Council seeks data after DAH reports $13.7M collected under collections contract; members raise concerns about blight fines and seniors

The Committee of the Whole asked the Department of Appeals and Hearings (DAH) for a detailed accounting after DAH reported that the city’s contingency‑fee collections vendor, Linebarger, Goggin, Blair & Sampson LLP, has collected $13,700,000 since placements began in March 2022.

"Over the course of this contract… this vendor has collected over $13,700,000 on behalf of the city," Julianne Pastril (Director, Department of Appeals and Hearings) told the committee. Pastril said those funds are returned to the city’s general fund and described the fee structure the vendor receives under the contract.

Why it matters: Council members asked for a breakdown showing outstanding balances from 2021 through 2025, amounts collected each year, and how much the vendor was paid. Member Angela Whitfield Callaway pressed for transparency and for a report showing how much of the collected money is retained by the vendor and how remitted funds are recorded and spent.

Key details on fee structure: Pastril explained the contingency‑fee schedule included in the contract: 10% retained if a file is placed with the vendor within six months of the date of judgment; 25% if placed more than six months after judgment; and 30% for amounts resulting from Third Circuit garnishments. Pastril also said DAH’s systems automatically transfer unpaid files to the vendor after a judgment reminder and that files currently transferred are not older than six months because of that automation.

Concerns about seniors and due process: Council members and public commenters raised repeated concerns about senior residents, low‑income homeowners and garnishments. Pastril said DAH provides due‑process protections: owner‑occupied, low‑income property owners may appear before a hearing officer who can waive the local blight ticket fine (but not state assessment fees remitted to Michigan). She said DAH uses conspicuous mailings (a bright yellow envelope with red writing) to improve notice, and she encouraged residents to contact city departments early to resolve issues before hearings.

Member Callaway asked whether DAH remits collected funds to a separate account or simply to the general fund; Pastril said remitted funds are returned to the general fund and that DAH will provide a written breakdown. "We can give you the specific answers about where that goes… we'll provide those answers in writing," she said.

Action and next steps: Member Callaway moved to bring the item back in one week with a full report covering collections, payments to the vendor, outstanding balances back to 2021, a residential vs. commercial breakdown, and details about remittance and settlement practice (including recent high‑profile settlements referenced by council members). The committee voted to bring the item back in one week.

Ending: The committee asked DAH to supply a written report addressing the amounts collected since 2021, how collected funds are recorded and used, the vendor’s compensation, and whether and how settlements have affected amounts remitted to the state or city.