services provided by court-appointed counsel at a cost that is estimated to be $1,765,474.80.
With a raise in the rates of compensation provided in the legislation, the agency would curtail billing for certain administrative tasks that have been historically permitted even though the statute provides only for compensation of legal services and reimbursement of expenses. The agency estimates that the reduction in payments to counsel for these services would be $815,711.94. While a raise in the rate of compensation would benefit all attorneys, the decrease in payment of these expenses would affect, in PDS’ estimate, only one-third of the attorneys submitting vouchers.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2019
Increase/Decrease
(use"-") |
2020
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
647,781 |
0 |
647,781 |
| Personal Services |
82,028 |
0 |
82,028 |
| Current Expenses |
565,753 |
0 |
565,753 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
A year of 2400 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, including weekends. 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. Any billing in excess of 2400 hours a year is simply unrealistic and unsustainable.
The agency has identified 24 individual attorneys who billed more than 2400 billable hours in Fiscal Year 2017. AR, pp. 224-227.
The agency believes that its “approval” of vouchers would limit the 24 attorneys who exceeded 2,400 hours to the more realistic level of 2,400 hours, if not less. The agency acknowledges that the hours reported in FY2017 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 FY2017 represent consistent levels of billing over a period of years. Accordingly, the amount billed by these attorneys in FY2017 is, in fact, a representation of the purported hours spent in one year on indigent defense.
With the addition of one attorney and with the authority to approve the vouchers rather than being restrained by the circuit court’s order approving the vouchers, the agency has the means to determine an attorneys’ historical level of billings, has the means to review an attorneys’ vouchers collectively, has the means to examine closely the vouchers submitted by the attorneys on an entry-by-entry basis, and has the authority to investigate overbilling and to require answers from the subject attorneys.
The 24 attorneys identified from the 2017 Annual Report billed, collectively, 13,314.76 hours in excess of a 2,400 billable hour year. Using the percentages of out-of-court time, 84.77%, and in-court time, 15.23%, set forth at A.R. 77, the total reduction in compensation upon the elimination of this excessive billing would be $639,720.95.
Again, this estimate is based only upon the reduction of hours for the 24 identified attorneys with over 2,400 billable hours.
PDS will also scrutinize carefully all billings received from counsel that constantly exceed levels of 2,000 billable hours per year. And, of course, PDS will continue to review all vouchers for compliance with the statutory provisions. Within the confines of its current review process, PDS has annually reduced vouchers by approximately $280,000 overall, representing about 1% of the total claims. With the authority provided by this legislation, PDS anticipates that it will double this amount, especially with respect to billings at a consistently high level. This would provide an additional $560,000 in reduced compensation.
The additional attorney required by the agency would result in increased administrative costs to the agency in the amount of $82,028, assuming a salary of $60,000 for the attorney.
The result is PDS’ anticipation that the legislation would reduce payments made to court appointed counsel in the amount of $1,117,692.90 ($639,720.95 + $560,000 - $82,028).
The legislation also increases compensation for legal services in some proceedings by five dollars for in-court and out-of-court services and reduces compensation for legal services in some proceedings related to in-court time.
Specifically, the more complex cases, such as felonies and child abuse and neglect cases, would be compensated at $50 an hour for legal services performed out-of-court, which is increased from $45 an hour, and at $70 an hour for legal services performed in-court, which is increased from $65 an hour. For the less complex cases, such as misdemeanors and mental hygiene proceedings, the compensation would be $45 for legal services performed both in-court and out-of-court. Presently, the out-of-court services for these less complex cases would be compensated at $65 an hour.
With respect to estimating the increased expenditure of general revenue attributed to the increased amount of compensation, the agency has used the reported hours of service in FY2017 for various types of proceedings. However, the grouping of proceedings in the current reporting is not entirely consistent with the grouping of the cases within the proposed statute. Accordingly, the estimates will be understated and overstated as noted.
The hours allocated to misdemeanors, mental hygiene proceedings, and municipal court charges is, in total, 77,600.85. AR, p. 72. Using the in-court percentage of hours for court-appointed counsel, i.e., %15.23, and the $20 an hour decrease, this represents a decrease in expenditures of $236,372.18. Again, the agency’s current allocation of hours to various proceedings does not match the eligible proceedings to be affected by this decrease, so this number is probably overstated, in that more proceedings would be considered with the serious proceedings.
The hours allocated to the more complex cases would be 400,369.39. A $5 increase for these hours of service would be $2,001,846.90. Again, due to the agency’s current grouping of eligible proceedings for reporting purposes, this amount may be nominally understated.
The total increase in the expenditure of general revenue for this increase in the rates of compensation would be, therefore, $1,765,474.80
If the expected savings of $1,117,692.90 from the remaining provisions of the legislation are offset, the total increase in expenditures by the agency from the account for appointed counsel would then be $647,781.90.
If the elimination of the payment of administrative tasks is implemented upon an increase in the rates of compensation, then this amount of $647,781.90 would be more than offset by the projected savings in the amount of $815,711.94.
Finally, the legislation addresses the issue of compensation for paralegals. Presently, the use of paralegals is considered an expense to the attorney. The attorney can be reimbursed for the hourly wage paid to the paralegal, up to $20 an hour. This discourages the use of paralegals, however, because the attorney recognizes no economic advantage. Indeed, the attorney is limited to the wage expense and, therefore, if a paralegal is hired, the attorney loses money if benefits are paid and if additional office space is leased. The legislation would make the compensation for paralegals $20 an hour without regard to the actual expense of the paralegal to the attorney. The agency believes that this will encourage the use of paralegals and will provide the attorney an economic incentive for their use. The further belief is that this will reduce the attorney time that is billed for basic legal services and will provide a decrease in the expenditures for fees. However, the agency cannot quantify this savings.
Memorandum
Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.
The fiscal note shows a total cost of $647,781. But, as described, a savings of $815,711 is anticipated once certain administrative tasks are no longer compensated concurrent with the increase in the rate of compensation.
An additional benefit from the legislation which cannot be quantified is that vouchers should be processed for payment more quickly with the elimination of the requirement that vouchers be submitted, first, to the courts for review, and then transmitted by mail to PDS. Now, vouchers will simply be electronically submitted to PDS, reducing also the expense of requiring hard copies of the vouchers and an accompanying court order. The result is that attorneys may not be as compelled to discount their vouchers to third party financial entities by ten or twenty percent if the period to await payment is reduced. For many attorneys, this would represent an increase in the net proceeds of payment for their services.
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 need arises. Accordingly, no estimate can be made about the amount of savings, if any, to the state.
Person submitting Fiscal Note: Dana F. Eddy
Email Address: Dana.F.Eddy@wv.gov