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5/16/2006 2:23 PM Page 1 Delinquent Tax Collection Analysis (July 2005 Report) Issues raised May 9, 2006 May 2006 PROPERTY TAXES PROPERTY TAXES Committee Members Auditor’s Office Planning and Budget Office Purchasing Office Resources Tax Assessor/Collector’s Office County Attorney’s Office

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Page 1: Attorney Tax

5/16/2006 2:23 PM Page 1

Delinquent Tax Collection Analysis (July 2005 Report)

Issues raised May 9, 2006

May 2006

PROPERTY TAXESPROPERTY TAXES

Committee MembersAuditor’s OfficePlanning and Budget OfficePurchasing Office

ResourcesTax Assessor/Collector’s OfficeCounty Attorney’s Office

Page 2: Attorney Tax

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Delinquent Property Taxes – Impact if outsourced

$ 7,858,828Linebarger Goggins (Hybrid Proposal in original proposal)

$ 7,790,195Linebarger Goggins (Hybrid Proposal made on May 9, 2006)

$ 5,347,405Linebarger Goggins (using best county collection rate - Tarrant County)

$ 7,116,639Linebarger Goggins (average collection rate excluding Harris and Hidalgo counties)

$ 6,029,252Perdue Brandon (average collection rate excluding Burleson ISD)

The data indicates that Travis County’s estimated net losses would have been the following amounts in FY04 had the County outsourced delinquent tax collections:

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Delinquent Property Taxes

The Net Revenue Analysis for Travis County was broken into two components:

1. Delinquent Property Tax Revenue

2. Delinquent Tax Collection ProcessREVENUES (Attorney fees, Parcel Rate fees, Court Costs)

MINUS

EXPENDITURES (Salaries and operating costs for County Attorney & Tax Offices, Litigation Costs for other County Offices)

EQUALS

NET PROFIT/(LOSS)

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Collection Rate Summary

Particulars Perdue LinebargerTravis

County

68.36%

Average collection rate of 5 largest entities for Tax Yr 2000 after 5 yrs

n/a 99.47% 99.75%

99.70%

n/a 79.66% 91.10%

98.77%

97.60% 97.58% 98.65%

Average delinquent collection rate of 6 largest entities for Feb 1 to Jun 30 for Tax Yrs 99-03Average delinquent collection rate of 6 largest entities for July 1, 2000 to Sept 30, 2004 for Tax Yrs 99-03

97.85% 97.70%

99.33% 99.31%

n/a 66.61%

Average annual collection rate of 5 largest entities for Tax Year 2003

Average annual collection rate of 5 largest entities for Tax Yrs 00-03

Average collection rate of 5 largest entities for Tax Yr 2000 after 4 yrs

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Taxes are levied and assessed by law and it is the legal responsibility of all property owners to comply with those laws.

As a matter of public policy, compliance with the law is strictly enforced by aggressively pursuing all delinquent taxpayers.

All of the jurisdictions for which Travis County collects taxes are treated in a fair and equitable manner.

Public Policy Assumptions

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Why and When Does Travis County File a Lawsuit?

The Tax Collector-Assessor performs many collection efforts starting on February 1 when property taxes become delinquent.

First, the Tax Office sends out a Section 33.04 delinquent notice that demands payment by February 28.

Second, if there is no response to the Section 33.04 letter, a demand letter is sent giving the taxpayer ten days to respond.

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Why and When Does Travis County File a Lawsuit?(cont’d)

Third, if there is no response to the demand letter, a litigation letter is sent demanding payment immediately and stating that Travis County is in the process of filing a lawsuit against them.

In short, taxpayers can avoid legal action by responding to the Tax Office’s collection letters and setting up alternative methods of payment if necessary. The Tax Office will only pursue litigation on taxpayers that are unresponsive to their collection efforts.

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Lawsuits are initiated based on the following criteria

The taxpayer owes a large amount of tax (the larger the balance the higher the priority).

The taxpayer already has a balance from a previous tax year.

The taxpayer has a poor payment history, has written a check on insufficient funds, or has broken a payment plan.

The taxpayer owes tax to a jurisdiction that has a low collection rate.

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Delinquent Property Taxes

Precinct

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

Pct 1 1,444 141 9.76%

Pct 2 862 120 13.92%

Pct 3 749 114 15.22%

Pct 4 1,275 153 12.00%

Total 4,330 528 12.19%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Precinct

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21.13%

31.14% 29.67%

18.06%

0%

10%

20%

30%

40%

Pct 1 Pct 2 Pct 3 Pct 4Travis County Precincts

% o

f tot

al h

omes

tead

par

cels

Total # of homestead parcels = 149,951

31,686 46,690 44,485 27,090

Homestead Parcels by Precinct for Tax Year 2003 (FY04)

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4.56%

1.85% 1.68%

4.71%

0%

2%

4%

6%

Pct 1 Pct 2 Pct 3 Pct 4Travis County Precincts

% w

ithin

eac

h pr

ecin

ct th

at a

re d

elin

quen

t

Total # of delinquent parcels = 4,330Total # of homestead parcels = 149,951

1,44431,686

86246,690

74944,485

1,27527,090

Homestead Parcels Delinquent on 7/1/04 - Tax Yr 2003 (FY04)

Delinquent parcels to total parcels by precinct

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33.35%

19.91%17.30%

29.45%

0%

10%

20%

30%

40%

Pct 1 Pct 2 Pct 3 Pct 4Travis County Precincts

% d

elin

quen

t w/i

each

pre

cinc

t to

tota

l del

inqu

ent

Total # of delinquent parcels = 4,330Total # of homestead parcels = 149,951

1,4444,330

8624,330

7494,330

1,2754,330

Homestead Parcels Delinquent on 7/1/04 - Tax Yr 2003 (FY04)

Delinquent parcels by precinct to total delinquent

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345

122

56 5648 31 21 41

0

100

200

300

400

$0 -$87,638

$87,639 -$116,064

$116,065 -$142,870

$142,871and up

Home Values

# of

taxp

ayer

s

Law Firm (incl. 15% atty fee) - 579 taxpayers chargedTravis County (incl. 15% atty fee & court costs) - 141 taxpayers charged

Precinct 1Precinct 1 – Taxpayers charged Attorney Fees in FY04 (TY03)

Delinquent as of July 1

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184

66 724041 27 25 27

0

50

100

150

200

250

$0 -$130,336

$130,337 -$182,124

$182,125 -$270,159

$270,160and up

Home Values

# of

taxp

ayer

s

Law Firm (incl. 15% atty fee) - 362 taxpayers chargedTravis County (incl. 15% atty fee & court costs) - 120 taxpayers charged

Precinct 2Precinct 2 – Taxpayers charged Attorney Fees in FY04 (TY03)

Delinquent as of July 1

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180

40 46 4737 28 22 27

0

50

100

150

200

250

$0 -$141,280

$141,821 -$199,779

$199,780 -$291,073

$291,074and up

Home Values

# of

taxp

ayer

s

Law Firm (incl. 15% atty fee) - 313 taxpayers chargedTravis County (incl. 15% atty fee & court costs) - 114 taxpayers charged

Precinct 3Precinct 3 – Taxpayers charged Attorney Fees in FY04 (TY03)

Delinquent as of July 1

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288

11361 5148 42 33 30

0

100

200

300

$0 -$79,751

$79,752 -$105,483

$105,484 -$137,242

$137,243and up

Home Values

# of

taxp

ayer

s

Law Firm (incl. 15% atty fee) - 513 taxpayers chargedTravis County (incl. 15% atty fee & court costs) - 153 taxpayers charged

Precinct 4Precinct 4 – Taxpayers charged Attorney Fees in FY04 (TY03)

Delinquent as of July 1

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579

362313

513

141 120 114 153

0

150

300

450

600

750

Pct 1 Pct 2 Pct 3 Pct 4Travis County Precincts

# of

taxp

ayer

s

Law Firm (incl. 15% atty fee) – 1,767 taxpayers chargedTravis County (incl. 15% atty fee & court costs) - 528 taxpayers charged

Taxpayers charged Attorney Fees in FY04 (TY03)

Delinquent as of July 1

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Delinquent Property Taxes

Homestead Value

Quartiles

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

1 (lowest) 2,097 174 8.30%

2 959 128 13.35%

3 702 101 14.39%

4 (highest) 572 125 21.85%

Total 4,330 528 12.19%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Homestead Value Quartile – All Precincts

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Delinquent Property Taxes

Homestead Value

Quartiles

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

1 (lowest) 723 48 6.64%

2 314 31 9.87%

3 201 21 10.45%

4 (highest) 206 41 19.90%

Total 1,444 141 9.76%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Homestead Value Quartile – Precinct 1

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Delinquent Property Taxes

Homestead Value

Quartiles

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

1 (lowest) 418 41 9.81%

2 187 27 14.44%

3 147 25 17.01%

4 (highest) 110 27 24.55%

Total 862 120 13.92%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Homestead Value Quartile – Precinct 2

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Delinquent Property Taxes

Homestead Value

Quartiles

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

1 (lowest) 359 37 10.31%

2 144 28 19.44%

3 136 22 16.18%

4 (highest) 110 27 24.55%

Total 749 114 15.22%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Homestead Value Quartile – Precinct 3

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Delinquent Property Taxes

Homestead Value

Quartiles

Delinquent Homestead Parcels

on 7/1/04 for Tax Year 2003 (FY04)

Lawsuits Filed on Tax Year 2003

Delinquent Homestead Parcels in FY04

% of Tax Year 2003 Delinquent

Homestead Parcels Sued in FY04

1 (lowest) 597 48 8.04%

2 314 42 13.38%

3 218 33 15.14%

4 (highest) 146 30 20.55%

Total 1,275 153 12.00%

Tax Year 2003 Delinquent Homestead Parcels Sued in FY04 by Homestead Value Quartile – Precinct 4

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Delinquent Property Taxes

39.2% of all homestead parcels are in Pcts 1 & 4

62.8% of all delinquent homestead parcels are in Pcts 1 & 4

55.7% of all lawsuits are in Pcts 1 & 4

10.8% of delinquent homestead parcels in Pcts 1 & 4 were sued

14.5% of delinquent homestead parcels in Pcts 2 & 3 were sued

PRECINCTS 1 & 4 STATISTICS

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Homesteads per Linebarger were sold between 2003 & Aug 2, 2005

Central East Austin Homesteads Sold (2003 - Aug, 2005)

Address Tax Sale Date

# of Tax Years Due

82 Anthony St 6/7/2005 76907 Bennett Av 5/4/2004 5 No contact since Feb 20031175 Springdale Rd 2/1/2005 72901 East 3rd St 5/6/2003 9 Residents had moved out2312 East 9th St 3/4/2005 103206 Goodwin Av 12/3/2002 5

Other Homesteads Sold (2003 - Aud, 2005)

AddressTax Sale

Date# of Tax

Years Due1302 Remmington Rd 12/7/2004 42304 Whitebead Tr 5/6/2003 63246 Brass Buttons Tr 8/2/2005 8 Property Owner Deceased6111 Melody Ln 2/1/2005 5 Vacant Property per visit11013 Maha Loop Rd 7/5/2005 2

Property was taken off sale role prior to Sale Property Redeemed by Owner14103 Lazyridge Dr 3106 Fallwell Ln1801 Westward Ho Tr 3113 River Rd

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END OF PRESENTATION