State’s debt center is almost ready more than a year late

PIERRE -- South Dakota's obligation recovery center is scheduled to open this summer to attempt to directly collect money from people who owe money to the state government, an official said Tuesday.

PIERRE - South Dakota’s obligation recovery center is scheduled to open this summer to attempt to directly collect money from people who owe money to the state government, an official said Tuesday.

Jeff Holden, commissioner for the state Bureau of Administration, briefed the Legislature’s Government Operations and Audit Committee about its status.

He said the private contractor selected to manage the center intends to start operations July 15. He said the contractor, CGI, is working with Wells Fargo.

CGI was one of two companies that sought the state contract, according to Holden. Based in Montreal, Quebec, the company has offices throughout the world.

Holden said negotiations are under way with three companies that want to serve as third-party collectors for debts that CGI chooses to send them.


The third-party collectors would work on one-year contracts with annual reviews and options for four annual renewals, according to Holden.

He acknowledged to Rep. Jean Hunhoff, R-Yankton, that CGI has a five-year contract without reviews.

The original timetable this year called for start-up April 15.

Sen. David Novstrup, R-Aberdeen, asked Holden to provide to legislators its policy for driver licenses and Game, Fish and Parks licenses and permits being withheld from debtors.

Holden said people wouldn’t get a notification unless at least $1,000 is owed and the person hasn’t taken any action to resolve the debt.

“The process of notification is something I’m still working out between CGI and those agencies,” he said. “I can’t tell you exactly how it’s going to work.”

Novstrup said there is “a huge difference” between a hunting or fishing license and a driver license. He called losing a driver license “a pretty big hammer.”

“We’re drafting the rules now,” Holden said.


CGI would get 20 percent of the debts it collects.

Rep. Roger Hunt, R-Brandon, asked Holden to describe the chain of command. “I don’t think I can,” Holden chuckled.

Hunt said it’s important information for legislators. “We need to know where it’s gone wrong,” Hunt said.

Holden said any issues should be addressed to him. Holden said he reports to Jason Dilges, who is the commissioner for the state Bureau of Finance and Management, and ultimately to Gov. Dennis Daugaard.

CGI is contracted manager and reports to the Bureau of Administration, Holden said. The third-party collectors report to CGI but their contracts are with BOA, he said, and CGI would make recommendations about them to BOA.

The three state agencies that would work first with CGI are the Unified Judicial System, the Department of Corrections and the Department of Game, Fish and Parks. Holden described it as “a phased approach.”

He said the Board of Regents, whose members govern the state universities, asked to delay its participation in the new system. The regents are still working out matters with CGI, according to Holden.

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