Macedonia’s mayor intends to end the city’s contract with a company that bills out-of-town drivers involved in crashes.
The move comes four days after the Akron Beacon Journal revealed the city’s contract with Cost Recovery Corp. does not cap the company’s fees.
The newspaper also reported that Cost Recovery refused to release documents to the city showing how much money the Dayton-area agency was receiving in the unbid contract.
In at least two dozen examples examined by the newspaper, Cost Recovery raised the cost to drivers or their insurances companies by 50 percent or more for its fees.
In a letter Thursday to city employees, Mayor Don Kuchta said a second look at the program, which seeks reimbursement from at-fault drivers for city safety forces’ time and equipment, spurred his decision.
“… after reviewing the contract and the procedures and its overall impact on the city of Macedonia,” Kuchta wrote, “I am immediately suspending the Cost Recovery program. I will be introducing new legislation recommending to council to overturn [the contract].”
The city’s contract with Cost Recovery can be terminated with 90 days’ notice.
A city employee released Kuchta’s letter about 5 p.m. Thursday. The mayor could not be reached for further comment.
In recent interviews, Kuchta acknowledged that he did not know fee details of the contract he signed with Cost Recovery. Only recently, when the Beacon Journal requested the information, did he learn that Cost Recovery would not share its financial records or that it was raising a driver’s cost by 50 percent or more.
For example, a driver who lost control of his vehicle on an icy stretch of Interstate 271 was charged $245 by Macedonia for city services, but by the time the bill arrived, it had been increased by Cost Recovery to $366, or 50 percent more.
Cost Recovery President Regina Moore has said that her company collects 9 percent to 33 percent of the total bill. That’s a different way to look at the math. Cost Recovery’s share of the $366 for the I-271 accident would be about 33 percent, or $121.
However, Cost Recovery declines to disclose to Macedonia how much it is actually collecting on paid bills, revealing only the amount the city received from its billing of hundreds of motorists or insurance companies.
Moore said Thursday she was not surprised by the city’s announcement. She again blamed insurance companies for failing to cover a legitimate expense.
“The insurance industry, with the help of the media, has done an impressive job of manipulating and bullying elected officials into decisions based upon re-election, as opposed to what is best for their citizens. I completely understand,” she said.
Macedonia has received about $20,000 during the 14 months of the program. City residents were exempt from the billing.
Over time, several hundred drivers or their insurance companies were billed through Cost Recovery. Most refused to pay.
On Tuesday, state Rep. Lynn Slaby, R-Akron, called the practice unfair and promised to introduce legislation to ban such arrangements. Similar reimbursement programs are banned or limited in 13 states.
For Macedonia’s mayor, the collection practice began in May 2010, when the city was looking for ways to raise money.
In his letter, the mayor said that while the police force is still understaffed, overall city finances have improved in the wake of a November tax increase approved by residents.
“Our finances are improving since those very troubled times and since the inception of this [contract],” he said in the letter.
Phil Trexler can be reached at 330-996-3717 or ptrexler@thebeaconjournal.com.
