Thursday, July 25, 2013

Non-refundable Fees: Why seen as objectionable for a bail bond?

Payment of non-refundable fees for services rendered is nothing new.  Landlords charge non-refundable fees in the form of security deposits, cleaning fees and pet fees.  There are non-refundable application fees and costs associated with lending of loans and mortgages.  Non-refundable fees are charged for student applications to colleges and universities, which is used to defray various administrative costs.  Many airline fares are non-fundable.  There are non-refundable trip insurance fees.  In the criminal justice system, Courts charge non-refundable filing fees for various licenses, documents or court services.  Attorneys charge non-refundable fees for legal services rendered, which are separate from other court costs or compensatory and punitive damages.   Such fees are just the cost of doing business.

So why should bail agents, who also charge a non-fundable fee for services rendered, be seen any differently than the examples above?  Does the guarantee of appearance at court and the financial accountability a bail agent assumes have no value?  Would the taxpayers be better served by assuming this responsibility rather than a private industry that has been proven to be the most effective and efficient means of pretrial release?  Where is the public uproar and deluge of news articles regarding non-refundable fees outside of the bail industry?

Bail agents across the country release from jail on average 250,000 defendants each month, resulting in a significant impact on jail operational expenses and taxpayer savings.  The non-refundable fee, or premium, is the cost of assuming the risk of appearance for a defendant.  This non-refundable fee must cover all expenses, insurance costs and fugitive recovery fees if necessary, and is good for the life of the bond.  This non-refundable fee is usually ten percent of the total bond for a bail agent to accept financial responsibility for court appearance. 

A defendant also has the right to post a full cash bond directly with the court, which often has a non-refundable fee tacked-on as well, and at the conclusion of the case if all court appearances were made, will get some of the money returned less court costs and fines.  Unsecured financial bail is a promise to appear and upon failure to do so, the defendant is obligated to pay the full amount of the bond to the court.  Cash deposit bail also requires a defendant to post ten percent of the total bond – but to the court instead of a bail agent.  If the defendant makes all required court appearances and at the conclusion of their case, the court is mandated to return this deposit to the defendant less court costs and fines. 

But what happens when a defendant fails to appear for court under a ten percent deposit system or other unsecured release methods?  Taxpayers are left on the hook to fund law enforcement to find the defendant and bring them back to jail vs. a private bail agent assuming this task.  When a defendant fails to appear on a commercial bail bond, the bail agent and the surety company underwriting the bond must pay the full amount of the bond to the court if the defendant is not found and returned within a specified amount of time. 

In Florida, the bail premium, or non-refundable fee, is $100 or ten percent of the total bail amount, whichever is greater.  For example, if the bail set is $10,000.00, the premium charged would be $1,000.00.  If the bail set is $250.00, the premium charged would be $100.00.  Florida Statute 648.33 states it is unlawful for a bail bond agent to execute a bail bond without charging a premium and the premium rate may not exceed or be less than the premium rate as filed with and approved by the Legislature.

Opponents of the commercial bail industry claim that once this non-refundable fee is paid to the bail agent, a defendant has no incentive to come to court because they know they won’t get any of their money back.  This is blatantly false. 

In a study released by the Bureau of Justice Statistics, their analysis showed that defendants released on a commercial bail bond were less likely to miss a court appearance and become fugitives than defendants released on any other means.  A recent research study conducted by Dr. Robert Morris, Associate Professor of Criminology and Director for the Center for Crime and Justice Studies at the University of Texas at Dallas, found the same results.  His analysis suggested that net of other effects (e.g., criminal history, age, indigence, etc.), defendants released via commercial bonds were least likely to fail to appear in court compared to any other specific mechanism.  This finding was consistent when assessed for all charge categories combined and when the data were stratified by felony and misdemeanor offenses, respectively.

Why is commercial bail so successful in holding defendants accountable for failure to appear?

Bail agents continually assess the risk of a defendant to influence a positive outcome.  They often require defendants to have regular check-ins, take detailed information on a defendant’s community ties and residency, provide court reminders and maintain contact with indemnitors to help ensure the defendant is adhering to the court’s conditions.  Bail agents can devote the time necessary to make sure pursuits are successful for defendants who have failed to appear as law enforcement are over-burdened and often give failures to appear a low priority.  Commercial bail is also successful because of its many layers of financial commitments and the involvement of third-party indemnitors, whose financial resources were used to bail the defendant out of jail.  Specifically, bail is user-funded.  Critical tax dollars are saved by a private entity doing what it does best – guaranteeing the appearance of a defendant in court.

So when we hear opponents of commercial bail state to the public and members of state legislatures that our citizens don’t need, nor should they care about allowing for an effective system of release and accountability in the criminal justice system, we have to wonder what their motives are.  Bail agents live and work in the same communities they release defendants into and therefore take the issue of public safety very seriously.  The tired argument that bail agents only care about “profit margins” is what it seems – just a tired argument.

Thursday, July 11, 2013

Draft Study Released on Orange County, FL's Home Confinement Program

The draft study report on the Orange County, FL Correction Department's Home Confinement Unit, conducted by the Matrix Consulting Group at a cost of $100,000, has been released to Orange County Commissioners for review.  The Home Confinement program was suspended and then terminated after two internal investigations found that there were numerous violations of the jail’s policies and procedures in operating the program.

The Matrix’s project team concluded that a home confinement program designed with fewer alleged offenders who are more likely to violate their terms of pretrial release, with improved and more credible technology and with an active monitoring component, would be the best solution for Orange County.  But their recommendations also come with a price tag: $643,500 in salaries and benefits to reinstate nine senior Community Corrections Officers and $165,000 in salaries and benefits to hire three new Aid positions; they also recommend a 25 percent reduction in case loads.  However the final report will not be issued until early August after the county has held their three-day budget worksessions for all county departments to set the budget for the 2013-2014 fiscal year.

The objective of the Matrix study was to evaluate the management, staffing and operations of the Home Confinement program.  The study noted that the Home Confinement program was originally designed for enhanced monitoring for defendants accused of relatively minor offenses but evolved to include more serious offenses to help keep the jail population in check.  Even as the inmate population declined however, the program did not shift back to just supervising defendants with minor offenses.

The study also found that the Home Confinement program’s fees were low compared to other counties and that collection fees for supervision have been only 10-15 percent of true program costs.  Typically $300,000 to $400,000 in invoiced fees was written off annually by the program; money that could have been used to benefit taxpayers. 

Opponents who advocate for the elimination of the private commercial bail industry state that financial release weakens public safety and characterize bail agents as only caring about profits by benefiting off the poor.  Yet taxpayer-funded pretrial supervision systems are using millions of taxpayer dollars to supervise defendants who many times can afford to pay for their own release, while also charging fees for their services but offering no guarantee to the court for appearance.  Sounds like a hypocritical argument. 

In reviewing the Home Confinement program, the Matrix questioned why there have been two separate programs within the Community Corrections Division responsible for supervising pretrial release defendants.  In addition to the Home Confinement program, the county also operates a taxpayer-funded Pretrial Supervision program in which defendants are released to be monitored via a telephone reporting system with limited office visits and with no electronic monitoring or field supervision.  Hundreds of defendants charged with both misdemeanor and felony offenses continue to be released into the Pretrial Supervision program with no personal financial obligation for their release; the taxpayers are paying for it instead. 

In 2011, the latest year that statistics are available to the public, a total of 3,992 defendants were released to non-electronic monitoring supervision while only 977 defendants were ordered to be supervised by electronic monitoring with field visits.  The Matrix study noted that these two programs are dealing with comparable offenders but the supervision and monitoring is vastly different.  Our previous blogs have detailed the seriousness of these releases and the effect on public safety.

The Matrix is recommending that these two programs be consolidated for the administration and management of pretrial release defendants so the “spectrum of supervision for pretrial releases are in one part of the Community Corrections Division.”  However no changes to supervision methods under the Pretrial Supervision program, which deals with many more defendants, vs. the Home Confinement program, has been recommended.

The Matrix study noted that without the Home Confinement program, Orange County lacks a significant tool in the supervision of persons released from custody on bail or on their own recognizance.  The Home Confinement program as noted in the study, was used primarily for pretrial defendants who could meet bail requirements and electronic monitoring was used as a supervision tool.  While the Matrix study noted that the vast majority of defendants in the Home Confinement program had been ordered there as a condition of bail, the study also implied that with a bail bond there is no form of supervision. 

In reality, public safety is enhanced under commercial bail as bail agents continually assess the risk of the defendant to influence a positive outcome through regular check-ins, ongoing communication with the defendant and indemnitor and court reminders.  In addition, third-party indemnitors provide a critical source of knowledge to bail agents, which enhances commercial bail’s effectiveness and ability to proactively manage risk.

The Matrix study asked the question, “What is the appropriate role for the private sector,” regarding the Home Confinement program.  The study recommends relying on the private sector to provide the most up-to-date technology as well as the maintenance of all equipment and software for GPS monitoring but the responsibility for actively monitoring defendants should be the county’s responsibility.  The commercial bail industry, as a private entity, can also be a partner in this endeavor. 

While the purpose of bail is to guarantee the appearance of a defendant at all required court hearings, bail agents should be a vital partner working in conjunction with any taxpayer-funded pretrial supervision program to enhance public safety and offender accountability.  When defendants are released both on bail and under a taxpayer-funded supervision program, effective communication between both entities can often result in a quick resolution to a violation or other issue with a defendant.

Bail is a constitutional right and society has relied on its effectiveness since the founding of the United States.  An industry that only collects ten percent upfront yet must pay out 100 percent of the bail amount for ineffective performance would go out of business quickly if it were not effective.  The bail industry’s longevity is the most telling sign of its effectiveness.

Representatives of the bail industry will be in attendance at the county’s budget worksessions beginning on Monday, July 15, 2013 at the Board of County Commissioners’ chambers.  We will be watching to see if the Correction Department’s funding remains the status quo or if taxpayer funding will be used more wisely in the public safety arena.