Loading...
05-I Delinquent Tax Contract LINEBARGER GOGGAN BLAIR & SAMPSON, LLP Attorneys at Law 1517 W. FRONT ST.. SUITE 202 P.O. BOX 2032 TYLER. TEXAS 75710 Telephone: (903) 597-2897 Facsimile: (903) 597-2402 April 12,2004 Curtis Fendley - Mayor Council Members: Joe McCarthy Willie James Weekly Benny Plata Jay Guest Francine Neeley Jim Bell RE: Delinquent Tax Collection Report for the period April 1, 2002 to March 31, 2004 Dear Mayor and Council Members: We are respectfully submitting our delinquent tax report which informs the mayor and council members of our various collection methods, litigation process and our collection results for a twenty-four (24) month period. MAILINGS During this reporting period, our law firm has continued its mailing program to ensure that delinquent taxpayers are aware that they owe taxes to the City of Paris. We have mailed on behalf of the City of Paris, warning notice letters in increasing severity of tone to delinquent taxpayers. Every taxpayer on your delinquent roll with a current address has heard ITom us several times. Io addition to our regular mailings, we have prepared and mailed various specialized letters on behalf of the City of Paris in order to supplement delinquent tax collections. The following letters were strategically mailed throughout this reporting period and targeted carefully selected delinquent accounts. ~ ~ "Notice of Tax Lien" "Notice ofIntent to Sue" "Notice of Defaulted Payment Agreement" We are pleased to report that these letters were very effective and produced favorable results. Numerous taxpayers who received one of these letters either paid his or her taxes in full or entered into a payment agreement with the City of Paris. LITIGATION NEW LAWSUITS - Where requests for payment and all other negotiations have failed, we have backed up our notice letters with lawsuits. During this reporting period we have filed two-hundred-twelve (212) lawsuits seeking the collection of $236,862.04 in delinquent taxes, penalties, and interest. JUDGMENTS - Courtroom judgments have been taken in one-hundred-seventy (170) lawsuits involving $145,762.22 in delinquent taxes, penalties and interest. DISMISSALS - There are many instances where a defendant in an ad valorem tax suit has been served with citations and they subsequently pay their taxes in full. Upon payment of the taxes and costs of court our law firm files a motion to dismiss the lawsuit. As a result of full payment, forty-seven (47) lawsuits involving $67,808.30 have been dismissed during this reporting period. PENDING LAWSUITS - There are one-hundred-eleven (111) pending lawsuits on the Court's docket on behalf of the City of Paris seeking the collection of $138,512.09 in delinquent taxes, penalties and interest. POST JUDGMENT COLLECTIONS TAX SALES - Where all other efforts have failed in collecting on our judgments, we then advertise and post properties for sale. During this reporting period, we have posted for tax sale one-hundred-twenty-three (123) tracts of real property involving $42,274.84 in delinquent taxes, penalties and interest owed to the City of Paris. DELINQUENT TAX ROLL In order to maximize our collection efforts on behalf of the City of Paris, our law firm regularly monitors and reviews the top delinquent accounts on your tax roll. We always try to target the largest delinquent accounts first and work down the roll by descending dollar amount. COLLECTIONS We have collected over $501,740.27 in delinquent taxes, penalties and interest for the City of Paris ITom April I, 2002 to March 31, 2004. CONCLUSION We pledge to continue to follow through with what has developed into a sound collection program. This will include prosecuting the pending suits to conclusion, writing demand letters on a regular basis, and filing additional suits in those cases where our letters and request for payment are ignored. We will also continue working closely with you to provide assistance and advice in all property tax matters, including changes in the law brought about by the Property Tax Code. As always, if there are any questions about this report or the council members desire a different format of presentation, please do not hesitate to contact me. We look forward to continuing our association with the City of Paris and we have genuinely appreciated the opportunity to work with you and for you during the past years. Sincerely, John R. Bolster JRB/jm DRAFT F:\Attorney\ALICE\RESWORK\CURRENT\Tax Atty Combined 20% Resolution and Contract Amendment.wpd April 8, 2004 RESOLUTION NO. _______________ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, IMPOSING AN ADDITIONAL PENALTY FOR 2003 AND SUBSEQUENT YEARS DELINQUENT TAXES AND AUTHORIZING AN AMENDMENT AND EXTENSION OF THE TERM OF SERVICE TO THE EXISTING SERVICES CONTRACT WITH LINEBARGER GOGGAN BLAIR & SAMPSON, LLP; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, The City of Paris contracts with Linebarger Goggan Blair & Sampson, LLP ("the private law firm") to enforce the collection of all delinquent taxes, penalties and interest by virtue of a written contract dated February 5, 2002("the Contract"); and , WHEREAS , the Texas Property Tax Code Sections 33.07 and 33.08 were amended by the Seventy Seventh Legislature by Act of May 17, 2001; and, WHEREAS , under said Sections 33.07 and 33.08, the governing body of the City of Paris is empowered to authorize the addition of a collection penalty in an amount that does not exceed the amount of the compensation specified in the contract with the private law firm; and, WHEREAS, the source of the funds for private counsel's compensation is the additional penalty paid by the delinquent taxpayer, rather than the public treasury; and WHEREAS, the current contract for services between the parties is on a month to month basis, and the parties desire to renew their contractual arrangements for a period of two (2) consecutive one (1) year terms as was the parties' original contractual arrangement; and, WHEREAS , the City of Paris desires to amend the existing contract with the private law NOW, THEREFORE, firm as per the attached Amendment No. 1 to the Contract; BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS : Section 1. That the findings set out in the preamble to this resolution are hereby in all things approved. Section 2. That the attached Amendment No.1 to Contract between the City of Paris and the law firm of Linebarger Goggan Blair & Sampson, LLP is hereby passed and approved on this day. Section 3. That taxes for the year 2003 and taxes for all subsequent years that become delinquent on or after February 1 but not later than May 1, that remain delinquent on July 1 of the year in which they become delinquent, incur an additional penalty in the amount of twenty percent (20%) of taxes, penalty and interest due, pursuant to Texas Property Tax Code Section 6.30 and 33.07, as amended. Section 4. That the taxes for the year 2003 and taxes for all subsequent years that remain delinquent on or after July 1 under Texas Property Tax Code Sections 26.07(f), 26.15(e), 31.03, 31.031, 31.032 or 31.04 incur an additional penalty in the amount of twenty percent (20%) of taxes, penalty and interest due, pursuant to Texas Property Tax Code Section 6.30 and Section 33.08, as amended. Section 5. That this resolution shall take effect immediately from and after its passage in accordance with the provisions of the law. PASSED AND APPROVED this 12th day of April, 2004. ____________________________________ Curtis Fendley, Mayor ATTEST: ____________________________________ Mattie Cunningham, City Clerk APPROVED AS TO FORM: ____________________________________ Larry W. Schenk, City Attorney STATE OF TEXAS§ KNOW ALL MEN BY THESE PRESENTS: COUNTY OF LAMAR§ AMENDMENT NO. 1 TO THE CONTRACT BETWEEN THE CITY OF PARIS, TEXAS AND LINEBARGER GOGGAN BLAIR & SAMPSON, LLP WHEREAS,The City of ParisFirst Party on February 5, 2002, hereinafter (“”) approved {Linebarger Heard Goggan Blair Graham Peña & Sampson, a Contract with the law firm of LLP}Second Party (now known as Linebarger Goggan Blair & Sampson, LLP and hereinafter “”), under which Contract a fifteen (15%) percent commission on the taxes, penalty and interest collected is provided as compensation for the Second Party; and WHEREAS, the Texas State Legislature has found and declared, by its enactment of TEX. TAX CODE § 6.30(c), that a twenty (20%) commission on the taxes, penalty and interest collected is a reasonable fee for delinquent tax collection services of a private attorney; and WHEREAS, TEX. TAX CODE §§ 33.07 and 33.08 were amended by the Seventy Seventh Legislature, by Act of May 17, 2001, to provide that certain taxes, in order to defray the costs of collection, may incur an additional penalty equal to the compensation specified in the contract with private counsel; and WHEREAS, the source of the funds for private counsel’s compensation is the additional penalty paid by the delinquent taxpayer, rather than the public treasury; WHEREAS, the current contract for services between the parties is on a month to month basis, and the parties desire to renew their contractual arrangement for a period of two (2) consecutive one (1) year terms as was the parties' original contractual arrangement; NOW THEREFORE, for and in consideration of the recitals shown above, of Second Party’s increased costs of doing business, and of enhanced services by Second Party that will result from the devotion of additional technological and human resources toward collection of delinquent taxes, the Contract, by execution of this Amendment No. 1, is amended hereby as set forth below. I. THE AMENDMENT SectionIII The following italicized language is hereby substituted for of the Contract: First Party agrees to pay to Second Party as compensation for services required herein the following amounts: EXHIBIT A 1 (a)fifteen (15%) of the amount collected of all 2002 and prior year delinquent taxes, penalty and interest that are subject to the terms of this contract, actually collected and paid to the collector of taxes during the term of this contract, as and when collected; and (b)twenty percent (20%) of the amount collected of all 2003 and subsequent year delinquent taxes, penalty and interest that are subject to the terms of this contract, actually collected and paid to the collector of taxes during the term of this contract, as and when collected. All compensation above provided for shall become the property of the Second Party at the time payment of taxes, penalty and interest is made to the collector. The collector shall pay over said funds monthly by check. The following italicized language is hereby substituted for Section VI of the Contract: “This contract is drawn to cover a period of 1 (one) year(s) beginning May 1, 2004 and ending April 30, 2005, and will renew automatically after the initial term for an additional 1 (one) year term beginning May 1, 2005 and ending April 30, 2006 unless either party exercises it's right to terminate or renegotiate the contract pursuant to the provisions set out herein. At the end of the second term, this contract will continue on a month-to-month basis. Either party may terminate or renegotiate this contract at the end of the initial contract term by giving the other party sixty (60) days advance notice of termination in writing. In the case of termination at the end of the initial or second term of this contract, Second Party shall be entitled to receive and retain all compensation due up to the date of said termination. Second Party shall have six (6) months following termination of the contract to reduce to judgement all suits filed prior thereto and to receive compensation for monies collected on behalf of First Party pursuant to said suits. In consideration of the terms and compensation herein stated, Second Party hereby accepts and employment and undertakes the performance of said contract as above written.” II. EFFECT OF THE AMENDMENT By execution of this Amendment No. 1, the Contract is amended. No other sections, provisions, clauses or conditions of the Contract are waived or changed hereby, and they shall all remain in full force and effect throughout the term of the Contract and any duly authorized extensions. IN WITNESS WHEREOF, by their signatures below, the duly authorized representatives The City of ParisLinebarger Goggan Blair & Sampson, LLP of and of do hereby agree and append this Amendment No. 1 to the Contract dated February 5, 2002. 2 EXECUTED THIS the 12th day of April, 2004. CITY OF PARISLINEBARGER GOGGAN BLAIR & SAMPSON, LLP By:_____________________________By:______________________________ Curtis Findley, MayorJohn R. Bolster, Partner 3