1. Portnoff Delinquent Tax collection review
Turnover January of 2016 of the un-paid Real Estate Taxes
Review of the results, data, observations, and recommendations
November 21, 2016

2. Countywide turnover – School District History
LANCASTER COUNTY SCHOOL DISTRICT TURNOVER
School District
Parcels
Penalty $
COCALICO
323
620,172
320
615,257
330
663,431
338
761,459
COLUMBIA
263
583,681
268
604,032
281
560,929
278
537,415
CONESTOGA VALLEY
258
561,898
270
633,757
294
657,540
292
702,543
DONEGAL
223
503,585
230
516,724
244
543,039
241
533,463
EASTERN LANCASTER CO.
262
442,188
279
457,771
274
387,039
384,573
ELIZABETHTOWN
310
668,437
675,914
339
860,607
353
819,581
EPHRATA
369
657,938
377
672,564
418
697,280
391
839,764
HEMPFIELD
450
1,052,728
434
1,113,438
459
989,175
462
1,016,269
LAMPETER-STRASBURG
177
580,859
181
570,505
189
617,209
200
701,607
LANCASTER
1479
2,630,848
1626
2,958,700
1487
3,087,811
1394
2,828,356
MANHEIM CENTRAL
336
641,212
307
561,490
483,080
299
535,735
MANHEIM TOWNSHIP
255
783,705
250
766,252
243
689,028
288
879,071
OCTORARA 43
170,220 52
166,215
187,988 60
238,434
PENN MANOR
463
772,635
457
733,844
473
794,653
449
713,085
PEQUEA VALLEY
541,747
347
652,397
304
563,110
674,444
SOLANCO
540
586,267
559
568,938
578
570,155
601
622,249
WARWICK
259
508,609
275
564,131
269
769,767
290
843,175
NET LANCASTER COUNTY SCHOOL DISTRICT TOTALS
6,302
12,306,727
6,552
12,831,929
6,515
13,121,840
13,631,225

3. Recap: For the Turnover of unpaid 2015-16 property taxes in January of 2016
Board approved (Fall of 2015) a one year pilot of utilizing professional collection services ( Portnoff) vs the County collection bureau
The firm works for Solanco (as a customer); services are customer focused and responsive, imbedded & transparent real time data tracking, significant collection expertise and experience, a detailed legal process / dealing with our customers as directed
District requested the County to waive the 5% “mandated” fee as they were no longer collecting the taxes.
The County declined to waive....
Taxes were turned over to Portnoff -- with significant front-end effort to contact, meet, and assist all cooperating customers to create payment plans set up schedules to get caught up

4. Tracking Activity on turnover
Solanco School District 2015 Taxes - Activity Summary as of 10/31/16
Number of Accounts Placed
533
100.0%
Number of Certified Letters Sent
512
96.1%
Number of First-Class Letters Sent 16
3.0%
Number of Accounts with a Phone Call
326
61.2%
Number of Accounts with Written Contact 48
9.0%
Number of Accounts with In-Person Contact 7
1.3%
Number of Accounts with Attorney Contact
Number of Accounts on Standard Payment Plans 21
3.9%
Number of Accounts on Hardship Payment Plans 33
6.2%
Number of Accounts with Hardship Applications Sent 54
10.1%
Number of Accounts Paid in Full
306
57.4%
Number of Accounts Exonerated by School District 9
1.7%

5. Summary: 2016 calendar year to date Note: (Collections cross over school district fiscal years)
Through June 30, 2016 FY ending; 59.2% of January 2016 turnover was collected (started about the 3rd week of February)
Through October 31, 2016 (into FY); 83.97% of January 22, turnover collected
Through October 31, 2016 – 306 accounts of 533 are paid in full, (191 of those paid no attorney fees---engaged and followed the process); 54 accounts remain on payment plans; 138 in various collection processes.
Through October 31, 2016; the county charged (Portnoff fronts the costs and assumes risk-of-loss) $31, in Prothonotary and Sheriff office fees for required filing processes
Through October 31, 2016; in addition to row office fees, the county charged Solanco $23, in 5% commission fees---
Total paid to the county through October 31, 2016 is $54,647.80

7. Selected Major Components of 2016 turnover data
Solanco
Property type
Dollar Value
SINGLE FAMILY DWELLING
32.8%
47.5%
AG - DAIRY/BEEF/HOGS
3.2%
10.1%
MOBILE HOME ONLY
39.2%
9.1%
MOBILE HOME ON LAND
6.4%
3.75%
Percent of total turnover
81.6%
70.6%
MOBILE HOMES
45.6%
12.9%
Observation: Mobile homes represented over 45% of the turnover --- and 13% of the dollars; it is believed that this is an area which can be targeted to address what appears to be an issue. Based on observations of these particular accounts, it is clear that a lack of understanding/communication exists---and the system itself may be complicit in generating additional costs to many who can least afford it. (See also total sheet of all property types for 2016 turnover)

8. Lancaster County Mobile Home Properties

9. Lancaster County Mobile Home Property- Percent Share

10. SOLANCO SCHOOL DISTRICT COLLECTIONS AS OF 10/31/16
AMOUNTS RECOVERED FOR SCHOOL DISTRICT
Total Face + Penalty Turned Over
611,746.52
Face + Penalty + Interest Collected
466,827.83
AMOUNTS PAID TO ROW TO OFFICES
Amount paid to Lancaster County Prothonotary
15,403.53
Amount paid to Lancaster County Sheriff
15,902.89
5% Commission Paid to Lancaster County Tax Claim Bureau
23,341.38
Amount paid to Lancaster County Tax Assessment office for Assessment Data
50.00
NOTICE EXPENSE CHARGE AND REIMBURSEMENT
Notice Expense Charged
23,123.40
Notice Expense Recovered and Remitted to School District
17,092.66
Notice Expense Balance
6,030.74
COURT COSTS CHARGED AND RECOVERED
Court Costs Charged (Prothonotary and Sheriff costs paid to county)
31,306.42
Court Costs Recovered
14,603.64
Court Costs Balance (Portnoff has to front those costs)
16,702.78
Through October 31, 2016

11. Current Year Collection---Running 1. 4% to 1
Current Year Collection---Running 1.4% to 1.7% ahead of past four year average and median---December and Turnover?
SOLANCO SCHOOL DISTRICT REAL ESTATE TAX COLLECTIONS
TAX COLLECTION STATISTICS RECENT 5-YEARS
2016/17
2015/16
2014/15
2013/14
2012/13
Duplicate - Reduced by
homestead/farmstead exclusions
23,138,480
22,186,373
21,434,265
20,653,435
19,770,866
# Taxable Parcels
11,806
11,788
11,794
11,775
11,767
Millage Rate
11.804
% of Millage Rate Increase
2.9%
2.5%
2.4%
3.6%
July 1 - August 31 Collections (Base Amount)
15,784,105
15,940,231
14,734,107
14,814,835
15,655,870
4yr Avg
4yr Median
Sept. 1 - October 31 Collections (Base Amount)
5,158,731
3,692,165
4,661,811
3,511,635
1,905,650
68.2%
72.9%
71.8%
Nov. 1 - December 31 Collections (Base Amount)
1,969,759
1,497,723
1,780,630
1,694,546
22.3%
16.3%
16.8%
Total Collections at Base Amount
20,942,836
21,602,155
20,893,641
20,107,100
19,256,066
90.5%
89.1%
88.8%
% of Duplicate Collected at Base Amount
90.51%
97.37%
97.48%
97.35%
97.40%
Change
1.4%
1.7%
July 1 - August 31 # Payments Collected
8523
8722
8594
8737
9539
Sept. 1 - October 31 # Payments Collected
3048
3666
2859
2843
1469
Nov. 1 - December 31 # Payments Collected
641
1404
1787
1430
July 1 - August 31 % of Duplicate Collected (Base Amount)
68.22%
71.85%
68.74%
71.73%
79.19%
Sept. 1 - October 31 % of Duplicate Collected (Base Amount)
22.30%
16.64%
21.75%
17.00%
9.64%
Nov. 1 - December 31 % of Duplicate Collected (Base Amount)
0.00%
8.88%
6.99%
8.62%
8.57%
Note for perspective: 1% of $23M is $230,000

12. Working through remaining 2015...
Real Estate Taxes: Turned over January 2016
Status as Of October 31, 2016
Count
Balance
On Payment Plans 54
$ ,944
In process
138
$ ,248
Active
192
$ ,192
Paid in full
306 $
Collectible files
498
In Bankruptcy 2
$ ,159
Closed due to low balances 21 $
Sale pending $
Other as listed 25
$ ,755
Base Tax
Amount Recovered
Percent Recovered
$ ,968
$ ,824
83.97%

13. Audit June 30, 2016----Current Year (2016)...
Delinquent Real Estate Taxes
County Base Tax and Penalty Collections
284,033.01
County Interest Collections
32,158.70
Portnoff Tax Collections
362,243.28
Portnoff Interest Collections
214.77
678,649.76
Account : Revenue From:
Prior Year Comparison:
Fiscal Yr ending 6/30
Turnover to Portnoff
Turnover (January) To county
Total collected 6411
Current year collections for Real Estate Taxes: a 1% improvement in current year collections equals:
Portnoff Collected
County Collected
2011/2012
765,404.71
622,249.38
2012/2013
691,692.21
570,154.76
2013/2014
649,267.36
568,937.95
2014/2015
615,709.36
586,266.59
2015/2016
362,458.05
611,746.52
316,191.71
2016/2017 *
574,000.00
500,000.00
$ ,546.00
637,546.00
$ ,000
2017/2018 **
400,000.00
450,000.00
$ ,000.00
430,000.00

14. Observations
For many of our customers-----some delinquent accounts were repetitive year after year---basically trapped in what can be described as a system which enabled too easily. As such, in some cases it fed/encouraged entry into an expensive delinquent collection process.
The objective is to move this process toward greater focus on customer need and hardship review; including work to avoid client entry into the delinquent system where possible in successive years. At a minimum, the goal is to lower delinquent amounts via payment plans which will lower client costs. Providing an easy path (i.e. never-ending County bureau payment plans) simply leads to higher costs for too many.
Year one is a transition year----it is having impact across several arenas....county & district past accounts, and current FY collections (crossing over FY’s), and our customers/clients behavior for some it will take a second year to get there......objective is to lift as many accounts as possible out of the ‘past’ delinquent trap...and get them to a current status
Focus on (and perhaps look for some creative solutions) those truly in the greatest need....delinquent as systemic vs one-off events....situations change and people have to work through them.
Data analytics and collection tracking provided a much improved lens to see and understand who and what type of properties ended up in turnover—what is working or not, & what remains to work on, and actionable information in general. ---Mobile homes in particular----information clearly indicates there are opportunities to improve at multiple levels.
Current year collections are up 1.4%---assuming it holds, this will lead to a lower turnover in January of our tax payers will pay less in 10% delinquent penalties, and mailing costs. They will pay less in filing fees, interest, and other costs for collection; as well as Solanco will not pay the 5% commission to the county on the reduced turnover amounts......assuming the county commissioners continue to charge the fee for not doing the work while still collecting significant row office fees.
County is making MORE money with this process....and doing significantly less work.

15. Recommendations:
To Continue with Portnoff indefinitely with adequate periodic reports to the board
Share key data with the Commissioners; and again request that the 5% commission fee either be waived....or lowered to 1% given they clearly are collecting significant row office fees covering county costs.
Refine and adjust with Portnoff as needed from year one experience.
Work with Portnoff on year two carry-overs to assist as we work clients through payment needs and individual situations.
Investigate work with local mobile home parks and owners to clarify communications regarding property tax bills; who owes them and when due....facilitate county assessment communications for required address changes.
Reassessment is coming....work with clients to educate on impact if any.