Ohio Rep. Lynn Slaby on Tuesday railed against Macedonia’s billing of drivers involved in crashes and said he is researching legislation targeting the controversial action.
Slaby, R-Akron, said he was troubled by Macedonia’s program as well as its contract with Cost Recovery Corp., detailed Sunday in the Akron Beacon Journal.
The newspaper reported that Macedonia’s agreement allows Cost Recovery to add unlimited fees to its bills sent to some drivers to recover the city’s cost of sending safety forces to crash scenes.
The deal precludes the city from looking at Cost Recovery’s share. The company has so far refused to release records detailing the amount of money it has collected or billed to dozens of out-of-town drivers or their insurance companies.
In about 25 cases pieced together by the Beacon Journal, the Dayton collection company’s fees have increased the overall safety-response bill by 50 percent or more.
“It bothered me immensely,” Slaby said. “It bothered me that the city agreed to a contract with a company without bidding, to collect fees for the city and then add their own fees on top of it that don’t really benefit the city.
“I don’t think it’s fair. It’s not fair at all.”
That’s the same reaction Brimfield police Chief David Blough expressed this week. He brought the program to the township in 2009, but later asked that it be ended after only five months.
Stow had a similar experience in 2006 when it used Cost Recovery services briefly before ending its practice, citing lower than expected revenue and negative public reaction.
In Brimfield’s case, Blough said Cost Recovery representatives told him insurance companies routinely reimbursed the township for police costs in responding to crashes. Like Macedonia, the township’s program targeted only out-of-town drivers who caused crashes in Brimfield.
“We were told, in fact, the insurance companies expected the billing and the practice of billing for ‘out-of-jurisdiction’ crashes was becoming more prevalent,” he said.
Blough said he soon learned, however, that most insurance companies actually were refusing to pay, saying the bill for a police officer’s time and the use of a police cruiser responding to the crash was not a covered liability.
Cost Recovery then started billing the driver, just as it does in Macedonia. That was enough for Blough to urge the township to end its contract.
“I just could not, in good conscience, be a part of collecting money from a person because of a traffic crash,” Blough said.
“We know crashes are rarely ‘accidents’ and crashes are usually caused by negligence or carelessness. However, I also knew I just was not comfortable with the idea of sending collection letters and calling people who had caused a crash. It just seemed like piling it on. So, in short, it was not what we expected.”
In response to Slaby’s announcement, Regina Moore, president of Cost Recovery, again defended her company’s work and criticized insurance companies for not paying the bills for at-fault drivers. She said independent research would show lawmakers the “value and necessity of user fees for all communities in Ohio.”
“This will certainly reveal whether Rep. Slaby is representing Ohio taxpayers and public safety or big insurance,” Moore wrote in an e-mail. “Who does Rep. Slaby believe should receive financial relief? In this economic climate, we are all being called by our government to be fiscally responsible. Why should the insurance industry be exempt from that call?
“I am certain the police and fire chiefs in Ohio look forward to his support and Rep. Slaby looks forward to theirs as well.”
Slaby said he will consult this week with Ohio Legislative Services, the group that helps lawmakers draw up legislation, to craft a plan aimed at banning or curtailing the restitution plan across Ohio. He said any laws would have to spare ambulance restitution, which many insurance companies pay to communities.
He said Macedonia’s practice of pursuing restitution only from out-of-city drivers raises constitutional issues of equal protection and selective enforcement. He also is troubled by the city’s inability to warn drivers at Mayor’s Court that restitution could be added to any fines or court costs.
“It’s a fairness issue,” Slaby said.
Macedonia Law Director Joseph Diemert said Tuesday that the city has yet to receive any records from Cost Recovery detailing the total fees it has collected since the city’s program began in May 2010.
Records the city released show Cost Recovery has turned over about $20,000 to Macedonia during that time. The records do not show Cost Recovery’s share.
When the program was started, Diemert and Mayor Donald Kuchta said they expected Cost Recovery to take 9 percent to 33 percent of the overall bill. In most cases that the Beacon Journal reviewed, Cost Recovery sought the maximum of that range.
Kuchta, could not be reached for comment Tuesday. He has defended the plan, saying it was one way to help the suburb cope with decreasing revenue.
In reaction to Slaby’s comments and research of new laws, Diemert said the lawmaker’s time would be better spent finding ways to help struggling cities. Diemert already has researched the restitution program in an eight-page legal opinion — paid for by Cost Recovery.
“I’d suggest he research restoring local [government] funds being taken back to Columbus, or adopting legislation authorizing restitution fees to municipalities,” he said.
Diemert also questioned campaign donations the insurance lobby has made to Slaby.
Mary Bonelli, a spokeswoman for the Ohio Insurance Institute, whose clients include insurance companies, said restitution plans have been around in various cities for several years with no action in Columbus. No previous legislation has been brought, she said, a fact the insurance lobby attributes to Ohio’s home rule laws. In 13 states, the practice is banned or restricted.
Nonetheless, Bonelli said the group would support Slaby’s efforts.
“The industry, along with local community and business groups, has supported measures in other states to ban or restrict such practices and looks forward to assisting in any way we are called upon,” she said.
Phil Trexler can be reached at 330-996-3717 or ptrexler@thebeaconjournal.com.
