NCC recovers $1.1 million in seriously delinquent taxes in seven months

By Peter Osborne

When New Castle County Executive Matt Meyer asked for the first property-tax increase in nine years last June, he promised he would increase revenue from seriously past-due accounts that are historically difficult to collect.

That promise has turned into $1.1 million from collections of accounts that were more than three years past due over the past seven months. The county assigned 2,300 property tax and sewer fee accounts last summer and an additional 3,000 accounts in December to Durham, North Carolina-based Professional Recovery Consultants (PRC) and gave PRC the ability to negotiate payment plans.

Between August and the end of February, PRC collected $575,000 in delinquent sewer fees and $543,000 in county and school district property taxes of the $14.75 million in seriously-past-due balances.

Paying your taxes is “a basic question of fairness,” Meyer said. “If you haven’t paid, we’re going to find you. We’re not taking our foot off the pedal.”

Additionally, the county’s in-house collections of shorter-term delinquencies resulted in $15.4 million in payments for past-due 2018 county and school district property taxes since the end of September when taxes were due. The strategy also frees up internal collection staff to collect short-term delinquent sewer fees after the Feb. 28 annual sewer fee deadline.

The $15.4 million in payments drove the 2018 county property tax collections rate to 99.45 percent, matching the record 99.45 percent collections rate for county property taxes due in 2017, a rate impacted by the initial decision in early 2018 to bring short-term delinquency collections in-house.

Meyer faced one big hurdle after announcing the collection effort a year ago: He had no stick to enforce the initiative since one of his predecessors had signed an executive order barring sheriff sales, so Meyer rescinded that order in July 2018. He reiterated last week that the county was not dislocating “the poorest of the poor” who had fallen seriously past due.

He and his finance team, led by Chief Financial Officer David Gregor, reached out to local school districts (which receive 80 percent of local property taxes collected by the county) to pay a proportionate share of the
10.4 percent in fees charged by PRC.

PRC has “worked for other municipalities and have experience with health-care collections, so they were familiar with the nuanced approach that we wanted,” said Gregor, who became CFO in June 2018, eight months after joining county government. “We felt that our people had the highest probability of success with the (shorter-term delinquent accounts), but that PRC has more resources to collect older debt,” thanks to their ability to skip trace and leverage big data.

The nuance is important when you’re talking about collecting not from customers but from citizens who are also your constituents.

“We use artificial intelligence-driven listening technology that monitors words and phrases and whether the tone of the call is escalating and who’s escalating it,” said Patrick Miller, VP of government and utilities services for PRC. “We transcribe those calls for educational purposes and the goal is treating citizens with respect and reducing complaints. To the best of my knowledge, we haven’t received any from our efforts in New Castle County.”

“The state [of Delaware] uses outside collectors and a few of us came from there so we were familiar with the process and the benefits,” Gregor said.

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