It appears two delinquent tax collection agencies are better than one

Two weeks after collecting $186,100 through an auction of 43 properties listed as delinquent due to owed back taxes, Warren County extended its contract with the newest of its two delinquent real estate tax collection services.

TACS (Tax Authority Consulting Services) was first contracted by the County in 2016.  On August 7, 2018, the county board of supervisors unanimously approved a one-year contract extension as part of its consent agenda.

Prior to 2016 the Pond Law Group was the sole agency handling delinquent tax seizures and sales for the County.  Pond still handles half of the County’s delinquent tax list according to County Administrator Doug Stanley.  Stanley recently reported that he expects the Pond Group to conduct a sale of approximately 30 delinquent properties this fall.

Numbers attached to the agenda item extending the TACS contract indicated that it has totaled $269,319 in delinquent collections since being brought on in 2016, including $45,996 in 2016; $131,383 in 2017; and $91,940 through the first five months of 2018.  Stanley told Royal Examiner he believed that first-year number reflected the company familiarizing itself with its new collection terrain and some lag time in getting its first letters seeking a solution out to delinquent property owners.

Since TACS was contracted, the Pond Law Group has been up to the challenge with its half of the County’s delinquent tax real estate list, collecting a total of $731,530, including $205,953 in 2016; $391,656 in 2017; and $133,921 through the first five months of 2018.

County revenue from TACS July 24, 2018 sale at the Warren County Government Center was not included in the revenue numbers presented to the supervisors on August 7.  Those sales have yet to be legally approved by the court.  That approval is anticipated within the next month.  When they are approved it will add approximately 75% of that $186,100 total collected by the sale into the county treasury.

Of payment to the collections contractors, the staff summary presented to the supervisors on August 7 explains that state law “authorizes the law firm to collect 20% of the delinquent taxes collected.  The legal fees will be paid out of collected funds.  The agreement between TACS and the County states that TACS will receive either a fee of 20% for collections of accounts prior to filing suit or a fee of 25% for collections of accounts subsequent to filing suit (and leading to the forced sales process).”

Stanley stressed that under the arrangement the fee paid to the collection agents is essentially being paid by “the person who owes the taxes” or in the case of the sales, by the purchaser of the properties.

Under the TACS contract the County does foot the up-front expense of “the advertisement, personal service to the owner, and title work which ranges typically from $1,000 to $1,200 a parcel” Stanley notes.  Other than that, he added that, “The cost to the County is really time in pulling the records.”

Stanley said that the July 24 TACS auction was bolstered by one riverside property that sold for $36,000, $6,000 above its assessed value and about $29,000 above the Taxes-Penalty-Interest (TPI) owed on the property.  Often properties are purchased for less than the back taxes, interest and fees trying to be recovered.

The list of sales at the July 24 auction attended by nearly 70 people was dotted by sale prices that fell short of the Tax-Penalty-Interest listed by several hundred, even several thousand dollars.

However, the county administrator notes that once auctioned off, the properties again become an active part of tax rolls, as opposed to continuing to languish through more years of non-payments.  And recovering $100,000 of $150,000 owed is better than watching that back Tax-Penalty-Interest continue to accumulate year after year.