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Luzerne County is seeking proposals from companies interested in handling tax claim operations, which includes the collection of delinquent real estate taxes and the auctioning of properties owned by defaulters.
The company doing the work has expressed an interest in continuing in the role when the next three-year contract takes effect on Jan. 1.
Plains Township-based Northeast Revenue Service LLC has been running the tax claim office since May 2010, when prior commissioners determined privatizing the operation would cut expenses and improve collections.
The company has been credited with turning around the office, which had been criticized for not enforcing mandates and allowing some politically connected defaulters to keep their properties out of auctions with no legal justification.
County council renewed Northeast Revenue’s contract in 2014.
The next contract will include the option for two extensions bringing the total contract term to five years.
Northeast Revenue representative Sean Shamany said his company will submit a proposal attempting to keep the work.
“We look forward to responding and highlighting our accomplishments since we took over and hopefully look forward to a long-term relationship with Luzerne County,” Shamany said.
According to the 25-page request for proposals posted in the purchasing section at www.luzernecounty.org:
Proposals must be submitted by 4 p.m. June 28. Because the work is a professional service, the county is not required to seek the lowest price and can consider factors such as a company’s experience, the quality of its personnel and services offered.
Following real estate laws, the tax-claim operator must identify and locate property owners owing back taxes and use best practices to collect payment.
While maximizing collection efforts, the operator must “act in a business-like manner,” the request says.
“Service provider shall interact with property owners in a courteous and professional manner and shall treat all property owners consistently and without favoritism,” it said.
Other duties include maintaining records, depositing funds, compiling monthly county reports and providing the county with read-only access to a collection status database.
Four types of sales are handled by the operator: first-stage upset auctions, between-auction private sales, free-and-clear judicial auctions and repository sales of properties that are up for grabs at any time because they were not purchased at auction.
Laws set strict requirements for notices to delinquent property owners to ensure all parties with stake in a property are aware of sales — another duty of the operator that often requires legal advice.
The company created a free online portal at www.luzernecountytaxclaim.com that is updated nightly, allowing owners and the public to search delinquencies. This site also includes information on all sales and properties available for purchase.
Properties are supposed to be auctioned if taxes are unpaid for two years unless a property owner has an active bankruptcy case, is on a repayment plan or convinces a judge to grant more time.
Northeast Revenue enforces uniform requirements on installment payments and holds auctions more frequently, particularly for situations in which owners have defaulted on payment agreements, Shamany said.
The company also aggressively challenges bankruptcies and court filings that keep properties out of sales. In one case, a Northeast Revenue attorney convinced a judge to lift an automatic stay that had blocked auctioning of a residential property after the owner had filed for bankruptcy five years in a row.
“We don’t treat anyone differently. We follow the laws the same for everybody,” Shamany said, maintaining auctions have become more popular because buyers now have more confidence all legal notification requirements have been met.
His company also added options to pay bills online or through Landmark Bank branches and generates more than $66,000 per year for the county by renting space in the courthouse that had been previously occupied by tax claim, he said.
Northeast Revenue is paid primarily through a 5 percent penalty added to overdue school and municipal taxes collected by the county as allowed by law. The county pays nothing out of pocket, officials have said.
Northeast Revenue collects about $8.5 million in delinquent county taxes annually.