Diving Into Delinquency: Effective Strategies for Addressing This Growing Issue Carolyn Rice Montgomery County Treasurer, Ohio

Montgomery County’s Story The Role of County Treasurer The Situation We Face In House: New Mindset, New Tactics, New Tools & Techniques Outreach & Communication What’s Next?

The Role of County Treasurer The County’s banker The County’s tax collector The County’s investment manager CEO of the Organization Chief Deputy = COO Four teams, 27 people

Montgomery County’s Situation Large urban county 250,000 parcels Dayton– largest city, heart of region 69 taxing jurisdictions Economy in transition 11% unemployment rate, population decline Forbes 2009 List of Dying Cities

Montgomery County’s Situation 2 nd highest property tax rate in Ohio Predatory lending 25,000+ foreclosures since 2005 Vacancy rate = 20% in Dayton Great Recession– double whammy! 2008 Property Reappraisal Budget cuts & more…

Montgomery County’s Situation : ~95% current, 87.7% overall 2009: 93.8% current, 85.7% overall Tax charges increased from $493.9 m to $754.4 m(53%) DQ charges inc. from $63.6 m to $98.2 (54%) Taxpayers hitting “the wall”

Montgomery County’s Situation How 2010 Is Shaping Up First Half Collection Results: $375,125,052 current charges collected (97.1%), $392,800,995 total charges collected (85.1%) DQ contracts voided Foreclosures filings YTD Revenue challenges continue

2007: Let the Change Begin Sworn in Feb 2007 Don’t rock the boat (4-6 mos) Question everything- why? Turnover in key managers Mindset change– reactive to proactive, we’re all in this together Orientation for Everyone

Deploying New DQ Tactics Return mail project launches (July 07) 2 Strikes You’re Out… maybe not Keeping better notes in the system Tax lien sale in Nov 07 ($2.69m) Prosecutor letters Robo calls DQ + prepay Fourth collection (Oct 09)

New Tactic: Return Mail Assigned to Taxpayer Services Send out new bill to forwarding address Met with Post Office & Mail House Researched each bill (5000+) Tracked results & gave credit Prosecutor okays bill suspension 2009 Results: $3.3 m 2010: LexisNexis pilot

New Tactic: 2 Strikes You’re Out Before: Residential- 2 DQ plans; Commercial – 1 DQ plan allowed 3 rd Chance = 50% down + DQ plan No plans below $500 Proactively called tax exempt applicants (churches) Proactively called commercial accounts Delving into bankruptcy cases & met with court administrators, lawyers (new brochures)

New Tactic: Keeping Better Notes Capture who, what, why… for future reference Train staff to thoroughly research Offer homestead, roll backs, etc when not receiving but qualified Filling out the paperwork on remittance of penalties Helping out Auditor’s office (obituary records, send out Homestead & BOR applications)

New Tactic: Tax Lien Sales Auction- One Buyer Pays All Taxes Owed First auction – 2005, only top 10 counties Last auction in parcels, $2.69m, 18% interest Financial crisis, term changed to 6 yr Motivates property owners to pay or get on DQ plan, 2 nd to last resort Working to get terms “3 or 6” yrs. Don’t want to be last auction in the state

New Tactic: Prosecutor Letters Have not done since 2007 Being more selective– property owner cares and chance for it to sell Gets the property owners attention Goal– payment or get on a DQ plan Target: 125- easy to follow up, cheap to do Need to show we still foreclose

New Tactic: Robo Calls Started 2008 Tell DQ plan & tax lien reminders will come Takes so little time to do, costs pennies– very efficient Works– very effective! We aim to use this technology in new ways in the future

New Tactic: DQ + Prepay Fact: 50% of DQ contracts void after each collection Work hard to find sweet spot– pay monthly on back taxes and pay toward future so they stack on track and don’t void Our computer system isn’t designed for this “People aren’t Stupid”- rework DQ payment system & offer new plans in August 2011

New Tactic: Fourth Collection 2009– significant increase in # DQ parcels August 2009– did our usual DQ notification Lots of property owners upset Oct th notice to newly DQ home-occupied residences and agriculture (6,480) Softer approach, giving benefit of doubt Results: 570 on DQ plans, 1649 parcels paid, $1.6 m collected Changing 3 rd collection this year to incorporate this approach Different messages, different targets

New Tools & Techniques in the Works Researching every parcel in 1 township AND 1 city to understand what’s going on Preliminary findings: foreclosures put many properties in limbo Personal letters and phone calls to Top 25 Home Owners (letter + brochure + bill) Cross-training staff + Tune Up Sessions – focus on “we’re all in this together” and no such thing as “downtime” Working with County Prosecutor to offer foreclosure mediation program (25-30% stay in their homes)

Outreach & Communication United Way Housing Counseling Agencies Council & Board Visits Treasurer’s Update Community meetings & field trips

United Way HelpLink Clearinghouse for agencies and services available to the public Partnered in 2007; cross-trained and set up dedicated line Help property owners get the help they need beyond taxes Qualify for grants & programs Most citizens not aware of this service

Housing Counseling & Agencies Train counselors on property taxes & delinquent payment options Have housing counselors on-site during collection period Literature rack in waiting area Attend agency events to stay current on their activities & programs

Councils & School Boards Routinely report our activities to city councils, township boards, and school boards Publicize options for property owners with delinquent taxes owed Build relationships with jurisdictions & work together to improve situation

Treasurer’s Update Quarterly 15-minute television broadcast on government channels of local cable TV stations Free, effective way to promote information about property taxes & things we do Steers citizens to website and to call our office People watch these programs! Programs available on our website

Community Meetings & Field Trips Important for people to put a face with a name Increases awareness of community needs and services– links Treasurer’s office into the community Builds trust and credibility in the community Fosters our approachability and compassion so people will not be afraid to come talk to us

What’s Next? Stay on cutting edge of technology: launching new merchant service agreement (May 2010) Redesign DQ payment plans (August 2011) Analyze information & DQ trends to better understand what’s happening & identify issues Robo calls in last week of regular collection Tune Ups, Supervisor Sessions, etc.

What’s Next? Land Banking Authorization!!!! Overwhelming bi-partisan support, Ohio Legislature voted approval of HB 313 3/24/10 Gov. Strickland signed into law 4/7/10 Montgomery County & 41 other counties will have authority Most robust land banking authorization in nation Create Montgomery County’s Land Bank

Thank You!!! Contact me with questions, concerns, ideas. Carolyn Rice Montgomery County Treasurer 451 W. Third St. Dayton, OH (direct #) (fax)