FISCAL NOTE

Date Requested: February 02, 2018
Time Requested: 01:35 PM
Agency: Public Defender Services
CBD Number: Version: Bill Number: Resolution Number:
2388 Introduced SB467
CBD Subject: Boards and Commissions, Courts


FUND(S):

0221-0226-78800 (Appointed Counsel Fees)

Sources of Revenue:

General Fund

Legislation creates:

Increases Existing Expenses



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


     The approval of the vouchers submitted by court-appointed counsel is currently the function of the court that appointed the counsel. In Fiscal Year 2017, the courts approved 37,504 vouchers representing claims for payment and reimbursement of expenses in the amount of $26,055,050.97. Public Defender Services, Annual Report, Fiscal Year 2017 (“AR”), p. 8. The vouchers are then transmitted, together with the court’s order approving payment, to Public Defender Services (“PDS” or the “agency”). PDS reviews the vouchers for compliance with the governing statutory provisions and the agency’s and the State Auditor’s guidelines as set forth in the provisions of W. Va. Code §29-21-13a(g).
    
     The legislation would transfer the “approval” function from the circuit courts to PDS who would review vouchers and confer with attorneys before court action would be required. The agency estimates, conservatively, that the transfer would result in a reduction of expenditures from general revenue in an annual amount of $1,529,772.
    
     Moving the function of approval of vouchers from the appointing court to the agency would result in 2 additional staff, 1 attorney and 1 paralegal, at a cost of $120,731. However, these costs are offset by savings as described below.
    
     The legislation would also change the rates of compensation for legal services provided by court-appointed counsel at a cost that is estimated to be $1,878,861. The legislation would permit compensation of paralegal services at $20 an hour.
    
     As a note, the agency’s intent is to curtail presently permitted billing for certain administrative tasks, such as preparing a voucher, which is believed to be sufficient in amount to offset the proposed increase in the rates of compensation without regard to the savings achieved by the change in the process for approving payment of the vouchers.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2018
Increase/Decrease
(use"-")
2019
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 349,089 349,089 0
Personal Services 349,089 349,089 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    A year of 2200 billable hours on court-appointed matters means that the attorney is fully engaged in court-appointed work and is working extended hours daily. The agency has identified 29 attorneys who billed more than 2200 billable hours in Fiscal Year 2017. AR, pp. 224-227.
    
     Using the fact that, on average, 84.77% of an attorney’s time is spent on out-of-court matters at the $45 hourly rate of compensation and the remaining percentage is spent on in-court matters at the $65 hourly rate of compensation, a 2,200 hour billable year yields compensation in the amount of $105,701.20. AR, p. 244. This monetary amount further emphasizes that a 2,200 hour year is at the outer boundaries of reasonableness.
    
     The agency believes that its “approval” of vouchers would limit the 29 attorneys who exceeded 2,200 hours to the more realistic level of 2,200 hours, if not less. The agency acknowledges that the hours reported in FY2017 are submitted at a culmination of a case which may span more than a one year period. Nonetheless, the agency has verified that, for these attorneys, the figures in FY2017 represent consistent levels of billing over a period of years. Accordingly, the amount billed by these attorneys in FY2017 is, in fact, a representation of the purported hours spent in one year on indigent defense.
    
    With the addition to the agency’s staff of one attorney and one paralegal and with the authority to approve the vouchers rather than relying on the circuit court’s order approving the vouchers, the agency has the means to determine an attorneys’ historical level of billings, has the means to review an attorneys’ vouchers collectively, and has the means to examine closely the vouchers submitted by the attorneys on an entry-by-entry basis.
    
     The 29 attorneys billed, collectively, 16,820.56 hours in excess of a 2,200 billable hour year. Using the percentages of out-of-court time and in-court time set forth above, the total reduction in compensation upon the elimination of this excessive billing would be $808,160.
    
    Again, this estimate is based only upon the reduction of hours for the 29 identified attorneys with over 2,200 billable hours. Approximately 700 attorneys throughout the state accept court-appointed work and reported, collectively, the performance of 490,751 hours of services in Fiscal Year 2017. AR, p. 244. The hours for the 29 attorneys that are expected to be reduced represents 21% of the total hours reported by these attorneys. While it is unrealistic to expect that every voucher would be reduced by this amount, it is nonetheless realistic to expect that one-third or a comparable percentage of vouchers would be reduced, resulting in a savings of approximately $1,650,503.60, including the savings related to the 29 attorneys billing over 2200 hours.
    
     The two additional personnel required by the agency would result in increased administrative costs to the agency in the amount of $120,731, assuming a salary of $60,000 for the attorney and a salary of $30,000 for the paralegal.
    
     The resulting estimation is that the agency would reduce the expenditure of general revenue in the payment of court appointed counsel by the amount of $1,529,772.60.
    
     The legislation also increases compensation for legal services in some proceedings by five dollars for in-court and out-of-court services and reduces compensation for legal services in some proceedings related to in-court time.
    
     Specifically, the more complex cases, such as felonies and child abuse and neglect cases, would be compensated at $50 an hour for legal services performed out-of-court, which is increased from $45 an hour, and at $70 an hour legal services performed in-court, which is increased from $65 an hour. For the less complex cases, such as misdemeanors and mental hygiene proceedings, the compensation would be $45 for legal services performed both in-court and out-of-court. Presently, the out-of-court services would be compensated at $65 an hour.
    
     With respect to estimating the increased expenditure of general revenue attributed to the increased amount of compensation, the agency has used the reported hours of service in FY2017 for various types of proceedings. However, the grouping of proceedings in the current reporting is not entirely consistent with the grouping of the cases within the proposed statute. Accordingly, the estimates will be understated and overstated as noted.
    
    The hours allocated to misdemeanors, mental hygiene proceedings, and municipal court charges is, in total, 71,450.82. AR, p. 72. Using the in-court percentage of hours for court-appointed counsel, i.e., 15.23%, and the $20 an hour decrease, this represents a decrease in expenditures of $217,639. Again, the agency’s current allocation of hours to various proceedings does not match the eligible proceedings to be affected by this decrease, so this number is probably understated.
    
     The hours allocated to the more complex cases would be 419,300.18. A $5 increase for these hours of service would be $2,096,500. Again, due to the agency’s current grouping of eligible proceedings for reporting purposes, this amount is probably overstated.
    
     The total increase in the expenditure of general revenue for this increase in the rates of compensation would be estimated, therefore, at $1,878,861.
    
     If the expected savings of $1,529,772 from the remaining provisions of the legislation are offset, the total increase in expenditures by the agency from the account for appointed counsel would then be $349,089.
    
    
     Finally, the legislation addresses the issue of compensation for paralegals. Presently, the use of paralegals is considered an expense to the attorney. The attorney can be reimbursed for the hourly wage paid to the paralegal, up to $20 an hour. This discourages the use of paralegals, however, because the attorney recognizes no economic advantage. Indeed, the attorney is limited to the wage expense and, therefore, if a paralegal is hired, the attorney loses money if benefits are paid and if additional office space is leased. The legislation would make the compensation for paralegals $20 an hour without regard to the actual expense of the paralegal to the attorney. The agency believes that this will encourage the use of paralegals and will provide the attorney an economic incentive for their use. The further belief is that this will reduce the attorney time that is billed for basic legal services and will provide a decrease in the expenditures for fees. However, the agency cannot quantify this savings.
    



Memorandum


     As a note, the agency is anticipating that, beginning July 1, 2018, compensation will no longer be paid for administrative tasks such as preparing a voucher or opening or closing a file. The agency believes that the decrease in expenditures for these presently compensated services will be greater than one and one-half million dollars. Accordingly, the increased expenditure for the proposed rates of compensation would be more than offset by these anticipated savings.
    
    
     The legislation also provides for the potential execution of contracts for legal services in certain situations that would pay an established amount for the handling of matters rather than the payment of an hourly rate. The contracts would be executed only as the need arises. Accordingly, no estimate can be made about the amount of savings, if any, to the state.



    Person submitting Fiscal Note: Dana F. Eddy
    Email Address: Dana.F.Eddy@wv.gov