TxDOT hires IBM as toll contractor as lawmakers propose fixes to billing system

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(AUSTIN) KXAN — More than a year after a law capped late fees for certain toll roads across Texas, Mela Louviere is still wary about driving on them.

That’s because the last time she drove on them regularly, she received a collections letter showing she owed $5,750 in administrative fees for only $412.85 in toll usage.

“We’ll use it if and when we really need to, but otherwise, I’d rather just avoid the headache,” Louviere said. “Or, you know, potential headache that comes with utilizing the toll roads and working with TxTag.”

Lawmakers took notice after KXAN shared Louviere’s story during a 2017 investigation that revealed customers were charged nearly $1 billion in late and collection fees that year. Since our investigation, the Texas Department of Transportation cut ties with a Houston-based collections agency and waived $1.3 billion in late fees.

Now, KXAN has learned TxDOT, which operates the state’s toll roads, is in “the process of developing a new back office system tailored for TxDOT’s needs.”

“TxDOT has awarded IBM a four-year contract to develop, implement, host and maintain software and a system to process toll transactions, handle billing and support customer service for TxDOT’s more than 2.3 million TxTag users and toll road drivers who opt for Pay By Mail invoicing,” according to the state agency’s annual continuing disclosure report for the Central Texas Turnpike System.

TxDOT says IBM was selected after a competitive bidding process. The new contract went into effect at the beginning of the year and runs through Dec. 31, 2022. KXAN sent an open records request for a copy of the contract, but hasn’t received it yet.

TxDOT is also still currently contracting with Conduent State and Local Solutions Inc. for its toll operations. TxDOT told KXAN last summer that it had to extend its contract with Conduent for two years due to the fact that it is in “process of purchasing software that will be specifically tailored to run our TxTag system.”

Between November 2014 and July 2018, Conduent was charged more than $2.4 million for “not meeting metrics.” Conduent runs toll systems in other states, where it’s also had issues with billing and customer service. In fact, last summer, two U.S. senators called on the Federal Trade Commission to investigate the contractor.

For now, TxDOT says both contracts with IBM and Conduent “will remain active until the new system is built and all TxTag operations are successfully transitioned to the new system.”

Proposed changes

State Sen. Paul Bettencourt, R-Houston, said constituents have reached out to him saying the issues with Texas’ toll roads have been ongoing for years. That’s why he’s proposing Senate Bill 1311 that would help solve some issues by modernizing billing.

“When mail gets lost, then that means you miss a bill, then there’s penalties, then you have to call and sort it out,” he said. “It’s just so simple – the 21st century. Pick the electronic medium of choice and use it.”

Bettencourt’s bill would require transportation agencies to offer an electronic option for drivers to receive toll bills instead of just sending those bills through the U.S. Postal Service.

“If a customer chooses to have their communication by email or by text or by social media, they should be able to do it,” Bettencourt told KXAN. “The fact that they’re prohibited is just preposterously bad public policy. We want people to communicate electronically. It costs less. It’s faster. There’s a more positive look on the outcome, and more importantly, it saves time.”

TxDOT says it is always willing to work with customers who have billing and customer service issues.

“We highly encourage those customers who come to you to come to us so that we can resolve any issues they are experiencing as soon as possible,” the agency said in a statement to KXAN.

One of the customers who reached out to KXAN says he’s reached out to TxTag via phone and online to resolve his issue, but finally gave up and paid the part of the bill he believed he owed.

“I’ve had a TxTag since I purchased my car and continued to receive pay by mail bill’s when my TX Tag account was up to date,” Nathan Goodfellow, of Austin, told KXAN. “I’ve overpaid on every pay by mail bill because I don’t get my TX Tag discount. I have no idea how to determine what has been billed or double billed as I have made payments to both billing providers.”

TxDOT said TxTag customers have always had the option to receiving statements via email, and as of last year about 90 percent chose to do so. The agency says it started offering Pay By Mail customers an electronic option late last year.

“You’ve got to get your customer service up to where the folks know what they have to pay and how to pay it,” Bettencourt said.

His bill passed the Senate and is in the House, where it is awaiting a vote.

It is just one of a dozen toll-related bills filed this session. Another bill still under consideration would require toll agencies to send a notice to a customer if their toll tag did not work properly 10 times in a 30-day period. Others would make toll roads free once they’re completely paid off and require non-tolled frontage roads along any newly-constructed toll road that is built along the route of a previously existing free roadway.

After a KXAN investigation into the state’s toll road system and an collections agency, lawmakers passed a law that went into effect on March 1, 2018, and required TxDOT-operated toll roads to cap administrative fines for nonpayment of tolls at $48 a year. Late fees decreased drastically, with TxDOT only assessing about $36.3 million in late fees between August 2018 and February of this year.

 
 

“TxDOT is pleased to see customers having fewer late fees. TxDOT’s goal has always been for customers to pay their original toll charge when due,” the agency said in a statement to KXAN. “TxDOT would be very happy to see everyone pay their bills on time and never have to charge another late fee.”

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