COVID-19 payments coincided with a record month for S.D. debt-collection office

Capitol News Bureau

PIERRE, S.D. (KELO) — State government’s obligation recovery center saw an unprecedented amount of money flow into it during March, just as South Dakota taxpayers were receiving their third round of federal COVID-19 payments.

The bit of serendipity was part of the message Andy Gerlach delivered Tuesday to the Legislature’s Government Operations and Audit Committee.

“That was our largest month ever, last March,” the deputy commissioner for the state Bureau of Administration said as he presented the center’s annual report.

Then-Governor Dennis Daugaard’s administration established the center after lawmakers passed a state law in 2015 that gives the contractor the right to add a 20% surcharge onto the principal.

CGI won the initial contract but eventually gave notice the company didn’t want to continue as the state’s collector. The amounts CGI brought in had been slipping a bit year after year.

“They really weren’t a debt collection company. They were a software company,” Gerlach said.

Reliant Capital Solutions was selected from a field of six in September 2020 and took over in November 2020.

“They focus on outbound calling instead of letters,” Gerlach said.

Reliant’s arrival generated about a $400,000 increase in collections to more than $3.8 million for the fiscal year that ended June 30, 2021: Some from being a new face, some from the emphasis on calls and some from offering affordable payment plans, according to Gerlach.

Virtuoso Sourcing Group and HS Financial Group came on as new third-party collectors in May this year.

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