SCANDAL: TxDOT-Xerox $100 million toll contract blows up in Texas Senate

Link to article here.

Xerox toll collection problems explode in Senate hearing
By Terri Hall
February 11, 2015

If ever there was a time to air the dirty laundry of a state agency in chaos, it’s the Texas Department of Transportation (TxDOT) and its $100 million contract with Xerox for toll collections in Central Texas. Today’s Senate Transportation Committee hearing put TxDOT and its contractor on the hot seat with plenty of rapid fire questions from incredulous senators who could hardly believe their ears. TxDOT admitted 3.5 million toll transactions got caught up in the billing snafu that sent up to 2-year-old bills to Austin motorists, many of them padded with steep late fees and fines.

At least 30,000 motorists had valid toll tag accounts that should have been charged through their accounts, but instead received paper bills adding an extra 33% for pay-by-mail as well as additional late fees. When they tried to reach customer service at TxDOT’s toll-free number, they faced extremely long wait times before anything could be resolved.

Even more amazing was the response from Xerox Vice President Laurie Zazadio when she was asked to testify. She stated her name, said Xerox was making improvements, and concluded her remarks saying she can answer any questions.

“Is that all you’ve got to say?” Senate Transportation Committee Chair Robert Nichols implored.

The problems with this $100 million contract are making headline news and stuck at least 30,000 motorists with erroneous bills - without ramping up the staffing at call centers until AFTER the flood of angry calls - and Zazadio literally had nothing to say but ‘we’re working on it.’ The stunned amazement was visible on the senators’ faces, and Senator Kirk Watson, who represents the Austin area, immediately grilled her for details.

Watson: “What are the longest call wait times?”

Zazadio: “Two minutes and 27 seconds.”

Watson: “Is that the time it takes to get the phone answered or the issue handled? I have to tell you, I doubt your numbers.”

Zazadio: “The average speed of answer is based on the inbound call - the time it takes for the CSR (customer service representative) to answer the call. How long it takes to get a call handled is calculated separately and our average call time yesterday was 8 minutes.”

Since the erroneous bills went out in December and January and the flood of calls began, Deputy Executive Director of TxDOT, John Barton noted that they have ramped up the number of call centers and call what times have been cut in half. So if the average wait time yesterday was 8 minutes, then the average wait time when the bills hit the fan was 16 minutes. Most customers would hang up and give up after getting that kind of run around.

Senator Sylvia Garcia said as much, “You really have no way of proving people got notice of the fees? I received a bill for a time I don’t recall being in Austin, and after waiting on hold for awhile, I gave up and just paid it out of sheer frustration. After 10 minutes, you lose people.”

So who knows how many Texans who have a right to be reimbursed or credited for erroneous bills and fines have given up in frustration and paid toll bills they don’t even owe? If motorists cannot get their fines resolved, they can escalate it to a Justice of the Peace court. But Garcia questioned the efficiency of a court hearing for a $6.50 toll bill.

Senator Don Huffines asked TxDOT what its goal for call what time is at this point. Barton answered 5 minutes. Huffines had to repeatedly ask what would be a goal the committee could hold them accountable for to implement that ideal wait time. Barton finally said 6-8 weeks.

But TxDOT Executive Director Joe Weber questioned whether pay-by-mail is even the way to go about toll billing, “I have shared internally with my staff, that if we can’t get this working right in three months, then we need to consider if this is a right process." He suggested it may be necessary to go back to toll booths to collect tolls.

Watson made clear that the practice of delaying toll bills is unacceptable and the long wait times to resolve toll bills and disputes is also unacceptable, yet many of these senators are the very characters who voted to open the door to the toll nightmare Texans are facing across the state.

Huffines along with Senator Lois Kolkhorst asked if this was a problem in other areas of the state, and TxDOT basically said ‘No.’ However, its well aware of the perpetual toll billing troubles from the get-go. Double billing was a problem in both Austin and Tyler. Texans have also complained about long wait times and even no answer at the North Texas Tollway Authority (NTTA) over erroneous bills. One resident in Austin received a toll bill for over $11,000 for $358 in actual tolls. Many have reported cases of receiving a bill for vehicles that have never been on these tollways.

A resident of Nacodoches received a bill with a fuzzy photo that looked like his truck, but the NTTA tried to bill him  for a farm truck that has never left his farm. Most of the photos supposedly ‘proving’ that a vehicle used a tollway without paying are often blurry and the license plate they produce is unintelligible. Another resident of Bulverde, Texas, received a bill from the North East Texas Regional Mobility Authority (NET RMA) for Loop 49 around Tyler, but neither he nor his vehicle had been to Tyler in 20 years. A Harlingen woman also received a toll bill from the NET RMA and she’s never even been to Tyler. It took the news media to intervene to get it resolved.

Senator Bob Hall asked the agency to break down how much toll revenue it receives on an annual basis against the cost to collect the tolls. The answer is $20 million a year to collect $110 million in toll revenue. Then Hall insisted on knowing how much can be attributed to fines and fees versus actual tolls. TxDOT didn’t have the answer, but promised to get it. Nichols demanded a weekly update on the agency’s progress with this toll billing problem until it gets resolved to the committee’s satisfaction. 

Kolkhorst shared that her own staffer took an Austin toll road in December and didn't have a toll tag, and she's been anxiously awaiting the bill in the mail for fear of all these late fees. Two months have passed and still no bill. Kolkhorst emphasized to TxDOT and Xerox that it's unacceptable to take two months to receive a toll bill. Weber assured her that staffer won't have to pay late fees since 'we owe her a timely bill.' However, there are a lot of Texans who aren't receiving timely bills and have late fees tacked onto pay-by-mail bills on their first bill, with no opportunity to pay just the tolls they owe without fines and penalties well before the Xerox scandal broke. With the microscope on TxDOT, perhaps now Texans will have those fines waived. 

Former Governor Rick Perry unleashed toll roads across Texas during his 14-year tenure. Between the nearly bankrupt foreign-operated SH 130, the prohibitively high toll rates being imposed on existing freeways (over 80 cents a mile), and the toll billing inefficiencies and errors, toll roads are a failed policy from start to finish. They’re also anti-liberty and impede freedom of mobility (through price) rather than facilitate it.

Thankfully, the new Governor, Greg Abbott, campaigned against toll roads and pledged to take the start in a different direction. Abbott plans to address the persistent road funding shortfall without raising taxes and without any more tolls. The new Lt. Governor Dan Patrick also campaigned on the same platform. So Texans may finally see some light at the end of this toll road nightmare. It’s 3 1/2 months until the end of the current legislative session, so we’ll soon find out.

Link to article here.

TxDOT, toll tag vendor taken to woodshed over toll billing problems
Wednesday, Feb. 11, 2015
By Ben Wear
Austin American Statesman

Austin — The state’s troubled toll tag system had more than 3.5 million toll charges that an outside contractor failed to process in a timely fashion — some were more than two years behind — and a variety of other problems that in recent weeks overwhelmed the system, Texas Department of Transportation officials said Wednesday at a legislative hearing that amounted to a trip to the woodshed.

That backlog of toll transactions, when they hit the system and Texas mailboxes late last year, in turn led to about 30,000 improper billings of people who have electronic TxTags on their windshields that are supposed to seamlessly pay the tolls. Calls from thousands of confused or angry drivers in turn overwhelmed the call center set up by vendor Xerox Corp., TxDOT and company officials said, leading to lengthy waits for calls to be answered and further holding until a representative could actually begin to help customers.

“I’ll begin by apologizing to our customers and the citizens of the state,” TxDOT deputy executive director John Barton said to the Senate Transportation Committee as he testified at a hearing called mainly so senators could get answers about the TxTag problems. “They deserved to be served better. … This must be fixed.”

Texas Department of Transportation officials faced pointed questions from lawmakers Wednesday over toll tag billing problems.

TxDOT officials gave the senators a blanket promise that late charges and fees associated with the delayed bills and other mistakes would be dismissed by TxDOT. And the agency in the past week has said that Xerox has added call centers in Houston and San Antonio, cutting call answering times from 14 minutes to less than two-and-a-half minutes.

But that’s only part of the story, state Sen. Kirk Watson, D-Austin, pointed out. He said a constituent told him that earlier this week a call to the TxTag call center was answered in less than three minutes. But then the person was immediately put on hold for 14 minutes.

“Frankly, I doubt your numbers,” Watson said.

The trouble began with TxDOT’s previous vendors. A group of companies, including URS and 3M, had various duties until July last year, when Xerox under a new contract took responsibility for all processing and billing of toll transactions and of the call center. James Bass, TxDOT’s chief financial officer, said 3.5 million bills for tolls incurred on TxDOT’s four Central Texas tollways between June 2012 and March 2014 became hung up in the system. Another 800,000 charges that were even older were dismissed, he said.

But those 3.5 million were billed again sometime this fall. By this time, Xerox had taken over the contract by itself. And while testing had occurred before the company assumed control of the operation, there were problems meeting TxDOT deadlines and standards. The company had been fined, in effect, $177,000 by TxDOT for failing those requirements, and Bass said further financial hits to Xerox’s $100 million, five-year contract are likely.

Watson was most surprised and troubled, he said, by the 30,000 TxTag customers who received bills as if they did not have automatic payment in place.

“The 30,000 is about three times as big as I thought it would be,” Watson said. “Xerox has created really a disastrous situation for Central Texas.”

Shouldn’t Xerox have expected a huge increase in customer inquiries, one senator asked, given the slug of invoices going out?

“We didn’t anticipate that high a call volume,” said Laurie Zavadil, a Xerox vice president called to testify at the hearing.

Correction: An earlier version of this story incorrectly said that Xerox was involved with the TxTag operation before July last year. It was not.