On February 3rd the Orleans Parish Clerk of Court, Dale Atkins, issued a press release announcing that her office had officially restored and verified all of the missing data which was lost in the October 25th computer crash.  Atkins also stated, "After restoring the electronic record system, I am now able to devote all the resources of my office to the consolidation and upgrading the land records division."

The consolidation she refers to was a mandate signed into law in 2006, and as of January 1st, 2009 the Clerk was bestowed with the monumental task of not only consolidating the three separate offices of the property records division for Orleans, she was also beholden by law to take over all the income generated by the Orleans Parish Civil District Court.

The new law would usher in a huge shift in money and power.  For decades the money generated by the court and the property records offices had been under the thumb of the judges of Orleans Civil District Court.  When this new law took effect, the Civil Court judges were supposed to relinquish that power and income to the newly ordained Clerk.

That's what was supposed to happen.

Unfortunately for Dale Atkins, the judges interpreted the law differently.  In fact, they outright ignored specific aspects of it.  They had been running the show for too long and had no intention of ceding control.  The conflict which ensued created a tangled, hierarchic web setting the stage for a disaster which nearly brought the New Orleans' real estate industry to its knees.

Act 621

Known as The Consolidation Act, 621 was designed to firstly, consolidate the three separate property record offices of Orleans Parish under one single office.  Previous to 621, three independent offices existed with two independent elected officials: the Registrar of Conveyances and the Recorder of Mortgages.  The third officer was a position appointed by the Governor, the  Custodian of Notarial Records.  

Orleans was the only parish in the state structured this way and the purpose of consolidating the offices was to cut costs and as the law states:

“Afford the citizens of the parish of Orleans the convenience and economy of filing a document (real estate transaction document) for record in one office.”  

Previous to the mandate a real estate transaction required three separate fees paid to each individual office.

621 was also designed to consolidate all the disparate Orleans’ courts: criminal, civil(s), and juvenile;  to create a single judicial district.  The new district known as the Forty-First Judicial District would be phased in over a period of time and become finalized in 2015.  The law also mandates the elimination of the Civil Sheriff and the Criminal Sheriff to create a single Orleans Parish Sheriff.  

The consolidation of the property records offices was the first merger to take effect in 2009.  It eliminated the three property records officers, replacing them with a single official, the Clerk of Court of the Forty-First Judicial District Court.  An elected position serving a four year term, attorney and former Clerk of Court for the Orleans Civil District Court, Dale Atkins, was elected to the position in 2008.

Act 621 also states:

“The consolidation of the courts and officers covered by this Act is critical to the future financial stability of the city and will ultimately lessen the financial burden to the citizens of the city of New Orleans and this state.  The legislature recognizes that a judicial system founded 200 years ago is unrealistic and not viable in the 21st century.”

621 seems to harp on the fact that Orleans’ court system was outdated and while the law was designed to be implemented over a 6 year time frame, it relayed an urgent tone:

“The legislature declares, however, that the process must begin now so that the elected officials covered by this Act as well as their employees and the citizens of New Orleans can plan for the future and know that the district court, clerk, and sheriff are structured in the most efficient manner with vision for the future and not in a system established two centuries ago.”

It sounds good on paper but the effects of 621 and the elected officials who were required to execute it are largely responsible for a massive governmental and administrative calamity which led to the mortgage and conveyance crisis.

Cut costs and create efficiency, it most certainly has not.  Fees to the public have actually risen. 

As for efficiency, a real estate transaction still requires three separate payments. For the past several months most transactions couldn’t even be completed, the result of a poorly maintained computer infrastructure that led to the loss of 180,000 digital mortgage and conveyance documents along with the index to navigate them.

How could this happen?  How could the most precious documents in the city simply vaporize?  

To find the answer, let’s take a look at the two entities Act 621 affects the most:  The Clerk of Court of the Forty-First Judcial District Court and the judges of Orleans Parish Civil District Court.

Justice, Inc.

Since the mid-1980’s, the judges have overseen a publicly subsidized fund called the Judicial Expense Fund (JEF).  In the other Louisiana parishes, the JEF is a funding mechanism designed to underwrite the basic needs and expenses of operating parish courts.  JEF’s are sustained by collecting a portion of court costs and filing fees.  

In most parishes, the JEF’s funds are collected by a parish’s Clerk of Court first, then divided and deposited.  The Clerk’s role is not only to manage the cost and maintenance of the courts, the Clerk position also creates a buffer between the parish’s judges and the money going into the JEF.

This buffer is an important factor, without it the judges have direct control over a fund they may personally benefit from by imposing fees, fines, and court costs on the public.  Even the appearance of a compromised judiciary can bring the courts autonomy into question.   

Since the judges took over the fund, the Orleans Parish JEF has been run without that buffer in place; Orleans judges have not only had direct control over the money in the fund, they’ve even had the ability to set court costs and increase the amount of money the fund takes in.

In the course of writing this story it’s been very difficult to find a knowledgeable source familiar with the history of the Civil Court operations, the JEF, and the property record offices who would go on record.  Humid Beings was able to conduct an interview with a professional who has been involved with these entities since the late 1970’s but the source wished to remain anonymous so his voice has been altered to protect his privacy.  We will call him Mr. A.  

Mr. A was working in the Civil Court arena when the Orleans parish judges originally devised a plan to take over the Orleans’ JEF:

AUDIO INTERVIEW - Mr. A 1- History of Judges and the JEF

It’s important to remember that the judges actually asked to take control of the JEF as well as the finances to maintain the existing courthouse.  At the time of the takeover, they also started a fund to build a new courthouse.  In other parishes the Clerk of Court is responsible for the JEF and the parish or city government is responsible for the provision and maintenance of courthouses.  For nearly three decades the Civil Court judges have been in control of the Orleans’ JEF with the intent of saving money to build a new courthouse for Orleans Parish.

In a City Council hearing on January 6th of this year, three of the judges of Civil District Court appeared along with Orleans Clerk of Court, Dale Atkins, to explain their respective roles and responsibilities in the court system and what they believe led to the mortgage and conveyance crisis.

Judge Madeleine Landrieu informed City Council there was a bill being proposed to the state legislature allowing Orleans Civil District Court to raise fees in order to help fund the new courthouse.

VIDEO INTERVIEW - City Council Meeting_Judge Landrieu on Courthouse

Judge Landrieu suggested that the city has a statutory obligation to fund Orleans’ Civil District Court.  In every other parish that is true, however, in Orleans the judges lobbied the legislature to take on that burden when they took over the JEF.  Legally, the judges are responsible for the Civil District Court, not the city.  

AUDIO INTERVIEW - Mr. A 2 - Why they took control of the JEF

Another factor Judge Landrieu failed to mention is that after Katrina the mortgage and conveyance offices were moved into the Amoco building on Poydras street with FEMA covering the cost of rent for the offices for years after the storm.  When FEMA stopped paying the costs the city took over the burden of paying the rent in all the offices with the exception of the notarial archives office on the 3rd floor of the Amoco building which is payed for by the Clerk’s office.

AUDIO INTERVIEW - Mr. A 3 - FEMA paid for Amoco rent, then city took over

Since 1985, the judges have had complete control of the JEF and the power to raise certain court filing fees at their discretion in order to increase the income to the fund, all under the guise of securing funding to build a new courthouse.  The same provision is now allowed under Act 621.

This power, unique to Orleans Parish Civil Court judges, brings into question the very ethos of the court system and the impartiality of the judges.

AUDIO INTERVIEW - Mr. A 4 - Judges setting filing fees

After nearly 3 decades of controlling the JEF, the judges don’t seem to be any closer to raising the money to build the courthouse than they were when they took over the fund.  So where has all the money gone?

AUDIO INTERVIEW - Mr. A 5 - Judges running the JEF like a club

Perhaps the most egregious example of the “club” mentality was exposed in August of 2010 when WWL-TV discovered that judges had employed a private chef, Gason Nelson, paid for with funds from the JEF.  Nelson was employed at that same time the judges were telling the court's CTO, Tynia Landry, that there was no money to spend on the IT department.  To make matters worse, Nelson was listed on the court’s payroll as a custodian.  Clearly an attempt to obfuscate his services, listing Nelson as a janitor could constitute payroll fraud.  Other expenses charged to the JEF include retreats taken to various beach resorts such as the Florida Gulf Coast and the Caribbean.

Still, when asked by City Council why the computer crash occurred both the Clerk and the judges bemoaned a lack of financial resources.  Both cited the difficulties Act 621 created and referred to it as an “unfunded mandate”.

VIDEO INTERVIEW - City Council - Unfunded Mandate

Where’s the money?

One of the primary goals of Act 621, was to put Orleans Parish back in line with other parishes in terms of how its court system operates.  Previous to the consolidation, the judges of Orleans were allowed to take money generated by the courts directly into the JEF.  This practice can give the appearance of a compromised judiciary in that the judges who are setting fees and fines on the public are directly benefiting from that income via the JEF.  

621 was supposed to eliminate money flowing directly into the JEF and require all money generated by the court to come directly into the Clerk of Court’s Salary Fund first.  The money would then be separated by the Clerk and deposited into the JEF.  

The original split mandated by the consolidation act was 60/40, with 60% going to the Clerk and 40% going to the JEF.  This split basically gutted the JEF’s accustomed income.  With that shift in funds the Clerk was supposed to take over all the fiscal responsibility of the courts, IT infrastructure included.  

Once again, that’s what was supposed to happen.

621 was signed by Governor Kathleen Blanco on June 23, 2006.  Section 30 of the act states:

“The provisions of R.S. 13:751.4 and 841.3 of Section 2 of this Act shall become effective upon signature of the governor or, if not signed by the governor, upon expiration of the time for bills to become law without the signature of the governor, as provided by article III, Section 18 of the Constitution of Louisiana.”

It also states:

“All the fees and costs assessed and collected by the Clerk of the Civil District Court or the Clerk of the Criminal District Court for the parish of Orleans in effect on the effective date of this Section are continued and shall be assessed and collected in accordance with these provisions.”

Then serving as Clerk of Civil District Court, Dale Atkins interpreted the law to mean that upon Governor Blanco signing the Act in June of 2006, she could begin collecting 60% of the general income generated from the courts.  Dale subsequently started billing the JEF for that 60%.  The judges were none too happy with those bills and resorted to filing a lawsuit against Atkins to clarify exactly when the bill went into effect and who was in control of the filing fees collected in Civil District Court.  

AUDIO INTERVIEW - Dale 1 - Lawsuit explanation

Right out of the gate, the (future) clerk and the judges were butting heads over the consolidation. The judges had been running the show for decades and there seemed to be little will to turn the money and control of the courts and the property record offices over to the Clerk.  

Before the Act even took effect on January 1, 2009, it was clear the ride was going to be a bumpy one.  The original intent of 621 was to correct anomalies in the Orleans court system and lessen the financial burden of the court system to the citizens of the parish but those corrections meant the judges would have to comply with the changes.  Instead, many mandates of the law were outright ignored to maintain the old way of doing things.  

Subsequently,  the cost of doing business with the court and the mortgage and conveyance offices has actually risen.

Here’s The Money

By 2010, the 60/40 split had created an enormous shift in money from the JEF to the clerk’s coffers.  The 2009 audit of the Clerk’s Salary Fund showed a net asset increase of $2,656,430.

In contrast, the 2009 audit for the JEF shows a net asset deficit of (-) $2,832,365.

The shift in money is clear, the shift in power and control...not so clear.

Who’s on First?

Back to the IT infrastructure, both the Clerk and the judges blamed the mortgage and conveyance crash on a lack of money.  The judges may be justified in that claim due to the financial effects of Act 621 but the Clerk had a 2.6 million dollar surplus in her coffers by 2010.  

AUDIO INTERVIEW - Dale 2 - Atkins says she has plan to update

So there was a plan in place by the Clerk to update the IT systems but she felt she needed around 4 million dollars to implement the chosen solution.  But has the Clerk actually had control of the IT systems running the court and the mortgage and conveyance offices?

AUDIO INTERVIEW - Dale 3 - Atkins explains money distribution for IT

There is a problem with this explanation.  Atkins still hasn’t explained who is responsible for the court’s IT infrastructure and the the mortgage and conveyance IT system.  The two IT employees which constituted the IT department were employed by the court (judges/JEF).  Is the Clerk responsible for IT expenses and maintenance or the judges?

AUDIO INTERVIEW - Dale 4 - Atkins says she is responsible for IT

So according to Atkins she is responsible for the expenses of the IT system but not the IT system itself.  During the City Council hearing, the judges told Council members another story.

VIDEO INTERVIEW - City Council - Judges claim they are responsible for IT

That claim, quite simply, is not true.  

In fact, during the process of installing the i365 backup software which failed during the crash former IT director, Tynia Landry, realized she needed to replace CDC 08 (the server that crashed) with a newer server in order for the i365 software solution to work properly .  Having already been told by the judges there would be no investment in IT that year, she asked the Clerk to buy the new server.

VIDEO INTERVIEW - Tynia Landry - explains she was told to go to Clerk

In relation to this issue, Act 621 clearly mandates that the Clerk is solely responsible for all aspects of the recording process of the mortgage and conveyance office.  As it stands, this mandate is not being met.  The Clerk is financially responsible for an IT infrastructure of which she has no control.  Yet the entire mortgage and conveyance database is wholly invested in the IT system.

So why would the judges want to maintain the managerial burden of the IT system?  They explained the situation in the City Council meeting.

VIDEO INTERVIEW - City Council - Judges explain they need to keep system uniform

Is IT a black hole or a cash cow?

The picture painted by the judges in the City Council chambers was that the IT infrastructure for the courts and the mortgage and conveyance offices was a complicated organizational and financial burden.  

The judges argued that in order for all the courts to have a unified hardware and software platform, they (the Civil Court judges) had to oversee the IT migration.  They even referred to the future consolidation of the Criminal Court with Civil District Court and implied they were best suited to handle that IT integration, even though the legal responsibility for the Criminal Court IT system will lie solely with the single Clerk of Court of Orleans Parish (the Criminal Clerk of Court will be phased out by 2014).

Act 621 clearly mandates that all money which comes into the court system and mortgage and conveyance offices must first come through the Clerk’s office.  

Once again, the judges and the clerk don’t seem to be in compliance with the Act.  The judges charge a remote access fee (Internet access)  to obtain basic information on both the mortgage and conveyance records and the Civil Court records, such as lawsuits, divorces, etc.  Right now the remote access service just provides docket numbers for civil records and basic information for mortgage and conveyance records.  The cost for using this remote access fee is $500/annually or $100/monthly.  

According to 621, that cash should go directly to the Clerk’s Salary Fund and then be split 60/40.  Instead 100% of the fees go directly into the JEF:

An example of a Remote Access Fee purchase processed by the JEF.

This Excel spreadsheet was pulled from Tynia Landry’s emails.  It summarizes the total funds generated by the remote access fees for 2007, 2008, 2009.

Over $200,000 annually, over double the combined salaries of the two IT employees the judges had employed previous to the crash.

Humid Beings asked the Clerk of Court why this money was still bypassing her office and going directly into the JEF.

AUDIO INTERVIEW - Dale 5 - Explains Remote Access Fee

Atkins' explanation here is dubious.  While the remote access fee may not constitute a filing fee, the intent of Act 621 was clearly to remove the judges from accepting any money generated by the courts.  In fact, many other cities provide free access to the same records and while other state parishes have a similar fee, it’s not even clear if charging Orleans’ citizens for access to public records is permitted by Louisiana law.

AUDIO INTERVIEW - Mr. A 6 - Remote Access Fee legality

If the remote access services are expanded to include even more information the fees could be raised and thus generate even more income directly to the JEF, income that bypasses the Clerk’s Salary Fund.  

Intent

The ultimate goal of Act 621 was to consolidate Orleans’ parish courts, consolidate the three separate property records offices, remove the judges from handling money that is generated by the courts, and lessen the financial burden of running the courts to the public.

The ultimate goal of the judges seems to be increasing the amount of money that flows into the JEF to compensate for the deficiency in funding which 621 created.  Whether that’s bypassing the mandates of 621 or simply increasing filing fees at their discretion, the burden falls back on the public the court serves.

After nearly 3 decades of failing to raise the necessary funds to build a new courthouse, the judges still seem intent on doing it themselves and they have discretionary control of court fees in order to accomplish their goal. The public seems to have little to no voice in the matter other than the election cycle.  

However, another law which the judges may not be in compliance with is Louisiana R.S. 39:1307.  The law requires any political subdivision with a budget over $500,000 to hold at least one public hearing before their annual budget is adopted.  Does the Orleans’ JEF budget qualify as a political subdivision?  According to Louisiana R.S. 39:1302, it does.   

Humid Beings was unable to find any instance where a public hearing has been held regarding the budget of the JEF or the plans to build a new courthouse.  

What is the ultimate goal of the current Clerk of Court?  Is it to serve the public or serve the judges?

AUDIO INTERVIEW - Dale 6 - Dale says a “real” consolidation must happen

A “true consolidation” would begin with adhering to the mandates in Act 621 and that would take Atkins' willingness to stand up to the judges, perhaps even file suit against them.  

Mr. A doesn’t think that’s a likely scenario.

AUDIO INTERVIEW - Mr. A 7 - Atkins doesn’t have the will to stand up

Far from standing up to the judges, Atkins seems more willing to capitulate to their will.  Ironically, on October 25th of 2010, the date of the crash, Atkins renegotiated the 60/40 split between her office and the JEF to a 50/50 split.

If the clerk’s goal is to raise 4 million dollars to overhaul the IT system for mortgage and conveyance, sacrificing 10% of her annual income doesn’t seem to make much sense.

The Reality

A little over a year since 621 became active, the results have had the exact opposite effect of its original intent.  A real estate transaction still takes three separate payments to process plus citizens must pay an added $325 filing fee, a tax unique to Orleans.  

The judges are still siphoning money out of the court system directly into the JEF.  Rates and fees have actually risen and there seems to be a plan in the works to raise them even more, making Orleans the most expensive parish in the state for its citizens to conduct business with the mortgage and conveyance office and the Civil Court.  

The level of service with these cost increases has arguably declined and in the case of the computer crash it nearly decimated the real estate industry in the city.

While the judges and the clerk claim 621 was an unfunded mandate and even flawed, it’s clear they are not in compliance with the Act and other state mandates regarding the JEF.  

What’s even more disconcerting is the consolidation of Criminal Court, Juvenile Court, and the Civil Courts is on schedule for 2014.  This initial battle between the judges and the Clerk may be a mere sampling of conflict and chaos to come.

In the final segment of The Big Crash we will examine what the best possible solutions are for developing a mortgage and conveyance office which truly serves the public.  We will look at best practices among other cities and look at whether or not the court even needs its own in-house IT infrastructure.