City of El Pasoís Delinquent Tax Collection Program a Model of Efficiency and Service

Much is being done to collect delinquent taxes within the City. And, the fact is that the delinquent rate for the taxing entities served by the Cityís Consolidated Tax Office is comparable to other jurisdictions in Texas. In Texas, property taxes are billed each October and become delinquent on the 1st of February of the following year. In October 2006 we billed $718.7 million in property taxes on behalf of 29 taxing entities. By February 2007 we had collected $667 million or 92.6 percent of all taxes billed. By the time we closed the fiscal year in August 2007, only 2.7 percent of the 2006 taxes remained delinquent. Over 97 percent of the current year taxes were collected within the year, leaving $19.4 million outstanding.

What is the City doing to address these delinquencies? The law firm of Delgado, Acosta, Spencer, Linebarger and Perez, LLP, a regional partnership of Linebarger Goggan Blair & Sampson, was hired to collect its delinquent taxes. The firm only gets paid if it collects the delinquent taxes. And taxpayers who pay on time donít pay for the collection services. Linebarger Goggan has had a local presence in El Paso and has collected for the City for over 25 years.

As of June 30, 2007, a total of $42.8 million (all delinquent years, not just 2006) had been turned over to Linebarger Goggan for collection. The firm analyzes the delinquent tax roll each year to determine which accounts are eligible for immediate collection.

Of that $42.8 million, $2.6 million (6 percent) was in bankruptcy actions; $6 million (14 percent) was in litigation; $9.7 million (23 percent) had judgments; $2.4 million (6 percent) was deemed uncollectible; and $16.9 million (39 percent) was being actively pursued for collection.

There is a filtering process to determine which accounts to pursue. Accounts with tax deferrals cannot be touched. Accounts in bankruptcy must be processed through a claim with the bankruptcy court. Accounts identified for active collection are sent delinquent notices and are eventually sued if they fail to respond. Property is auctioned once a judgment is obtained.

During the period of July 1, 2006 through June 2007, there were 1,020 lawsuits filed, 275 judgments granted, 514 proofs of claim submitted, 66 tax warrants filed, 322 properties auctioned, about 90,000 delinquent notices sent, resulting in over $23 million in delinquent tax collections.

El Paso is the only fully consolidated tax office of any of the large urban areas in Texas. It is considered a most efficient and very effective operation by an independent performance audit of the delinquent tax collection process conducted three years ago. El Paso residents have in their consolidated tax collections office, a high-performing operation, one that is the envy of many throughout the state. Together with Linebarger Goggan, we collected over $23 million in delinquent taxes from July 2006 through June 2007. Taxpayers deserve no less than the best efforts on behalf of the Consolidated Tax Office and the jurisdictions it serves.