A new firm is taking over Davidson County’s privatized child support enforcement — and not a moment too soon 

Child's Pay

Child's Pay
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Illustration: Pete Ryan

On July 1, with no public fanfare, a handoff will take place that will affect children and families across Davidson County. It concerns the Davidson County Child Support Enforcement Office, a social service agency many Nashvillians probably do not know exists. Yet for tens of thousands of Metro Nashville children, it means the difference between financial health and hardship.

This little-known agency tracks down non-custodial parents (i.e., those who don't have custody of their children) and makes them appear in Davidson County Juvenile Court. There a judge can order them to pay the custodial parent a court-determined amount of financial support until the child is 18 — or face prison time, among other penalties.

Out of the 42,000 current Metro Nashville cases, slightly more than 50 percent of non-custodial parents pay consistently. That sobering statistic stands roughly the same across Tennessee, according to state records. The news is no better across the country. Nationwide, as of fiscal year 2009, the amount of unpaid child support had grown to more than $107 billion.

For the state's children of broken homes, and the single parents raising them, the only thing greater than the need for such an agency is the need for it to run smoothly. Unbeknownst to most Davidson County residents, that agency — and others like it across the state — was long ago privatized.

For the past 20 years, two private firms have controlled the Davidson County Child Support Enforcement Office. A third is about to take over after winning the $4 million-a-year, five-year performance-based contract earlier this year. Officials contacted by the Scene, both on the record and on condition of anonymity, express high hopes for the new firm, Mississippi-based YoungWilliams, which assumes control on July 1.

But those same officials say the track record of the previous two companies that ran the agency — Maximus, headquartered in Reston, Va., and Policy Studies Inc., which Maximus purchased in 2012 — shows why privatization remains a problematic solution to government bureaucracy. Neither company lived up to its promised potential, says Davidson County Juvenile Court Magistrate Scott Rosenberg.

"Honestly, I've been concerned over the years about every company's performance that has come through here," Rosenberg tells the Scene.

For a magistrate like Rosenberg, those concerns come down to underperformance — failing to keep the docket loaded with cases. For parents, complaints involve how promptly payments are distributed and how diligently the overseers pursue those who are late.

Some critics even claim that federal dollars meant to spur child-support enforcement only exacerbate the problem. Why should a company work harder to collect, they argue, when the government offers money to address the problem of low collection rates? Doing the job well, theoretically, could put the company out of a job.

Those are some of the issues facing the agency as YoungWilliams prepares to assume control. For critics of Maximus in particular, July 1 cannot come soon enough.

The importance of implementing a thorough, aggressive child support enforcement program became apparent over the past 20 years, based mostly on what some call the "new normal" regarding nuclear families — that the number of children born out of wedlock has climbed steadily since the 1970s.

According to a paper by Jacqueline Kirby at Ohio State University, the number of single-parent families in 1970 with children under the age of 18 was 3.8 million. By 1990, the number had nearly tripled to 9.7 million.

Those numbers make a good case in general for privatizing child support collection, a Hamilton County, Tenn., official told the Scene on condition of anonymity. The number of single-parent families is in flux and rising, the official said, and the private sector can hire employees to handle them faster than the government. Also, the official added, a private firm can run the program more efficiently and allow the county to "throw more resources at the judicial side of things." 

Back in 1992, Metro Nashville had no say whether its child support enforcement office would be privatized. That decision came down from the state's Department of Human Services, which oversees every child support program in Tennessee and makes the decision to privatize and award contracts.

According to Susan Niland, director of communication for the Office of the Davidson County District Attorney General, the decision to privatize 21 years ago wasn't made because of poor performance on the part of the agency. Nevertheless, Niland says, the county decided that it would not contest DHS' decision to privatize Davidson County.

The first corporation the DHS chose to run Davidson County's child support enforcement program was Maximus. A publicly traded global corporation specializing in running government services, Maximus reported $1 billion in revenue for 2012. It lost the Davidson County contract in 1997 to Policy Studies Inc., which Tennessee had made the first private company ever awarded a contract to handle child support back in 1991. PSI ran the program until 2012, at which point Maximus acquired the company that year and took over once again.

According to the state DHS, Maximus and other private child support enforcement firms have saved Tennessee taxpayers tens of millions of dollars. Contacted by the Scene, the DHS could not provide an exact figure as to how much Davidson County has saved in 20 years of privatization.

But in Hamilton County, Maximus has saved Chattanooga taxpayers $10 million since 2001. In Shelby County, Maximus collected $16 in 2012 for every $1 spent of Memphis taxpayers' money. When the Shelby County government last ran the program, in 2008, it collected only $7 for every $1 spent.

The company has accomplished this savings, at least in some cases, by firing salaried government workers and replacing them with temporary workers paid a lower wage. Davidson County was not one of those cases, according to Niland. She tells the Scene that when it took over in 1992, "Maximus took all of the county employees as part of the arrangement, and many stayed with them for years."

That stands in contrast, however, to what happened in Memphis in 2009. After the DHS allowed Maximus to take over Shelby County's child support collection, the firm handed nearly 200 county employees a pink slip. Within the very building that housed Memphis' new child support office, which Maximus chose as its new local headquarters, a Randstand temp agency office was established.

Neither the state nor Maximus would comment on the company's use of temporary employees. To those seeking to trim government costs, such moves are seen as a brutal but needed move toward efficiency. Others claim Maximus forced out veteran employees with passion for their jobs and institutional knowledge, only to replace them with less-skilled temps.

Whichever the case, the company's service draws harsh comments from veteran Juvenile Court personnel. "Their internal service was horrible," said one Juvenile Court official contacted by the Scene who spoke on condition of anonymity, while another reached by phone mentioned the company's "very poor performance over the years, not good at all."

"We have three full-time magistrates ready to hear cases, and our dockets have never been completely full [under Maximus]," Magistrate Rosenberg says. "I know what I see in court, and as far as the court process goes, we were being underutilized. [Maximus'] production rate of getting cases through the system was not good. The organization as a whole was underperforming."

It's not just local county employees who disparage the private firm. Across Tennessee, where the DHS has privatized 20-plus counties — including those encompassing Knoxville, Chattanooga and Memphis, each also handled of late by Maximus — thousands of parents are fed up with for-profit corporations running a program whose main responsibility is the welfare of children.

Michelle Baker, a single parent from Chattanooga, has inspired an online uprising against Maximus and other child support enforcement firms across the state. Baker has penned a blog since 2009 (found at mothercluckerblogger.blogspot.com), and her rants and investigations have logged more than 30,000 views.

"When you have a private company coming in and taking over, it becomes a business," Baker says. "It is no longer a public service that assists the public. They're going to be more concerned about making money and trading their stocks. They're more concerned about the almighty dollar. They've turned [child support] into a money-making industry."

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