Carefree Truth

Issue #432, October 13, 2015

 

 

 

Gary Neiss said this is the first audit of the Carefree/Cave Creek Consolidated Court, which consolidated in January, 2014.  He praised Presiding Judge Stephanie Olohan and Court Administrator Adrian Larson.

 

 

 

Judge Olohan thanked the Council for letting her speak.  Courts are mandated to adhere to Minimum Accounting Standards (MAS), pursuant to the Arizona Judicial Administration.  The code requires an external review audit every 3 years, but Carefree has always chosen to be audited annually for all money received.  This includes fines, civil sanctions, restitution, bonds, etc.  Financial roles and responsibilities are outlined.  The money goes into a case management system which shows where there money is disbursed.  The system is complex.  The Courts or Towns don't get to keep all the money. 

 

 

 

This audit concluded with "no findings", meaning nothing was incorrect.  The Judge said in school terms it earned 100%, an A+, reflecting the skill of the Court's staff, their attention to detail, professionalism, and experience.  It is extraordinary to have zero findings.  The auditor is excellent, very thorough.  "Adrian and her staff have it all organized."  The Judge recognized Mrs. Larson in the audience.  Mrs. Larson replied that she doesn't do it alone, and commended her staff.

 

 

 

Vice Mayor John Crane noted no findings is more exceptional because the audit covered the time during which the Courts consolidated and the Carefree Court moved into the Cave Creek Court space.  He commented that there were even more balls in the air than normal.  Councilman Mike Farrar said he always heard glowing reports about Mrs. Larson.  Jim Van Allen pointed out the this makes 8 or 9 years in a row with no findings.  Mayor Les Peterson called it quite an accomplishment.  An audience member asked if the Court makes money.  The Mayor replied, "No.  Justice is not a profit center."

 

 

 

Mr. Neiss agreed, explaining that the Court is not a profit center; it's a public service.  Courts are required by state law, and they cost communities money.  It produced an economy of scale when 2 Courts that were within 2 miles of each other joined forces.  "We should be celebrating this and holding it up as the rule of thumb of efficient small governments working together."  

 

 

 

Mr. Neiss described the Court finances as a "doughnut".  What is the overall size and cost of the "nut" in the center?  The nut is the $411,163 that it cost to operate the Consolidated Court in Fiscal Year (FY) 2014/15.  Around the nut is the "dough", the allocated money.  Like most businesses, the largest expense is the employee salaries and benefits, which was 59%, for Mrs. Larson and 2 Deputy Clerks.  The AZTEC system software is over 500 pages long, and is dynamic.  The employees must also be properly trained, and kept current on all changes.  

 

 

 

Operation expenses were 21%.  These include the contract with the Judge, pro temp services, jury trials, the public defender, interpreters, incarceration fees, hardware and software, and all documents and forms.  The Inter Governmental Agreement (IGA) requires Carefree to cover all costs passed on from incarceration fees.  

 

 

 

15% were the Prosecutor's fees.  The Prosecutor, an attorney, bills for his time. This provides a good indicator of how the case loads are distributed, how many are generated in each Town, and the types of respective cases.  

 

 

 

Prior to the consolidation, Mr. Neiss spoke with the Administrative Office of the Courts (AOC) and their Presiding Judge Davis in order to understand the liability being assumed by Carefree when administering the Consolidated Court.  What expenses could be expected from the Carefree and the Cave Creek sides of the Court?  He was told it was dependent on the types of cases generated from each.  Cave Creek's cases, with a high volume of criminal misdemeanors including DUIs and bar fights, are more labor intensive.  Cases generated in Carefree are primarily traffic violations, which are civil citations.  These differences stem from the business environments in each town. 

 

 

 

Looking at this data, it was estimated that approximately 60% of the costs would be generated by Cave Creek due to the nature of the cases, and 40% by Carefree.  Those involved in DUIs and bar fights frequently hire an attorney. This requires additional processing.  The Prosecutor takes more time and bills for more hours.  The support staff has more data to input.  The predictions were accurate.  Actual costs generated in FY 2014/15 were 58% for Cave Creek and 42% for Carefree. The IGA is a cost recovery model.  Monthly fees are paid by Cave Creek to recover the cost of administering their cases.  The model is working well.

 

 

 

Fines help offset the costs, but fines are a fraction of what is actually collected.  2/3 of the money collected by the Court goes to the State and the County to support the justice system and to pay for justice infrastructure such as jails, and 1/3 goes to Carefree.  $149,000 was collected in fines in FY 2014/15.  Prior to the consolidation, between $89,000 and $100,000 was typically collected in Carefree.  Historical fines in Cave Creek were clouded by the assessment of an arbitrary "facility fee" using no rational basis, which artificially inflated fines.  This was discovered during a random AOC audit.  Cave Creek was not giving these fees to the State or the County, which raised their fines number to $189,000.    There were flawed issues with the cost recovery, since the numbers given to Carefree could not be relied upon.  The true number was closer to $60,000 after the discovery, because the revenue changed.  That was the final number used in the IGA.  Carefree fines constituted $89,451, with out of pocket costs of $115,881.  Cave Creek fines constituted $59,634 with out of pocket costs of $146,196, so again, the predictions were accurate.  Cave Creek pays $12,000 a month for cost recovery, equaling $146,000.  Cost recovery from Cave Creek and fines balance out the expenses.  Carefree pays $205,332.  Cave Creek pays $205,830. The model is working well.

 

 

 

Mr. Neiss said, "The Consolidated Court should be a point of pride for both the citizens of Cave Creek as well as the citizens of Carefree, and used as a benchmark for minimal, efficient, and effective government."  He added that the Presiding Judge who signed the document said he knew this would be used as a future model for other small communities.  Independently, Carefree and Cave Creek would each be paying $150,000 or more per year.

 

 

 

Councilman Glenn Miller asked if this information would be presented to the Cave Creek Council at a public meeting.  Mr. Neiss replied that the information had been shared with Cave Creek Mayor Vincent Francia a week or two ago, and he was taking it back to the Cave Creek Council with hard copies.  Mayor Peterson mentioned that 2 members of the AOC were present at that meeting and were taking notes to share with other small towns in close proximity as an example of working efficiently and effectively.  It is saving both Towns a lot of money.  He said that Gary Neiss brought the IGA together and made it a model to be used throughout the state.

 

https://vimeo.com/user18676056/review/141990254/56d4b24c3f

 

 

Lyn Hitchon

 

 

 

Prepared by Carefree Truth

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