Travis County Commissioners Court
May 16, 2006
Item 32
32-a is to consider and take appropriate action on responses to request for information on collection of delinquent taxes. And 32-b is to receive property taxes final report dated July --
>> I don't think we need that one, judge.
>> we did not vote on that last week. We don't need b, we'll just need a. Last week we did promise the representatives from purdue that we would give them an opportunity to address the Commissioners court. And so now is that opportunity. Afternoon. If you give us your full names, we'll be happy to get your comments.
>> I知 john banks, the managing attorney of the Austin office of purdue ran don and with me is my law partner, sergio garcia.
>> judge, this is a follow-up to the meetings that we had last year, and I thank everyone -- I think everyone on the court is familiar with the history. And if you'll bear with me, I値l be brief. I will recounted some of that. It seems like last spring this court issued its request for information. And at that point the rfi was issued for the purposes of determining whether or not it was in the best interest of Travis County and its taxpayers to privatize the delinquent tax collections either in whole or part or parcel it out. I think that when the rfi was prepared that everyone in this court, folks in the tax office and folks in the purchasing department had an opportunity to participate in formulating the questions. I know that in reviewing the rfi, I commend the drafters, it was the most thorough and comprehensive rfi that I致e ever had to respond to. It required detailed information on our collections statistics, our performance, our efforts to work with community members. We responded to that along with four -- pardon me, three other private law firms. The auditor's office in Travis County, and I believe this court, formed the committee, but they -- there was a committee established to review those requests for information, to review the mounds and mounds of data compiled and come back and report to this governing body as to whether or not privatizization was in the best interest of the county and its taxpayers. As a partner with purdue brandon, I take great pride in the fact that that auditor's report ranked as the highest as any of the other competing law firms. And I suppose I should be here today encouraging and requesting the court to consider privatizization, but I知 also here as a taxpayer and I would be remiss -- and bear with me, judge. I know everyone on the court is familiar with this. But that county auditor's report, very detailed in its findings, says or determines that if there is privatizization, and they go through -- everyone has seen the 100 pages of report. That if there's privatizization, there will be a significant loss in county revenues. And I for one being familiar with the processes that are in place in Travis County, I致e worked with outlying counties who happen to have overlapping school districts, for a brief period of time our firm had a contract with one of the Travis County school districts, which at the time there was ve heement protest from the county attorney's office three and a half years ago about any privatizization, but I致e worked with the I致e worked with the ct's tax office, I know nelda and her staff. I致e worked with the county attorney's office. And what I have seen is a situation where you've got machinery in place to collect the taxes. And when I look at that auditor's report and I see a determination from an independent, fact-finding body that's not beholding to members of this court, not beholding to the tax office or to any other office, I have to give due deference to it and I certainly encourage all folks to do that. I think that report is something that when you look at it on its face in black and white, you're left with a detailed accounting of revenues. And I guess what's disturbing to me is after this collections report came out, there seemed to be some very harmful and damning accusations made suggesting that somehow the county attorney's office, nelda spears and her folks at the county tax office were engaged in some type of discriminatory practice targeting unfairly lower income individuals in east Austin. And I will tell you that if those accusations -- and I take those very seriously as everyone on this court does. If those accusations are in the least bit true, I don't see the response being let's farm it away and give it to somebody else who is not going to do that. The response ought to be calling the united states attorney's office, calling the f.b.i., having folks come in and investigate, and if anybody is found to have violated any taxpayers' civil rights, prosecute them and put them in jail. You don't hand over because -- because they've done wrong, you don't take away the assignments and say let's farm it out to a private firm. To me. That's my opinion. I take those accusations very seriously and I think there's ways to address those. I will tell you that knowing nelda spears, as everyone on this court does, very well, in most instances better than I do, knowing the folks in her office, I don't believe that there's any truth or merit to those accusations. I think that the harshness that has been alluded to I知 not going to deny that there's harshness in our system. There is. But it's something that we talked about last year. It's something that -- and I forget which Commissioner asked me the question, but last year the issue of lawsuits or the unfair apportionment of lawsuits in certain precincts, we talked about that and I tell you that working in neighboring counties, working in the border, working where there are large pockets of lower income individuals, I know for a fact that the harshness that's built into the system results from situations where you have folks throughout an entire neighborhood who have lived in an area and it's a prime example in east Austin. They've lived where their parents lived. They've had houses that are paid for and there's no mortgage lenders. There's no one to step in. There's not a wells fargo or a security bank or whoever the lienholder may be. There's no one to step in and pay in an escrow account that property tax. There's no one to step in and help folks on an annual basis or whenever there's a threat of litigation. That's built into the system. You know, I don't like it, I don't think you like it, but it's the harshness of our property tax system. There's way to work around that harshness and that is something that I will -- we'll pat ourselves on the back, I think we've done an excellent job. We've been commend bid presaidio contract where it's 98% hispanic population and they've written letters of commendation about our performances. I知 sure all our competitors could find the same, but the point I want to make on that is I believe you've got that machinery in place right now. I believe you've got folks at the tax office, nelda spears and her right hand folks and the folks at the county attorney's office who are doing the same thing that everyone else is doing. Again, I知 not trying to speak out of both sides of my mouth, Commissioners and judge. What I知 telling you is or suggesting to the court is that you've got a system in place that if you need to tweak it, tweak it. You can't in my opinion go in and overhaul a system, and you certainly -- I can't see that you need to overhaul a system because you think there's some type of wrongdoing. Punish the wrong doers. Go in and investigate and find out who's doing what as far as civil rights violations and don't dismiss those and saying since you may be taking inappropriate actions we're going to go ahead and give to someone else. Most type of accusations have also surfaced in other areas, philadelphia is a prime example where private law firms handling the private collection contracts and they've been under attack by the minority community for having harshly treated minorities. So this is not a new issue to surface. That's something that the Commissioners and the judge ought to consider is investigating that further, but get some authorities that have the ability to investigate that with unlimited resources and find the culprits that exist and prosecute them.
>> the important thing is Travis County represents about 19 percent of the entire tax levee in the county. You've got 81% of a tax levee comprised of six school districts, a number of cities, a number of water districts, a number of other entities. I forget the number, but it's 70 or eight other taxing entities in this county. The process that you're under taking or that you're considering on privatization is not an issue that simply affects this court. It affects every taxing entity in this county. It affects -- you will be required to spend tens of thousands of dollars in modifying the existing software. There are other things that will result in increases in cost and expenses. And it's something that I think that other entities are deserving of input and I certainly am not suggesting how this court ought -- how to run their business, but I知 saying that I know there are a lot of folks out there that I致e dealt with in the past that are going to be impacted. School districts, cities that are going to be impacted by the decision that you make today. And there's going to be issues that surface in the future. On this collection decision that's reached today.
>> [one moment, please, for change in captioners]
>> they're turning over one to one and a half percent of the tax levee for collection. What we historically do when that turnover is turned over to us, for example, a million dollars is turned over to us, historically we've collected 70% of that in the first 12 month period. The information that we provided sets forth a number of entities, and there's ways to gauge it. Some folks gauge it against the entire levy. Comparing the actual efforts of the delinquent tax law firm, you want to look at what gets turned over to them and what they can do with it and how quickly they can do it. So what they typically provide when we're on any proposal or any request for information is databased on how much the turnover is to us, not what is based on your good taxpayers paying on time, it's how much we get the first year. It's 60 to 70. It depends. Judge, I represent communities and school districts right on the border, I知 not that successful. But then neither are my competitors.
>> so should I take your comments to indicate that purdue thinks that the collection ought to be left in-house and you're no longer interested in it?
>> no, it's not. I think you can take my comments as we are very much interested. As a private lawyer I知 very much interested in vying for the tract -- the Travis County contract. It's a very lucrative contract. It's worth millions of dollars to a private law firm. I absolutely would be interested in it. But as a taxpayer what I知 saying is if-- and I知 not a cpa, I知 not an auditor, and I致e read the auditor's report, and if it's telling me and I致e got to believe this that this court in its wisdom selected a good group of independent fact finders to collect the data, if they found there will be a 10-million-dollar shortfall in privatizization, I would just as soon not have my taxes go up. Because that money will have to go from somewhere. I知 absolutely interested. Judge, what I pointed out is if you look at the auditor's report and that's one reason I知 keen on pointing out the auditor's report is they rank our firm the highest in collection efforts. I i would love the opportunity to represent the county.
>> they gave you a much higher rate than 70%. So if we tell you -- you can't wear two hats today, you can only wear one, are you wearing your private lawyer hat or your Travis County citizen taxpayer hat right now?
>> judge, right now I知 telling you you have machinery in place and I think that you're going to have harsh consequence if you privatize. So I知 wearing my private taxpayer hat.
>> any other question? Mr. Garcia, any comments?
>> the only comment I would have, judge, has to be the issue of sensitivity in dealing with a diverse population, especially minority taxpayers and economically disadvantaged taxpayers. Our firm believes that that is a very serious issue, and we recognize that senseibility is required in dealing with economically disadvantaged and minority taxpayers. And I would submit to the court that we have established a track record throughout the state in working just with those populations. As mr. Banks alluded, we represent a number of border communities. Presidio is one such community and they recently gave us a letter of commendation for our efforts. Since we took over and started representing their county, they have obtained unprecedented levels of delinquent tax collection. They were not used to seeing that. In fact, the school district had their bond rating upgraded recently as a result of our collections. And that is a community that has around 98% hispanic. Most of them are economically disadvantaged. And we feel that if we can accomplish that in that county, in a county like Travis County that affords many more economic opportunities, we are confident that should the court decide to hire a private law firm, we would be the most qualified law firm for the job. And I have a copy of that letter if the court would like to see it.
>> I壇 be happy to get it. Five copies.
>> I have three copies of it for everybody.
>> make sure the clerk gets a copy.
>> john, let me reask a question another way. If the decision today is simply is it broke, your testimony would be not only as somebody that understands this business, but as a Travis County taxpayer, it ain't broke. But if a decision is made in terms of to do something other than in-house collections, you're gently reminding us that the independent review ranked your firm second after Travis County.
>> that would be correct.
>> thank you.
>> any questions for mr. Garcia? Thank y'all very much.
>> appreciate your time.
>> last week we promised mike of the auditor's office an opportunity to give follow-up comments from last summer's discussion and also last week's discussion.
>> the green one is in case you didn't want to read it. It's a synopsis. I just pulled some excerpts. Let me start with some general things while we're getting set up herement.
>> and you are our county auditor.
>> and I知 going to do part of the presentation and mike is going to do part. We did an extensive analysis a year ago and it's probably not fresh in everybody's mind, and I would remind people that they do want to read it. It is on the tax office's website and I did contact the web master and ask him to put it back on taikt Travis County's website. And we will put the handouts that we gave you today on a pdf file so that could be loaded there so the public if they would like that information could pull it down. Of course, you can always call and make a request for it. And we have some here for the public. And just as a parameter for the discussion, I知 sorry I wasn't here last week, but I did watch you on television and some of the observations I made is I think we need to very carefully frame what the issue is today. And some things that I think need to be clarified, we heard a lot of testimony and we heard that at the legislature, too, to be honest where people are really having a very difficult time paying property taxes when their value goes up and they are on a fixed income. That's a real problem, but this issue today doesn't address that. This is that is not the issue. With regard to property taxes, the legislature determines the types of taxation that local governments can use. They're the ones that decided, for instance, that the county, the school district and the hospital district will rely primarily on the property tax, so it's not a tax that we choose or not choose. Property taxes are based on the fair market value of the home, not people's ability to pay. And there's often a disconnect behind that. This issue today does not deal or cannot correct that. Properties are appraised by the Travis County appraisal district, and that is an independent body that goes out and appraises property. So if people think that their property is incorrectly appraised, this doesn't deal with that. What you need to do is go to the Travis County appraisal district and have that reviewed and protest. The other thing is that the controller's office audits the appraisal districts to make sure that they are appraising at fair market value, so they're under pressure to get that at fair market value. And all of these things create a pressure on homeowners who have to pay a property tax when in fact the value of their property may not be keeping track with their income. The other fact, just as we're getting through this, is that Travis County has contracted to collect for 80 other taxing jurisdictions in Travis County. It is the only such consolidated system in the state of Texas, and what this report really looks at is it is data driven, so we're not looking at policy here, we're looking at the data that says is it more effective and efficient for Travis County to continue the centralized collection effort, current and delinquent taxes, or outsource it? So that's what we're going to be looking at today. This is data driven. The auditor's office was asked to analyze this, not from a policy viewpoint. We don't make those policies. We can make financial policies in terms of data we need for keeping our books, but the policy, the public policy is made by the Commissioners court and the eye lekted officials -- elected officials that drive this system. And nothing in this report changes that. What we did is we responded to the comissers court request for our office to serve on the committee and of course any time the Commissioners court asks us something, I like to do it. But furthermore, by Texas state statute, the auditor's office has to provide the revenue estimate based on the policies that the Commissioners court and other elected officials adopt. So we were very interested in this issue because ultimately whatever you decide we will make the best revenue estimate that we know, just like we do on every other type of income or revenue in the budget. So are we ready here with the slides? I知 going to take the first issue, and the first question is very simple. And I don't want to go over anything that you already know and remember and don't want to go over again. But I will if you have questions. I知 going to take my lead from you. We spent three hours on this last year, and I知 going to go over things that you really -- I don't want to go over things that you really already understand. The first question is will the Travis County taxpayers financially be better off or worse off if we outsource taxes? In other words, will we see a revenue gain, will we be revenue neutral or will we see a revenue loss? On page 2 of your handout and what is on the slides on the television -- I don't know if the television is picking that up, we are ranking the estimated net losses that in the best of our ability would have been recognized by Travis County in fy '04. We studied this in fy '04. We picked out fy '04 in the four years before that because that's when we started analyzing. Had the county outsourced delinquent tax collections. And the gentleman from purdue, brandon, was right. If you look at the firm, other than using tarrant county data alone, purdue brandon would have been the firm that appeared to have the least loss, if there's such a thing as a least loss. So all of these you can see, Travis County would have lost money. What we did --
>> susan, explain to us again how you arrived at these numbers.
>> I sure will, judge. If you look at the long sheets -- did everyone bring those with you? I couldn't get that on the screen. There more here if you do not have them. And why don't I go over the linebarger initial proposal first? And that would be the second sheet that says linebarger analysis. Let's go over that, and I can tell you how I got to those numbers. And when I say aye, I mean the 12 people that worked on it. Obviously I didn't do this myself. I wish I had, but I知 not that smart. If you're looking at that, the revenue that Travis County gets for tax collections can be broken down into two segments, and christie, if you will put up page 3 so they can be looking at that. The first issue we looked at was the revenue from the delinquent taxes themselves. So that's just our taxes and the delinquent collections. And what we did when we looked at the different vendors is we asked every vendor to give us five years of data on their six largest clients. And the reason we asked that is we wanted to get a really complete view where we could see not only what they do for more than one client, but also what they've done, their track record for more than one year. The information that they submitted to us we took on face value. In other words, we did not go back to like tarrant county and audit their numbers. We took the vendors' numbers at face value. We did not do that with Travis County. Our people went in and looked at the tax system. We examined individual tax records, we tied those to the books in the auditor's office and went through and reviewed those actual records. We did not take that at face value. We analyzed it and reviewed it to make sure it was accurate. And we had full access to everything we need. And the firms, the linebarger firm did not submit harris county because harris county wrote them a letter and said they did not keep that data, so they couldn't submit that data, so we couldn't analyze harris county. And purdue brandon did not submit five years' data, they submitted four, but we felt four was enough to look at, so we were okay with that. Both firms had one entity that was very different from the others. And we would have called that an outlier. And it would be like, for instance, if anyone is collecting the collection rate is 90%, this one's 70. So when you're averaging that would pull it down and really distort the analysis so. We took out the outliers to give them the best chance. So the part above the line here is just plain delinquent taxes. In fy '04 Travis County actually collected $12.6 million of estimated taxes. If we had used linebarger, using the statistics that they provided us, the actual performance measures for the governments that they had, and we took an average of those, they would have collected $8.5 million. Travis County in delinquent taxes would have lost $4 million just on delinquent taxes had we outsourced to the linebarger firm with that data and that experience in that year. That's the first part of the analysis.
>> so we average the collection rate.
>> that is for the counties listed.
>> the average?
>> the average to what figure?
>> I知 sorry, I didn't hear you.
>> we multiplied that average times what figure?
>> we didn't -- okay. That average came out to be 97.7%. And that's for the whole year, that's delinquent and current collections. And Travis County's for example, the actual for us was 98.77. To get these numbers up here, though, it's a little more complicated. I ran through this a year ago, but I値l say it again. Travis County current collections were 95.48%, so from basically the beginning of the year to February 1st when things would be delinquent we've already collected 95-point sfrai 48%. The fact that by the end of the year we had 98.77, the difference between those two numbers is the delinquent taxes we collected for the surnt year. Does that make sense? And then I did the same thing with any of the law firm. I still assumed we collected 95.48 in current collections because it would still be the tax office doing that. So assume no change. And then they're at 97.70, I took that minus the 95.48, which would be about 2.2%, and multiplied that by what the original roll was. The same thing I did for Travis County. That's the difference. One you would get $9.7 million, the other you would get 6.5. Does that make sense?
>> I think I understand it, but let me try another question.
>> okay.
>> to arrive at $8.5 million, we applied -- we multiplied the 97.7% times a certain number.
>> what I知 saying is we multiplied the difference between Travis County's current collection rate, which was from up until February 1st, that's 95-point 48%. You take the 97.7 minus 95.48, which is 2.2%, times the tax -- that's the same tax roll that Travis County has.
>> so what we did, judge, is we knew how much we had collected when they became delinquent on February 1. That's the first percentage. Then we know what we had at the end of the year. So if you subtract what we had on February 1st from what we had at the end of the year then you know the delinquent collections. And that's the methodology that we used used. With the other firms we used the collection rates that were the average for the entities that were turned in.
>> okay. I think I understand ours, but I知 trying to -- the 4.000000 is a big number. I知 trying to figure out how we got to the eight and a half million.
>> again, their average collection rate was 97.7. Ours was 98.77. So to do theirs I took 97.7 minus the current part that was collected, which would be 95.48, and that gives you 2.2%. And you multiply that by the amount of taxes that were owed originally. That's the only way -- that is for sure an accurate way to calculate that. Because at the end of the year, Travis County has 98.77% of all taxes collected, and using this model then the linebarger -- Travis County would have 97.7% of all taxes collected. Because with everybody -- everybody I think would agree that to keep the assumption that the county would still collect the same amount of non-delinquent taxes. Because there should be no effect before February 1st.
>> okay.
>> and to get on that, the assumptions we made really were those that favored the firms. And we made that assumption, mike's right, but on the long-term I知 not sure I would make that assumption because the clients that many of them had did not collect as many current taxes. And in any kind of collection activity, part of getting people to pay is knowing that they're going to have to pay. They might as well pay on time no matter what you're kind of collecting. So we made that assumption, but truthfully, not only did Travis County collect more taxes, but we collected them faster. And so that's kind of important. We assumed that we'd keep collecting them that fast, but I think that might not be actually true and we would be worse off. But we don't know that. Okay. The second calculation we did. That's the delinquent tax loss. Okay. The second calculation below that line there is and a way to view that is the private firm is a law firm that's out in the business of delinquent tax collections. And they're going to make money doing it and it's going to cost them money to perform those services. We're doing the same thing in the consolidated system that Travis County has put together. In other words, for collecting for 80 plus entities in Travis County, there are revenues that we make in that process, just kind of consider it a little business. And then it costs us money to do that. So that's the second part that we're looking at. And the revenues are looked at like this. We looked at the actual attorney fees that we collected in '04. And that's $2.9 million. We assume that if you outsourced to linebarger we would not be in the delinquent tax business at all. And so we would get no attorney fees. So we've got zero there, no revenue there. The other thing that we do is we charge the 80 entities a parcel rate and that parcel rate includes the cost of collecting current taxes and delinquent taxes.
>> hang on a second. I didn't understand something. Attorneys' fees in-house is 2.9 million.
>> right.
>> you said zero from linebarger. Unless I致e got the wrong page --
>> you've got the wrong page. Do the one that says --
>> I致e only got about 900 pages up here.
>> that's the hybrid.
>> hybrid 1. We're going to get there. Did you find that Commissioner?
>> I think I致e got unwith of those that looks like that.
>> that's important that we said, we're not going to get any attorney fees because we're not going to be in the collection business anymore. The other thing we do is the parcel fee. What we said is we're not in the business of collecting delinquent taxes, we won't be charging the other entities for collecting the taxes, so the parcel fee would not be $935,000, but basically 570. So we wouldn't charge them as much a reduction in revenue. Then the other thing is when we file lawsuits and perfect a judgment like any other civil lawsuit, the county gets court costs. And we went through and looked at the legal filings, and Travis County got $1.2 million in court costs. So in this delinquent tax business, so to speak, or program, I guess we should call it, we got in fy '04 five million dollars' worth of revenue. If we out source to linebarger, they would do all of that, so we would have gotten revenue of $867,000. Above the line in this are the revenue estimates that impact the revenue, but there's more than that because we said to the budget office, but if we're not in the delinquent tax business anymore, we obviously have expenditures that we could get rid of. So the budget office is the one that analyzes the budget and came up with these numbers. In fy '04, the attorneys, the salaries in the county attorney's office working on litigation for the tax assessor is basically $811,000. We assumed if linebarger took all the litigation, we wouldn't have that anymore, that you would eliminate that unit completely. So we would have zero salaries in that unit. They obviously would not have operating costs, so we would save $33,000 of operating costs. We looked at the operating costs of the tax office and the salaries in the tax office of the people working on delinquent taxes and I知 saying we, the committee, but the planning and budget office did that part of it. And they assumed that based on the work flow and the fact that all of those delinquent taxes would have to flow back into the tax office anyway, they didn't really think we could get rid of any people in the tax office. The other thing in the tax office is there is a huge volume up front, and you need to be able to handle ha in that kind of a staffing environment. To through the year roarn that crush period, you have things for those people to do so you've got the number of people devoted to taxes. So we didn't see any reduction there. There are litigation costs throughout the county. In the constable's office, in the clerk's office, in the courts, and the planning and budget office estimated that that was $507,000. Now, in the linebarger proposal, unlike purdue, they said that they would reduce litigation by 75%. We did not judge whether we thought they could do that or not whavment we said is we assume they will and the costs for that are gone. So we cut the litigation costs by that amount. So the expenditures currently in Travis County for '04 we got five million dollars' worth of revenue, we spent 1.8 million to get it. We made $3.3 million on that. If we outsourced, we would have made revenue of 867,000. I知 rounding these off. We would have expenses of 574,000. We would have made then 283. You compare the two, we would have a net loss from the delinquent tax operations of $2.97 million. And that indeed would be like a profit in that little business, but that profit stays in Travis County to the benefit of Travis County taxpayers because all the expenditures were paid for by Travis County taxpayers. So we are providing the service more efficiently. Our expenditures are less than the revenue, so the money, the excess there we keep. A private firm of course would keep that profit themselves because they pay for their own expenditures and they keep all of their profit. So when you compare those on that sheet, if we totally outsourced to linebarger, it is our estimate that revenue -- the revenue reduction mitigated by the expenditure reduction as well -- that's why we call it net. In that year we would have been $7.1 million less revenue in the Travis County coffers. And judge, your question last week was what about the hey brid proposal? So -- hybrid proposal? So I can tell you conceptually how that is different. The other thing we did, though, by the way, and this was in our other report, is we said. Well, what if linebarger took their best client, not the average action but the best, tarrant county, and we ran that and we -- and tarrant was it. So we said what if we used their collection data. And if that were the case, Travis County would have lost $5.3 million. Linebarger did submit a hybrid proposal and clearly it was a strategic mistake for us not to put it in the report, but the reason that we did not is that when you look at the revenue loss, Travis County would have lost more revenue with that for this reason. It was a hybrid proposal where linebarger said, look, you can still do some of the legal work and you can keep some of those fees, and that's the 102 you're looking at, Commissioner Daugherty. And so we're going to still -- you're going to still be in the lawsuit business here, but we're going to split those fees with you. And the split that they proposed, our people went and they looked at all of the lawsuits in that time frame and figured out what we would have kept. And it would have been in this year a $102,377. Now, while we got slightly more revenue, a little bit of revenue, we still have to maintain our whole litigation staff. So there were no expenditure savings. So this proposal here in fact we would have lost $7.8 million instead of the 7.1, and that is why we did not include it. We took the best plan from each of the vendors. Last week linebarger submitted another hybrid proposal, and ms. Jordan was right, it was not materially different. And basically what it allowed us instead of deeing 102, we would have kept 171. So it was an immaterial difference because we would have still basketball keeping a litigation staff. So that is the analysis that the data indicates.
>> [one moment, please, for change in captioners]
>> this is the break down based on use of that Round Rock data.
>> what we did, judge, and this is why -- yeah. I知 sorry, I had to diseeks xerox these, I couldn't find them on the computer file. This is from the other report. One of the things in the report in '04, that's when we did the comprehensive analysis is the linebarger form said their Round Rock in Round Rock i.s.d. Was better than Travis County's collection rate. Notice this, Austin i.s.d. We collect for them, the collection rate for that school district was 98.95. Lake Travis i.s.d. 98.84, Travis County 98.77, Pflugerville, 98.62 and Round Rock i.s.d. By linebarger was 98.62, the same as Pflugerville. When we look at that data in '94, there would be nothing there that would indicate that they could do better than Travis County's collection rate. What that were talking last week about is their collection rate this year. In order to do that we are talking about another 5 to 600 hours of analysis. What I would like to point out is that because of the importance and the material amount of the money, it would be very foolish for us to pick out just one number from one entity, one year. Because you can see from this that if we had -- if we had contracted with them and assumed that the Round Rock i.s.d. Number was the one to use, we would have been wrong because it was lower than our collections. So that's why we took and used the averages. The other thing is we had a problem relying totally on school data for this reason. When you are in an area that doesn't have centralized collections, all of the bills come separately. Here what we do is you get one bill. And when we collect it, whether it's all, a part or through a lawsuit, we proportion that pro rata to all of the jurisdictions so they get their fair share of money. When you are not consolidated like we are, it's every man for themselves. So they are sending out separate bills and if people can't pay all of their tax bill, they can really choose what bill they are going to pay, so we don't know what impact that has and the other thing is a school district doesn't have the geographic diversity that we thought a county did. So if that's another reason that we would be very hesitant to base this analysis on one year of one school district. So that's why -- that's -- that was what our thinking is of that. The second page there, which was also interesting, is that there was a comment made, I can't remember who even made the comment, but that one of the reasons our collection efforts were better isn't that we weren't better, but that we had a better, more socio-economic advantaged population than other areas. You can see right there that that is not true because we looked at socio-economic data from the t.e.a. And what it showed is that our best collection rate that I showed you on that sheet there, was from Austin i.s.d., 98.9% and of the three school districts looked at there, that had the greatest percentage of socio-economic disadvantaged students. The next one was Pflugerville at 34.9 and the last was Round Rock independent school district with 20.5. So even if one said socio-economic status impacts your collection and it might, we overcame that in our collection efforts. So, judge, that's why we did the analysis that we did and used the data rather than pick one incident, one year from one jurisdiction. We would like to move on then to the second question that -- to the next issue of collections, mike is going to do that a framework for people who have not had the chance to read the report or are watching. We know there's a lot of public interest in this. I think it's important to start with the public policy assumptions under which our policy has worked. You can change public policy. These are the assumptions that this system worked under.
>> [reading graphic] I might say as an aside, we found no law that allows us to tell anyone as a particular taxpayer they don't need to pay their taxes as sad as the situation might be.
>> [reading graphic] we were -- the comment was made that we file too many lawsuits. So what we examined is when does Travis County file a lawsuit.
>> [reading graphic] second notice.
>> [reading graphic] we have many, many -- we have many, many payment plans that the tax office will set up, so for taxpayers that are watching, it is very important to contact the tax office and set up a payment plan if in fact you are -- you are having a problem paying your taxes, because they -- they are what we saw over there, they will work with you. The tax office will only pursue litigation on taxpayers that are unresponsive to their collection efforts. The other thing that was say was the pursuit of lawsuits is inequitable and unfair. What we did is we sent to the tax office, we said what are the criteria, what criteria do you look at? Are they evenly applied. The criteria are this. Number one -- the taxpayer owes a large amount of tax. The larger the balance the higher the priority. Goes down in deacceptedding order, start with the biggest taxes moves right on. We saw that. Two, the taxpayer already has a balance from the previous year. Not paying their last years, year before, before, before, they move in on those sooner rather than this is the first year that you were late with your taxes. Three the taxpayer has a poor payment history, has written a check on insufficient funds or has broken a payment plan. Four, the taxpayer owes tax to a jurisdiction that has a low collection rate. Commissioner Gomez, this is particularly I know of interest and importance in your precinct because one of the areas that there is a sensitivity is we collect for del valle independent school district. And it is a school district that often has a lower payment, higher clintonnency and because they need to keep the school doors open, they ask us to press very hard out there. That's in your precinct, it's pushing on your people. So that's an issue. Still, I mean, I think anybody could intellectually agree with all of these statements. I don't think we are asking for anybody to be let off the hook in having to pay taxes. If you are going to own property or own a vehicle, you have to pay something on it. However, that's intellectually. I can understand this. However, when -- when you -- when you are more human, you know, you run into people, every day, then these kind of things kind of go to the back burner. You look at people who you have said, you know, go to the tax office, set up a payment plan. And they go. Then still they are unable to pay their taxes. At some point. I have never said to anyone just forget about it, don't pay taxes.
>> sure.
>> you know, I have never said that. But I have had calls from people who have set up payment plans and then the following year they still can't pay.
>> sure.
>> and so are we saying that these folks are going to even own property?
>> oh, I don't think so.
>> but -- but because there are other -- other factors that are affecting them being able to pay their taxes. One, which I think is pretty obvious, is the -- someone on a fixed income. And -- and how to -- how to deal with that issue. And it's -- the answer for me is not for us to continue I guess intellectually I could say, yeah, probably in business -- from a business points of view, I could say yeah let's keep filing lawsuits on them every year. But where does that really get that person and so -- and so I -- I have to be concerned about the person. As a person and -- and not as -- as a taxpayer who in addition, I guess, being the taxpayer who is unable to pay their taxes.
>> of course.
>> unfortunately a lot of them are minorities. So -- so never have I -- have I ever said that -- that one office or the other was doing something illegal. To those folks. So it still -- I understand that all of this stuff, I have heard it many times and -- but still as a human being I have to be concerned about people who cannot pay their taxes and then get filed on year after year.
>> I think that you will --
>> of course you are. I think what you are going to see -- does hiring an outside collector make that better, more worse or nothing. I think what you are going to see is turn this over to mike in one second, I think what you are going to see is that because of the policies and the fee schedules that those very people that you are concerned in, about, will pay significantly more in penalties if we outsource this.
>> unless we handle them differently.
>> right. And that --
>> from the very beginning.
>> that would be a policy issue that you would take up with the tax assessors.
>> right.
>> let me have you look at this, then I知 going to turn it over to mike because it's extremely important that you see this.
>> is that page 9.
>> that is -- that is where -- where it's the continuum, judge, that shows -- the penalties and interests -- do we have that on the screen? Chrissy is on the seen, can you see that on your paper.
>> on page 7. The green section. The green section. Okay. Here it is. Do we have that.
>> page 7.
>> yes.
>> when does Travis County file a lawsuit?
>> it is -- it says property taxes, law firms, fee --
>>
>> [multiple voices] there's so many numbers I realize that it's cumbersome, but this is a numbers report. What's important here, it goes to your issue, Commissioner. It does. That is that -- that this is a time line with regard to the payment of taxes and what penalties, interests, fees are attaching to that so that you can see that. October 1, '03, the taxes are assessed, they are due January 31st, '04. They become delinquent February 1. The state sets a penalty for that. And I made the tax a thousand dollars just because -- so you could see it. Moving up in -- in round numbers. So what -- if you owed one thousand dollars in taxes, starting February 1, there would be a 6% penalty that month, not per annum, but that month. Very steep. Plus one percent interest. The next month there would be a one percent, one percent, one percent, one percent and in July 20%. So at that point in time 2%, I知 sorry. Looking at the dollars. By the end of July, state law would have attached a 12% penalty on anyone that had not paid their taxes by 12-1. Very stiff. We can't excuse that. Interest. They attach a percent a month. Again that's not per annum, that's like 12% a year. That goes on forever. And so you can see at the end of February, you owe 1070. On July 1, you owe $1,180. Now this is the important part that's red. And that is -- that is because of the section that the law firms operate under, whether they are sued or not, if they send a demand letter out on July 1, every person that owes delinquent taxes now owes 15%. And that rate can be as high as 20. That showed that bexar county's rate went up to 20. So it doesn't matter if you are sued or not. The law firm's fee is attached on July 1. Then your taxpayer that you are talking about and rightfully concerned about if we had been collecting and not suing by July 1, you are going to see rarely do we sue by July 1 in this time frame, that would have owed $1,180. They would -- they would owe $1,357 if we contracted out. Because on July 1st, that attaches. Now I知 going to turn it over to mike but it's important to see the difference. Our fee, we attach 15 to it is when we have a perfected judgment and we sue. So a difference is July 1st, everyone pays that. In our section we get it when we get it perfected. And we -- yeah, perfected. I don't know the legal terms.
>> the only thing that I want to add to that is that is 15% on top of the 12% that is mandated by state law. I知 making it clear because it's not one or the other.
>> no.
>> it is 15% on top of the 12%.
>> it goes to Commissioner Gomez's concern that -- is that -- I know the tax office feels it. It's important to try to help people as much as we can early. Because this thing really sky rockets very quickly because of the mandatory interest.
>>
>> [indiscernible] occupy the screen, not going to green anymore, judge. We are out of green.
>> it's the -- it says tax year 2003 delinquent homestead parcels sued in fiscal year '04 by precinct. Is everybody on -- okay.
>> this is the one that ought to be --
>> yes, you should.
>>
>> [indiscernible]
>> I want to explain this real briefly because -- because what we did here, you've gotten all kinds of lawsuit information, both from us and from vendors and I think what mr. Oden had up the last time had quite a few more lawsuits because a it included two fiscal years instead of one. Just to go through this much data and actually verify it, this takes a really long time so we selected one year, which happened to be fiscal year '04, also these are lawsuits that were filed in fiscal year fiscal year '04 for the current tax year because another thing that I think maybe we haven't even said to you before is you look at those lawsuit numbers, it looks really large. But most of those are for tax years that were previous to that year. These are all lawsuits at least for that year and also include like I may have been sued because I知 delinquent in tax year '03 which is the current tax year that we are talking about in this chart. We also may have been delinquent for previous years. We counted those. There seems to be an idea out there that -- you know, you become delinquent on February 1st, we get right in there and sue you, you know, between then and July. It -- very few of the lawsuits actually fall in that category and typically involve people who are delinquent for other tax years as well. I just wanted to make that clear. That's what we are looking at. Again if you still look at like the second column, that's the actual number of lawsuit that's we filed for people that were delinquent in the current tax year. And just by looking at the number, you can see the highest number was in precinct 4, 153 and then the next highest was precinct 1, 141. And then the other two precincts were lower. But this is -- you know, you have to put these in some sort of context and to me the context that makes some sense is to say how many delinquent taxpayers were in those precincts and I -- we selected the date July 1st because that's the date that the law firm could attach that 15% attorney fee. So if you look at -- now if you put this number of lawsuits in context and say how many lawsuits were filed, for example, in precinct 1, on delinquent homestead parcels as a percentage of the number of people who had a delinquent homestead parcel in that precinct, you get a different picture. The percentage at that point is 9.76% in precinct 1. In other words we sue 9.76% of the delinquent homestead tax owners for that current year. Which is a much smaller percent than what we are suing in precincts two and three and in fact in precinct 4 as well. So I think if you are --
>>
>> [indiscernible] value of homes on that
>> [indiscernible] in other words are those particular 141.
>> I would get to that on other -- this is right now just so you know all homesteads in each precinct, right? I have charts after this that will break that down by value, Commissioners, that should answer your question.
>> again, I have heard the term disproportionate effect a lot. The truth is that the proportion has a percentage, if you look at it on a percentage basis, the disproportionate effect is actually in precincts 2 and 3 in this particular case. That doesn't take away from the number of lawsuits, but I知 just saying put it in some context and see the number of delinquent homestead parcels as a percentage of who we sue. I知 going to go pretty quickly over the next couple of charts. They just give you some background information that maybe put the chart I just showed you in context. The first is just total number of homestead parcels within Travis County. There's almost 150,000 in that tax year. This shows how they break down. The higher percentage of home instead parcels are in precincts 2 and 3. I知 sure that's a surprise to nobody. But just some information. The next two charts deal with the delinquent homestead parcels. Again this first chart looks at the number of delinquent parcels in each precinct as a percentage of homestead parcels in that precinct. So -- so when you look at that, again, it may not be a surprise just to give you some context for the numbers. The higher percentage of delinquent parcels are -- are in precincts 1 and 4 and the lower percentages are in 2 and 3. The next chart really just shows you that in a different way by taking the percentage of delinquent parcels in that precinct as a total number of the delinquent parcels just another way to -- to evaluate that same data. Now we are getting to the question that you asked Commissioner Davis about the home values. I知 on page 13 now, which is a chart for precinct 1. And we have charts for all of the precincts, this is just the first one and what this does is the first thing that we did is we put the home values in each precinct. Into a quartile. We said 20, just homesteads, we put 25% in each precinct would fall into a quartile. For example, in precinct 1, 25% of the home said in that -- homesteads have a home value of 86,639 or less. You can see the values there for the our quartiles as well. What's in blue on this chart is the people that we actually sued during that fiscal year for that tax year in those quartiles for precinct 1. You know as we are aware, the people who were sued the most were in the lowest quartile, 48 people were sued in the lowest value. The next highest would be in the highest which is sort of unusual and I think not the same for every precinct.
>> just to understand this a little bit better then, what goes into the decision making that you are going to go after the 48 and not the 345?
>> just -- could I --
>> that's
>> [indiscernible]
>> that's not what this is showing. What this shows is the actual -- I didn't get a chance to explain the red. Blue is the number of people we sued. We got to the point where Travis County said you haven't paid your taxes, you are delinquent for this year. In these cases probably delinquent for prior years, too. We went ahead and sued them for that current year's taxes, 48 people in the lowest quartile. Those people had to pay 15% attorney fee as well as court costs which would be additional charges on top of the penalty and interest and the delinquent taxes they had, too. Now, what is the red bar. The red bar is had you -- had Travis County outsourced this to a law firm, these are all of the people who were delinquent on July 1st. That would have -- that would have been charged the 15% attorney fee by any law firm. Doesn't matter who it was. You know, as soon as they send out their letter July 1st, that's when that 15% fee -- we are assumed 15% when in reality it can be up to 20%.
>> I want to ask a question. On this page 13, from-- for a homestead from 0 to 87,638, had we in that tax year gone outside, 48 would have been the number of lawsuits filed in precinct 1 and -- in that home value category, they would have had to pay the attorney's fees had we perfected our judgment. 7 times that number would have paid the 15% regardless a lawsuit or not?
>> yeah. Like I said it would not matter where the county or the law firm filed the lawsuit. That 15% fee that a law firm can charge is strictly based on July 1st hitting, still being delinquent and having sent out a letter to them notifying that that was going to be charged.
>> so by the same token, the 48, what goes into making the decision to go after the 48?
>> that was what -- that's a good question.
>> [multiple voices]
>> > susan just answered that before mike started speaking when she went through all of the process. It's in your report. Nelda decides that. By the way, whether you go to an outside firm or not, nelda decides that. Regardless of which lawyer you choose, anyone, nelda decides which 48 to sue.
>> in that --
>> [multiple voices]
>> because of statute.
>> state statute. It's nelda's decision to determine who goes after as far as the lawsuit is concerned.
>> what I致e been saying lately if your car battery goes out, you are going to replace your tires as many times as you want to, that car is still not going to start.
>> in this quartile when you -- to kind of answer --
>> I知 not sure that I understand that.
>> we women don't get cars.
>> to answer your question, those four criterion one is the highest amount of taxes owed. Obviously in one year people in this quartile with homes in this value would probably not be caught by that. They might be caught for numerous years, 3, four, five, or they made an agreement to pay their taxes and broke that agreement or they happened to be located in an area where they, like the del valle independent school district, where we were being pressed to get taxes. That cite I don't know is how -- cite I don't know is how that decision is made. The most important thing is that we decided, Travis County decided not to sue 345 people in the lowest quartile in precinct 1 who would have paid a 15% additional penalty had we outsourced. So for the poorest people, Commissioner Davis, in your precinct, because we are looking at that, I keep looking at that, in -- in your precinct, 345 people in the lowest quartile of homes would have been paying 15% that would not have been under our -- our system.
>> I guess I知 having a little trouble with the numbers. Maybe you can help me out. I知 looking at these particular quartiles, also going back to -- to -- to linebarger's report as far as looking at the value. That's why I asked the question about home value. What's the value of the home as far as what we are looking at. In your particular example to put on the table for 0 more than $87,000, you have 48 lawsuits that are filed, but ranges all the way up to the next column which is 31 which is -- which is a value of no more than $87,000 to $116,000. That is 69 lawsuits for that range. 79 lawsuits for that range.
>> yes.
>> all right. Since that's the range, now I remember also making a comparison to -- to some of the linebarger, even though it was two years, assessed values of homesteads that were less than $111,000, $111,000 or less where lawsuits were filed. My question is that that number was like 289 of a two year period.
>> right.
>> all right. '03 and '04. Based your particular deal here is an '04 deal. You mean to tell me between, I don't know if all of these numbers, but the 289 over a two year period and a one year period here, that's a difference of 210 lawsuits difference.
>> yes. And what I -- I thought that I explained this at the beginning, but maybe I forgot. The difference between the linebarger numbers besides being ours one year and theirs two years, they also included all of the lawsuits that were for only prior tax years. In other words, let's look at just fy '04 for a moment, because that's what we are looking at here. They looked at every lawsuit that was filed in fy '04 regardless of what tax year it was -- it related to. Am I making sense?
>> it makes sense. But as far as my interpretation it was for the -- for the assessed property value of homesteads less than -- below $111,000 of which the lawsuit was lawsuit I think it was for 2003
>> [indiscernible]
>> they included. See there's a difference between when we file a lawsuit and what years those lawsuits are for. Especially in the -- when you are talking about lower value homesteads. Those lawsuits may not be filed for years. In fact, the average for any lawsuit is two and a half years. So we don't go right you on when you are delinquent and go file a lawsuit. That's kind of a common misperception out there is that you are delinquent February 1st and the jackals are at your door by July 1st, you know, filing a lawsuit. The average is more like two and a half years before we even file the lawsuit for the period that you were delinquent in.
>> we analyzed the specific examples they had to at the end, michael gold, last week's report linebarger talked about people that were targeting.
>> they showed you 15 --
>> we will get to that.
>> right.
>> [multiple voices]
>> the percentage is a lot higher, of course it probably would be. There was 35% for those homes less than -- than that assessed -- less than $111,000. Whereas -- whereas there was about 35%, I think as far as representing precinct 1. I think precinct 4 at about 38%, I think 317 on down the line.
>> there's no way that there was 35% of the homesteads sued in any precinct. As far as assessed value.
>> not for that, there's no way. There was a number, I think that you went, I知 trying to remember, too. It's hard to remember back on everything. I think what they had was 340 some lawsuits that they were talking about. For precinct 4. Okay? The 141 we are showing here, but theirs included two years. As well they included all lawsuits that were filed in those two years from homestead's regardless of what tax year the person was delinquent. What I was saying to analyze this stuff, it takes so long to go through every one of these lawsuits, find out what the reason was, what the home value was and put a chart together like this. We simply stuck to the homesteads in fy '04 that were sued that year for the current taxes in every precinct.
>> our people looked at every one of them, pulled them up and looked at them.
>> [multiple voices]
>> what I am also hearing you guys are trying to drill down to the actual numbers and to try to get -- put some perspective or to what's going on with the percentage. Perches can be very misleading. I知 so remembering chief dyson when he was the police chief, murder rate doubled, went up 100%. He was yeah, you are right, from one to two. Well, you know, the percentage is something to be cautious of. But it is also real important to look up what was the actual number. That's what I think that you are trying to drill down to is let's look at real numbers because these percentages can -- can get away from us.
>> the other thing that I noticed is in precinct 1, precinct 4, the -- the values of the home, the highest number of people are delinquent. It's in the lower -- in the lower -- lower -- yeah.
>> it's in the lower --
>> lower value.
>> lower quartile in all of the precincts. Just the value of those are different. The lowest quartile is lower priced homes than in three. But interestingly enough, your observation is exactly correct. That is that of people who do not pay their taxes, there is a greater percentage in the lowest quartile in all precincts.
>> right. Except that the values are -- are different. You know. At least -- in precinct 2 and 3, it's -- it's over 1,230,000.
>> right -- over 130,000.
>> but still kind of tells me something is going on here with the -- with the taxpayers who have the lower value homes and so -- so you know that's something that --
>> I think it's fair to say I mean just as a factual statement that people in the lowest value homes in Travis County have a more difficult time paying their property taxes and therefore there are more of them who are delinquent. I mean that's just a factual statement. I think there's a lot of questions on what could you do to make that better? I think those are useful. The one thing that I -- that I did want to try to draw to your attention with a chart like this is that -- is that it is -- it does not appear to us, just from analyzing the facts, that -- that contracting with any outside firm to do your delinquent tax collections is going to make that problem better. In fact, it's going to make it considerably worse. And that's what -- that's what the purpose of this chart just to show you that, you can draw your own conclusions as well. But I had sort of thought that there may have been the implication from the -- in a couple of presentations that, you know, the people in the lowest value homes are really getting, you know, hurt by these lawsuits. And that somehow if you contract with an outside vendor, you are going to make that problem better. And the reality is you are going to make that problem worse because of the fact that -- that you have such a large number of people who are delinquent on July 1st. And those people are going to have to pay a 15% attorney fee, whether or not they ever get sued or anything else. Just the fact that they get a letter, they are going to have to pay an attorney fee. I keep saying 15%, but that's what we assumed in this examples like they can charge up to 20. So -- so --
>> in the regular report, we tried to put a dollar value on that, if you recall. For the period that we looked at, we determined that the delinquent taxpayers would have paid $5.1 million more if you had outsourced than they did from Travis County, including our attorney fees and the court costs. So that's as an aggregate, all of them for several years. But it is -- mike is exactly right, that is the people that are having the most problem, will pay more with an outside firm. They will.
>> I had no assumption for -- about that.
>> I know.
>> was trying to think -- that's the reason you need to get the information out there.
>> sure.
>> I never assume that anybody knew this one
>> [multiple voices]
>> what I was really trying to say is you've had people come over before you and make that implication, imply that. It's a fair point is it true or not? And I think the facts show that it's not true. It would actually be worse.
>> very quickly, mike. I have to really differentiate in my mind is the problem, very legitimate issues that Commissioner Davis and Commissioner Gomez have both brought up, is the problem in the collection of those delinquent property taxes or is the problem, yes, in the assessment of taxes? When we talk about that $87,000 homestead in precinct 1 like I知 looking at right now, under Travis County giving a 20% homestead exemption, that $87,000 home is taxed on $70,000 worth of value. If they are over 65, they also get to take out $65,000 worth of value, so that $87,000 homestead for somebody over 65 paying Travis County taxes, they are being taxed on something worth $5,000. But that exact same property for the city of Austin they are being taxed for $87,000 because the city does not take advantage of the state law that allows them to do up to a 20% homestead exemption. With all due respect they do give a homestead exemption for folks over 65, but I don't have that number in front of me. But we are way generous on that. In addition to the 20%. For aisd, assuming that's an i.s.d. Home, they are at a flat 15,000. So they are taxed at 72,000. So there's a huge differential here in terms of who is trying to get their pound of flesh out of that exact same taxpayer. $70,000, 72,000, 87,000, or 5. That really has to do with -- with homestead exemptions, other kinds of exemptions that are within the purview of a Commissioners court, a school district or a city council to help those at the bottom end. We are going to be seeing some tax relief thank you very much to the state legislature in terms of those rates coming down on the i.s.d.'s which have the highest rate to be attached. Although they are still limited with the 156789 there's other way within our purview, we can't tell the city council get off your did you haves and do a homestead exemption, it's certainly within our purview to say you know what maybe it is time we revisited the $65,000 exemption on top of the 25% for those over 65. That is something if we are talking about the elderly in fixed incomes in areas that are seeing very rapid appraisals going up, we can have some say-so over what Travis County taxes are going to be, certainly they are frozen for the school district taxes. Maybe that's where we can help. That's within our purview. But that is a tax rate and an exemption issue. Doesn't have anything to do with collection osama bin laden.
>> speaking of collections -- speaking of collections, anything else --
>> dwiewpt me to go over the other precincts -- same exact effect in each of the precincts, the lowest value of homes, although obviously in different precincts what constitutes the lowest value of home is something different in each precinct the lowest value homes the lowest 25% would be the most sharply hit. If you contracted with any outside firm.
>> while you are finishing, I guess I need somebody from the tax assessor to let us know the manner in which the criteria set forth on page 8 is implemented. What you are saying is that these lawsuits resulted in -- resulted from the application of criteria set forth on page 8.
>> right.
>> okay.
>> go ahead.
>> I知 going to skip the -- unless there are any of these that you want me to look at, I知 going to kind of -- if you want me to explain any of the rest of these charts. But there are some other ones that kind of slice and dice the data different ways as far as by the quartiles. Pages 18, page 18 shows you by quartile across all precincts. That's a good one to look at just because it does again show you that the -- the highest number of delinquent taxpayers across all of the precincts are in the lowest 25% value -- you know value of the homes. Again there's more lawsuits there, 174, if you take it as a percentage of how many delinquent taxpayers there are in -- in other words 174 over 2097, it's 8.3% of the people in the lowest quartile homes are being sued. Again it's not the disproportionate effect, at least that's how I致e heard it being described. It is not disproportionate out of the lowest value of homeowners. It's actually on the higher value which fits right along with the criteria that the tax office had that reported which is they go after the higher ones, first. Page 23, just a very quick summary of what they have been talking about. Kind of -- kind of different ways to look at the data. 40% of all of the homestead parcels in Travis County are in precincts 1 and 4. But yet 63% of the delinquent homestead parcels are in precincts 1 and 4. You know, then 55% of the lawsuits are in precincts 1 and 4. So less than the percentage of the delinquent homestead homers. Another way to kind of look at that, which made the most sense to me it to say 10.8% in precincts 1 and 4 were sued verse 14.5% of dwlint homestead parcels in precincts 2 and 3 were sued. The last thing that I wanted to talk about last week there was in the presentation that was made by mr. Oden, he had a couple of sheets up there that showed you 15 homesteads that were sold and so the --
>>
>> [indiscernible]
>> basically over two and a half years from 2003 to August 2nd of 2005. And I wanted to point out also, then six of those were shown on the next sheet in his presentation as being in central east Austin, those were homesteads that were sold. If you look at the six that were in central east Austin, one thing that was left out was how many tax years those particular homesteads owed for. If you look for the six of them, two of them had five years of taxes that were due, two of them had seven years of taxes that were due, one had nine years of taxes that were due, one had 10. And the other thing is two of those homes although they were on the role with the homestead exemption they had been abandoned. That really I think the others obviously the people owed a lot of years of taxes and were forced, their home was foreclosed on. The other two the property had been abandoned. I wouldn't count that as a homestead at least from the analysis that we were doing. The ones that were not in east Austin there were five more, remember the list had 15 on it. One property there that only had two years of taxes due. I did not find out, you know, what the story was on that particular house. The rest have four, five, six and eight years of taxes due. And again one of those even though it was in their as a homestead, the property owner was deceased we would not consider that really a hoemd at that points. Really four of the 15 had been abandoned. The other deceased. So really those were not homesteads. The others were taken off prior to sale, I can understand how the linebarger firm would have missed some of those because I知 pretty sure he's working off the data on the internet site for the foreclosures, sometimes that data is wrong, it will show it was somd when it was pulled. We went back and verify understand the files whether these were pulled or not. I知 sure that was a natural mistake. We took the time to go over to the tax office and look every one of these up, which wouldn't expect anybody else to do. The other thing is two of the properties out of the 15 had been redeemed by the owner. Just as a reminder when you foreclose on a homestead, somebody actually lives in that house as their main residence, they have -- there's a 24 month period I believe, someone can correct me if I知 wrong, they have 24 months to redeem that property. In other words they can buy it back. Two of those people did that. Them if it's not a homestead I think you have six months to rekeep the property. Any property -- redeem the property. Any property foreclosed on you have six months to redeem.
>>
>> [indiscernible]
>> probably that year.
>> like the ones in central east, you can see the average number of years taxes were due were 7.17. The other homesteads 5, 5 years. The other thing that if you looked at all of them, this has been longer than we thought it was going to be, but most of these people had multiple payment arrangements that they defaulted on. And that home was put on sale, we pulled it off the roll. They didn't pay. We put it back on. So this is a more accurate picture of when we take a homestead, when Travis County takes a homestead to sell.
>> we wouldn't want anybody out there to think that if you don't pay your taxes on February 1st, that we show up with moving van to move you out and foreclose on your home immediately. That really does not happen. You know, that's a really serious thing to lose your home. For not paying taxes. And it does not happen that often.
>> let me ask a question. I recall a conversation that we had three or four years ago, from a revenue certification point, what if one of the private firms were willing to guarantee that the county would not lose money as a result of -- of it taking over collection of delinquent taxes.
>> I don't -- just answer the question one of two ways. We in the rfi that went out, which our office did not write that rfi. It asked that question.
>> from a revenue certification point.
>> it matters if we are going to certify the revenue whether or not it's legal. So the first question would be is that legal?
>> that's why we have the county attorney. I知 not saying seen the contract. If you had a lock stock guarantee that he was going to make a certain amount of revenue, obviously we could certify that. If it's legal, whatever guarantee or security that you would put up for that, if you had a contract that said we are going to collect x number of dollars no matter what, if we are going to collect it we are going to pay you the difference that's a biggy because as you can see, we were four, five, six, seven million different just on tax collections. So it would be a huge guarantee, judge, but I don't know the legality of it.
>> every offer that responded to the rfi, all four of them responded that it was not legal to guarantee them that r. That was the response from linebarger, purdue, as well as the two that we threw out as not being responsive.
>> especially if you called it a guarantee.
>> I don't think it was even phrased that way. It was like but I値l leave that to your attorneys to figure that out.
>> for the tax assessor collector, is there a one minute sort of summary of what we are doing, how we do it or if the tax assessor herself make that a minutes and a half to two minutes
>> [laughter]
>>
>> [multiple voices]
>> minute.
>> good afternoon. You asked the question. I i don't want to go over ground that's already been covered. Most of the things that I had to say in my presentation have been covered by someone either by the county attorney or the county auditor or --
>> my question is for taxpayers who approach me and ask, sam, do you all really implement the procedures described on page 8? And how do you do it? Those are the four criteria that I can -- mike and susan shared with us a few moments ago. These are the steps that we use to resolve, to determine basically who do we sue next. Or who too we sue.
>> these are they. We work first from high dollar to low. If the account has prior year delinquencies, that's taken into consideration. If they have entered into payment agreements with us before, repeatedly broken them, that would be a factor.
>> so somebody or some persons are assigned this responsibility?
>> tax compliance office, yes.
>> the residential delinquent and -- in paying taxes, their case would end up before one of your --
>> before me.
>> -- employees or you, basically from this stack he go through them one by one, apply this criteria, decide what action if any to take.
>> that's correct.
>> okay. Any other questions for ms. Spears?
>> multiple notices, letters, reminders, prior to taking any kind of legal action. For delinquent taxpayer. People are given many, many opportunities to come and talk with us. The people that end up generally getting the lawsuits and other actions taken against them, are people who don't want to sit down and talk. You know? I don't know what their logic or rationale could be, but if I keep saying call me, call me, call me, sending letters saying call me, call me, call me and they don't, we can't help them. We cannot work with them, we cannot work out any kind of arrangements with the person who doesn't want to talk to you, doesn't want to work out a plan.
>> the only clarification that I wanted to add is we are concentrating on everything going delinquent as of February 1st. When approximately do you send out a notice to a taxpayer this is what you owe, isn't it around November 1st?
>> yes. Original bills the first week in November at the latest.
>> meaning you know for November, all of December, all of January, it's owed. I know we are spending all of our time and attention talking about what happens after it becomes delinquent, it doesn't sneak up on you that you have got a tax bill coming. You know what you owe and you've got 90 days before you even go delinquent. So there's I think Gerald used expression we too all but take you out to dinner in order to make it really clear that this is owed and you need to come in and visit with ms. Spears and make all of this happen. Nelda, do you think anything is prone with the system that we have got now in terms of in-house collections?
>> I do not. We have a very high collection rate of delinquents. We have a lot of -- we have some situations where -- where some money the delinquent taxes are not collected as fast as we would like to. That happens when we sit down with somebody, work out a payment arrangement, they tell you repeatedly I can only pay $100 a month. Well, if you owe 3,000, and the penalty and interest continues to -- the interest continues to increase, a percent per month, and you are paying $100, that's not as fast as I would like to collect it. But in deference to those taxpayers who really can't pay any more than $100 a month, that's what we do.
>> if somebody has a payment plan in place, do they get put on-- I won't use the word deferred, but do they get put to the side in terms of any kind of decision made about whether they get sued? Does the -- what's the impact of having a payment plan in place in terms of having the intention of -- of tax collector and the county attorney in terms of getting sued? If a person has payment arrangements with the tax office, signed imream, they are making their -- signed agreement, they are making their payments, then we are not taking any legal action. We are -- we are leaving those folks alone and bringing a -- praying to god that they get those payments in each month and -- and eventually get rid of the delinquency.
>> even in that instance that you just mentioned there, the person that could only do 100 a month, but unfortunately that's not going to be covering it, even that person there that's getting further and further behind, the fact that they are making good faith to just try their darneddest, that keeps them off the -- off the lawsuit list so long as they just keep paying what has been agreed to with the tax collector.
>> uh-huh, yes. That's correct. Making payments on time. They are told that it's part of the -- of the written agreement that -- that entering into this agreement keeps us -- stops us from taking further legal action. Filing lawsuits and what have you. We are not bothering those folks who are paying. I did get a phone call from a taxpayer last week who said that he got one of our reminder letters and he was on a payment plan and he was making his payments on time. He failed to mention that he had missed some payments after I went back and looked at the be the. But as long as -- at the account, as long as they are making their payments we are not going after them with any kind of legal situation.
>> Commissioner Gomez?
>> nelda that works very well with some people. I have referred some folks to your office, you have taken care of them, so thanks, it does work in some cases. The only thing is that there's some other folks who are not responding for whatever reason but I think that that's why representative eddie rodriguez passed that legislation, I think it's house bill 525, for the preservation district in east Austin. And to kind of address some of these issues that people have who are unable to pay their taxes. They know at least I get the -- the hint from them, they know that they have to pay taxes. They know that they are not going to get out of paying taxes. If they are going to -- going -- property. But I think that's probably our next step, judge, to kind of look at that legislation and see what it is that we can do. Because it does call for education of people out in the community that -- that -- about these homestead exemptions, about these 65 and over that -- the disability exemption. But there's -- there's a lot of education that needs to take place, especially east of i-35. In precinct 1 and 4. So that we can get people to -- to take advantage of everything that -- that -- that's available to all taxpayers. So -- so I think that would be the next step for us to look at.
>> okay.
>> one of the things that -- that the Commissioners court can do is to look at exemptions. I know that you had already mentioned that. But -- but the over 65 exemption in Travis County hadn't been dealt with by y'all since '94.
>> we had a lot of
>> [indiscernible] over some of these other taxing jurisdictions such as the city of Austin and others that they maybe could join us in that attempt to -- to lessen the burden on the --
>>
>> [indiscernible]
>> persons here. By granting homestead exemptions. And then so it's really I think an overall effort. From all of us because really this is a very, very -- subject matter that affects a lot folks who could not have the ability just to write a check and go on about their business.
>> I am one of those.
>> struggling every day to just make ends meet. It is an economic thing.
>> yes, sir.
>> of course the most economically depressed in this community, I know you have got maybe pockets of poverty all over, Travis County, but the majority that according to the data and the according to the
>> [indiscernible] reside in precinct 1 and 4. There's no doubt about that. So of course what kind of relief I don't know -- I think everybody is aware that taxes must be paid. Then again built-in relief factors that we can also look at and employ. I think there's a serious challenge to address this particular issue as we go through this. Of course I understand at the end of the day, it all resides with you as far as lawsuits and things like that. When it resides in your county, statutorily, you have that authority and all of these things may go on, sometimes there's no choice. But again I just think that we need to -- to look and see what we can do to mitigate burden on some of the folks that are really having to struggle.
>> you know, before we just -- just talk about certainly a number of people have to have relief. Whether it's the city of Austin or whoever. The one thing that we operate government with are taxes. There are people down here wanting services. There are people down here that we have non-profits, we have people expanding standing in line for money from the government. Now you know I guess we could get hard line say you know what, we are going to try to help you out there, but you can't get out of this line, get in this line. I can assure you I don't think any of the government, we do have an $1.82 billion surplus, befuddling to me how you get that in the state.
>> [laughter] but, you know, most of us don't have a lot of -- of known laying around that we can't get someone to ask us for, without having someone come in and give us money to ask us for. I do understand that we had issues with some folks, what we are really talking about thank goodness that 95 point something percent of the people pay their taxes. That is really how we keep everything going. It is unfortunate that you have got to have something in line that says if you don't do this, there are repercussions from it. If you don't do that, this is what happens to you. There is an san antonio to try to pay on time. You know, I don't like -- it is unfortunate because it's -- it's always the people that can't pay -- they can't pay their regular fee, much less getting something tacked on. Even what government says that you can tack the 12%, then the percent each month. Like you said, nelda, you are right. I mean, if you have a $3,000 tab, you are only paying $100, try to pay your master card off when you are paying minimum. You are not going that way. You are going the wrong way because the penalties are the -- or the interests that the credit cards charge you just eat up what little bit of principal that you are willing to take on. I do think that we need to try to find a way. I think eddie rodriguez's bill is merittable. What you do have in one and four, you have people that they have taken the home over from their parents, grandparents it is sad whenever you just can't simply afford your taxes. When you have so little money you don't even have a mortgage, you can't pay your property taxes. As elected officials, I guarantee that is one of the first things that we have, you know, mentioned to us. So it is a sad deal, but I do think that we need to bear in mind in that we are government, we are asked to pay for things every day. That's something we have to be mindful of.
>> thank you, ms. Spears, it's always a pleasure to have you here in our courtroom.
>> I told you that I could do it in a minute judge, I知 not done.
>> I knew this court wouldn't let you do a minute. But please proceed.
>> I was not able to be here last week, the tax assessor's collector's association had their annual meeting. I have watched the tape. I noted that there were some concerns that there's not enough outreach being done to the community. And I take issue with that. Over a a two year period, we've had 25 or more public forums, part of the thing that I said that I would do when I first became tax assessor collector was to -- to get out into the community and provide information. I think if the -- the more information that people have, the better equipped they are to -- to deal with their issues like property taxes and it is an issue for a lot of people. We've gone out into the community and had property tax forms with neighborhood associations, church groups, community groups, all over and very often the -- the -- the chief appraiser has -- has come with us to do those meetings. And provide people with information on what to expect from the tax system, from the Texas property tax system, what their obligations are under the system and what their remedies are, what their responsibilities are. We have -- we have tried to get that information out over and over and over. We have also scheduled forums where six people came or -- or four people came. It's hard to get people to come out these days to -- to get information. We did -- we did a meeting with representative rodriguez last night at terazzas library. There was a nice group of people there. Their complaints and concerns had nothing whatsoever so do with delinquent tax collections or with which attorney the county is using. Their concern -- they are concerned about stuff this court probably can't do anything about. They are concerned about their property values that are escalating. In a way that's -- that's just foreign to them. Values are going up really high, but the appraisal district has a method sent out by the legislature of how -- how to -- to value property. Within a jurisdiction. And they are following that. But -- and there's nothing really that they can do about the values. So -- so my suggestion to that group was to -- they wanted to go and -- and be a group somewhere and lay their concerns out, I said that that would be to their lecture, their legislators. What's broken is not the way Travis County collects property taxes current or delinquent. What's broken to some extent is the way the state legislature has determined that that the whole system has to work. The rates that people pay on delinquent taxes are absurd. If you could qualify for a bank loan, you could get that a lot cheaper than you could using the interest rates that we are required by law to apply to thrint property accounts. So I don't think that your system in Travis County is broken. No matter what attorney you use, the public attorney who is accountable to all the people all the time, or the private attorney who is not really accountable to anybody. The attorney fees are collected either way. The 15%, the public attorney has to file a lawsuit for the county to collect that 15% fee. The private attorney doesn't have to do anything. We have to send out a letter, set out by the legislature, to every taxpayer saying that this transition is taking place. So whoever conduct, whoever does your legal work, is really not I don't think an issue that this court needs to be all take concerned about. You have a great attorney doing the legal work now. The number the number good. The numbers are good.
>> I noticed you pointed to david.
>> I知 talking about david, the current county attorney
>> [laughter]
>> he has -- he has to go by the law as to what he does and how he does it. He is a private attorney. The difference is where that 15% or as of late 20% is the number that keeps popping up. The private attorney can charge 20%. At -- when it used to be 15. The taxpayer is going to pay the 15% if the public attorney files a lawsuit. The taxpayer is going to pay the 15% if the private attorney does nothing. You will pay for those letters to go out. The Travis County will pay for those mandatory notices to go out. And you are going to penalize a larger number of taxpayers who are already having trouble paying because more of them will be charged than the -- an additional 15%, that's on top of penalty and interest. By the private law firm than by the public attorney. The public attorney can't do that. The law doesn't allow it because private attorneys have gone to the legislature and gotten it fixed so that they can get it and the public attorney cannot. I think that you are in a better position having a -- having a publicly elected attorney and tax collector working for you who is accountable to all of the people, the same people that you are accountable to, as elected officials, david is, I am. Only ours is not just one precinct. It's county-wide. Those people have had enough confidence in the way that you are doing your busy to reelect us. Multiple times, I appreciate that. I will do everything in my power to make sure that nobody is treated unfairly, everyone is treated the same in the tax system and stay within the law. Thank you, ladies and gentlemen.
>> thank you.
>> now, others have come down today to give testimony.
>> [one moment please for change in captioners]
>> my house got sold, I didn't pay my taxes, but it was -- when I tried to talk to the lady that just talked, ms. Spears, tried to contact them, they sent me a letter, like she said, we tried to get in contact with her, some other ladies, charlotte, and they tried to foreclose the house and they never contacted with us until seven days before they foreclosed my house. And they sold my house at an auction, whatever, the 2nd of may. I don't know if I can get it back or what can I do.
>> we only have six months supposedly because it was a homestead, if my understanding is correct, and like he said, we tried to contact, you know, charlotte and irma deleon. And my name is manuel's brother-in-law. My wife called them and left messages, and I致e got a letter here that was sent on April 5th from the tax collectors, and two days we get it after that, which is about the 7th. We was out of town, so he didn't get the letter until he got back. When we came back from out of town he told his sister about it and that's when we started calling these people. They wouldn't respond. She says that they do everything but take us out to eat. We were never asked to go out to eat. Not to make it funny, but then again, you know, what they do is what they do, but we weren't contacted. Finally I did get ahold of charlotte on the 2nd of may, and the night before we were trying to contact them, we went over there, my wife did with her sister-in-law, and we offered to get a payment plan. They wouldn't work with us. They said that this was the bottom line, we had to come up with the total. We offered them up to 14,000, they still wouldn't budge, so the house got foreclosed on may 2nd. And sold.
>> do you know what you have to do.
>> we have six months supposedly --
>> your house was sold? It has been sold at auction?
>> somebody bought it.
>> you bought it.
>> no, somebody else bought it.
>> there's a redemption.
>> can I get the address?
>> that's 912 lyndon street.
>> how much was that.
>> 18,000 --
>> multiple years?
>> I think so, yes, sir.
>> his dad passed away about four years ago, and, you know, sadly, he probably never told him about it, and as the years went on, which was about four years ago, then through all this time this is the only letter that we received or that he received, shall I say. And he brought it to his sister's attention and, as I said before, we tried everything to make contact and there was no response. We left messages and finally I called and I finally got through. But we offered to see if we could get a payment plan. It wouldn't work. We offered them up to 14 14,000. That's only five thousand away from the whole amount.
>> you said he passed away?
>> yes.
>> the wife and her brother didn't know about the program. Nobody informed them of anything about anything.
>> so david, can they gave you a phone number and somebody can contact him later?
>> yeah.
>> thank you very much.
>> thank you.
>> yes, sir? And if we could get two more persons wishing to give testimony today to come forward?
>> my name is richard franklin. I was here last week and I had a chance to look at some more of those reports. Of course I致e also had a chance to drive through the neighborhood. And what bothers me is it appears that we've reduced lives to numbers. And that's the saddest part about what we're doing here. It's very easy to sit here and talk about things in non-did he script terms. I知 thriving did you a neighborhood talking to people about these type situations as they just left. We're talking about people's lives. And those numbers can be made to look like anything you want to make them look like. You know how it is, there's lives, and the statistics are the worst. Depending on who decides to take make the case, which is exactly what we're looking at here. I had some more questions as I read the report that was handed to me that said you you are going after the people with the highest value homes, the highest amount of money owed on taxes. And then you say why aren't more lawsuits being filed? Not percentage of lawsuits, more lawsuits being filed in the high rent districts as it were if that be the case. We had to wonder why it is that you have more lawsuits being filed in precinct 1 and 4 than you have in the other areas on the fact that the people have a great deal more money, but we have to know that there's some that have to be delinquent just as they're not doing well in education, but we don't get those numbers either. So the question that is raised now is if the county is doing such a fine job, then why are the rates going up so high for people losing their homes in the area? They're continuing to escalate. And we have to find some relief to that. So the problem we're having here is I think we're being misled by what we're talking about. The process, what we're talking about right now is how, who and when do we file a lawsuit and on whom at this point. We have some real questions about what we're doing here. If it's just about lawsuits, then let's try to -- let's take the lawsuits off the table. Let's get away from that. We have to look at that issue only. If it's revenue that we're talking about, and this is revenue generated situation, we have some real questions because this is on the backs of the poor people that you're generating lawsuits and fees. And that's what's really going on here. The people at the bottom are the least likely to be able to pay and yet they're having additional fees and lawsuits piled on top of them year after year. I mean, that's the reality. We talk about the fact that somebody else is in pain later on, all the other rigmarole we're going through here, but the bottom line is you're going through a bunch of motions but we need to look at the lawsuits and the people whose lives are being affected. You raised the question earlier, judge, that if they were able to say, look, I知 going to give you the exact amount of money you had, if it's just about the revenue, if somebody could guarantee the revenue in a contract, I don't see why that should be illegal.
>> it's illegal.
>> I知 sorry, I知 not sure what is or is not legal. I just know if there's something that can be done. If there's anything that can be done, a contract can be written up almost any way you want to and you hash it out after the fact, but the reality is let's look at how you can do something accurate trally that can keep these people from having to fall into a lawsuit type situation. Is it necessary to have a 15% situation assessed. Is that automatic. Is that mandated by state law do we have to do that or can it be done contractually? We have to find a way to get around this for these people. We have to help the neighborhood is what I知 telling you right now is you have to help these people. And we can work with the other organizations, you with work with the other taxing entities and so forth, that's something else that -- that's up to you guys. But this is about a situation about lawsuits and that's all this is about. If you're generating revenue off people's backs, we've got to stop that. If it's revenue you need, then get your normal revenue and go about your business, but let's get away from the lawsuit situation. That's what this whole thing is about.
>> you keep saying that. And that is absolutely not the truth, unless you just believe that this is all lies. It's not about lawsuits. As a matter of fact, it clearly states from our side that come July we don't automatically do lawsuits in July, but automatically what does happen in July is that the private firms get to add an automatic 15 to as much as 20 percent. What this is about, it's not about lawsuits. What it's about is how do you -- how does the court, by state statute, collect monies that are due it? I mean, it's unfortunate that some people don't have the money to pay for things, but we don't have the discretion to just say, you know what, we know you don't have the money to pay it, so don't pay it. But Travis County is not out trying to hammer you in a lawsuit. You've heard it from our people. We will do everything that we can, even if we didn't talk about lawsuits, the one thing that is the differential is because after July, all we're tacking on is the one percent. I mean, you've already gotten the biggest hit that you can up to that time because you've gotten the 12 percent and the one percent each month. I don't have any problem with looking at this thing with my eyes open, whether it's private or public, but unless I just do not believe my auditor, that is not the case here. It is not about us wanting to do lawsuits. I mean, we can show that. Now, if you can show it otherwise, then I知 willing to listen to it, but, you know, this is not --
>> I知 not changing anybody's mind. I知 saying that numbers can be made to look what they look like, regardless. Across the board people make numbers look like what they want to look' like when they're trying to make a case. Anything you do now as far as a legal situation, because I know that's what we're talking about here. What we're talk being is fairness and equity in the community.
>> I agree.
>> across the board. Someone spoke about a racial component earlier, and that's what we're breaking this down to is a racial component. The people being affected the most are people of color.
>> richard, that also is not true. I知 looking at the page here where it showed in maybe 2003 as an aberration, but in 2003 the highest percentage of delinquency and collections was in precinct 3. And precinct 3 we probably have the highest values.
>> what you just said is the highest percentage. I知 going to go back to this again. If you have 10 homes in that precinct and five of them are foreclosed on, that's 50%. But if you go to the east side and you've got 18 homes out of 100 that are foreclosed on, you're talking families. I知 talking families, real numbers. I知 talking about the families being affected in the community.
>> I can see in precinct 1 you have 141 numbers. In precinct 2 you have 120 families. In precinct 3114 families. It happens that out of 115, it's 15.22%. Do you think that we are out selectively, you know, trying to --
>> I知 just driving through the neighborhood. I see what I see. Everyday. And I知 all over the city. I see what's going on in the community, and it's sad. And we need some relief, we need some help. Need people to stand up for fairness and equity in the community.
>> if you can show me where the numbers are wrong. You know me. You and I have been together several times. I致e never refused to get with you. If you want a copy of these numbers and you want to sit down with me and discuss those things and let's talk about them, but I do not think that the accusations about that this is about revenue and this is about lawsuits, that is not the case. We do not -- we do not have the responsibility up here to do that.
>> the conversation just left out of here was about revenue. The auditor spoke about revenue. Loss of revenue was the biggest issue up here. How much refuse newer you're going to lose. If you don't lose revenue, what is the issue then? It goes back to lawsuits and piling on more and more bawts lauts on to these people's backs. That's what it comes down to. Somebody has to stand up and say enough is enough.
>> let's give you a chance to finish.
>> I知 done.
>> any questions from the court? Any other questions? Yes.
>> my name is latoya manor, I知 a single mother of two. A couple of years ago I started getting solicitation letters for loans because my house was going to be foreclosed on. I was never notified by the tax assessor, anyone. If I hadn't received those notices I would not have known. I spoke with legal aid. They told me that -- I think it was maybe less than a week. Before the date my house was supposed to be foreclosed on. They told me to go ahead and file bankruptcy. It's not going to stop the tax lien, but it will stop the foreclosure. I did that, and even though I did it in time, my house was still sold. I called to try to speak with the county attorney's office, and they told me that -- I don't remember the lady's name. Karen something. But they told me she was not in. Call back. I called back for three days straight. She was never in. Finally I got upset and they told me, well, she's not going to come to the phone to talk to you. She does not take calls from the public. You have to come in and make an appointment. I go into the office to try to make an appointment, of course I can't reach her. I call to speak to ms. Nelda spears, of course I cannot speak with her. No one would ever talk to me about the situation. Still to this day I don't know what is going on. I know that they had to reverse the foreclosure, but to this day no one will return my phone calls. I致e not received a letter of any sort. Apparently there's a lawsuit that I apparently missed, but I wasn't informed that I should be there, so I think that it's just really unfair that you would expect -- not you guys, but that I would be expected to go to a lawsuit that I知 not informed of where I知 supposed to be, when I知 supposed to be there. And I get, I guess, punished, 15 percent on top of 15 percent. It's ridiculous. I知 living hand to mouth trying to feed my children, and I can barely make ends meet, and I知 supposed to pay a lawsuit or 15 percent, and I was never informed? To me it's ridiculous. I don't really care if we have a public attorney or a private attorney, that doesn't matter to me. What matters to me is that I should be able to somehow -- a lower class of people should somehow be able to keep our homes. There should be another way that we should not have to break our backs or end up living on the street when we have enough people living on the street just in order to pay taxes. I never said I didn't want to pay taxes, but when you -- may my taxes are $1,500 and you keep adding on to them, how am I ever going to pay it? And that's it.
>> so were you residing in this house?
>> yes.
>> and are you still living there?
>> yes.
>> you say you didn't receive a foreclosure notice?
>> no.
>> you did not?
>> what's your name and phone number?
>> I致e never received anything except solicitors' notes.
>> would you mind giving the assistant county attorney your name and telephone number? Would you do that?
>> I most definitely will.
>> thank you.
>> now, the five chairs are all empty. If you wish to address the court today, please, sir come forward. Representatives from purdue and linebarger, if you have comments, come forward. Yes, sir?
>> honorable judge and members of the court. It's good to see you and be with you once again. My name is jeffrey richard. I am president and chief executive officer of the Austin area urban league, and I come to you today somewhat distinctly from last weekend and in an additional capacity. I will say to you that at the end of my remarks I will speak in an official capacity with the urban league, but what I want to do is by way of introduction is what I did not say last year and then some analysis that I have done on my own that I think may be of assistance to this court in making the decision that it may make.
>> could I interrupt you? We're confused. We're speaking after jeffrey, but I think one of our helpers just handed out a document to you that will be real rent vent to our presentation. It's not his document.
>> okay.
>> I知 going to be speaking from the document that you already have. And I値l be referring to them, for example, your auditor's report and some analyses that both you have done and the linebarger firm has done and some others. It may be helpful to note that I am also a performance auditor. I work for the comptroller of the state of Texas, and do performance reviews for a number of very large institutions, school systems, dallas isd, which has about a billion dollar budget. Knox county tennessee, fair fax county, virginia. Florida. I致e done this for some time looking at school systems. As I said, I do performance order in a previous job, did the performance audit for Austin energy, which is another public sector entity which has collection not for taxes, but for electric utility bills. And I did the performance review on that, and my comments today may have some specific bearing to what you are talking about in your time line. And I壇 like to share a little with you if I may. One other thing is that I致e already mentioned about my degree in economics, but I知 also an elected official just to remind you with Austin community college, although you will I知 not here in that capacity, I do have a responsibility to set a tax rate and the same tax bill we're talking about over at a.c.c. If I may, there are some things that jump out to me and that I壇 like to make sure that you have heard and received in the same way that I do. You have a document I believe prepared by your auditor. It talks about core tiles and that's 25 percent of home values per precinct. If you were to look -- I知 sorry, I don't know what colors you have and all that, but if you were to look at home values, for example, in precinct 1, I値l go all the way across, the data are pretty clear that there are 345 cases or people or families that could have been (indiscernible) and 42 were. You see this document like this? I知 going to show you something that I think is important because there is a point about proportionality that was made that may seem to indicate that some of us may not always understand proportionality. I want to see if we understand what we're saying. 48 in the left-hand column, 31, 21 and 41. This is in precinct 1. These are the individuals which were sued by the county, including the attorneys' fee and court costs. The important thing here is not so much the numbers at this juncture. The important thing is the value of the homes at this juncture. Notice that the value of the homes in precinct 1 goes from zero all the way up to a little bit more than 142,000. That's in every core tile. The reason this is important is that an average home in Austin is nowhere near any of these numbers. Depending upon how you dw define the term average. There's not one definition of average, there's four. There's a mean average, there's a median average, there's a mid range average, and there is a mode average. Most time when statistic statisticians are doing this kind of analysis they take a median average. They take all home values, line them um from the most expensive to the least, pick the one in the middle. If you do that for Travis County, the median average home is probably somewhere around 170,000 or a little bit more. Which is to say that all homes, if that's the number, all homes that are foreclosed upon or sued that are above 170,000 would be above average, and all those that are sued that are below 170,000 would be below average. So if you look at precinct 1, being generous, every one of those homes would be below the median average. Is that a fair statement? So you see 48 plus 31 plus 21 plus 41, not just the 41. Go to precinct 2. Here you see that the numbers are different, but even median, if we see it's 170, it could be more or less, those numbers I would say at least are 41 because it's from zero to 130,000, but then also some number within that 27 or some number there. Go to precinct 3. Precinct 3 suggests that at least everyone in the fifth quarter tile and some, we can't tell which because they're in core tiles and not any other designation, may be below the median. And finally precinct 4. Here again almost 100 percent of those homes would be below the median. How do you determine if you're suing disproportion nationally or not? One way is to add up the hoamdz that are less than the average. That would be -- and I did it briefly. That could be something closer to everything in precinct 1 plus number the first one in precinct 2, plus the first section in precinct 3, plus just about everything in precinct 4 and you get something like 65 percent. So let me try again. If 65% of the homes that are being sued by our own records are less than the average value, that does suggest that there's a disproportionate number of homes that are being sued based upon the value of the homes. That is a definition of disproportion nationality. That is it is not the same as saying most homes or some homes are being sued that are much more. So which is true? Well, both are true. It's also true that the statistics that you were shown, about nine percent being in precinct 1, is that right, 9.7. I think that's -- yes. 9.76%, that is true by precinct. But what is true by county? And what is true by county is that if you add all of these up and line them up in a line, you will see that most of the homes that are being foreclosed upon and most of the persons that are being sued have home values that are less than the median, less than average. So I hope that may shed some light. It doesn't give you clear direction, it simply says that people are not completely incorrect when they say there's disproportion nationality in the system. Let me suggest something else. There is much made of the county auditor's report, particularly on the -- I guess it's hybrid 2 proposal. And all I would imp isly say is I致e had a chance to read maybe hybrid 1, hybrid 2. I have finally read every bit of this now, and I do have some comments on it. What if I were to say to you that the analysis here that says you may be losing five million or losing seven million or losing 10 million could turn on maybe two assumptions. Would that be of interest? Not if the numbers were the same, but the siewmses were different. It would be of interest to me. I値l give you an example. Even though I know, judge Biscoe asked the question, and I sat back there trying to understand the answer, the differential between Travis County and delinquent taxes and if linebarger -- by the way, I have no dog in this hunt as to who you hire or don't hire and I値l make that clear in a moment. But it says that their collection for the current year, 9.7, and gave linebarger 6.5. My big question to that would be why that difference at that time? Something is being made that says, the county did its analysis on persons who were delinquent this year and separated out all those suits they may have brought this year for previous years delinquency, so which I would ask why is that relevant to the suits? If you're suing persons in a year for a previous year forea current year, it seems to me that all those suits are still occurring in the same year. And that is a suit that had been born by the processes. And as an objective person, it wouldn't matter to me for two reasons, two things. Whether there's a suit for some years past, and I知 going to get to that in a moment, or whether the suit is for this year. It wouldn't matter to me there. And I think secondly from a positive point of view, it wouldn't necessarily matter if a homeowner lived in the home from a positive point of view or if the homeowner didn't any longer live in the home. That's a distinction, but I don't know that it makes a difference. It's still property that was owned and now some of it is no longer. The human factor is you wouldn't be kicking a person out because they're not there, but there is value, there is wealth there that no longer goes to that family. So if it is possible that the assumptions one makes could change the whole bottom line, would that be of interest? It's not my job to do that for you, but it is my job to point out that some things could obtain. I値l give you another example that is listed in your powerpoint this afternoon. You heard this evening or afternoon, whatever time it is now, that most of the homes in a review were on the rolls four years, five years, delinquent six years, delinquent eight years. And my question to that is is that the average? And remember I said there are four-year averages. The way averages are calculated is that if you have most of anything a small number, a large number can affect the average. That is, if you calculate it one way or the other. So what I would ask then is -- and this may have already been done. I can't see from the data. If you line up all those years past in sequential order in terms of years going back six years to however many they go back together, where's the midpoint? I do not think -- maybe it is true that the median average of that number is two and a half years, which is what I heard. It may well are be. If I represent it as two and a half years, then I have another question. The county must be making a great deal of funds and revenue, offer two and a half-year-old collections. And there's a perennial backlog because we're being told that really you aren't sued in February, you aren't sued in March, may, June. You aren't sued for two and a half years. So where does the money then come from for that backlog. Is it the case know, it seems to me, that the only way that that could be completely accurate is that there are -- there's an enormous backlog of pending cases that could be sued and will be sued, let's say, in 2006, but for 2002. If that's the case, there's this bubble that is going on. And to me the point that is hard to recognize is if on average, -- how is it that we receive annual 3 million something per year.
>> you factor in the pay out. It's revenue coming in, and yet not a lawsuit filed.
>> payment agreements. Taxpayers can come in and enter into a payment agreement. So they're not being sued in that year, but there's revenue coming in.
>> so that makes up part of the three million.
>> I can get the numbers for you, but that's a clear factor.
>> all right. So payout ra agreements. All right, that's a reasonable point. Since I知 objective here, that makes sense to me. May I then go through a couple other things in the auditor's report. I see on page 14 about the lawsuits here. It's also I think on page 9 about the process that occurs. And since I did this for another public institution, there's -- to understand a time line, one needs to know time. I think the criteria -- I see the criteria, but I do not see the length of time per criteria. For example, a taxpayer owes -- I知 sorry, that's a different piece. I知 sorry. Going back to page -- I think it's page 9. I知 sorry, page 8. Is says, lawsuits are initiated based on the following criteria. The taxpayer owes a large amount of taxes. It's the same item. So my question would be how long is a person given before they -- and they do not respond. How long are they given before the next thing happens? That's a valid criteria? Is it two weeks, two months, two and a half years? I don't know. Second point, the taxpayer already has a balance from the previous year or they default or they write a hot check. All of these things are triggers that create a lawsuit, but I do not know the length of time for each. In other entities if you don't pay your water bill you're given a certain period of time and you are sent a notice. Then you're given another period of time and sent another notice and then a door hanger goes on and something happens and you can add up all those days or months or years and get a sense for how long this really takes. The difficulty here is I知 not certain how long all of that may be taking. I値l stop there by saying, it is not unreasonable for persons to read the same data and come to differing conclusions. It is not unreasonable for persons to look at the number of lawsuits being filed as an average or as a median average and say that poor people seem to be getting hit more so. I think the biggest reason that I am here is to ask really two questions. One mainly. Two. If the county could do things differently, would it? If it could. And then the second question is, since we may be convinced that this is the best system going, why is it a lone best practice in the state and indeed in the nation? Those are pretty big questions to me. If this is such a wonderful idea, if it is, and I do believe it is very efficient, very high quality collections that we talked about last week that you're going to get 85% even if you do nothing because people do pay their bills. 95%. That's without having any system, lawyer or non-lawyer, private or public. But when as an analyst or an auditor you look for benchmarks, you look for who else is doing this the way you're doing it. And if no one is, you do ask why. That's a reasonable question. It's a reasonable question. But I知 not here to say what you should do or shouldn't do. I知 simply here to say that there are people who have asked questions about the effects, not the intent. Some talked about people intentionally hammering the poor. I don't think so. But as policymakers if you see a point where there is an affect r. Effect, do you have any responsibility to try to mitigate that by drt, by negotiation -- by contract, by negotiation, by wisdom. The last thing I want to say is that I am now here in an official capacity as president of the Austin area urban league. The board of directors this morning voted with a statement of position on this very issue. And I have that for your consideration. I will simply point to two or three of the seven points that the board of directors of the urban league states. Number one, the county to this point has declined to engage in outside private sector agency to assist in the collection of delinquent taxes as ear governmental entities do and as the law permits. Travis County has chosen to utilize its own staffing and is prohibited from recouping certain fees and revenues in the way that an outside agency may. The question is should the county modify its approach so that it could avoid filing a lawsuit as the only means of revenue available to it? Number three, another point, if it is factual that Travis County has peers that collect taxes -- has few peers that collect taxes in this manner, the burden at least shifts to the county to explain why its process is an anomaly to be preserved. One more point. We believe that the only way the county can earn its revenue is that it is forced to sue taxpayers in order to collect court costs. This creates a perverse incentive. If it is likely or even possible that a similar collections rate could be achieved without resorting to lawsuits, it seems obvious that such an approach merits consideration. And I値l end my comments there. Thank you for your time.
>> jeffrey, did you afford the opportunity for either ms. Spears or mr. Escamilla to advice it with the board of the urban league to be able to get a complete picture and perhaps have answers to some of those very legitimate questions that you asked just there?
>> what I did was present to them in about 40 minutes for a board of my size I presented to them this report, I presented to them some other information that I received from the linebarger firm and analyzed over nine months. But no, again, since I analyzed it before, I gave them what I believed was an accurate portrayal of the issues as I致e tried to do here.
>> when you said this report, you raised something there. Was that the report from a year ago?
>> no. It's --
>> yes, that is a report from a year ago.
>> the only report that's on the website as far as I know.
>> it's okay. I知 just asking. So in terms of the new backup that they have done that really brings us up to date, drills down into new information, that information, the new backup, the updated backup, the information not only on hybrid 1, but hybrid 2, they were not privy to this information?
>> I think that's a fair statement, they were not privy to the hybrids that have come forth. I think -- in fact, neither have I been privy to all of these things. As I was sitting here, I was reading and asked a few questions, for example, like the cumulative effect of the suits still when you look at the median average, it still is the case that more people who have lesser valued hoamdz are being sued, even under this new proposal. That's still a true at the same time statement.
>> I think.
>> would the urban league be open for ms. Spears or whoever else to address the urban league and to basically with no ris respect to your presentation skills, be able to further explain not only what is their day-to-day job and is in the local government code, but these folks have put in more than 650 hours, and they've put a lot of time in analyzing this. With no disrespect to you, perhaps a few more hours associated with what these numbers mean, what their jobs are. I know we're focusing on lawsuits. We're talking about a situation that if a private law firm is chosen, July 1st, for the very first year, then if something goes delinquent is when those 15 percent or 20 percent if we're bexar county, kicks in happens. So you talk about piling on poor people, that is what happens. And you heard ms. Spears there say that if someone comes in and gets a payment plan, even if that payment plan does not cover what is owed to a jurisdiction, including Austin community college, it's not putting you in a pile for lawsuits. It's not happening. And that the lawsuits are being filed against people who have five, six, 10 years. We have things all the time in terms of people wanting to come in and make offers on property that are dealing with multiple years or very complicated bankruptcies. There's more to this story than perhaps what they have heard. I知 wondering if the opportunity and invitation would still hold that they would get an opportunity to at least have the very person whose job that is be able to fully explain their job.
>> I would invite my friend david escamilla to come any time. We enjoy starbucks from time to time, so that would be perfectly welcome. And I would say two things. The question will still be on the table as to is there a viable explanation to why the county is an anomaly in collecting taxes this way when other peers did do not? This is nationwide. And I think that it will be important to answer that question from the point of view of others who do not do that rather than why we do such a good job in what we do.
>> perhaps that's something that the invitation could be extended to former judge bill aleshire. We had a very interesting situation here that predates me on this Commissioners court where some very visionary people got together and got the centralized collections. It would not have been possible if you could not have gotten everybody on the same page. And can you imagine in our county what do we have, 80 plus jurisdictions that are on the same page? You can imagine counties after the fact trying to get 80 jurisdictions to agree on anything. And people say we will defer to the tax collector to do that. We will defer to the county attorney to do that. I can certainly respect somebody saying if we had no system in place right now, that would be no discussion to have of do we create this system or do we create and go and out source? And I don't disrespect anybody who has made the decision that they shall out source because they are choosing what is best for their county. What we are talking about dismantling a system that is already in place here, not shall we hire the number of people in the county attorney's office, do we find the space, do we fund them? It's already there. It's imbedded in the budget. And we do a good job and what we have are more jurisdictions wanting to join up, not people saying, do you know what? I知 dissatisfied with that. I致e not heard from a.c.c. Saying we're dissatisfied. We want to get out of this. We choose not to have you do sfrallized -- centralized collections for us. Not just delinquent stuff, but collections. It a big package and a very small part of the work is the delinquency work. If that's something you're telling me that a.c.c. Is unhappy with the job performance of Travis County, I would be very interested in hearing about that. But that's not what I知 hearing no.
>> no, I知 coming in a different capacity, as I said, urban league. I would like to say two things there.
>> closing statements, please.
>> okay. It is important to note that the urban league here is not an endorser of any particular vendor. In fact, what you've just mentioned is a possible solution, that is, since you have already invested what we would call the economics of sunk costs for the investment, it is possible that if you take these items into consideration, you could tweak, you could modify, you could insist upon some things to yield a different result than what we have been talking about. That's possible. I hadn't heard part of that as the debate, but I will say to you we don't care if there is a private sector person, a public sector person. We do care about the results and this disproportion nationality that could be looked at. I say the word again, disproportionalty. I値l end by saying this, the analysis that I have seen here always assumes that any private sector firm would charge 15 percent on or sometimes 20 percent, but the law that I知 reading to dating back before your time, 1983, simply uses the word may. It sets a cap. It doesn't set a floor. It said the total may not exceed 20% in this case. I don't see where it says the total must be. And so it seems to me part of the negotiation that could occur, should you choose, you can negotiate a lower rate. To me these are things that are for the policymakers to decide. But I thank you for hearing me.
>> thank you, mr. Richards.
>> mr. Odom.
>> if I知 permitted, I値l go through this pretty quickly and very directly. I want to make -- let me introduce carmen perez from our el paso office and an attorney in our firm and
>> [one moment, please, for change in captioners]
>> I -- I am trying to propose not a dismantling of a good system. A tweaking of the system to make it better. Those are good words that come out of here today. I知 going to run through some -- some distinctive things and the first is to try to draw attention between what I think is the spirit of a different kind of approach, when you are in a certain very tiny group of the most delinquent, most difficult pair category which is all you're talking about privatizing under my propose. The way that I would say tweak it because our proposal from day 1, which was never mentioned in the 200 pager, which never said outsource the whole thing, but it was analyzed as if we had said that. Eventually, after that was pointed out, we got a temporary review and now we another review which is closer to what we actually were trying to talk about from day 1. This is just a quote from last week, on the same discussion and another county in Texas about the linebarger approach. The key word in this is -- is -- concerns someone --
>> get the mic.
>> stay on the mic.
>> take the mic with you, please. The key that I知 trying to point out, another Commissioner said he likes the law firm's attempt to collect back taxes before filing a lawsuit. That is all that we're talking about here or I would say the central issue. Practically nothing about the tax office, not even much about the county attorney's office, the only body of activity that we talk about is that little red slice. That slice is so small because the tax office does so well in our county in collecting current taxes. What do you do to collect them? You have to collect them. Do you use a different approach? I would say the quote in that article, it was a newspaper article, and about actuality the hiring of the linebarger firm, compare that quote to what is set out and what is -- ask me does it sound a little different. If you look on page 6 of the auditor's report, you say what do we do prior to suit. We send the tax bill. We call twice. Might more be done on some cases? Maybe so. What it actually says is we send the first tax bill, the notice is required by law, then we send you a letter saying -- giving you 10 days to respond. The second letter says a lawsuit is being prepared. Now, I could tell you, I used to work over there, we are not quite that efficient.
>> [indiscernible] get sued, on a lot of -- the lower the value the property taxes are it may take longer for you to get in the target group. That's really the distinction on the group of homestead that's we pointed out last week. Fwog that you have heard disputes a single drop of
>> [indiscernible] from this map. I知 not calling it targeting, but what do you call it if the homestead sold in that two year period where almost entirely on the east side low valued properties. Nobody said, you know, that's not correct. Let me tell you something else, look at who -- we took these people's homes for how much taxes? 3,000, 5,000, 1,000, 5,000, the big one was 13,000. 6,000, 4,000, 4,000, 1,000. And -- and these were properties that were appraised 50, 54, 52, 41, but they sold maybe 40, 50, 60% lower than that, I can tell you when a spiking appraisals, why were they selling like hot cake, because they are worth a lot more. But the process starts when you get into the back hold of getting that lawsuit, you are stuck with 15%, it's not on the year you got sued. It's on all years, one suit covers all of those eight years. Now, I think, I know what gus garcia called his -- your fiduciary role. It's the most serious thing that you do. You wade through all of this stuff, you are acting for 81 jurisdictions, you have bias by the vendors who want the business and can make money at it. I would suggest there's some degree of bias within this bureaucracy of kind of my first semester in government school over at u.t. I think that the professor told me if you ask a bureaucracy would it like to become smaller, it rarely says yes. But if we could -- if we could convince that -- that the bureaucracy could be more focused, and we could get -- give out of some of the things that are not planned and not desired by any of the good people doing any of this business, and that is lawsuits. Now, they have got to be lawsuits. But let's look at -- this is where the rubber meets the road on their analysis. And I知 going to hit what I would say to me are the standout incorrect things that -- that add to what -- what jeffrey said. They put us in -- why did he come with the big $5 million a year hickey that the county would take if they hired a private firm? They start out by four million of it, 4,148,000 is just because you wouldn't collect as many taxes. They get there by saying in a completely different system, not one being proposed by us here, and in other counties that do the cycle completely different, they came up with the collection number of 97-7, they just assigned it to your total tax base. So we take a big 4 million hickey that's utterly irrelevant to what we propose. You have had for the last two years a 98.5% collection rate that's certified by your auditor. That's what you write your budget on. If a private firm can hit the 98-5, you are going to be certified for the same budget. I will hit the 98-5 or I will take the hickey. I would be willing to talk details about that, let me clarify something, it's never been illegal. You cannot split your fees, but you can agree to a performance measure and you can agree to important fit your fee ifs you don't reach it. This is my hometown, this is my law firm's national headquarters. I admit I知 prideful about that. Don't listen to a word I say or do anything that I propose if you think that's a cute story but it's not going to help us. But if you look at the numbers and you say right out of
>> [indiscernible] how could this scenario be true if, number one, I mean you can argue it round or flat, but we collect taxes in this community and we beat the county's numbers and all of the school district numbers, it is the school district. It's a second largest school district in this county, Round Rock. In the metro area. What does it tell you? We beat everybody. 80 or something jurisdictions, one or two small things like a -- like the water control improvement district, something like that, that we didn't beat. The -- the career that they looked at that number it was the one year out of six years that we didn't beat Travis County. We beat Travis County number's five out of six years. We will beat that collection rate that you are certified or we would be willing to talk a deal that would immunize you from the effect. Really, I think finally, we are getting to the discussion that ought to be, do you modify your system at all or not, and what risk you would take and is it worth the risk? I think there's two issues. Money and fairness. If we could get to a break even on the money and you could change the unwanted present practice of suing four to five times as many of your citizens to get the same collection rate, as other metropolitan counties, isn't that a legitimate question? The other big changes here is -- is we talked about it, but -- but miraculously, there's no mention in the economic analysis for the auditor that your revenue from attorney fees has to go down by school taxes if I guess get signed today or attorney. It's a 20% reduction on -- on the pie, on the delinquent pie and on the tax, on the revenues that you get from your attorney fees. The private vendor might suffer the same 20% reduction on his fee, but you don't pay that hickey. Under your present system, you do. That's $600,000 right there. The other thing is we said, I started out in this town, a fine job that I might never should have left as a bus driver, I was head of our union. I知 not going to make a proposal anywhere in my hometown for people to lose jobs. On that strength, that statement they left in almost a million dollars worth of costs as if I had not also said however you can do 25% reduction in your litigation activities by tweaking the system to farm that out. You could reduce a considerable portion of a very small section of the county attorney's office and those people that would -- but it's a department because justifiable needs, it's grown 50%. There are other vacant positions in most reorganizations that it happens all of the time without this kind of problem, people move from one division to another, open jobs every year for a small operation like that to move into other areas, you would lose positions, but you wouldn't lose jobs. Positions save you money, though. That's not in their analysis anywhere.
>> the other thick is this is a kind of -- the other thing is this is a kind of spooky thing here. It basically says, acknowledges if you believe our collection rate is going to be so low starting out that we would have to catch up after a few years, five years they say, because we had more available to collect, that's in my view not a very valid way of looking at it if you are going to start out as good or better to begin with and that's what I say this -- this number is -- you would get close to a break even point if all of this was true, and I would say a lot of it is not, not accurate. But you would still save a half million or so if it all were exactly accurate except for the things that I just said. The other thing is that it's supposedly is an economic analysis, it supposedly is done on the commission that you issued to all of the people who responded. Show us your idea for a net economic benefit. It's not just what could we do for one portion of the county government. What could we do for taxpayers. What could we do for the whole community? Tell us. Well, this economic analysis done, but leaves out I would say pretty serious economic aspects of our proposal. Because it looks at only your government issue. It doesn't look at the benefit in the number of lawsuits themselves, the reduction in court costs. It pays no attention to the fact that -- that it's almost like we are supposed to kind of not mention the fact that we have on the table bringing with a facilities we would put in place and expand on for this kind of activity and our national headquarters hometown of hundreds of jobs. That's millions of dollars and that's real money in our community. We are doing it on a limited basis, doing it the best that we can. The more work we have in a place where you do that work, the approximate more jobs that you have. The other thing we put in there a hard dollar number, $100,000 hardship fee, it not even mentioned in what is supposed to be an economic analysis. The analysis that ought to be looked at at, not just what would it do for your government, not what would it do for your community. We have given you these numbers, I would say given what weight they deserve, it's millions of dollars, a 10 million-dollar approximate number of a five year period for the cost within
>> [indiscernible] I知 going to hit a few things now that I don't have to argue necessarily with your report that you made your decision. I知 not arguing with you, I知 pointing out things that are actually agreed with it, in some respects just because they don't dispute certain information that you have received. The most important thing that they do not dispute is the spiking property values in certain enclaves where we are having the hardest problem with people paying their taxes that is east Austin. We took another 20 properties in addition to the 15 homesteads, we showed you last week, the last two years those homesteads are almost entirely, people that are losing their houses are almost entirely on the east side. What does this show you just about their appraisal increases? Because that's the canary in the coal mine. If you hit a spike in appraisals, you are going to get tagged with a spike in taxes, especially if they are -- if they are the word disproportionate to the increases around you. 16% is the incredibly high and disturbing -- kind of the good news. Hot economy, a lot of people want to move here and values go up. This is how much values have gone up, Travis County, county-wide all properties. But what were the values and -- in those 20 properties within what we call central east Austin, just in the last 12 months. 44%. On the homesteads, it's only four or five of them, what's the definition of this 20 group? Properties posted for sale in central east Austin, in the 12-month period. The percentage increase that -- that went along if you were a homestead, 70.5% in one year. These pressures have effects. And the effects were not at the end of them, we are not at the -- in the middle of 'em. We are at the beginning of 'em and if we make policy changes to deal with them, we can ameliorate the effects that are presently bad but unintended. I will quickly say as far as how much of these big attorneys' fees a private firm might make. I will point out these numbers, because our system in -- in -- a fee in the system is file a lawsuit. So your attorney fees in lawsuits already almost $3 million. You will get along list of lawyers that will do this for $3 million a year. A little tiny slice of pie that you can make a fee on is 15%. You don't get that 5 minutes later. As your own reports show back in 2000, it's the hardest, that last one and a half percent, hard' money to get three years later you still might not get 77, 75% of it the industry standard irs the first year that you would get 55% of that tiny slice, that's 425,000. You did pretty good, up at -- at 55 to 70%, you are in the $500,000 range. In the year before county taxes. The fallacy of this number, this comparison is this is for all jurisdictions. So he's -- david nor I either one of us collected this kind of money just from Travis County. But if you -- if you looked at all jurisdictions and say well how much attorneys' fees would they be paid, it's remarkably similar. This is how much and for -- for '05 I believe, that -- that the attorney fees under the present system if we collected in the first year or two in this range, 55, 60, percent, we would be getting right up there. Three or four years later, we might get this number for those people in -- from that one year collections. Now I知 going to run through what I would say are interesting things about the county's auditor's report. It disputes things, what does it not dispute? It is it not dispute that in the two years that we have been looking at, over 86% of -- of the tax suits were on properties appraised at below the average homestead amount. Now, that doesn't mean they are homesteads. It's just the homestead amount was the benchmark the year we did this, a few months back it was 197. That is a -- that will tell you who is getting sued county-wide. By the way, I don't want -- I don't want our comments to indicate we think this is just an east side phenomenon. The dispro portionalty, tends to be lower economic areas wherever you are, it happens to be if you are filing more on those lowered values properties, you are going to be more in east Austin than anywhere else. I知 going to just quickly go through a list of -- of what is not disputed that I think are important aspects and it's just a bullet list that I will go fast. The auditor's report never addresses the main problem. It never mentions the fact that Travis County filed four to five times in any lawsuits per capita as other metropolitan areas. It's not disputed that we do that. In -- in the purdue firms, I want to make another distinction. They are offering the complete privatization model. We are not. The auditor's report does not dispute that when lawsuits are filed, they are disproportionately regressive. They are disproportionate. That simply means that if you are filing a lawsuit that the court costs are four, five, six hundreds that matters a lot more on a property and tax bill that's -- well, it matters so much more in precinct 1 and 4 that the effect on your tax bill is a 60 to 70% increase. Just because of the costs for the suit. If we are filing four or five times as many, and you are doing it on people that have that disproportionate effect on them, there's policy issues there of whether or not we could do that better in a different way, a slightly different way. The auditor's report does not
>> [indiscernible] disproportionately located east of i-35. The auditor's report does not dispute that the analysis on foreclosed homesteads from 2003 to 2005 show that they are overwhelming in east Austin. All of these things had they been incorrect after the attention put on our presentation, do you figure they would have said by the way he was wrong about that. They have never said these things are wrong because they are not wrong. The auditor's report does not dispute the fact that the cool finance legislationment have that reduction but it's nowhere in their report. The financial analysis shows that the actual attorney fees in the present system is a 3 million, I think those aspects are obvious. It doesn't really dispute that the linebarger performance in Travis County you can argue about well maybe it means this, maybe it means that, but it does not dispute that it's higher than Travis County's very respectable collection rate. It's very respectable, but the linebarger's collection in Travis County is higher. The auditor's report when you look through it, seemed to say to try to cure the equity problems, by saying that we sue lower value properties disproportionately, they acknowledge that. Death penalty, dpt. That it is regretted, that's not -- we sue people all over town, people in the lower valves all over town. They more or less said that's not our system, the system -- that's not our decision, the system is made that way and we have to live with it. But do you -- could you do it a different way? Could we collect it without the lawsuit that
>> [indiscernible] the disporportionatety in different ways. Two things in our proposal, under the private collector system you get 15% stuck on who goes delinquent after 7-1, but you get a five month grace period. Let me show you what happens this that five months under our present system. Now the particular timing depends on the vietnam and these other factors -- depends on the value other factors. But there's no dispute there's enough lawsuits filed every year that here's what your collections are in those five months. Last year, February 2005, this is in your packet, threw June, 185, 252,000, 164,000, 332,000, 344,000. It's over a million -- it's about a million-three in attorney's fees in that five months. That's not a dormant system during a grace period. That's a system that's
>> [indiscernible] along pretty heavy. If there are reasons we need to do that, we don't annihilate that. We would say under our proposal you keep that revenue when it is the most low hanging fruit. That number however should be reduced that by the fact under our proposal the prior year delinquents to your turnover date would be collected by the private firm. It wouldn't be in future years 1.3. Next year probably be a million even instead of 1.3. That's a guesstimate. I had started discussing the last day or two that I can tell and I think it's correct that the equity issues ought to matter, we ought to try to find a way to get away from lawsuits and their regressive effect. I didn't find anybody that disagrees with that, most people say we are stuck with that for all of these reasons. But I want to say that we could get away from that. If you hired our firm, I wouldn't want to put you at risk. I have also said I didn't want to ever make an offer in my own town that I disagreed with when I was sitting in david's chair. I am making an offer that -- that I begged firms to make in -- and they never would. It is that -- that we do all of these things and we try to bring jobs, too, and we do hardship fund and we pledge this. If you hired us now and put us on a trial period, till just even three or four months, it's a very low risk for you. If what we say is -- is we will hit the -- we will hit the target you have to -- you have to reach is 98-5 to meet your -- it's been that way for two years, probably be that way next year. We will say we'll eat -- we'll meet your 98-5 or exceed it, target, that the present county attorney is trying to meet himself. Or we will forfeit every nickel of anything that we make. Now, I致e heard some of the arguments that we will make a lot more money than I think we'll make because that little piece of the pie here is so tiny. But let's suppose it's 500,000, a million, whatever it is. It is a serious risk that's never been issued by any law firm when we have considered and we have considered it pretty regularly for the last 10 or 15 years. I will make that commitment and my only caveat is that we not be told well, we are making that commitment, because January 1 of '05, which it's based on, you have got to reach a 98-5 for us to get our projected revenue. But on the turnover date, it was x last year, I don't know what it was. But as long as it's x this year, or better, I will meet what their projection is or better or we will forfeit every nickel to the county and the money we paid through the mailings and what would it do? First of all, we probably wouldn't make much money the first year. If that happened we would get fired and we would lose a chunk of money, I would probably be looking for a job. But I know what we could do. I know that we could preserve a good system with people that are clerking it well, but they are saddled with what jeffrey that talked about, that is a perverse city of san antonio for too many -- perverse incentive for too many lawsuits. When the statistics say you are suing four or five times many people. The treadmill that we are going on is not going away. East Austin properties and the anecdotes that you heard here, there's many of them, that's my presentation. I think if what I suggest you to do is not good for our community, do not do it. But if it's a risk and it's close to being a risk free, it might be worth trying. Any questions? I know that we all went longer than we wanted to.
>> ken, what is the lowest -- in terms of what richard brought up, in terms of the contracts that you have with cities, counties, whatever in the state of Texas, what is that lowest add on that you have got in any of your jurisdictions? Because it was the may and I知 not aware of anything less than 15.
>> I believe it's a minimum of 15, but it can go to 20. I don't do that part of the business. It can be as high as 20, but we are proposing 15.
>> it's an automatic 15. Any misinpress that was out there that jeff that it's a may, it's a -- it shall be. If there is -- there is a minimum amount.
>> to tell you the truth, what I was saying, what I think we are finally getting to is I had said from our earliest proposal, we ought to be finding out if this kind of proposal makes sense, the county people who understand this probably better than david or i, would be looking at that continuum, too you privatize everything, do you privatize everybody, do you turn over February 1, turn over in may, go as far as we have gone by saying a July 1 turnover. Or -- and would you want to guarantee with a forfeiture? Is there something in there they say that's better than we've ever heard, but it's still not good enough. To me I don't know if you would sell it to any law firm if it got better than that. But I do know there's nothing evil in doing it either way. But if you wanted to get the same result and get away from the lawsuits, you would find the spot in the negotiated terms that was a net win-win. And I think from day one that's what should have been on the table, figuring out not either side trying to spin the numbers, and get what -- just what they want, but something truly independent that you could rely on and I do say this, going past July 1 to my knowledge it doesn't get better than that in the industry. Most of the industry is complete privatization. But I would also say if you hire our firm, I don't care about the first year. Put in a 30 day termination clause, fire us if you don't get what you think is the best of both worlds.
>> next question, if -- if somebody were not paying attention to ms. Spears kind offers to come in for a payment plan, somebody truly is scared to pieces by the thought of not a 12% add on, but adding another 15 on top of that, 27% is something that gets their attention. Does the linebarger firm offer payment plans?
>> of course. And I want to make a point about that. It's a metro area. Everybody doing this work they just do the best they can. Public and private. But what makes the difference, if you are trying to get payment plans worked out, trying to get people that are in the most difficult time past the point where you have to file a lawsuit, or go to more enforcement, you -- you get more inventive about it. I -- carmen made a point when we were talking about this, would you speak to -- carmen runs the el paso office. A lot of the problems that we face I would suggest to you are -- are even worse there.
>> in the event of a foreclosure, one of the requirements that our firm has is that prior to a foreclosure, prior to posting a property for sale, there is a property inspection done. So we have someone actually go out to the property, knock on the door, and leave a sign if no one is there and ask for immediate attention to the matter. So we always make contact. That's one of our -- our main focus is to make contact with the taxpayer to get their attention. Personal contact. So we are doing outreach. As far as the bankruptcy, every day we are down loading all of the bankrupt filings from the bankruptcy courts throughout the united states, that information is transmitted electronically to our tax offices that we represent. So that we immediately know when someone has -- has filed for bankrupt. Those two services that we provide that avoid these situations that you have heard about today.
>> I知 asking a question about whether you offer a payment plan. That's a yes or a no. Why is your payment plan better than a payment plan that ms. Spears can put you on, other than ours doesn't require a 15% minimum add on.
>> well, your payment plan certainly does include it if you sue before you talk about a payment plan.
>> well, that's three, five, seven years later, yeah. And whether it's accessible or not --
>> the provisions are essentially the same. The efforts, the desire to have them are the same. The fee if you don't live up to them is the same. The difference is there's a grace period under our program. By statute. We sue roughly 15% of the people you sue per capita.
>> do you ever eliminate your 15% fee? Let's say somebody gets with the program on July 2nd. Or whatever date that is during that first five month period. Do you -- I値l use the word forgive for lack of a better phrase --
>> well the attorney fees, of course, we both do. It's a -- I mean from time to time if you got a situation that you could tell is -- tries out for something and you have to try to do something, even if it doesn't -- you can't waive the taxes, you can't waive the penalties, but you can work on your attorney fees, that's the direction of the client if they are allow you to. And.
>> you are not hearing my question. It's not about waiving the attorney's fees. I知 asking you if you waive the 15% minimum that you all add on to the contract. Do you waive your fees.
>> well, I -- I will say this: there's a lot of ways to work out the economic aspects of it. Even the attorney fees are say shall on the lawsuit. We don't -- we stick them on there. And -- and I tell you the truth I知 not aware of the legal aspects of that. I don't know.
>> we normally don't waive an attorney fee. But when you look at what your county attorney does and if you file lawsuits two, three, four years down the line, you have got penalty and interest that has been accruing all of those years and so really the taxpayer is already burdened at that point with additional penalty and interest. When the accounts are turned over to us on July 1st, we immediately start a mailing campaign and try to do outreach, try -- we have phone calls, call the taxpayer. So many times we find that through phone banks and through mailings, through contact with the taxpayer we are going to collect faster. Lawsuits unfortunately the judicial system takes a little longer. You have attorneys on the other side, you might not have attorneys, you might have deceased owners that you have to look for. That requires hiring an ad litem or appointing an ad litem. So really what we offer is immediate contact with the taxpayer to try to forgo the lawsuit.
>> but again the question is related to the 15% that is collected whether there is a lawsuit filed or not by a private firm, do you all waive the 15% if it never comes down to that and let's say a week, two weeks later, after the July 1st deadline, it's simply not necessary. It worked out. Do you waive your fee when it does not involve a lawsuit?
>> well, my answer to that is we just said we will take a fee set aside that would amount to a whole lot of waivers at $100,000. And work with whatever direction the court gave us on the policies that they want us to follow. I don't know off the top of my head what legal parameters would be on top of that. We would do what will be fair --
>> you brought up win-win that we have talked about for some many years. What we we have talked about today, what I love about these procedures, you have sweetened the pot. Could we get that in writing. We are under a formal process --
>> well, I wanted to make it, I don't know what's the right to my knowledge to do it. Right time to do it. I want to make the point that I did the --
>> give it to the purchasing agent rather than me, it's a purchasing process.
>> I was going to hand it out
>> [inaudible - no mic]
>> if one proposer is being given the opportunity under an rfi to basically sweeten the deal, change what they had originally turned in, changed what was analyzed, it seems that all of the proposers under the rfi ought to be given that same consideration or else nobody outing to be given the same consideration.
>> I would say that's a legitimate point and that everybody that we are down to two now. That asked would you make the same guarantee and back it up with a waiver of your fees.
>> that's not -- the law -- it not that they have to match. It's not a match type of deal. If you allow one to modify their proposal, you have to let the other have an opportunity to modify the proposal. It's not a match.
>> yeah but I知 saying in the normal process, we are in the r.f.p. Process, what you do is say some of this is on the table, would everyone else -- would you be willing to or not and then you make your decision on the totality of who is best, who made the best offer and pick one and then say y'all go negotiate and there's -- it's the procedures for professional services, this is not anything unusual.
>> well, no it's not, you are right generally you get to the same point. What she's saying, correct me, we have to give each side an opportunity to give their best and final offer.
>> I agree. But you don't have to give them a year. You don't have to --
>> right.
>> you can say in this meeting, would you all do the same thing or not.
>> it's not --
>> it's not a match.
>> do you have another question.
>> yes, I do. How would we ever be able to tell that hitting the 98.5 had to do with the private law firms' efforts as opposed to the what is a 365-24/7 effort by the Travis County's attorney's office and the Travis County tax collector to do their jobs, in the way that things work their way through the process. How do we know that hitting 98.5 was through solely your efforts versus we were going to hit that without your help.
>> well, you would not know the first year basically if you just got three or four months, you wouldn't know exactly why. But if we are doing an economic analysis, the point is you can write a budget that looks the same way, whatever the ropes were. Then -- whatever the reasons were. Then you have a month the following period of time to determine if it was good enough to stay with it or not. By the same I知 not supg being that -- suggesting that we would raise 98.5. We will do more than that. My point is that's our present projection, what he's held to, what david is, in-house collection is held to. I would saying we would be held to the same thing or we would forfeit.
>> I would suggest if we want to pursue something like this, we would have to spend a whole lot more time than we have in this meeting.
>> where we talk about guarantee because you asked me that question, the revenue estimate, estimates how much money we are going to bring in.
>> sure.
>> how much we are going to bring in on taxes, how much we are going to bring in on the collection of those taxes. That's the loss. So unless linebarger wants to guarantee that amount, that's what's going to impact my revenue estimate. The forfeiture of their fee --
>>
>> [indiscernible] analyze, et cetera. We won't be able to get that done today. I can guarantee you that
>> [multiple voices]
>> I want to make sure that's not what the county attorney certifies as far as performance. You pick the number enough of what we do last year, you can make it, we will depend on it, that's what -- 98.5 has been the standard, saying we will meet it or forfeit any benefits that I think will greatly exceed the risk that you have if we miss it.
>> sorry if this is a stupid question, does linebarger collect for any entity other than a governmental entity, cities, counties, school districts, toll authorities, is there anything that's not a governmental entity.
>> we are the largest law firm of its kind, which is that we collect only for government receivables, up until --
>> other than the i.r.s. Thing.
>> that's government.
>> government, too.
>> that's government.
>> [laughter]
>> up until the last couple of months that was true. We merged with a smaller law firm in denver that I think has some of that -- some non-government portfolio and what the future of that is, but it would be a very tiny, tiny part. We are primarily government service --
>> within the state of Texas, it's all government.
>> yes, ma'am, as far as I know.
>> okay.
>> ms. Spears, just related to that issue?
>> yes, it is.
>> all right.
>> I would like to know if having listened to the various presentations, if it is the desire of this court that the tax assessor and county attorney file fewer lawsuits? And if that's what you want, you need to let us know that. Secondly, I can -- I want to point out how we got started filing this many lawsuits. It was the county attorney's promise to several taxing jurisdictions that we would file more lawsuits, that we would sue everything, and that we would bring 40 properties per month to tax sale on the courthouse steps. And he probably doesn't remember that. But that's how we got -- to going down this road of filing --
>> that was instead granger, wasn't it?
>> no, that was ken oden.
>> that was not ken oden.
>> yes, sir.
>> I would clarify that.
>> Commissioner Sonleitner has a couple more questions.
>> I would like to --
>> [multiple voices]
>> we are going to lose our quorum. Commissioner Sonleitner.
>> we have established that you only collect on behalf of governmental entities within the state of Texas. So if some enterprising person were to put in an open records request to your firm asking for a complete break down of revenues and expenditures related to all of your public contracts, anything related to hard costs which would be salaries, benefits, rent, utilities, printing, postage, whatever, soft costs entertainment, travel, political contributions, sponsorships, tax deductible contributions whatever, e-mails to and from governmental entity, calendars of all people involved, what would be the response to an open records request to your firm saying tell us everything about this contract that -- that somebody might load up into an open records request.
>> I believe that we have a response made by every other firm in this state that I know of that works for governments, and does bond business, or any other kind of work. That is you have ran through a lot of scenarios. All of our e-mails that come and go to government officials are open records. All of our documents are open records that come and go. If you are running a business organization in competitive, you don't open up your bank account and who you buy and sell the equipment from and what your pensions accounts are, what your health insurance, none of that. There are things that no firm, you asked that question in the r.f.p., we said that we would comply with all laws, but we would not open up the business, some aspect of our business just because of -- because someone asked for it.
>> include profits, all of that kind of stuff, anything? The point being david if I were to make a similar request as a citizen open records request asking you for a complete break down of all revenue, expenditure, hard costs, soft costs whatever, what would your response be?
>> well, you can't say -- you would have to look at all of the specifics, but generally all of the business that you are talking about, I知 not aware of an exception that I would be able to rely on to protect them. Your my client, the only work that I do is all related to -- tax work is related to nelda as the client. You on any of my other business, if you didn't get it through the open records process, you are entitled to it by the fact of the attorney-client relationship.
>> the reality, Commissioner, is that there are many exceptions that our own government exercises every day to withhold information that's either too personal about its employees or that is not in the best interests of the organization and private organizations are the same. Too quick, it will be 10 seconds. You could be ordered under the present system to file lawsuits. But because we are saddled with only funding the system for the fees in the lawsuits, if you did that, you would get immediate direct reduction in your fees and if you are running a system that you can only pay with or that pay for with the attorney fees, then you start going in deficit spending and the only people that can pay for that are the innocent taxpayers that didn't go delinquent to begin with. I think there's a policy issue that ought to be out on the table because if we finally get to the point where we are all going to understand it -- a big part of this is -- a bigger group, maybe 20,000 people on that one and a half percent each year, would go delinquent for that fee. And it's -- opposed to maybe four or five thousand of them get sued every year. It's the same fee. It's a harder -- harder to collect that last little so you don't ever get anywhere close to the 15% that we feared that we would get on the last 20,000 or something. But there's an -- there's a policy question and it can be figured either way. But it's really where the debate ought to finally get down to. Part of it is if you have got 20,000 delinquents and they have gone delinquent that long and they are the lower accounts and they have gone through the grace period, they are on now at a point where they could be sued or in the private system they would get stuck with the same fee, under the private system when you are tagged with that fee, everyone in that group gets the same treatment. Under the present system you get a huge hickey if you are in that tiny little last group and unfortunate enough to be sued, everybody else in that group doesn't pay their share, they don't even pay the same share of the other delinquents, they don't pay the same share as innocent taxpayers. The other thing about what nelda said.
>> is this a 30 second closing statement.
>> what did she say.
>> we are to b to run out of time. Time -- 30 second closing statement. Purdue, anybody else? Wants to speak, we will give you some time.
>> I think the equity issues are clear, I think they are powerful. There's a big argument on the money, a firm that runs the contract to come to the point where you think that it's a win-win situation, we would work hard to do that.
>> we didn't give you a chance to say anything.
>> that's all right.
>> eloquently said. If you have scments.
>> I don't think we will need a five minutes. Earlier,
>> [indiscernible] number of entities throughout the state where dealing with -- with any diverse taxpayer base in terms of ethnic makeup and economic conditions and we have established a track record of success of those communities. So if what you are looking for is sensitivity and -- and a firm that deals with your taxpayers I would submit to you that purdue is the best law firm in the state to address those issues. I just submit a letter to you earlier that is directly on point. The -- other issue that I would address has to do with the -- with the linebarger presentation, they agreed to forfeit their fee if they do not achieve the 98.5% target. I think this is an issue that your county attorney has to look at very closely. Attorney fees are very --
>> regulated.
>> regulated. Thank you, very regulated under the rules of ethics that may not be a permissible offer. You may not be able to accept that kind of contract. Where -- where a -- where a -- if there is an attorney opinion on point that states that an attorney cannot give their fee back as part of a contract. And I think that is an issue that you would want to research before you entered into such a contract to make sure that it is legal.
>> mr. Franks?
>> yes, I would like to add few comments judge. One thing about performance guarantees they sound well, great selling pitch. I would ask that this court in its due diligence contact humble i.s.d. They are a prime example of the two firms involved today represented, have represented in the past humble i.s.d. Talk to them about performance guarantees, I知 for the going to because there are a lot of curve balls that have been coming out here recently. I知 not going to state to you the -- the level of performance guarantee that was made to humble i.s.d. I知 not going to represent to you the level of lack of achievement but they can certainly comment, same issue came up, same firms involved and so it's all going to say I am not familiar enough with the details but the folks, mr. County attorney certainly contacting humble i.s.d. You can get the details on what kind of representations were made, what kind of performance was viewed. I will echo my law partners' comments. I think there is an attorney's opinion within the last year and a half out of a situation dealing with a contract in bastrop county or lee county that focused on propriety of that. Certainly we are in a position if the county attorney is comfortable with whatever counter proposal the county seeks, if you are -- if you are agreeable to and comfortable with that arrangement, we would like an opportunity. Again, judge, I am not trying to sit and do double speak. What I said earlier I stand by. That is I think that you have got a system that works. I think it needs tweaking. Boy I got to hear that 40 times.
>> new and different. Anything new and different. We heard you loud and clear before.
>> okay. As far as comments on -- with regard to that proposal I知 not in a position to comment today. I know that there was a comment that maybe at the end of this meeting or during this meeting that we could make, you know, a competing bid -- again the guaranteed perform, I am a partner in a partnership, I do not act as a renegade, go out and bind my partners to issues that we have not addressed previously, especially at this magnitude. We are talking about a contract that is worth I believe it's a 7 figure contract, and I believe that in order to come back with any counter proposal different from what was previously requested, the information that was requested last year, that we would like to have an opportunity if that's what the court is going to do, if they are going to move toward privatization for us to come back and respond. All that I have, judge.
>> thank you.
>> thank you. Anybody else who has not had a chance to speak today?
>> anybody else have had a chance to speak on this today.
>> may I ask something. If something needs tweaking why would we not be offering the first opportunity to offer the tweaked proposal to the Travis County attorney and the Travis County tax collector? And if we are -- if we are not impressed or still have questions, concerns, et cetera, et cetera, the -- then we -- you go from there. But I知 not understanding why -- why the first opportunity to tweak ought to be offered to the very people who are doing it right now because everything that I知 hearing so far is these are policy questions. It is not something that -- that you have to go in essence fire, compromise, come habit our -- our folks with another firm, I知 not understanding something here. If it's broke, why isn't the internal forces, why aren't the internal forces being given the courtesy and opportunity to -- to try and respond to the issues that have been brought up that could be handled completely in house and we all move on with our lives.
>> I have a couple of questions of the county attorney in executive session.
>> okay.
>> after we return, I will ask this court to put this matter back on the court's agenda next week early for action early on.
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Last Modified:
Wednesday, May 17, 2006 10:30 AM