Wednesday, February 24, 2010

Not All Municipalities Outsourcing

By Mark Brousseau

While payments processing outsourcing has gained traction among government entities during the economic downturn, it's still not for everyone. A case in point: the Apache County Tax Collector (Arizona), which recently implemented a solution to automate the processing of its tax payments.

"We never really considered outsourcing," explains Apache County Tax Collector Chief Deputy Sandy Klinchock. She believes that in-house processing provides more control and better quality.

Known as the longest county in the country, Apache County runs 211 miles from the Utah border to just south of Alpine, Arizona. Two-thirds of the population, and over one-half of the land area, belongs to the Navajo Nation, the largest Native American tribe. Currently comprised of 70,000 residents, Apache County is growing : new subdivisions have been approved, permanent jobs are being created, and the county is investing in the services required for an expanding population.

With the Apache County Tax Collector committed to keeping its payments processing in-house, it knew it needed a solution for automating its tax processing. Previously, three employees processed the county's roughly 68,000 tax payments in about a three-week window. By automating, the county also hoped to streamline its deposits to improve funds availability and working capital management.

"We wanted to become more efficient, while enhancing our service to constituents," Klinchock says.

In late 2009, the Apache County Tax Collector implemented an image-enabled remittance processing solution from Creditron. The system includes a 3000t check scanner from NCR, courtesy and legal amount recognition (CAR/LAR), and the ability to deposit funds electronically via Check 21.

The Apache County Tax Collector selected Creditron based on its implementation of a system at nearby Navajo County, and on its willingness to meet the county's fast installation schedule; the Apache County Tax Collector went into production a few weeks after signing its Creditron contract. Navajo County handles back-end tax accounting on behalf of the Apache County Tax Collector.

As a result of automating its tax processing, and depositing funds electronically, Apache County Tax Collector now gets all of its funds to the bank the same day they are processed. In its old manual environment, it took the county two to three days to turn around its deposits. "Now, we can keep our money invested for a longer period of time," Klinchock says. "We also have a clearer picture of how much money we have in the bank, and whether we have to pull from investments to pay warrants."

The county also is able to make electronic deposits for all eight of its departments. And depositing funds electronically eliminated daily courier runs to the bank, which cost the county $350 a month. Additionally, there are fewer calls from customers asking why their check hasn't cleared sooner.

With results like these, Klinchock is surprised that so many government entities are outsourcing their payments processing. "If they take some of these arguments to their board, I think they will find a receptive audience," she says. "When our board heard about the benefits, they were all for it."

Creditron Founder and CEO Wally Vogel adds that the experience of the Apache County Tax Collector shows that government entities don't have to outsource to reduce costs or gain efficiencies.

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