Luzerne County Government

April 27, 2010

Tax Claim Office privatization near

Northeast Revenue Service may take over as soon as May 3, president says.

By Jennifer Learn-Andes jandes@timesleader.com
Luzerne County Reporter
Jennifer Learn-Andes on Facebook   |   @TLJenLearnAndes on Twitter

Luzerne County’s Tax Claim Office may be privatized as early as next Monday, according to the new company that will take over operations.

“Our goal is to make the transition so smooth that nobody will notice the difference,” said John Rodgers, president of the new operator, Northeast Revenue Service LLC in Wilkes-Barre, which was hired over seven other interested firms on April 14.

Commissioners say the outsourcing, which has been implemented by only two or three other counties in the state, will cut costs and should boost back-tax collection.

Northeast plans to accept payment of back taxes at various banks and quickly set up a system that will allow property owners to pay by credit card, Rodgers said. The firm’s proposal cited other plans to maximize collections, such as utilizing collectors who accept payment by phone.

Northeast will report non-payments to the three major credit bureaus if back taxes are not paid within 30 days of the first delinquent notice, its proposal says. The county has not been reporting to credit bureaus.

The company will also identify mortgage holders for each delinquent property and send them copies of delinquent-tax notices.

“This should enhance collections due to the fact that all mortgages have a provision which requires the mortgager to pay taxes,” Northeast’s proposal says. Lenders may opt to pay the taxes to protect the property and then seek reimbursement from the mortgager, Rodgers said.

Northeast plans to open a payment center in the southern part of the county for the convenience of Hazleton area taxpayers and attorneys, the proposal said.

The firm agreed to offer employment to the county’s seven tax-claim workers. County officials say two employees have opted to take layoffs instead – Albina Fonzo and Maryanne Schmoll.

“We’ve interviewed the rest of the workers, and we’re in the process of deciding who will stay or go,” Rodgers said. “We’re going to try to keep as many as we can.”

The company is also waiting for the county’s proposed rental fee to remain in the tax-claim office on the first floor of the courthouse, Rodgers said.

Northeast is purchasing licensing agreements to use the office’s current software system so there will be “no data lost in conversion,” Rodgers said.

County Chief Clerk/Manager Doug Pape said the company must also pay the county a fee to access the computer software and decide if it wants to purchase office computers and copiers.

A final contract with the company is under review, he said.

“We’re hoping to get everything taken care of for May 3, but it’s certainly not definitive at this point,” Pape said.

Northeast Revenue plans to increase the back-tax collection rate to 90 percent within the first year, compared to rates of 89.7 percent in 2004 and 86.5 percent in 2008, its proposal said. Each percentage point equates to about $862,000, the proposal said.

The firm, which submitted a joint proposal with the Wetzel, Caverly, Shea, Phillips & Rodgers law firm, will be paid through a 5 percent penalty already added to overdue taxes. The county will continue to receive its 5 percent penalty on county taxes but divert the penalty on school and municipal taxes to Northeast instead of keeping it.

Properties are supposed to go to back-tax sale if taxes are unpaid for two years. However, the county’s tax-claim office has been criticized in recent years because some politically connected property owners stayed out of back-tax sales, even though they weren’t keeping up with payment plans or paying at all. Federal agents have interviewed workers and reviewed records about properties questionably removed from past back-tax sales.

Jennifer Learn-Andes, a Times Leader staff writer, may be reached at 831-7333.

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