06-F Tax Proposal - McCrearyPROPOSALFOR
DELINQUENTTAX COLLECTION
ATTORNEYS
for
THE CITY OF PARIS,TEXAS
November 2, 2001
submitted by
McCreary, Veselka, Bragg & Allen, P.C.
Attorneys at Law
5929 Balcones Drive
Suite 200
Austin, TX 78731
Contact Person:
Bryant Smith, Director of Operations
Phone Numbers:
512-451-9000
1-800-369-9001
MCCREARY, VESELKA, BRAGG & ALLEN, P.C.
Attorneys at Law
P.O. Box 26990
Austin, Texas 78755
512-451-9000
November 2, 2001
Mr. Larry Schenk
City of Attorney
The City of Paris
135 First Street SE
P.O. Box 9037
Paris, Texas 75461-9037
Re: Request for Proposals for Delinquent Tax Collection Attorney
Dear Mr. Schenk:
Pursuant to your request, McCreary, Veselka, Bragg & Allen, P.C., is pleased to submit
this proposal to The City of Paris, Texas. The information following this letter is a detailed
description of our delinquent property tax collection program.
Since 1960 our Firm has represented school districts, cities and counties through out The
State of Texas. No other Firm will more dedicated to delivering the highest level of service and
results than McCreary, Veselka, Bragg & Allen, and P.C.
We would consider it a privilege to represent The City of Paris, Texas. I have been
designated the chief contact person for this proposal. Please contact me if you have questions or
comments at 1-800-369-9000.
Sincerely,
MCCREARY, VESELKA, BRAGG & ALLEN, P.C.
D. Bryant Smith
D. Bryant Smith
Director of Operations
TABLE OF CONTENTS
Beginning
Page Number
1. EXECUTIVE SUMMARY 3
II. DELINQUENT TAX COLLECTION PROGRAM 10
Collection Procedures Flow Chart
11
A.
Collection Notices and Letters
12
B.
Address and Title Research
14
C.
Installment Payment Agreements
16
D.
Bankruptcy Proceedings
17
E.
Collecting Taxes from Federal Agencies
18
F.
Filing and Prosecuting Lawsuits to Judgment
19
G.
Collections of Judgments by Execution and Sale
22
H.
Data Processing Support
24
1.
Statistical Summary of Collections
27
III. PROFILE AND EXPERIENCE OF THE LAW FIRM 28
A. Philosophy of the Firm 29
B. Profile of Partners and Key Professional Staff 30
C. Summary of Appellate Court Decisions 36
D. Communications and Reporting Capabilities 43
E. Represenation in All Property Tax Matters 57
F. Client References 58
G. Office and Staffing Arrangement 59
IV. RELATED ISSUES
60
A. Compensation of the Law Firm 60
B. Public Relations 60
C. No Conflicts of Interest 61
D. Interventions 61
E. Disposition of Existing Litigation 61
McCreary, Veselka, Bragg & Allen
Beginning
Page Number
F. Proposed Contract 61
G. Equal Employment Opportunity 62
H. Financial Strength 62
V. PROPOSED CONTRACT 63
McCreary, Veselka, Bragg & Allen
I. EXECUTIVE SUMMARY
The Law Firm of McCreary, Veselka, Bragg & Allen, P.C., is pleased to present this
proposal for the collection of delinquent property taxes and legal representation to The City of
Paris. The success of any effective delinquent tax collection program is predicated on the
selection of a law firm which has an in-depth knowledge of property taxation, understands the
application of law as related to property taxation, has the experience and professional staff to
implement an aggressive delinquent tax collection program and provides personal service to its
client taxing units. McCreary, Veselka, Bragg & Allen have 40 years of experience in working
with counties, school districts, cities, and appraisal districts. MVBA represents over 450 tax
units in the collection of delinquent property taxes. We are aware of the professional and
responsible approach that is necessary to establish and maintain a successful collection program.
During MVBA's years of representing taxing units in delinquent property tax collections, we
have efficiently and cost effectively collected the delinquent taxes due our clients. Moreover,
we have achieved the goal of maximizing collections using a firm, but fair approach in dealing
with taxpayers.
The following are some of the significant points contained in our proposal.
(1) MVBA has implemented a very successful tax collection program in Counties,
School Districts, Cities, and Appraisal Districts. Among our clients in north
Texas are:
* Bowie County
* City of Texarkana
* TexarkanaISD
* Liberty-EylauISD
* Pleasant Grove ISD
* City of Wake Village
* New Boston ISD
* CityofDekalb
* City ofNew Boston
* CityofLeary
* CitofNash
* City of Red Lick
* Maud ISD
* Hooks ISD
* Leary ISD
* Red Lick ISD
* Hubbard ISD
* Ma1taISD
*
Redwater ISD
*
Dekalb ISD
*
Simms ISD
*
Denton County
*
Ponder ISD
*
PilotPointISD
*
AubreyISD
*
Sanger ISD
*
CityofAubrey
*
City of Colony
*
City of Justin
*
City of Krum
*
City of Sanger
*
City ofPonder
*
City of Krugerville
*
City of Marshall Creek
*
City of Oakl Point
*
City of Trophy Club
McCreary, Veselka, Bragg & Allen
*
City of Hickory Creek
*
City of Hackberry
*
City ofArgyle
*
City of Lakewood
*
City of Bartonville
*
Town ofNorthlake
*
Town of Shady Shores
*
Town of Clark
*
City of Pilot Point
*
GladewaterISD
*
City of Warren
*
Longview ISD
*
Pine Tree ISD
*
White Oak ISD
*
City of Marshall
*
KarnackISD
*
HallsvilleISD
*
HarletonISD
3
*
Harrison County
*
Waskom ISD
*
City of Waskom
*
City of Quanah
*
QuanahISD
*
Hardeman County
*
Northside ISD
*
VernonISD
*
City of Vernon
* Wilbarger County
* Harrold ISD
* Van Zandt County
* Canton ISD
* Edgewood ISD
* Grand Saline ISD
* Martins Mi11ISD
* Van ISD
* Wi1lsPointISD
* Fruitvale ISD
* City of Canton
* City of Edgewood
* City of Grand Saline
* City of Van
* City of Wills Point
* Tyler Junior College
(2) An Experienced, Professional Staff to Provide Complete Representation
* McCreary, Veselka, Bragg & Allen has an experienced and knowledgeable
staff. Biographical information for the partners, attorneys, and key professional
staff inembers of MVBA who will be working for The City are included in
Section V of this proposal. The names and job description of the staff assigned
to The City of Paris, are listed below:
Gilbert T. Bragg, is a partner in the Firm. He has been a member of the Firm
since 1978. He will provide legal representation in regards to delinquent
property tax matters and supervise the MVBA staff assigned to The City
of Paris.
Michael Reed will represent The City of Paris in all bankruptcy proceedings.
Mr. Reeds's responsibilities will include every phase of bankruptcy law and
procedures including supervising claims filing, reviewing plans of reorganization,
negotiating with debtors, trustees and competing creditors, attending hearings in
the Bankruptcy Court and aggressively litigating the legal position of The City.
KirkSwinney, an attorney in our Austin Office, may provide legal opinions and
representation in all property tax matters relating to the Lamar County
Appraisal District as directed by the City Attorney. He has litigated numerous
appraisal district cases. In addition, Mr. Swinney teaches several different tax
education courses required for certification of tax professionals.
Donna Elkins is the legal assistant who will be responsible for many of the day-
to-day issues that arise in delinquent tax collection. She was an abstractor for
Lawyers Title of Denton from 1984-1987. She joined out staff in 1987.
Bryant Smith is the Director of Operations of the Firm. Mr. Smith will assist
Mr. Bragg with the coordination of the efforts of our support staff necessary in
implementing and administering our tax collection program.
McCreary, Veselka, Bragg & Allen
4
(3) Regular and Informative Collection Activity Reports
McCreary, Veselka, Bragg & Allen will report to and communicate with the
City Attorney as frequently as necessary.
Written reports to the City Council will be provided monthly, as well as annually,
detailing the numbers of letters mailed (detail, demand, lienholder), suits filed,
judgments taken, tax warrant and tax sale activity, and bankruptcy claims filed.
The dollar amount of the tax accounts involved will be listed. A Sample Annual
Report is included for your review beginning on page 44 of this proposal.
MVBA will provide the tax office and City Attorney with copies of all lawsuits,
judgments, notices of sales, abstracts of judgments, and proofs of claims in bank-
ruptcies. MVBA does not request that The City maintain these copies in their files,
but rather they are furnished to apprise The City and tax office staff of all collec-
tion procedures initiated.
(4) Taxpayer Notification
* McCreary, Veselka, Bragg & Allen will notify all property owners of their tax
delinquency. These notices are personalized letters directed to individual property
owners containing the property description, the years and amounts due and the
address of the tax office at which payment may be made.
* MVBA will mail delinquent tax notices to persons listed on the delinquent tax roll
four times each year to insure that each delinquent property owner is aware of their
tax delinquency.
* MVBA pledges to process delinquent tax tapes from receipt of the tape to mailing
of the notices in 7-10 days except under extraordinary circumstances.
* In addition to the four delinquent tax mailings, MVBA will prepare and mail the
May notice letter required by statute.
* The delinquent tax notices sent by the Firm are constantly monitored for returned
mail. Address research is conducted on returned mail and new notices sent promptly
to notify all property owners of the delinquency. The Firm will advise the tax office
of all new addresses which we identify.
* MVBA will make a concerted effort to collect small accounts through letters,
phone calls, personal visits and tax warrants.
* MVBA will monitor all payout arrangements for current activity, maintain records,
and follow-up unpaid accounts quickly and systematically.
McCreary, Veselka, Bragg & Allen
(5) Title Research
McCreary, Veselka, Bragg & Allen will conduct a full title examination on each
tract of real property and conduct ownership verification on personal property
before a tax suit is filed.
MVBA will conduct its title examinations using the records of the Lamar County
Clerk's office and local title companies.
Title examinations performed by MVBA will confirm that the individual or
company shown on the tax roll is the true owner of the property on which there
is a tax delinquency and provide a proper legal description of the property. Our
title examinations will also identify all liens on real property including federal and
state tax liens and abstracts of judgment liens as well as those held by individuals
and financial institutions as a result of deeds of trust or mechanics liens.
We will send additional notices to parties we determine through our title research
have an interest in property on which delinquent taxes are due and who may not
have received any prior notification of the tax delinquency. These persons, usually
lienholders, new owners or j oint owners, once notified of this delinquency, usually
make prompt payment to our clients without unnecessary and costly litigation.
After a delinquent tax suit is filed, MVBA will include a$100.00 title research fee,
per suit, as a court cost. This fee is authorized by the Prop. Tax Code.
(6) Litigation, Tax Sales and Tax Warrants (See Pages 19 through 23 of this
proposal)
* McCreary, Veselka, Bragg & Allen systematically initiates litigation to collect
delinquent taxes.
* MVBA files delinquent tax suits if the delinquent property owner fails to respond
to the notices mailed by the Firm.
* We obtain judgments against those defendant property owners who do not pay
their delinquent taxes after suit has been filed. Subsequently, an abstract of
judgment is recorded creating a judgment lien on the non-exempt real property
of the defendant property owners.
* If the taxes are not paid after judgment is obtained, the tracts of real property
contained in the judgment will be posted for sale after consultation with the tax
offices. Upon publication of the notice of sale, taxes on many of the tracts of real
property are paid prior to the sale date.
McCreary, Veselka, Bragg & Allen
* MVBA will file foreclosure lawsuits on and sell vacant and abandoned property
regardless of the amount of taxes due. MVBA will seek direction from the City
Attorney in this effort. Tax Sales on vacant and abandoned property are an
important aspect of our collection program.
* MVBA will initiate tax warrants where appropriate to collect personal property
taxes due to The City. For details of our tax warrant procedure see Page 23 of
this proposal.
(7) Bankruptcy (See Page 17 of this Proposal)
* McCreary, Veselka, Bragg & Allen will vigorously pursue taxes due from
property owners who file bankruptcy. Michael Reed of the Austin office will
represent The City in bankruptcy proceedings.
* MVBA has a complete bankruptcy department within the Firm to file claims and
monitor the progress of all bankruptcies in which our clients are due taxes. The
Firm's attorneys are fully licensed in all the Federal Courts.
* After the proof of claim or administrative claim is filed, MVBA follows the
Bankruptcy proceedings closely. We regularly file objections and motions and
attend hearings in Bankruptcy Courts throughout the State to protect our clients'
taxes in Bankruptcy proceedings.
(8) Homestead Program
* McCreary, Veselka, Bragg & Allen will work closely with the City Attorney to
prepare properties for resale that are deemed to meet this program's guidelines
as directed by the City Attorney.
(9) Comprehensive Legal Representation and Educational Opportunities
* McCreary, Veselka, Bragg & Allen provides, for no additional compensation,
legal representation to our clients on all property tax issues.
* MVBA represents our clients in all litigation filed by property owners regarding
property taxes.
* We advise our clients on effective tax rate calculations, tax abatements, and tax
roll back petitions and elections.
* MVBA provides our clients with informative updates on tax litigation, attorney
general opinions, and legislation concerning all aspects of property taxation.
McCreary, Veselka, Bragg & Allen
7
We actively monitor all legislation in the property tax area. We subscribe to the
Texas Legislative Services thatprovides instant access to legislative actions. Our
attorneys regularly testify before Legislative Committees, consult with members of
the Legislature on property tax matters, and assist clients in passage of bills
amending the Tax Code.
* MVBA can assist with the training of tax office personnel in the area of property
tax law. Several of our Attorneys are certified instructors and regularly teach tax
education courses required by the State for certification of tax professionals.
(10) State of the Art Computer Capabilities (See Pages 24 through 26 of this
proposal)
* MVBA has the finest computer capabilities and data processing system available
supporting our delinquent tax collection program. We are fully compatible with the
computer hardware and software used to collect your property taxes.
* We are able to generate the following listings, reports, and schedules which are avail-
able to the City Attorney and tax office.
List of Substantial Delinquent Accounts in Dollar Order
Alpha-cross Index reflecting all accounts in same name
Delinquent Detail Listing - Alpha Order
Delinquent Detail Listing - Geo Order
D.T.R. Calculation Schedule
Exception List reflecting tax accounts which are coded as
Suit, Mail Return, Quarterly Payments, Over-65 Deferrals, etc.
* The sophistication of our computer system makes possible the statistical reporting
capabilities. The suit and bankruptcy activity tracking system also provides
valuable information to the Firm and our clients.
(11) Compensation and The Contract
McCreary, Veselka, Bragg & Allen provides all the elements of our delinquent
tax collection and legal representation program for a contingent fee of fifteen
percent (15%) of the delinquent taxes, and accrued penalties and interest
collected.
Our fee is passed on directly to the delinquent taxpayer through the adoption of
the additional penalty provided by Section 33.07 of the Property Tax Code and
Section 33.48 of the Property Tax Code which allows the recovery of attorneys'
fees.
McCreary, Veselka, Bragg & Allen
* This fee includes all of the services we provide, including all legal representation
in both collection and administrative matters, taxpayer notification, address
research, title research and data processing activities. Our clients are not
responsible for the payment of any expenses incurred by the Firm in the collection
of delinquent taxes.
* MVBA proposes a two-year contract with an annual renewal, thereafter. (See
Section V. beginning on Page 63 of this proposal)
(12) Ethical Conduct and Integrity
* MVBA gives careful consideration in every aspect of the collection program to
insure all property owners are treated equally and fairly.
* We maintain the highest ethical standards in our dealings with our clients and the
delinquent property owners.
* MVBA achieves the goal of maximizing collections in a professional and ethical
manner without embarrassing our clients with unfavorable publicity about
ourselves individually or as a law firm.
* Character and integrity are not just words at McCreary, Veselka, Bragg &
Allen.
McCreary, Veselka, Bragg & Allen
9
II.
DELINQUENT
TAX
COLLECTION PROGRAM
(RFP SCOPE OF WORK)
McCreary, Veselka, Bragg & Allen
10
NtcCreary,Veselka, Bragg & A,llen
A. COLLECTION NOTICES AND LETTERS
TAXPAYER NOTIFICATION
McCreary, Veselka, Bragg & Allen utilizes several types of notices and letters in the process
of collecting delinquent property taxes. MVBA's ability to produce both large and specialized
mailings as well as manage the delinquent tax data is unsurpassed by any other firm. The
mailing of notices and letters follows a proposed work calendar which is developed in consultation
with the tax office. All of our notices and letters provide the delinquent property owner with
a description of the property, the tax years delinquent, the amount of tax, penalties and interest
due, and the tax office address to which payments should be directed. MVBA mails
notices of delinquency to every delinquent property owner at least three times each year. Our
experience has proven that through the use of this series of notices and letters to delinquent
property owners, substantial payments will be made prior to the institution of legal
proceedings. We also mail notices to selected accounts within targeted parameters.
INITIAL NOTICES
MVBA's contact with the delinquent property owner normally begins with a polite, but
pointed, notice of delinquent property taxes. This letter is sent to all delinquent property owners
except those in bankruptcy or that have been identified by the tax office as a legitimate
hardship case. These initial notices provide a reminder to the delinquent property owners of
the tax liability and gives the property owners an opportunity to contact us or the tax office
about the matter. Specific language may be inserted in these notices to emphasize a deadline
date for payment or give some special instructions.
DEMAND NOTICES
Our second letter is a demand notice. This letter is mailed in mass, following the initial
notices of delinquency or may be mailed in batches prior to the filing of lawsuits. The
demand letter advises the delinquent property owner that a lawsuit will be filed for
foreclosure of the tax lien and personal liability against the property owner unless payment
is made immediately.
NEW OWNER LETTERS
In addition to our initial notices of delinquency and demand notices, MVBA has a number
of other letters to respond to specific circumstances which frequently arise. Among these
are our "New Owner" letters. Research of the title of real property sometimes reveals a new
owner of delinquent real property. This letter informs the new owner of the delinquent tax on
his or her property and that he or she is responsible for payment of the tax.
McCreary, Veselka, Bragg & Allen
12
LIENHOLDER NOTICES
When our title research indicates that an individual, bank, savings association, the State or
Federal government has a recorded lien on a delinquent property, we send a"lienholder letter"
to such person or entity. Our letter notifies the lienholder that the property on which they
have a lien has delinquent taxes due. Further, should it become necessary to file suit to
foreclose the tax lien on the property, they will be included as a defendant in the tax suit and
their lien will be extinguished by the foreclosure. This extra step of title research and lienholder
notification prior to the filing of a delinquent tax suit usually results in prompt payment of the
delinquent taxes.
DEFAULTED PAYOUT NOTICES
There are delinquent property owners who want to pay their taxes but simply do not have
the funds to do so. Many delinquent property owners who find themselves in this
circumstance enter into payout agreements with the tax office. While most property owners
honor their payout agreement, some do not. Upon default by the delinquent property owner
on a payout agreement, MVBA sends a defaulted payout notice. This notice gives the delinquent
property owner an opportunity to immediately pay the balance due before a lawsuit is filed.
RESPONDING TO TAXPAYER INQUIRIES
Our notices and letters always result in numerous phone calls from delinquent property
owners and lienholders. These telephone calls are initially answered by MVBA staff
members who are trained to answer most common questions and concerns. Our attorneys
are available to speak with any property owner or lienholder who has a question beyond
the experience or knowledge level of our staff inembers or legal assistants.
McCreary, Veselka, Bragg & Allen
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B. ADDRESS AND TITLE RESEARCH
ADDRESS RESEARCH
Tax accounts may be delinquent because the address of the property owner on the tax roll is
not current. A successful delinquent tax collection program requires an exhaustive address
research effort. Many delinquent accounts are collected when proper attention is given to finding
the correct address of a property owner.
Accounts with incorrect addresses are identified through designations presently on the
delinquent tax roll, mail which is returned as "undeliverable" by the United States Postal
Service to our office, or citations which are unable to be delivered by officers serving process
in a delinquent tax suit.
When we discover an account with an incorrect address, that account is identified on our
computer record so that special attention will be given to that account.
Names and addresses on tax accounts coded as incorrect are compared to more recent
data files, and the accounts are updated where different information is on the updated record.
Alpha-cross indexes of data files are produced to identify discrepancies between addresses
given for an owner of multiple properties.
If this procedure does not result in locating a correct address, the Firm uses the following
sources of information:
1) Address correction request from the United States Postal Service
2) Comparison with the most recent Appraisal District roll
3) Comparison with tax rolls of congruent taxing units
4) Telephone directory for the area
5) Privately compiled city directory
6) City utility records
7) Voter registration records
8) Criss-cross directory
9) Credit bureau automated file search
10) County Clerk's records (deed records, etc.)
11) On-site investigation of the property, including conversations with occupants of the
property and adjoining land owners
12) Texas Motor Vehicle Registration
13) Accumail by DATATECH
14) Internet Databases of names, addresses and telephone numbers
15) Lexis
McCreary, Veselka, Bragg & Allen
14
Additionally, the following sources are used to obtain the correct addresses for owners or
principals of delinquent business accounts:
1) Comptroller of Public Accounts
2) Secretary of State
3) County Clerk's Records for Financing Statements and Assumed Names
Through the use of these sources of information, MVBA is very successful in locating the
correct addresses of delinquent property owners and obtaining payment of these taxes due.
TITLE RESEARCH
MVBA conducts an exhaustive examination of the title on all delinquent real property prior to
filing lawsuits. Much confusion and embarrassment results when lawsuits are filed using only
the information on the tax roll or with incomplete title information. We perform all of the
necessary title research to identify the owners and lienholders on each delinquent real property
account selected for lawsuit and to confirm the legal description of the delinquent property.
Real property accounts are researched through courthouse records or title companies for
persons who have a recorded legal interest. Numerous questions are resolved from the
information obtained from the examination of deeds, deeds of trust, federal and state tax liens,
mechanics liens, probate records, financing statements and assumed name files. On-site inves-
tigation and inquiry of the owners of neighboring property to ascertain the whereabouts of the
record owners is made by Firm personnel as required.
We supplement the above procedure with telephone contact to taxpayers to establish ownership
of business personal property and real property where no deed is of record. Telephone calls
also verify the accuracy of addresses and convey to the taxpayer that his property is subject
to collection procedures.
Should our title research indicate that persons other than those listed on the tax roll have an
interest in the property, as in the case of lienholders, new owners, and joint ownership of
property as a result of tenancy in common, heirship, or a partnership, and who may not have
received prior notification from either our Firm or the tax office, an additional notification is
sent to those persons informing them of the delinquency and need for prompt payment of taxes
before any delinquent tax suit is filed.
When delinquent tax suits are filed, MVBA will charge the delinquent taxpayer a$100.00 title
research fee per suit regardless of the number of parcels. The Property Tax Code authorizes
this fee which is included as part of the court costs owed by the delinquent taxpayer.
McCreary, Veselka, Bragg & Allen
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C. INSTALLMENT PAYMENT AGREEMENTS
Some delinquent taxpayers are unable to pay the entire amount due in a single payment, and
many of our clients have adopted policies that permit installment payment agreements. Such
policies vary among jurisdictions, and we comply with any payout arrangement or policy
adopted by our clients. Accordingly, we provide the following support program for installment
payment agreements:
1. Consultation and Review of Existing Program.
We consult with the tax collector and review policies and procedures regarding
installment payment agreements. Where there is no conflict with existing policy,
we recommend the following:
a) While the Tax Code permits agreements to extend as long as 36 months, the payment
agreement should provide for complete satisfaction of the delinquency in the shortest
possible time.
b) If an agreement is signed before litigation, a suit will not be filed so long as the
agreement is current.
c) Agreements signed after suit has been filed should permit judgment to be taken. The
agreement will be continued post-judgment, and the judgment will not be enforced so
long as the agreement is current.
2. Preparation of Installment Payment Agreements.
After consultation and review of the current program, the tax office may choose to continue
with the existing forms and procedures. However, we redesign forms to be used by the
tax office upon request of the tax collector. Additionally, our office assumes all of the
responsibility of generating installment agreements and securing the necessary signatures
of the property owners.
3. Monitoring Compliance with Installment Payment Agreements.
Immediately upon receipt of notification that an installment agreement has been signed,
that account is coded in the tax office computer and in our system. We maintain copies
of all payment agreements. MVBA will monitor all installment payment agreements for
compliance.
4. Enforcing Compliance with Agreements.
In the event a taxpayer defaults on an installment agreement, we send a notice of
cancellation of the payout agreement and begin the next step in the collection process.
McCreary, Veselka, Bragg & Allen
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D. BANKRUPTCY PROCEEDINGS
McCreary, Veselka, Bragg & Allen has an excellent bankruptcy department capable of
providing the finest representation to our clients in this important area of practice. The
seven-person staff of the MVBA bankruptcy department is trained in bankruptcy law, and
their efforts are devoted exclusively to bankruptcy matters. Bankruptcy litigation is
administered by three attorneys, P. Michael Reed, D. Kirk Swinney and Lee Gordon,
who are licensed to practice before each of the federal courts in Texas, the United States
Court of Appeals for the Sth Circuit, and the United States Supreme Court. Our attorneys
make more personal appearances before bankruptcy judges than the attorneys of any other
law firm engaged in property tax collections. They aggressively assert the tax claims and
priorities and defend the tax liens of our clients in the Bankruptcy court.
To handle the large number of bankruptcy cases, the Firm has made use of a computerized
tracking system since 1986. That system has been updated within the last year to provide
the most capable and efficient bankruptcy tracking system available.
Upon notification of a bankruptcy affecting a client, we generate and file a claim for current
and delinquent taxes and a Notice of Appearance. The Appearance notifies participants
in the bankruptcy of the need to provide us with copies of all relevant documents so that
we may respond appropriately on behalf of our clients. From that point, various measures,
both defensive and offensive, may be in order. If the situation warrants, we move for
a modification of the automatic stay, which would otherwise bar our pursuing the taxes
by suit. When we are able to do this, we may subsequently seek the payment of the taxes
due in a state court action. Additionally, we find that taxing units frequently are vulnerable
to impairment of their tax liens by not protecting their interest when a Chapter 11 or
Chapter 13 bankruptcy plan of reorganization is drawn. Therefore, we monitor all bank-
ruptcy reorganization plans to determine that the provisions contained in those plans
provide the full legal redress available to our clients. Additionally, we carefully monitor
and respond to other bankruptcy transactions which jeopardize recovery, including sales
of property, motions for relief of automatic stay filed by other creditors, and lien claims,
as well as defending any challenges made to the tax claims of our clients. We negotiate
with debtors, trustees, and other competing creditors to protect the property tax liens and
obtain priority payment of taxes. We attend hearings in Bankruptcy Court to litigate any
objections filed by debtors to tax claims. Our goal is to maximize the return of tax dollars
to our clients in every bankruptcy case.
Additionally, we have procedures for carefully following up after a bankruptcy has been
concluded. We determine the status of taxes which were a part of a bankruptcy proceed-
ing, to determine any remaining liability for those taxes, and pursue the liable parties in
the collection of those taxes. Our diligence and aggressive legal actions in the area of
bankruptcy results in the timely collection of the taxes due to our clients which otherwise
might be lost or inordinately delayed.
McCreary, Veselka, Bragg & Allen
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E. COLLECTING TAXES FROM FEDERAL AGENCIES
With the closing of numerous banks and savings and loan associations in Texas by the
Federal Deposit Insurance Corporation and Resolution Trust Corporation, a new challenge
has arisen in the collection of delinquent property taxes. The enactment of the Financial
Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) by the United
States Congress significantly changed the law relating to the payment of taxes on property
owned by the FDIC and RTC in their capacity as receiver for an insolvent financial
institution. McCreary, Veselka, Bragg & Allen files claims, as required by FIRREA,
for current and delinquent taxes with the FDIC and RTC. We aggressively pursue all legal
remedies and take other practical measures to collect the taxes and accrued penalties and
interest due. Our Firm has vast experience in collecting taxes on property which has been
foreclosed upon by the FHA, VA, SBA, HUD and other Federal agencies. We are
successful in obtaining payment of all taxes, penalties and interest from these Federal
agencies.
McCreary, Veselka, Bragg & Allen
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F. FILING AND PROSECUTING LAWSUITS TO JUDGMENT
It is necessary to file lawsuits against those delinquent property owners who do not respond
to our notices of delinquency. MVBA takes the initiative to identify delinquent property owners
for lawsuits, consults with the client and/or tax office, files lawsuits, and pursues the lawsuits
to payment or judgment and sale. While we regularly consult with the tax office and respond
to the suggestions of our clients, MVBA does not wait for our clients to tell us upon which
delinquent property owners to file lawsuits. MVBA files lawsuits regularly and continuously.
The following is a description of our standard litigation process. However, we adapt our
process to meet our clients' desires and policies.
SELECTION OF ACCOUNTS FOR LAWSUITS
MVBA uses specially-designed computer programs to sort the accounts on the delinquent
tax roll by various characteristics such as the amount due and the number of tax years
delinquent. Accordingly, we file lawsuits on tax accounts with large amounts due and on
those tax accounts where the amount is smaller but where a number of years are delinquent.
This provides a representative cross section of the property owners on the delinquent tax
roll and avoids undue concentration on a group of property owners or a specific area of the
county. We carefully identify those property owners who have legitimate economic or medical
hardships or those who have filed over age 65 tax deferrals. However, MVBA scrupulously
avoids any other discriminatory criteria in selecting accounts for lawsuit.
CONSOLIDATION OF TAX ACCOUNTS UNDER COMMON OWNERSHIP
The policy of MVBA is to file a single lawsuit encompassing all the delinquent properties,
both real and personal, with common ownership. This is accomplished by use of an alpha-
cross index computer program which identifies all accounts on the delinquent tax roll under
the same name. We also inquire of the tax office to identify name variations or the business
names of a delinquent property owner. Combining all the delinquent accounts of a property
owner in a single lawsuit makes it easier to collect the total tax liability of the property
owner, reduces the amount of court costs charged to the delinquent property owner, and
eliminates confusion and duplication of efforts which can result if multiple suits are filed
against the same person.
After the account selection process, title and address research is performed on all parties to
the lawsuit. Upon completion of this research, the MVBA computer system combines the
delinquent tax roll data on the tax amounts, the tax years due, and the description of the property
taxed with our research information on title to the property and the addresses of the property
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owners and lienholders. We generate an Original Petition and a Citation. The Original Petition
is filed in the Court, and the District Clerk issues the citations we prepare to each defendant.
OBTAINING SERVICE OF CITATION ON THE DEFENDANTS
Each defendant property owner and lienholder in a lawsuit must be served with citation prior
to setting the case for trial and judgment. Within sixty days from the date a citation is issued,
MVBA examines the Court's file for the sheriff s return of the citation indicating that a
defendant has been served or, in the alternative, that the defendant could not be located at
the address given on the citation. If there is not a sheriff s return of the citation at the
initial examination, we will review the Court's file again every thirty days until the sheriff s
return is filed. If a citation is not returned by the sheriff within sixty to seventy-five days of
issuance of the citation, we make inquiry of the sheriff s department as to the status of the
service of citation or any questions that may have arisen.
If the sheriff is unable to locate a defendant at the address given on the citation, we begin
an immediate search for a new address. A detailed discussion of address research is included
in Section B. If a new address is identified, a new citation is issued. If the defendant cannot
be located after a diligent search, a citation by publication will be issued on the defendant.
DEALING WITH DEFENDANT PROPERTY OWNERS
Many defendant property owners will pay after service of citation. We communicate
with the defendants or their attorneys to arrange the payment of the taxes and court costs
and the dismissal of the lawsuit. Other defendant property owners may wish to sign an
installment payment agreement. If the tax office approves of the payment agreement, we
closely monitor the defendant's compliance with the agreed-upon payment schedule. In
some cases, we will obtain an agreed judgment along with a payment agreement wherein
we agree not to execute on the judgment provided the defendant keeps the payout agreement.
A detailed discussion of installment payment agreements is included in Section C.
SUIT TRACKING SYSTEM
The process of keeping numerous lawsuits flowing through the court system requires a
computerized suit tracking system. McCreary, Veselka, Bragg & Allen maintains a
sophisticated automated suit tracking system providing the following information on each
pending suit:
*Cause Number
*Style of Case
*Filing Date
*Defendants' Names
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*Lienholders' and other parties' names
*Property Description
*Service of Citation and Date
*Answers by Opposing Attorneys
*Motions or Discovery filed by any party to the suit
*Installment Payment Agreement
*Court Cost Payments
*Dismissal Date
*Judgment Date
*Abstract of Judgment
*Tax Sale
*Bankruptcy
JUDGMENT
If payment is not made after service of citation, we request the Court to set the case for
trial on the merits. The Firm believes in pursuing tax suits to a speedy conclusion. When
a trial date is obtained, a"Notice of Trial" letter is sent notifying the defendant of the date
and time that judgment will be sought for foreclosure of the tax lien on the property and
for personal judgment against the defendant for amounts due.
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G. COLLECTIONS OF JUDGMENTS BY EXECUTION AND SALE
After the Court's entry of Judgment, it may become necessary to seek execution or sale to
recover the taxes due. Tax sales are conducted only after consultation with our clients. We
consider executions and sales the strongest part of our program. Accordingly, we devote
much effort to extensive research and notification. The sale can only be as solid as the
underlying petition and judgment.
MVBA will usually send a notice of intent to sell property to delinquent property owners
after judgment is taken. If payment is not made, MVBA prepares a Order of Sale for issuance
by the District Clerk. After issuance of the Order of Sale by the District Clerk, a Notice of
Sale is mailed to each defendent and is printed in the newspaper. MVBA prepares a Bid Sheet
listing the legal description of each tract posted for sale and the minimum bid for each tract.
We attend the Sale and assist the Sheriff or Constable conducting the Sale. After the Sale,
MVBA will calculate the disbursement of the Sale proceeds from each tract.
VACANT AND ABANDONED PROPERTY TAX SALES
The Firm actively pursues the sale of vacant and abandoned property. Several vacant,
abandoned and "assessed unknown" properties are placed in one lawsuit. After title
run sheets are obtained, extensive research is done, particularly as to heirships, probated
wills, etc. Numerous defendants may be listed in one suit. Citation by Publication is
necessary as to defendants with unknown addresses. A local attorney is appointed
attorney- ad- litem to represent all defendants cited by publication. After judgment is
obtained, an Order of Sale is issued by the District Clerk and Notice of Sale is published.
A bid sheet is prepared describing the property to be sold and the minimum bid for
each tract. The bid sheet is mailed to local realtors and other persons who have
expressed interest in bidding at tax sales in general or to those persons who have
contacted the tax office about a particular parcel of property. The properties are sold
at public auction to the highest bidder and Sheriff s deeds are issued to the purchasers.
Tax sales return those vacant and abandoned properties which once represented lost
revenue to our clients back to a current income producing status in the hands of a local
taxpayer. More importantly, tax sales will create a substantial incentive for other
delinquent property owners to pay their accounts.
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TAX WARRANTS
The Property Tax Code authorizes the seizure ofpersonalproperty in order to satisfy property
taxes. Seizure proceedings are among the most effective collection techniques, especially when
utilized to collect delinquent taxes on business personal property. The publicity from successful
seizures can also be very effective in prompting other property owners to pay without litigation.
We recognize that the use of seizures is also the harshest technique for collecting delinquent
taxes. Therefore, seizures are initiated only after discussion with, and approval of, the client.
Furthermore, we have developed seizure procedures to assure our clients that the tax seizures
we conduct will be professionally and carefully executed.
These procedures are:
1. Identify the account to be seized. This is accomplished in close conjunction with the
tax office. Larger accounts and those with several years of taxes due are considered.
Businesses with inventory which is readily subject to seizure are the best candidates
for seizure. We are extremely careful to confirm the ownership of all personal property
to be seized.
2. Send notice to the property owners. When time is not of the essence, we will notify
the property owners that their property is subj ect to seizure and sale for non-payment of
taxes. Mostproperty owners respond withpayment after receiving this notice.
3. Determine the feasibility of seizure. We will inspect the property to verify the
existence of property which can be seized and will, if there is a possibility of a
pending bankruptcy, check with the Bankruptcy Court to ensure that no automatic stay is
violated.
4. Preparation and issuance of the tax warrant. We will prepare the necessary forms
for seizure. These forms, which have been designed by the Firm, include the Application,
the Order issued by the judge for the issuance of the Tax Warrant, and the Tax Warrant
itself. A judge of a court of appropriate jurisdiction in the county where the seizure is
to take place must sign the Tax Warrant.
5. Execution of the warrant. We will accompany the tax collector and the sheriff in the actual
seizure of the property. Most property owners pay when they are served with
the Tax Warrant by the sheriff.
6. Sale of the property. Should the property owner still refuse to pay the tax after
seizure, we will prepare the necessary notices of sale which must be sent to all
persons with an interest in or lien on the property seized. This notice sets forth the
time and place of sale. We will have an attorney present at the sale of the property.
Finally, we will prepare the Bill of Sale conveying to the purchaser title to the property
sold.
MVBA has vast experience in the seizure of business personal property. After consultation and
with the consent ofthe City Attorney and Tax Assessor-Collector, MVBA will initiate seizures
ofproperty forthe City ofParis.
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H. DATA PROCESSING SUPPORT
McCreary, Veselka, Bragg & Allen has custom designed and developed the most
sophisticated software for delinquent tax collections. The Firm has employed computer systems
analysts with expertise in property taxation to produce a highly specialized software which has
extensive integrated word and data processing capabilities. As we service our clients, we are
continuously developing, testing, and revising our system in response to changes in the legal
and collection environment. All of our clients benefit from new program developments and
system enhancements. We have successfully processed data from thirty-five different software
systems operating on six different makes of computer hardware. We are fully compatible with
all computer hardware and collection software systems used by tax offices in Texas, including
The Software Group. We invite you to visit our main office in Austin for a demonstration of
the vast capabilities of our computer system.
The capabilities of our data processing system are as follows:
1. Automated Collection System
* Print and process over 200,000 delinquent notices a week
* Data record structured for variable access and output by name, legal description
or year level
* File structure accommodates 80 sub-jurisdictions
* Automated system follow-up
* Calculates standard penalty and interest, special penalty and attorney fees
automatically
* Accumulates and logs statistics of all notices, letters, suits, judgments and sales
processed
* Individual statements of delinquent accounts
* Delinquent listing by alpha or geographic account number sequence
* Cross index files
* Flag accounts by status and amounts
2. Automated Suit Document System
* Computer generated petitions and citations for personal service and vacant and
abandoned property suits
* Separate schedules of taxes for each jurisdiction calculated to include attorney fees
* Computer generated judgments and releases
* Status of suits
* Computer generated statistics
* Computer generated letters before/after suit is filed, judgment taken and property
sold to satisfy lien
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3. Automated Suit Tracking System
* Cause Number
* Style of Case
* Filing Date
* Defendants' Names
* Lienholders' and other parties' names
* Property Description
* Service of citation and date
* Court cost payments
* Status of Suits
* Judgment date
* Abstract of Judgment
* Tax Sale
* Payout
* Special case status: Hardship, over-65, homestead, etc.
* Answers by opposing attorneys
* Impleaded tax jurisdictions
* Motions filed by any party to the suit
4. Automated Bankruptcy Tracking System
* Case Number
* Style of Case
* Defendant's names
* Property description
* Jurisdictions in which claims are filed
* Claim years and tax amounts
* Suit filed
5. Texas Legislature Tracking System
* On Line Service
Tracks all phases of legislation
* Committee Calendars
6. File Access and Update
* Secured access to Tax Data, Suit, and Bankruptcy Files
* Update by CRT entry and computer tape or diskette
* Selection of Data by Record Indicators
Property under suit and judgment
Returned mail
Paid accounts
Holds - Including Payouts, Hardships, Exemptions, and Bankruptcies
* Specified years, amounts, property types
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7. Reports
* Complete Statistics
Number and type of letter
Number and amount of suits filed
Number and amount of judgments
Number of dismissals
Collections received
Accounts paid
Various percentages of totals
* Total items and amount of delinquency by year
* Detail delinquent listing of all accounts
* Ability to develop custom reports by selection of certain records by varied
qualifications
8. Color Graphic Illustrations of Statistics
* Illustrations and Comparison of Collection Statistics
* Diagram of Delinquent File Status
Work in Progress
Suits
Judgments
Returns
Holds
Bankruptcies
9. Data Processing Resources
* The main computer installation of McCreary, Veselka, Bragg & Allen, is located
at 5929 Balcones Drive, Suite 200, Austin, Texas. At this location, we have the
most advanced IBM RISC System/6000 andNT Serverplatform.
A small list of computer components are as follows:
Frame relay with voice over IP
RISC 6000 w/ Unix AIX operating system
Dell Servers (NT Platform)
CISCO Routers
4 mm Tape Drive
8 mm Tape Drive
1/2 9 Track Tape Drive
Dell PC's
Wyse Terminals
Lexmarkprinters
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I. STATISTICAL SUMMARY OF COLLECTIONS
As part of our proposal, we offer the following collection statistics for a few cities MVBA
represents. This information shows our firm's commitment to collect a high percentage of
delinquent taxes during the first year they are delinquent. We believe that the earlier the City's
taxes are collected, the earlier the City of Paris can use the money.
City of Copperas Cove
Total 1999 delinquent as of 7/1/00 $80,401.74
Total 1999 collected by 6/30/01 $51,983.62
Percent collected 64.66%
Total delinquent roll levy on July 1, 1999 $140,494
City of Hillsboro
Total 1999 delinquent as of 7/1/00 $105,761.30
Total 1999 collected by 6/30/01 $69,123.28
Percent collected 65.36%
Total delinquent roll levy on July l, 1999 $298,297
City of Belton
Total 1999 delinquent as of 7/1/00 $86,768
Total 1999 collected by 6/30/01 $61,179
Percent collected 67.05%
Total delinquentroll levy on July l, 1999 $185,355
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III.
PROFILE AND EXPERIENCE
OF THE
LAw FIRM
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A. PHILOSOPHY OF THE FIRM
McCreary, Veselka, Bragg & Allen, P.C., as a law firm, has been engaged exclusively
in the practice of property tax law since 1960 with emphasis on delinquent property tax
collections. The main office of MVBA is in Austin, with branch offices in Denton,
Georgetown, Waco, Longview, Abilene, San Angelo, San Marcos, Seguin and Victoria.
MVBA currently represents over 450 taxing units in the collection of delinquent property
taxes. These taxing units include school districts, cities, counties, appraisal districts, and
other special taxing districts of all sizes.
At the present time, MVBA has 91 employees consisting of 10 Attorneys, 34 Legal
Assistants, and support staff of 47. Each member of our staff is dedicated to delivering
the highest level of personal service to each of our clients.
Our philosophy is predicated on the premise that every taxpayer should and will be treated
as a human being. Every call and letter will be answered. All the help and assistance,
short of legal advice, will be provided to the taxpayer. Collections are the major goal
of our efforts, but good relations with your taxpayers are essential to enhancing your
collections and creating a spirit of civic pride and mutual respect in the community.
McCreary, Veselka, Bragg & Allen has a staff of experienced attorneys, legal assistants,
computer programmers and operators, and other support personnel dedicated to the task
of maximizing your delinquent tax collections. MVBA combines the strong personal
commitment to excellence of our experienced and knowledgeable attorneys, legal assis-
tants and staff inembers with the most modern computer technology to meet the needs of
our clients. MVBA has consistently demonstrated the ability to administer an aggressive
collection program and attain extremely high levels of delinquent tax collection for our
clients. Moreover, MVBA achieves the goal of maximizing the collections in a professional
and ethical manner without embarrassing our clients with unfavorable publicity about
ourselves, individually or as a law firm. MVBA is aware that our actions reflect not only
on us but our clients as well. Character and integrity are not just words at McCreary,
Veselka, Bragg & Allen.
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B. PROFILE OF THE PARTNERS AND KEY PROFESSIONAL STAFF
OF McCREARY, VESELKA, BRAGG & ALLEN, P.C.
PARTNERS
SHELBURNE (SHELLY) J. VESELKA is the partner in charge of the delinquent tax programs
in Taylor County, Hardin County, Guadalupe County, Brazos County and Hays County, among
others. He has been a member of the Firm since 1971. Mr. Veselka has extensive experience
in tax litigation, both in the trial courts and appellate courts. He has personally conducted the
sale of thousands of parcels of real property and performed numerous summary seizures of
personal property. Mr. Veselka has addressed many civic organizations and professional tax
organizations on property tax matters.
Mr. Veselka was raised in several towns in the Texas oil patch where his father was a petroleum
engineer. His family moved to Houston in 1956, and he graduated from Bellaire High School
in 1960. He graduated in 1964 from Texas A&M University with a B.A. in History.
Upon graduation, he was commissioned as a Second Lieutenant in the United States Army.
While in the Army, Mr. Veselka served in Vietnam where he advanced to the rank of
Captain, was awarded the Bronze Star, the Purple Heart, and the Combat Infantryman's
Badge. After being honorably discharged from the Army in 1969, he entered the University
of Texas School of Law earning his Doctor of Jurisprudence degree in 1971. Mr. Veselka
is a member of the State Bar of Texas and is licensed to practice in the U.S. District Court
for the Western District of Texas.
Mr. Veselka has four children and three grandchildren. His interests include golf, live
"blues" music, Aggie sporting events, soccer and travel. He is a member of First
United Methodist Church, Victoria, Texas.
HARVEY M. ALLEN is the partner responsible for the delinquent tax collection
programs in Williamson County, Midland Central Appraisal District, Bowie County
Appraisal District, and the Tax Appraisal District of Bell County, among others. He has
been a member of the Firm since 1981. He is active in all phases of the Firm's work,
including trial and appellate practice involving both collection and appraisal matters. Over
the years, Mr. Allen has rendered numerous legal opinions to schools, cities, counties and
appraisal districts on property tax related matters. Mr. Allen is an authority on the
Financial Institutions Reform Recovery and Enforcement Act of 1989 (the "savings & loan
bailout" legislation) and its impact on local taxing units. He has addressed the
Tax Assessor-Collectors Association of Texas and Texas Association of Assessing Officers
on the complex provisions of this Federal law. Mr. Allen is the supervising partner of
the delinquent tax collection programs for all of our east Texas clients.
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A certified public accountant, Mr. Allen formerly worked on the audit staff of Arthur
Andersen & Co., Certified Public Accountants, in Houston. He has participated in
numerous audit engagements involving Fortune 500 companies. Mr. Allen is a member
of the Texas Society of Certified Public Accountants.
Mr. Allen, from Houston, Texas, graduated from Spring Woods High School. He attended
Baylor University and obtained a B.A. degree in 1975. Mr. Allen entered graduate
school and received a Masters in Business Administration degree in 1977. After working
in public accounting, he returned to Baylor University School of Law and received
a Doctor of Jurisprudence degree in 1981. Mr. Allen is a member of the State Bar of
Texas and is admitted to practice in Federal Courts. Mr. Allen has three sons and is
a member of Hyde Park Baptist Church where he has served as a deacon and has served
as the Chairman of the Finance Committee of the Church. He has also served on the Board
of the Parent-Teacher Association of his sons' elementary school. His interests include
golf, fishing and travel.
GILBERT T. BRAGG is originally from Baltimore, Maryland where his father was a
Baptist minister. Mr. Bragg attended Baylor University on a United States Air Force
ROTC scholarship. He received a B.B.A. degree in 1972 along with a commission as a
Second Lieutenant in the Air Force. He received his Doctor of Jurisprudence degree from
the Baylor University School of Law in 1973. After graduation from law school, he was
promoted to the rank of Captain. He was a Judge Advocate at Bergstrom Air Force Base
in Austin from 1974 until 1978.
Mr. Bragg joined the Firm in 1978. He has handled all phases of delinquent tax collection
litigation. He is the managing partner for the County of Denton and County of Comal.
He is a member of the Property Tax Section of the State Bar of Texas.
Mr. Bragg and his wife have one son who is a Senior at Texas A& M University. They
are active members of Hyde Park Baptist Church where Mr. Bragg serves as a deacon,
Church Trustee (Past President), and is a Past Chairman of the Personnel Committee of
the Church.
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ATTORNEYS
ROBERT L. MEYERS is from Houston, Texas where he graduated from Spring Woods
High School. He attended undergraduate school at Baylor University, receiving a B.A.
degree in History. He is a 1980 graduate with a J.D. degree from Baylor University School
of Law. Mr. Meyers served as an assistant city attorney for the City of Waco from
1980-1986 where he worked primarily in the area of ad valorem taxation. His duties
included the supervision of the collection of taxes for the City of Waco and the
Waco Independent School District as well as representing the City in establishment
and operation of Tax Increment Financing Districts and Tax Abatement Districts.
Mr. Meyers joined McCreary, Veselka, Bragg & Allen on January 1, 1987. Mr. Meyers,
as the managing attorney for the Waco office, represents various school districts, cities,
counties and special districts in the collection of taxes. He also represents the McLennan
County Appraisal District as general counsel and in appraisal litigation. He was appointed
general counsel of the McLennan County Education District.
He is a frequent speaker for the Texas Association of Appraisal Districts and Texas
Association of Assessing Officers. Mr. Meyers is a certified instructor by the Board of
Tax Professional Examiners and teaches several tax courses throughout the State.
Mr. Meyers is a member of the State Bar of Texas and practices before the trial and
appellate courts of this State. He is also a member of the State Bar of Texas Committee
on Ad Valorem Taxation and Committee on Professionalism. He is licensed in Federal
Court, where he has litigated cases concerning the appraisal of property for ad valorem
taxation.
MICHAEL REED is an attorney in our Austin office. Mr. Reed grew up in San Antonio,
Texas, where he graduated from Jefferson High School in 1965. He attended Texas
A&M University, graduating in 1969 with a degree in History and Political Science, and
served as an officer in the U.S. Air Force from 1969-1972. He graduated in 1988
from the University of Texas Law School, and began to practice with McCreary, Veselka,
Bragg & Allen at that time. He is admitted to practice law in the state courts of Texas,
the Federal District Courts for the Northern, Southern, Eastern, and Western Districts of
Texas, as well as the Fifth Circuit Court of Appeals.
Since joining the Firm, Mr. Reed has largely focused on bankruptcy problems facing ad
valorem tax jurisdictions. He has helped to devise the procedures that we use to maximize
the recovery to tax jurisdictions of revenues that are jeopardized by bankruptcy proceed-
ings. He has also participated in developing the computer system by which we are able
to track bankruptcies with delinquent tax problems throughout the state.
Apart from bankruptcy practice, Mr. Reed has been active in soliciting passage of useful
ad valorem tax legislation in the Texas Legislature. Along with Harvey Allen, he has
McCreary, Veselka, Bragg & Allen
32
obtained Legislative sponsorship and passage of pertinent ad valorem tax measures that
benefit all tax jurisdictions. Along with such active participation in the Legislative process,
Mr. Reed has been in the position to monitor the changes in the school finance system,
and was able to assist numerous school districts in making the necessary adaptations to
comply with school funding system changes. Along the same line, when the CED funding
system was challenged in Federal Court, Mr. Reed participated in the defense of the school
districts in the Federal District Court and Fifth Circuit proceedings.
Mr. Reed has been a frequent speaker and publisher for associations of appraisal district
personnel, tax officials, other tax professionals, and school officials, as well as for the West
Texas Bankruptcy Bar and the Ad Valorem Tax Section of the State Bar of Texas.
D. HIRK SWINNEY joined the Firm in April, 1990. Mr. Swinney provides legal
representation to our clients in the areas of bankruptcy and appraisal district litigation.
He has extensive experience in the United States Bankruptcy Court. Mr. Swinney has
litigated numerous cases before the Bankruptcy Court while protecting the interest of
taxing units from the claims of competing creditors and against the Trustee of the debtor.
He currently has several Bankruptcy Court cases on appeal to the United States District
Court and the U.S. Fifth Circuit Court of Appeals.
Prior to joining the Firm, he was First Assistant City Attorney for the City of Midland
where he practiced in a wide range of litigation fields including contracts and local
government law, procedures, and problems. He has been a speaker and writer for the
Texas Municipal League/Texas City Attorneys Association Conferences, as well as a
frequent advisor to Texas municipalities regarding issues such as constitutional procedures,
utilities, all types of local taxes, and bankruptcy. He has also been a contributing writer
to the National Institute of Municipal Law Officers Publication "Municipal Attorney".
Since joining the Firm, he has successfully litigated several appraisal district cases and
participated in and successfully settled numerous others.
Mr. Swinney was admitted to the State Bar of Texas in 1984. He is also licensed to
practice before the Federal District Courts of the Northern, Southern, Western, and
Eastern Districts of Texas, the Eastern and Western District of Arkansas, the Fifth Circuit
Court of Appeals, and the United States Supreme Court. He graduated from Lubbock
Christian University (B.A. 1981 Summa Cum Laude) and Texas Tech University School
of Law (J.D. 1984). He is a member of the Texas City Attorneys Association, State Bar
of Texas, and Christian Legal Society.
JAVIER GUTIERREZ is from Hebbronville, Texas where he graduated from
Hebbronville High School in 1988. His family are life-long residents of Hebbronville.
He received a Bachelor of Business Administration, with honors, from Texas A& I
University in Kingsville, Texas. He joined McCreary, Veselka, Bragg & Allen, P.C.
in January of 1994, as a law clerk while attending law schooL Mr. Gutierrez is a 1995
McCreary, Veselka, Bragg & Allen
33
graduate of the University of Texas School of Law. Mr. Gutierrez became a full time
member of McCreary, Veselka, Bragg & Allen, P.C., in August, 1995, and was admitted
to the State Bar of Texas in November, 1995.
SERGIO E. GARCIA is from San Juan, Texas where his family still resides. He graduated
from Pharr-San Juan-Alamo High SchooL Mr. Garcia attended undergraduate school at
The University of Texas at Austin and received a Bachelor of Arts in Government in 1992.
He received his J.D. degree from The University of Texas School of Law in 1995
and was admitted to the State Bar of Texas in May, 1996. Mr. Garcia joined McCreary,
Veselka, Bragg & Allen, in May of 1993 as a law clerk while attending law school.
JUDY SINGLETON is the managing attorney in our Longview Office. She received a
B.B.A. in Accounting from Texas A&M University in 1986, and graduated from the
University of Texas School of Law in 1990. Mrs. Singleton has also been a Certified
Public Accountant since 1991. Prior to j oining MVBA, Mrs. Singleton has six years
experience as an Assistant Criminal District Attorney for Gregg County. Additionally,
Mrs. Singleton pursued a private practice emphasizing Criminal, Family and Probate Law
and Guardianships, representing clients in all phases of ligitation, including jury trials. She
is a member of the Accounting Society and Beta Gamma Sigma Honor Society, and enjoys
traveling and spending time with her husband and fourteen month old twins.
LEE GORDON is an attorney who joined the Firm in the Austin office on October 18,
2000. He graduated with a bachelor's degree from the University of Texas in
1972 and from Texas Tech University with a law degree in 1975. Mr. Gordon has
over 20 years of experience in the field of ad valorem taxation. He has represented
many taxing entities throughout the state in both collection and appraisal matters.
In addition to being licensed to practice in state court, Mr. Gordon is licensed to practice
in the Federal District Court for the Eastern District of Texas where he has
represented taxing jurisdictions in bankruptcy cases.
Mr. Gordon has made numerous collection and bankruptcy presentations to taxing
entity personnel at their offices as well as to associations of taxing jurisdictions.
He is also certified by the Texas Association of Appraisal Officers to teach various
continuing legal education courses.
Lee is the proud husband of Jodie Gordon, a pre-school teacher at St. Matthews Episcopal
Day School, and the proud father of Hannah Gordon, an elementary school student at
Hill Elementary in Austin. His outside interests include golf, youth sports, and travel.
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34
KEYPROFESSIONAL STAFF
D. BRYANT SMITH is the Director of Operations of the Firm. He joined the Firm in 1988
as a Tax Consultant. He has extensive experience in the areas of tax program analysis, title
research, taxpayer notification and address research.
Mr. Smith's area of expertise includes contract management and public relations with both tax
office personnel and the general public. He has been instrumental in the Firm's implementation
of extensive integrated word processing and data processing systems. Management of office
functions include coordinating computer data services and being the liaison between the law
firm and computer system analysts, as well as directing the daily operations of the Austin office.
He is a graduate of the University of Texas at Austin.
LUCINDA (CINDY) WILCOXEN is Director of Information Systems. She became a
member of the Firm in 1976 after graduation from Mary Hardin-Baylor University.
With twenty-four years of experience in delinquent tax collections, Ms. Wilcoxen
coordinates the development, documentation and maintenance of the MVBA computer
system. She supervises computer data conversions and all data processing
applications. During her years with the Firm, she has processed data from every
make and model of computer hardware and software which are installed in tax offices
across the state.
McCreary, Veselka, Bragg & Allen
35
C. SUMMARY OF APPELLATE COURT DECISIONS-MCCREARY,
VESELKA, BRAGG & ALLEN, P.C., AS LEGAL COUNSEL
No. 11-93-050-CV, Walker's Country Place, Inc. v. Central Appraisal District of Taylor
Co., 867 S.W.2d 111 (Tex.App.-Eastland 1993, no writ)
Walker's Country Place, Inc. purchased an apartment building in Abilene from a lender sub-
sequent to that lender having foreclosed upon the property in a bankruptcy. When the Taylor
County taxing jurisdictions pressed the new owner for the payment of delinquent taxes, penalties
and interest, the taxpayer filed a declaratory judgment action seeking to have the penalties and
interest which arose during the bankruptcy declared void. The District Court in Taylor County
ruled in favor of the taxing jurisdictions and the taxpayer appealed. On appeal the Eastland
Court ruled that while the imposition of penalties subsequent to the filing of bankruptcy may
have constituted a violation of the automatic stay under bankruptcy law, it was necessary for
a party in interest to have challenged those penalties and interest during the bankruptcy, in
bankruptcy court. Therefore the taxpayer could not collaterally attack the assessment in state
court once the bankruptcy was over. This ruling protects the right of taxing jurisdictions to
collect all penalties and interest which have accumulated on properties while they were in
bankruptcy from subsequent holders of the property by lien enforcement once the bankruptcy
is over.
No. 90-60670, Longview Independent School District v. Machinery Supply & Grinding
Company, Inc. (In the United States District Court for the Eastern District of Texas,
Tyler Division, 1992)
In a Chapter 7 bankruptcy, the personal property assets of Machinery Supply & Grinding
Company, Inc. were liquidated by the Trustee. Longview Bank and Trust Company sought
release of the proceeds of the sale to their commercial lien on that personal property. Longview
ISD also sought the satisfaction of the personal property taxes from the proceeds of the sale
in satisfaction of its delinquent ad valorem tax claims. The Bankruptcy Court denied the request
of Longview ISD and granted the entirety of the funds to Longview Bank and Trust. Longview
ISD appealed the decision to the Federal District Court and that Court reversed in favor of
Longview ISD. In reversing the Bankruptcy Court, the District Court found that Longview ISD
had a superior lien claim by virtue of Texas Property Tax Code § 32.05, and that while the
tax lien may have been avoidable by the Trustee, no action was taken in the bankruptcy by
the Trustee to avoid that lien. The Appellate Court further found that Longview Bank and Trust
had no standing to initiate a lien avoidance action on its own part and thus Longview ISD would
be awarded their portion of the proceeds of sale.
McCreary, Veselka, Bragg & Allen
36
No. 93-8408, City of Boerne, et al v. Boerne Hills Leasing Corp. and Chrysler Credit
Corporation, 15 F.3d 57 (Sth Cir. 1994)
Upon the sale in bankruptcy of the personal property assets of Boerne Hills Leasing Corp.,
the Bankruptcy Court in the Western District of Texas granted all proceeds of the sale of the
inventory to Chrysler Credit Corporation, the commercial lender in the case. The taxing juris-
dictions objected and requested distribution to their own lien claims which objections were
overruled and requests denied on the theory that the liens were fundamentally inferior to the
prior liens of the floor plan financier. The taxing jurisdictions appealed to the Federal District
Court, and while restating the basis for the ruling, that Court affirmed the Bankruptcy Court's
ruling. On appeal to the Fifth Circuit Court of Appeals, the rulings of the lower Courts were
reversed. The Fifth Circuit concluded that the tax lien of the taxing jurisdictions under Texas
law is superior to that of commercial lenders even when those commercial liens predate the
taxes, and that while the tax liens may have been avoidable under bankruptcy law, no action
had been taken by the Trustee to do so. Furthermore, the Fifth Circuit found that while Chrysler
Credit could have sought authorization from the Court to initiate a lien avoidance action on behalf
of the Trustee, no such authorization had been sought and thus the jurisdictions were entitled
to their portion of the proceeds of the sale of the debtors' inventory.
No. 4:91CV117, Robert V. Thurmond, Jr. v. Leander Independent School District, City
of Sachse, Wylie Independent School District, and Travis County, (In the United States
District Court for the Eastern District of Texas, Sherman Division, 1992)
Robert V. Thurmond, Jr., debtor in a Chapter 11 bankruptcy, challenged the classification
of the 1990 property taxes in his bankruptcy. The bankruptcy was filed in February of 1990
and if the 1990 taxes were pre-petition claims, they would be subject to a six year payout,
while if they were post-petition claims (administrative expenses), they would have to be paid
in full with full penalty and interest at the time the Chapter 11 plan was confirmed. In the
Bankruptcy Court, the Debtor argued that since personal liability had arisen on January 1 of
the tax year, the debt pre-dated the bankruptcy. The tax jurisdictions argued that under existing
case law in Texas, it was not the date of personal liability but the date of assessment which
determines whether a particular year's ad valorem tax pre-dates or post-dates the filing of the
bankruptcy. The Bankruptcy Court agreed with the taxing jurisdictions and ruled in their favor.
Mr. Thurman appealed, and on appeal the Federal District Court followed the same reasoning
as had the Bankruptcy Court, affirming that decision in favor of the taxing jurisdictions.
No. 93-8067, Midland Central Appraisal District v. Midland Industrial Service Corp.,
35 F.3d 164 (Sth Cir. 1994):
A debtor had filed bankruptcy on January 14, 1988. The bankruptcy court ruled that the 1988
taxes were pre-petition claims of the estate. The taxing jurisdiction contended that the
1988 taxes were administrative expenses to the bankruptcy. The Fifth Circuit concurred with
the bankruptcy court, affirming the case. Application for writ of certiorari to the United States
Supreme Court was denied.
McCreary, Veselka, Bragg & Allen
37
County of Burleson et al. v. General Electric Credit Corp., 831 S.W.2d 54 (Tex.App.-
Houston [14th Dist.], 1992 writ den.):
Contrary to the way the facts are reported in the case, the taxing jurisdiction seized a
manufactured home which had a given serial number on it. The taxing jurisdiction applied to
the Texas Department of Licensing and Regulation for information regarding the ownership
and lienholders on the home of that serial number. No record with the Texas Department
of Licensing and Regulation was found. Later, after the tax sale, GECC appeared claiming
a lien on the manufactured home. It demonstrated to the trial court that the serial number of
the manufactured home was not what it had appeared to be, but a different number under
which GECC held a lien. The appellate court affirmed the decision of the trial court in favor
of GECC.
Civil Docket No. 92-009-5, In re Texas Draughon Institute, Inc.; Pine Tree Inde-
pendent School District v. Texas National Bank, Western District of Louisiana 1993:
This case is factually and legally nearly identical to the Boerne Hills Leasing case. The
bankruptcy court in Louisiana held for the secured lendor, Texas National Bank, distributing
all proceeds of the sale of personal property to it as opposed to a taxing jurisdiction.
Taxing jurisdiction appealed and won a procedural reversal at the district court. On remand
to the bankruptcy court, the taxing jurisdictions prevailed on the theory that 11 U.S.C.
§ 546 allows for post-bankruptcy petition perfection of the personal property tax lien via
the filing of a claim in bankruptcy. Texas National Bank appealed, but the decision was
affirmed by the district court. The case was settled prior to reaching the Fifth Circuit
Court of Appeals, with substantially all of the taxes being paid.
No. SA-92-CA-698, In re W.H. Mangum, Inc.; County of Comal et al. v. W.H.
Mangum, Inc. et al., United States District Court for the Western District of Texas
1994:
The bankruptcy court disallowed the taxing jurisdiction's claim for § 33.07 fees and interest
on administrative expenses. The court also disallowed taxes for the year of filing as an
administrative expense. Following the bankruptcy court decision in the Boerne Hills case, the
court also disallowed all pre-petition tax claims on personal property as being inferior to
commercial vendors' liens. The district court reversed the bankruptcy court on all points ruling
for the taxing jurisdiction.
No. 04-93-00279-CV, Stahmann Sales Company v. County of Guadalupe et al., 4th
Judicial District Court of Appeal-San Antonio, February 23, 1994 (writ den.):
This case resulted from a tax judgment for personal property taxes on a recreational vehicle
retailer. The defendant, on appeal, contended that the entire Texas ad valorem tax scheme
on personal property was unconstitutional, that CED taxes were unconstitutional, that the tax
McCreary, Veselka, Bragg & Allen
38
affidavits submitted at the trial court were insufficient to establish a case, that the trial court
should have granted its motion for continuance, that certain taxes were barred by the statute
of limitations, that other taxes were barred by the doctrine of res judicata, that the description
of the personal property on the tax roll was insufficient, that insufficient notice of the taxation
was made, that the CED did not properly intervene in the case, and several other more
spurious matters. The court of appeal upheld the judgment of the trial court on all points
for MVBA clients county and school district. The judgment for the city was reversed due
to an insufficient tax affidavit. The state Supreme Court denied writ of error.
92-8244, Smith v. Travis County Education District, 968 F.2d 453, (Sth Cir. 1992):
MVBA participated with several other firms in the trial and appeal of the federal challenge
to the collection of CED taxes. The federal district court ruled against the CEDs but
stayed the effectiveness of its ruling. Both sides appealed to the Fifth Circuit where that
court reversed in favor of the CEDs.
No. 08-90-00164-CV, General Electric Credit Corporation v. Midland Central Ap-
praisal District and Appraisal Review Board of Midland Central Appraisal District,
and Freestone County Appraisal District and the Freestone County Appraisal Review
Board, 808 S.W.2d 169 (Tex.App.-El Paso 1991) Judgment modified in 826 S.W.2d 124
(Tex.1991)
GECC owned an aircraft which spent considerable time in both Midland and Freestone
Counties. Both appraisal districts placed the aircraft on their respective tax rolls. GECC did
not file a protest with the ARB of either county, but simply sued both in district court. The
court of appeals held that GECC was required to follow its administrative remedies pursuant
to Chapter 41 of the Texas Property Tax Code in both counties. The Court of Appeals also
sanctioned GECC approximately $60,000 for a frivolous appeal. The Supreme Court reversed
these sanctions, but upheld the appellate court's decision regarding following administrative
remedies.
No. 07-88-0284-CV, S. M. Ferguson, Jr. and S. M. Ferguson, Jr., Inc. v. Chillicothe
Independent School District, 798 S.W.2d 395 (Tex.App.-Amarillo 1990, writ den'd)
Ferguson sued the Hardeman County Appraisal District and others concerning the appraisal of
his property located within Chillicothe Independent School District. However, Ferguson failed
to make timely payment of the ad valorem taxes pursuant to Tex. Prop. Tax Code §42.08.
Later, he attempted to make a payment of the taxes and claimed that he had substantially
complied with §42.08. The court of appeals held that compliance with §42.08 is determined
as of the date of delinquency, and that any delinquency in payment would subj ect the property
owner to having his appraisal district suit dismissed pursuant to §42.08.
McCreary, Veselka, Bragg & Allen
39
No. 3-91-482-CV, Paul W. Kimmell AKA Paul W. Kimmell DC v. Burnet County
Appraisal District, 835 S.W.2d 108 (Tex.App.-Austin 1992, no writ)
Dr. Kimmell was a tax protestor who denied the jurisdictional authority of the State of Texas.
After multiple dilatory motions at the trial court, Dr. Kimmell suffered an adverse judgment for
delinquent taxes. He then appealed to the Third Court of Appeals. Prior to the time the Third
Court of Appeals issued a decision, Dr. Kimmell sent papers to the court and to the litigants
purporting to be orders of removal from the "Common Law Court for the Republic of Texas"
withdrawing the case from the jurisdiction of the Third Court of Appeals. The documents even
bore file-marked stamps from the alleged clerk of this "Common Law Court for the Republic
of Texas". The Third Court of Appeals held that there is no such thing as the "Common Law
Court for the Republic of Texas", dismissed Dr. Kimmell's case for abandonment of the appeal,
and sanctioned him for frivolous appeal.
No. 11-91-236-CV, Otis T. Hawkins v. Van Zandt County Appraisal District et al, 834
S.W.2d 619 (Tex.App.-Eastland 1992, writ den'd)
Hawkins operates a commercial nursery in Van Zandt County. On his property he has a number
of greenhouses which are constructed of inetal pipe sleeves driven into the ground in parallel
rows. Into the sleeves are inserted tubular arches called bows. Plastic is then stretched over
the parallel rows of bows to create a Quonset hut style greenhouse. Mr. Hawkins, supported
by the Texas Association of Nurserymen, claimed that these greenhouses, which he referred
to as "covers", were in reality only implements of husbandry and should be exempted from
taxation under Tex. Prop. Tax Code § 11.161. The trial court and court of appeals ruled in
favor of the appraisal district holding the greenhouses to be improvements to realty and thus
taxable. The Supreme Court denied Mr. Hawkins' application for writ of error.
No. 3-90-200-CV, J. M. Huber Corporation, Calcium Carbonate Division v. Burnet
County Appraisal District, 808 S.W.2d 613 (Tex.App.-Austin 1991, writ den'd)
J. M. Huber Corporation failed to render, for a number of years, a substantial rock crushing
plant in Burnet County in spite of repeated requests of the appraisal district to make a rendition.
Huber made substantial improvements to the plant. Finally, the appraisal district assembled
sufficient data to arrive at what it considered to be a realistic appraisal of the plant. That
appraisal was substantially higher than it had been in previous years. A representative of Huber
then contacted the chief appraiser. The chief appraiser told Huber that, even though it was
past time for filing renditions for that year, the appraisal district would consider a rendition if
Huber promptly sent it to the appraisal district. The next day, by express delivery, a document
arrived from Huber addressed to the chief appraiser. The document was essentially a letter
from Huber indicating what it thought the value of the rock crushing plant should be. The chief
appraiser filed the document as a rendition when she received it in May of the year in question.
Huber made no further contact with the appraisal district until after it received its tax bill. Finally,
several months into the next year, Huber asked the appraisal district when it would have its
McCreary, Veselka, Bragg & Allen
40
protest hearing before the ARB. The appraisal district indicated that the ARB process was
over and that Huber had not protested. Huber then filed suit contending that its communication
in May of the previous year was intended to be a protest. The court of appeals agreed with
the property owner and ordered the appraisal review board to hear the protest.
No. 11-87-297-CV, First Union Real Estate Investments v. Taylor County Appraisal
District and Taylor County Appraisal Review Board, 758 S.W.2d 380 (Tex.App.-
Eastland 1988, writ ref'd n.r.e.)
The property owner filed a confusing document concerning the authority of its agent. The
Appraisal Review Board sent a notice to the agent which was duly received. After it failed
to file its lawsuit on time, the property owner blamed the Board for misdelivering its notice.
The Court allowed the property owner to benefit from the ambiguity in its own document and
held that the Board's notice should not have gone to the agent.
No. 08-94-00358-CV, Glasscock Underground Water Conservation District v. Pruit, 915
S.W.2d 577 (Tex.App.--E1 Paso 1996, no writ)
A special statute allowed landowners to transfer their properties from one underground water
district to another. The owners of severed minerals, however, did not transfer their properties.
The second district claimed that the transfer of surface lands automatically transferred the
minerals which then became taxable in that district. The trial court and the court of appeals
rejected this claim. The minerals were held to have remained in the first district which had
authority to tax them. The appraisal district's appraisals of the minerals were upheld.
No. 04-00-00138-CV, PNL Asset Management Co., L.L.C. v. Kerrville Independent
School District, 37 S.W. 3d 80 (Tex.App.-San Antonio, 2000, petition pending)
PNL Asset Management Co., L.L.C. ("PNL") bought a note and lien hold by the FDIC on
real property against which there were delinquent taxes. PNL foreclosed its lien and acquired
the real property at the foreclosure sale. After acquiring the property, PNL asserted (1) that
the tax liens did not attach to the property while FDIC held the property and (2) that PNL
was not liable for the penalties for failure to pay the tax because federal law barred the penalties.
The trial court ruled in favor of the school district. The Court of Appeals agreed that the tax
liens attached to the property even though the FDIC held liens on the property. The appellate
court also confirmed the trial court's decision that the penalties on the delinquent taxes remained
due. This case is pending before the Texas Supreme Court.
McCreary, Veselka, Bragg & Allen
41
No. 11-94-053-CV, Central Appraisal District of Taylor County v. Dixie-Rose Jewels,
Inc., 894 S. W. 2d 841 (Tex.App.-Eastland, 1995)
Dixie-Rose Jewels owned inventory that was taxed by the taxing entities and collected at the
appraisal district. A bank that had a security interest in the inventory foreclosed its lien and
took possession of the same. When the bank began to sell the inventory to satisfy its debt,
the appraisal district obtained a temporary restraining order prohibiting further sale of the
property. At a hearing the trial court ruled that the tax lien could not be enforced against the
property due to the bank's status as a buyer of the property in the ordinary course of business
(Section 32.03 of the Property Tax Code). The Court of Appeals disagreed and ruled the
under these circumstances the bank was not a buyer in the ordinary course of business as defined
by the Texas Business & Commerce Code. Thus, the tax lien was still attached to the property
and the bank took the property subject to that lien.
McCreary, Veselka, Bragg & Allen
42
D. COMMUNICATIONS AND REPORTING CAPABILITIES
McCreary, Veselka, Bragg & Allen takes great pride in our ability to communicate with our
clients. We regularly report to our clients on the collection procedures initiated and the
collections achieved. Copies of all payout agreements, demand and lienholder letters, suits,
judgments, and bankruptcy claims are provided to our clients for informational purposes, but
they are not requested to maintain any files for the Firm.
As each collection procedure is taken by MVBA, from the first notice of delinquency to the
sale of the property, the action is instantaneously recorded on a Collection Activity Report in
our computer system. The Collection Activity Report enables us to report the type and date
of every collection activity taken on behalf of a client at any time.
We provide our clients annually with a Collection Activity Report reflecting the progress of the
collection program. These reports can be submitted more frequently upon request. The reports
include the following information:
(1) Amount of delinquent taxes, penalties and interest collected
(2) Number of notices and letters mailed including types and deadlines
(3) Number and type of suits filed (real, personal, "bacant and abandoned")
(4) Amount of money involved in litigation
(5) Number of judgments taken and amounts involved
(6) Summary seizure and tax sale activity
(7) Number of bankruptcy claims filed and amount of taxes included
A graphic report of the collection activity on the delinquent taxes divides the tax accounts into
suits, bankruptcy, payouts, research, and other categories, including that most important
category, those accounts paid.
As part of the Firm's service, we provide opinions regarding property tax problems our clients
experience. These opinions are generally in writing, and the Firm is available to follow these
up with discussions with the tax office, client administrators, and the governing body of the
client. In addition to requested opinions, the Firm has found it beneficial to advise clients of
key appellate court decisions or topics of common concern. Each quarter, the Firm publishes
the MVBA ViewPoint to keep our clients informed of the latest developments in property
taxation. If a significant event occurs, such as the school finance decision, we immediately send
an MVBA Bulletin on the subj ect matter.
McCreary, Veselka, Bragg & Allen provides a toll-free 800 number to our Denton and Austin
office for the use of our clients and their staf£ We welcome the opportunity to meet with client
administrators and attend the meetings of the governing body of our clients at any time to
discuss property tax collections or other property tax matters.
McCreary, Veselka, Bragg & Allen
43
SAMPLE
ANNUAL REPORT
ON
DELINQUENT PROPERTY
TAX COLLECTIONS
McCreary, Veselka, Bragg & Allen
44
CI"TY OF PAl.ESi'1NE - REPO1'27° ON COLLEC7°ION OF DELINCItJEN°T PPtOPErt°rY 7"AXES
~
w
■ ~ ~ ~ ~
~I
The goal of our tax collection program is to collect the greatest amount of tax in
the shortest period of time. McCreary, Veselka, Bragg & Allen believes it has
met this goal for the City of Palestine.
Tax Collections generally fall into two categories, current tax collections, the
collection of the current levy of taxes within the fiscal year in which they are assessed,
and delinquent tax collection, taxes that are unpaid and referred to a law firm for
collection. It is our belief that an effective delinquent tax collection program will
not only result in the quick recovery of delinquent taxes, but will also enhance
current collections. When the taxpaying public is aware that the City aggressively,
but fairly, pursues unpaid taxes, there is more incentive for a property owner to
timely pay their current taxes.
The following are some of the significant points contained in our report.
Current Tax Collections
• In the last four years, the City's annual total tax collection (current and
delinquent taxes, penalties and interest) actually exceed the amount of
taxes that were levied. (Chart 1)
• As of the date of this report, the City has collected 95.91% to 99.04% of
the taxes that were levied for each of the last four years. (Chart 2)
Delinquent Tax Collections
• The delinquent taxes referred to MVBA have been quickly and efficiently
collected. (Charts 3 through 5)
l~
~7
p
0
R
r~~
N
L
y
McCreary, Veselka, Bragg & Allen, P.C.
ITY OF PALEsT~~~ ~ ~~ORT ON' ELI c2UENT ROPERTY TAXEs
A. l INAL L VY VS. TOTAL A,NIVUAL COLLECTI NS
Chart
Original Levy vs. Tatal Annual Tax Collections
(Oetaber 1sk through Septernber 30th)
9999 9998 9997 1996
11DQ.5fa/a 1{t1.95°la 101.32°l0 141.22°l0
Gollected' CQflected Ca1lected Callecied
$4
$3
~
a
a
0
$2
p
I n the Ias# four yea rs9 the amount
af current taxes coIlected when
added to the delinquent taxes,
penalties and interest (excludwng
attorney's fees) also callected
exceeds the origina~ amount caf
taXes lE"4''1£~.'d.
Chart 1 and the Table beIovv
campare the amount of the
original tax Ievy (adjusted for Tax
Offiice correcticans) for the years
1996, 1997, 1998 and 1399 tQ
the total amount of curr€:nt taxes
and delinquent taxes, penalfies
and interest collected from Octo-
ber 1 st through Sep#er~ber 30th
of each of these years.
~
~
11
~
~
R
~
.4
~
$1
For the years 1996 through 1999,
140,56~'r° ta 101.95% of each
year's tax Ievy has been coliected.
ORI~INr1L
LEVV VS, TOTAI.
ANNL1AL `I'AX
COI.,LEGTIC)NS
(See C
hart l)
Tax
OrigillalTaxLevy
xTotal Tax
Tt~tal
'~eai°
(AdjlistLCt)
1
C[llld~ctions
~`E°~'ce~it "'~r~l1ec1~~d
1999
$3,651,195
$3,679,856
100.56%
1998
S3'6I.6,I.08
-
$3s.686391.2
1411..75%
~
1997
S3,662,264
$3,710,655
101,32%
1.97~6
eA39l)!. 1.733k)
+D'3'y6~55g5.4I
101.22%
T
0
N
~
~
McCreary, Vesegka, Bragg & A6Ieni, P.C. _
2
prigimM Tax Levy U
(AdJ usCed) Total Annual Tax Culle+ctions ~
~
OF ~AL~~~~~~ ~ ~~~~RT ~~~CTION OF DELI : UE 'T PROPER`~Y TAXES
B. I INAL. LEVY VS. COLLECTION OF LEVY
Chart
flriginal Levy vs. +Co11ectian af L.evy to Date
ate of Ana_lysis, September 30, 2000
1999 1998 7997 1996
95.91% 98,21% s8.s4$r4 99.04%
Collected Collected Collected Collected
$4
~3
~2
0
~
~ $2
q
2
$1
As of September 30, 2000, 5.91
to 99.04% of the ~~tual taxes
(adjusted) Ievied for the I~~~ ~our
tax years have been recQVered
according ta the tax office records.
The autstanding taxes that are
due is the difference betvveen the
top of the b1ue bar (taxes levied)
and the top of the yellow bar (taxes
coilected) on Chart 2.
COLLEC'll'1ON OF Z'AX LEVY THROUGH 0~9-30-00
(See
Chczrr 2)
Tax Ye~~
~~~~~na~ ~~vy
Tax Collected
Percent!CoI~ected
(AdJust4d):
1999
S3,651,195
$3,501.908
95.91%
~
19~'>f3'
S3y61.6,108
i $3'551.,503
.
98.21%
1997
$3,66~2,,264
$3g619'84.3
98'.84%
1996
$3j61.6.y:7J11
J3~3,.516t€704
97.V4~1.0
s
L
E
E T
0
N
~
~
McCreary9 YG3eIIhap Brag~ & AlBen, P.C.
3
~ Original Tax Levy ~ Base 7ax Galleciions
'
(Adjusted) tnrouyn 9-30-2000
~
CITY OF PALESTINE - EPOrrT ON COLLECTION OF _ ELINQs~~ ~ ~~~~~~TY AXES
C. ANALYSIS COLLECTION STATUS OF 1998, 19_7
AND 1396 DEL1NQUENT TAXES
The purpase caf this anafysis is to provide information regarding the
eollection status of the delinquent taxes far the tax years 1998, 1997 and
1996, and a synopsis of the efforts that haue been, and are being taken, to
collect these delinquent taxes.
Whi1e MV - A us collecting a very high percentage of the delinquent taxes,
there are taxes still rema'ining unpaNd. The cumulative amount of each year`s
upaid taxes, even though they are only asmall percentage of each year's tax
Ievy, constitute the total balance af delia~quent taxes due.
The de9inquent balances for each tax year steadiiy decrease over time
as our caiReetion procedures are successful in abtaining payrnents.
For example, we have callected 64.70% of the 1998 taxes that were
outstanding an July 1, 1999 (15 months ago) while we have callected 79.34°l0
of the 1996 taxes that were outstanding on July 1, 1997 (39 m~~ths ago).
s
A
m
p
L
E
Chart
+Collectian Status of 1998 elinquent Taxes
as af September 30, 2000
Insolveot i'ersoaal &
At~andoned Iteal
$10,247
5,~fi0°fa ~
a
eank~~~~cy
$3,606
1.97°fa
Suits 8: .liaclgnaents
a25,ti4{l
14.fl4°fo
it
Rayouts & Halc9.s
x ~12y~20
7.06%
1998 Taxes Ilelinquent as of July 1, 1999: $183,039
McGFeaFy, Veselka, Bragg & Allen, P.C. _
~
~
L
4
tTY ~F PALESTi E r EPORT O, COLLECTION OF DELt U~NT ~~RTY TAXES
Chart
Gollection S4atus Qf 1997 I?etanquent laxes
as +af September° 30, 2040
InsnCvent Persn
,Abandooed I
$5,778
3.i2°/a
Banksriiptcy
$2,9i13
Ltr7 "lo
Chart 5 reflects the status as
of SeptembeC 30, 2000, of
the 1996 taxes which were
dekinquent on July 1„ 1997.
There were $167,114 in
delinquent 1996 taxes out=
standlng or~~ July 1, 1997,
~~ar~ ~ shoWs that MVBA
has coll~.'cteCi $132,5$2 ltrl
19~96 delinquent taxes or
7.34% of the JuIy 1, 1997
amotant.
Chart
Collection Status o,f 1946 Delinquent '1'axes
as of September 30, 200,0
6tls ~'a
ia„co,cs,
9,750
.R?°tn
PayQ~~s &
iHolds
$3,048
1.82%
~ Reyearcn rp
Bprog;ress
$3,775
2.26%
1996 Taxes Deliaaquent as of ,1a1y l, 1997; $167,114
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McCreary, Veselka, Bra9g & Alfen, P.C.
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tiuits & Rescarch in
Jiadgments F';ry6uts & YrQgress
$21,752 HoIds S5,861
1.2,50°!o $6,127 337"l0
1997'1'axes 1)e1aiaq~ent as of .Tulg= l, 1498: $173,998
Bankc°uptcy
$2,319 1i7saYverut Pcrsana) &
1,39°fn A[,andoaietlRral
C17°Y OF PALE57°lNE - EPOf2°i° ON COt.t.EC°i°I~~ ~F DE!.lNQllEN7° Pi2OPEf2TY `1'AXES
This outstanding level of collections did not simply happen. We have worked
diligently collecting these taxes. MVBA has conducted a comprehensive delinquent
tax collection program which provides for:
(1) Regular and systematic mailing of delinquent tax notices to delinquent
property owners;
(2) Thorough title examinations and ownership verification on selected
delinquent tax accounts;
(3) Pre-litigation notices to all property owners and lienholders on each
delinquent tract of real property; and
(4) The filing and prosecuting of delinquent tax suits to judgment and the
final sale of the property to satisfy the tax delinquency if payment
arrangements were not satisfactorily made.
We believe that these charts graphically depict the results of MVBA's aggressive
delinquent tax collection program.
McCreary, Veselka, Bragg & Allen, P.C.
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CI'rY OF PALES'i"INE - REPOR'1' ON COLLEC7'ION OF ELINQt1EN2' PROPER2"Y TAXES
DEFINITIONS AND COMMENTS REGARDING CHARTS 3, 4 AND 5
Lawsuits/Judgments
From October 1, 1999 through September 30, 2000, the Firm has filed 76 delinquent
tax suits on 100 parcels, totaling $96,385, for the collection of delinquent taxes. Often
property owners enter into payment arrangements subsequent to the filing of suit.
Further prosecution of these delinquent tax suits is abated as long as the taxpayer
complies with the payout agreement. If the property owner makes no effort to pay
after suit is filed and citation is served, or if the taxpayer defaults on a payout
agreement, judgment is sought. The Firm has obtained 40 judgments on 53 parcels,
totalling $40,270 in delinquent taxes. The Firm held 4 tax sales in which 32 parcels
were posted for sale to recover $35,307 in delinquent taxes.
Bankruptcy
Accounts on which collection activity is prohibited by automatic stay under the United
States Bankruptcy Code. The Firm has filed 20 original proofs of claims for
pre-petition taxes, involving 25 accounts for $22,205 in delinquent taxes. The Firm
monitors the progress of bankruptcy cases and filed appropriate motions and
objections with the Bankruptcy Court to insure that the tax claims and the tax liens
are accorded the highest possible priority. The amount of the claims which will
ultimately be paid, particularly in Chapter 7 cases, cannot be estimated.
Insolvent Personal & Abandoned Real Property
Tax accounts on which delinquent notices mailed by the Firm have been returned to
us by the U. S. Postal Service as undeliverable or accounts for which the Appraisal
District or Tax Office has been unable to determine an address. The Firm is engaged
in an extensive address research program. When new addresses are found, notices
are promptly sent. However, without an accurate address personal property
delinquent taxes are, as a practical matter, uncollectable. Some of the these
accounts represent mobile homes which are no longer in the County. In most cases,
the Appraisal District has no knowledge of the whereabouts of the owners of these
mobile homes. As such collection activity against the owners is effectively precluded,
these accounts are uncollectable. There are numerous business personal accounts
where the business is no longer operating. When a business ceases operation, often
the owner leaves the County and/or State. Even if the owners of the business can
be located, they are usually "judgment proof". Many of these businesses were
corporations which are either defunct or have no assets. The whereabouts of the
owners of a few real property accounts are unknown. These are unimproved lots or
vacant acreage tracts making it extremely difficult to locate the owners. In some
cases, the record owners are deceased and their heirs are unknown or cannot be
located. The owners of these vacant and abandoned properties will be served with
citation by publication and the properties sold at tax sales.
McCreary, Veselka, Bragg & Allen, P.C.
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C1'i'Y OF PALEST"!NE - REI~ORT ON COLLEC°flON OF ELINCIIlEteJT PItoAER TAXES
Pre-Litigation Payouts/Deferrals & Hardships
Written installment payment agreements entered into pursuant to §33.02 of the
Property Tax Code prior to suit being filed. These payment agreements are tailored
to the individual taxpayer's ability to pay based on their particular financial problems.
As a result of the payout agreements, a steady flow of tax payments has been
obtained. There are a few property owners who have claimed the over-65 tax deferral
provided by the Property Tax Code. In addition, a few property owners have been
designated as hardship cases. Hardship cases are those in which the property
owners have documented severe medical conditions or acute financial problems that
warrant unusual consideration. Designation as a hardship merely delays collection
but does allow the eventual collection of the account.
Research in Progress
This segment refers to those accounts which do not have any known impediment to
the collection process or specific collection activity pending. The Firm has sent
several notices of delinquency on each delinquent account. Over 6,000 notices have
been mailed by the Firm. We are continuing to place additional accounts under
litigation. However, we stress that there may be circumstances which may preclude
the collection of some of these taxes. These may include bankruptcies, insolvent or
closed businesses, hardship cases, and/or incorrect addresses which are unknown.
Nevertheless, the Firm will continue to use all appropriate measures to collect the
maximum amount of revenue possible given the circumstances.
McCreary, Veselka, Bragg & Allen, P.C.
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C!7°Y OF PALES°I°1NE - EPO12T° ON COLLEC7°ION ~F DEL1NQ11EN7° PftOPEft°CY TAXES
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TAXPAYER NOTIFICATION - Our experience has proven that the right notice
to the right person at the right time results in the payment of taxes to our client. For
this reason, McCreary, Veselka, Bragg & Allen sends a series of letters to
property owners both before and after we have filed a delinquent tax suit against a
property owner and the property. Listed below are various types of notices sent by
the Firm to property owners notifying them of their tax delinquency and the status of
legal action taken by the Firm to collect the taxes.
Many delinquent accounts are collected as a result of giving the proper attention to
finding the correct address of a property owner. Delinquent accounts with unknown
or incorrect addresses are researched by the Firm through the use of Texas Motor
Vehicle Registration information, Internet Databases, telephone directories, City
Directories, utility records, voter registration records, assumed name files and the
records of the Secretary of State. When the Firm obtains new addresses, notices
are immediately sent informing the property owner of their tax delinquency and the
need for prompt payment of the delinquent taxes. The Firm simultaneously notifies
the Tax Office of the new address so that the tax records can be updated.
Notices
Initial Notices are polite, but pointed, notices
designed to remind the delinquent property
owner of their tax liability and urging voluntary
payment of the taxes due. 2,061
Delinquent Notices are more insistent notices
requiring payment of the delinquent taxes and
inform the property owner that a tax lien has attached
to their property and they are personnally liable for
the tax. 2,812
Demand Notices are sent on selected accounts
giving notice that if the taxes are not paid,
a delinquent tax suit will be filed against the
property owner and the property. 1,091
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C1°CY OF PALEST°/NE - EPOrf°I° ON COLLEC°r1OP~ OF ELlNQlJEN°r Pf2OPE127°Y 7mAXES
TITLE RESEARCH - McCreary, Veselka, Bragg & Allen conducts a thorough
title examination and ownership verification on all delinquent property accounts prior
to filing delinquent lawsuits. The Firm carefully researches the title of property in
order to identify all parties who have an ownership interest or lien on the delinquent
property. The Firm examines deeds, deeds of trust and probate records to determine
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who has interest in the property. All parties who have been determined to have an ~
interest in the property are sent a final series of notices.
New Owner Notices are sent to persons who the Firm has determined have ~j
recently acquired property on which there are delinquent taxes and who have not
received a prior tax notice. Lienholder Notices are sent to financial institutions
and individuals who have a lien on property on which there are delinquent taxes.
The lienholders are informed that the Firm is preparing to file a delinquent tax suit L
that will extinguish their interest in the property if the taxes are not paid. Foreclosure
Notices are sent to all parties who have an interest in the property informing them ~j
that a delinquent tax suit will be filed to foreclose their interest in the property in
order to have it sold to satisfy the tax delinquency.
Number Number Amount R
Type of Notices of Properties Due 17
New Owner Notices 1 1 $1,360 p
Lienholder Notices 44 48 $45,459
Foreclosure Notices 65 83 $62,799 R
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LITIGATION- The Firm files delinquent tax suits when property owners and all
other parties whom the Firm has determined to have an interest in property fail to
respond to the notices sent to them. Delinquent tax suits filed by the Firm seek a
personal judgment against the property owner and foreclosure and sale of the ~
property to satisfy the tax delinquency. When all delinquent taxes, penalties and
interest have been paid to the taxing jurisdiction, and all costs of court have been paid
in the lawsuit, the lawsuit is dismissed against both the property owner and the L
property. Y
Number Number Amount
Type of Suits of Properties Due
District Court Suits 76 100 $96,385
McCreary, Veselka, Bragg & Allen, P.C.
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C!7°Y OF PAl,ESi°!NE - REPOR'7° ON COLLEC7°ION OF E!,lNCIUEN7° PROPEIYI°Y TAXES
Number Number Amount p
Type of Judgments of Properties Due L
Judgments 40 53 $40,270 17
TAX SALES - After consultation with the Tax Assessor-Collector, judgments
authorizing foreclosure of the tax lien are followed up by a Sheriff's Sale of the
property. The Firm publishes a Notice of Sale in the local newspaper and sends
copies to the property owner and all other defendants in the delinquent tax suit, as
required by law. In many instances, the property owner either pays the taxes prior to
sale or enters into satisfactory arrangements for the payment of the taxes, in which
case, the property is withdrawn from the Sheriff's Sale. Properties which are offered
for sale are either conveyed to purchasers or, if no acceptable bid is made on the
property, conveyed to the taxing units in lieu of payment of taxes. The Firm assists R
the Sheriff in conducting the sale and prepares the deeds to the purchasers, finalizes
the sale papers and supervises the distribution of the sale proceeds to the taxing T
authorities in order to satisfy the tax delinquency.
Properties
Properties Withdrawn
Properties
Date of
Posted for
Paid/Payment Agreements
Sold/Conveyed
Amount
Sale
Sale
Prior to Sale
in Trust
Due
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12-07-99
9
4
5
$18,148
03-07-00
5
2
3
$3,979
06-06-00
9
2
7
$5,046
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9
3
6
$7,774
TOTAL
32
9
23
$48,528
In addition, 27 properties that the City acquired through tax foreclosures were
resold.
McCreary, Veselka, Bragg & Allen, P.C.
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CI°i°Y OF PALES7°!NE - EPOi2T" ON COLLEC7°ION OF ELlNCItlEN7° Pf2OPEI2"rY 7"AXES
BANKRUPTCY LITIGATION - McCreary, Veselka, Bragg & Allen's bank-
ruptcy department closely supervises those individuals and corporations that file
for protection under the bankruptcy laws who owe delinquent taxes. Through our
fully computerized bankruptcy tracking system, the Firm files and monitors all claims
for delinquent taxes owed by the bankrupt debtor. Proofs of claim are filed by the
Firm to give notice to the debtor of the amount of delinquent tax, penalty and interest
due when the bankruptcy is filed. Administrative claims are filed to seek recovery
of taxes that come due after the debtor has filed bankruptcy. Our attorneys review
all Motions and Plans for Reorganization filed by the debtor or any other creditor with
the Bankruptcy Court, and aggressively asserts the tax claims and defends the tax
liens of our clients to the fullest extent allowed under the Bankruptcy Code.
Type
Proofs of Claim
Number of Number Amount
Bankruptcies of Properties Due
Administrative Claim
20 25 $22,205
5 6 $1,575
ANDERSON COUNTY LEGAL ASSISTANT
MVBA employs a full-time legal assistant, Sue Miles, who works in Palestine.
Ms. Miles prepares delinquent tax accounts for research, responds to inquiries
of delinquent property owners, conducts address and title research, initiates and
monitors payout agreements, coordinates the Firm's activities with the District
Clerk and District Court, and examines service of citation in lawsuits.
MVBA has a local office in Palestine located at 617 East Lacy Street directly
across from the Courthouse. Our Palestine telephone number is (903)723-0883.
Our Palestine office provides easy access for the taxpayers as will as the tax
assessor-collector and the tax office staff to MVBA staff inembers.
MVBA ANDERSON COUNTY CLIENTS
For nearly 20 years, McCreary, Veselka, Bragg & Allen has represented taxing
authorities in Anderson County. Our Anderson County clients include:
•Palestine Independent School District •The County of Anderson
•Westwood Independent School District •The City of Palestine
•Neches Independent School District
McCreary, Veselka, Bragg & Allen, P.C.
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E. REPRESENTATION IN ALL PROPERTY TAX MATTERS
McCreary, Veselka, Bragg & Allen provides legal guidance, opinions and representation
on property tax matters to our clients at no additional charge. Our legal counsel on the
calculation and publication of the effective tax rate and the potential and consequences
of tax rollback elections is valuable during the budget planning process.
The Firm monitors the opinions of the Attorney General, the rules and regulations of the
Property Tax Division of the Comptroller of Public Accounts and tax related proposals
when the Legislature is in session.
McCreary, Veselka, Bragg & Allen
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F. CLIENT REFERENCES
MVBA is pleased to provide the following list of clients located in north Texas and encourage
you to contact them regarding our tax collection services and legal representation.
Bowie Central Appraisal District
(The County of Bowie, City of Texarkana, Texarkana
Comm. College, Texarkana I.S.D., Liberty-Eylau I.S.D.,
Pleasant Grove I.S.D., City of Wake Village, New Boston
I.S.D., City ofDeKalb, City ofNew Boston, City ofLeary,
City of Nash, Maud I.S.D., Leary I.S.D., Red LickI.S.D.,
Hubbard I.S.D., Malta I.S.D., Redwater I.S.D., DeKalb
I.S.D., SimmI.S.D., Bowie Co. Rural Fire Prevention Dis-
trict #16)
Mr. Wayne Hawkins
ChiefAppraiser
P. O. Box 6527
Texarkana, Texas 75505-6527
(903)793-8936
The County of Denton
(The County of Denton, City of Aubrey, City of The
Colony, City ofJustin, City ofKi^um, City ofSanger, City
ofPonder, CityofKi^ugerville, City ofMarshall Creek, City
ofOakPoint, City ofTi^ophy Club, City ofHickory Creek,
City of Hackberry, City of Argoyle, City of Lakewood Vil-
lage, CityofBartonville, TownofNorthlake, CorinthMUD
#1, Ki^umI.S.D., Ponderl.S.D., Aubreyl.S.D., Sangerl.S.D.,
Town of Shady Shores, Town of Clark)
Ms. MaryHorn
TaxAssessor-Collector
P. O. Box 1249
Denton, Texas 76201
(940)565-8655
Van Zandt CountyAppraisal District
(County of Van Zandt, Canton LS.D., Edgewood
LS.D., Grand Saline LS.D., Martins Mill I.S.D.,
Van LS.D., Wills Point LS.D., Fruitvale LS.D.,
City of Canton, City of Edgewood, City of Grand
Saline, City of Van, City of Wills Point, Tyler
Junior College District, Trinity Valley Commu-
nity College District, Van Zandt County Fire
Prevention District No. 1)
Mr. Chris Becker
ChiefAppraiser
P. O. Box 926
Canton, Texas 75103
(903)567-4956
The City of Waco
Mr. Art Pertile, III.
CityAttorney
P. O. Box 2570
Waco, Texas 76702-2570
(254)750-5680
CentralAppraisal District of
Taylor County
(The County of Taylor, Merkel LS.D., Wylie I.S.D.,
City of Abilene, City of Merkel, City of Trent,
City of Tuscola, City of Buffalo Gap, City of
Impact, Abilene LS.D., Jim Ned LS.D., Trent
LS.D., West Central Texas M.W.D.)
Mr. Richard Petree
ChiefAppraiser
P. O. Box 1800
Abilene, Texas 79604
(915)676-9381 ext. 23
McCreary, Veselka, Bragg & Allen
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G. OFFICE AND STAFFING ARRANGEMENT
The MVBA staff devoted to the representation of The City of Paris as previously identified in
our Denton and Austin offices will conduct all legal work for The City. Our Legal Assistant and
Mr. Bragg will regularly be available for consultation as well as other staff as needed.
McCreary, Veselka, Bragg & Allen
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IV. RELATED ISSUES
A. COMPENSATION OF THE LAW FIRM
ATTORNEY'S FEES
McCreary, Veselka, Bragg & Allen proposes a fee of fifteen percent (15%) of the
delinquent property taxes, penalties and interest collected during the term of the
contract. The fee would be paid to the Firm on a monthly basis and would be in direct
relationship to the quality of our performance. Each subsequent year of delinquent property
tax would enter into the terms of the contract on July l. All costs incurred for data
processing activities, taxpayer notification, postage, address research and legal assistance
will be paid by the Firm.
The Property Tax Code, Section 33.07, provides for an additional penalty of fifteen
percent (15%) which may be added to the amount of taxes, penalties and interest due if
the client contracts with a private law firm and gives proper notice to taxpayers
during the month of May each year. This statute allows the client to collect the
additional penalty which will offset fees paid for delinquent tax collection. Section 33.48
of the Property Tax Code provides for fifteen percent (15%) attorney fees on all
delinquent tax years which are placed in litigation. Therefore, as a result of Sections 33.07
and 33.48 of the Property Tax Code, the fees earned by the Firm will be paid by the
delinquent property owners. All fees earned shall be paid to the Firm by check each
month.
B. PUBLIC RELATIONS
An important facet of a comprehensive tax collection program is community awareness.
An informed public rallies behind a credible and responsive tax program.
The Firm provides press releases to the local news media, detailing the initiation of
collection activities such as summary seizures of personal property, mass mailings of
delinquent tax notices, the filing of delinquent tax suits, and public auctions of real
property. All of our press releases are approved by client staff inembers prior to trans-
mittal to the news media. Appropriate and well-managed press coverage greatly enhances
collection efforts.
In addition, we are available to speak before professional, civic and social groups to
explain the goals of the delinquent tax collection program.
McCreary, Veselka, Bragg & Allen
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C. NO CONFLICTS OF INTEREST
McCreary, Veselka, Bragg & Allen has never represented a party who was in an
adversary position with any client. The Firm knows of no conflicts of interest or potential
conflicts of interest which would impede its representation of this taxing unit. McCreary,
Veselka, Bragg & Allen does not represent any private sector clients who own property
within the City. The Firm is not currently engaged in any business activity or related by
consanguinity or affinity to any member of the governing body of this City.
D. INTERVENTIONS
The Firm intervenes in all suits for property taxes filed by any other taxing unit. Copies
of all suits filed by McCreary, Veselka, Bragg & Allen will be forwarded to the
attorneys representing other taxing units in order that they may intervene in our suit
and avoid the initiation of another suit on the same defendant by the other taxing unit.
MVBA will promptly prepare and file an intervention on behalf of any taxing unit whose
taxes are collected by The City.
E. DISPOSITION OF EXISTING LITIGATION
McCreary, Veselka, Bragg & Allen assumes the responsibility for all pending
delinquent tax litigation involving our clients. The Firm assumes control of the old suit
records and amends or files motions to substitute counsel in all the pending cases.
F. PROPOSED CONTRACT
Enclosed is a proposed two year contract with annual renewal option thereafter between
McCreary, Veselka, Bragg & Allen, P. C. and the City of Paris. It provides that our
compensation be 15% of all taxes collected.
McCreary, Veselka, Bragg & Allen
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G. EQUAL EMPLOYMENT OPPORTUNITY
McCreary, Veselka, Bragg & Allen is an EQUAL OPPORTUNITY EMPLOYER.
Applicants for position are considered based on their qualifications for the position applied
without regard to race, color, religion, creed, gender, national origin, age, marital or
veteran status, disability or any other criteria prohibited by law.
H. FINANCIAL STRENGTH
McCreary, Veselka, Bragg & Allen has been in existence since 1960. With over 450
clients, the Firm has the financial strength to commit the resources required to administer
an effective delinquent tax collection program. You may contact the following bank officer
for comments on our financial strength:
Mr. Keith Griffith
Senior Vice President
Bank One, Texas, N.A.
P.O. Box 9789
Austin, Texas 78766
512-479-5571
McCreary, Veselka, Bragg & Allen
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v.
PROPOSED CONTRACT
McCreary, Veselka, Bragg & Allen
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CONTRACT FOR THE COLLECTION OF
DELINQUENT PROPERTY TAXES
THE STATE OF TEXAS
COUNTY OF LAMAR
THIS CONTRACT is made and entered into by and between THE CITY OF PARIS,
TEXAS (The City), acting herein by and through its governing body, and McCreary, Veselka,
Bragg and Allen, P.C. (The Firm), 5929 Balcones Drive, P.O. Box 26990, Austin, Texas, 78755.
1.
The City agrees to employ and does hereby employ The Firm to enforce by suit or otherwise
the collection of all delinquent taxes, penalty and interest owing to The City and all the other taxing
units for which The County collects property taxes. Current year taxes which become delinquent
within the period of this contract shall become subj ect to the terms of the contract upon the following
conditions:
A. Taxes that become delinquent during the term of this contract, that are not delinquent
for any prior years, become subj ect to the terms of this contract on July 1 st of the year in which
they become delinquent.
B. Taxes that become delinquent during the term of this contract, on property that is delinquent
for prior years and is the subj ect of a suit to collect the prior years delinquent taxes, shall become
subject to its terms on the first day of delinquency as defined by the Texas Property Tax Code.
II.
The City agrees to furnish all necessary delinquent tax information to The Firm on all property
within the boundaries of The City. The City hereby authorizes The Firm to determine the name,
identity and location of necessary parties and to procure necessary legal descriptions of property
and hereby assigns to The Firm the right to recover the costs of obtaining such information.
III.
The Firm is to advise The City of errors, double assessments or other discrepancies coming
under observation during the progress of the work.
IV.
The Firm is to intervene on behalf of The City in all suits for ad valorem taxes hereafter
filed by any other taxing unit on property located within its boundaries.
V.
The Firm agrees to make written delinquent tax collection progress reports to The City upon
request.
vl.
The City agrees to pay The Firm, for services rendered, Fifteen Per Cent (15%) of all
delinquent taxes, penalty and interest collected by The City for years covered by this contract. The
penalty imposed pursuant to Section 33.07 of the Property Tax Code is not subject to this contractual
fee. The City does hereby adopt the additional penalty provided by Section 33.07 of the Property
Tax Code. All fees provided for in this contract shall become the property of The Firm at the
time payment of taxes, penalty and interest is made to The City. The City shall pay fees due
The Firm monthly by check.
VII.
This contract is drawn to cover a period of two years beginning 200,
and ending , 200, and shall continue in effect thereafter on the same
terms and conditions from year to year until either party delivers notice of its intent to terminate
this contract. Either party shall have the right to terminate this contract by giving thirty (30) days
written notice of intent to terminate to the other party; provided, however, The Firm shall have
an additional six (6) months to reduce to judgment and sale all tax collection lawsuits filed and collect
all bankruptcy claims filed prior to the termination of this contract and shall have the exclusive right
to compensation of fees earned due to these suits during this six (6) month period. In consideration
of the terms and compensation herein stated, The Firm hereby accepts said employment and
undertakes the performance of this contract as above written.
VIII.
This contract is executed on behalf of The City by the presiding officer of its governing body
who is authorized to execute this instrument by order heretofore passed and duly recorded in its
minutes.
WITNESS the signatures of all parties hereto in duplicate originals this the day
of A.D. 200___, Lamar County, Texas.
THE CITY OF PARIS, TEXAS
BY
McCREARY, VESELKA, BRAGG AND ALLEN, P.C.
Attorneys at Law
Gate Way Center
5929 Balcones Drive
P.O. Box 26990
Austin, Texas 78755
BY
Gilbert T. Bragg