QUESTION
What is the collection rate for sheriff's joint compliance task force fines, and how would lien sales impact city revenue?
5:45:57
·
6 min
The council member inquires about the collection rate of fines issued by the sheriff's joint compliance task force, the uncollected $2.1 billion, and the potential revenue from lien sales, while the commissioner details the collection process and challenges.
- Only a portion of fines issued by the sheriff's joint compliance task force gets collected, and some fines are non-dockable, not reaching the Department of Finance for collection.
- The Department of Finance oversees the collection of defaulted or unpaid fines through internal efforts and external collection agencies, which get paid a percentage of what they collect.
- There's a significant amount of uncollected debt, with property tax delinquency becoming a growing concern, potentially reaching over $800,000,000 in delinquent property taxes by the end of the fiscal year.
- Regular lien sales historically helped keep property tax delinquency under $350,000,000, highlighting the importance of enforcement tools to address tax nonpayment.
Gale Brewer
5:45:57
Thank you.
5:45:58
First of all, thank you to Rita Ten for all that she does.
5:46:01
We appreciate it very much.
5:46:03
When you talk about the sheriff, I wanna thank him also because I have been out and I see the amazing amount of work that goes into a raid and calculations and bags of stuff and time, etcetera.
5:46:16
So my question though is, I believe looking at some of the online data in the open data platform that is, like, only 10% of what is submitted to actually gets collected.
5:46:29
So I'm just wondering if you have some ideas about what gets collected.
5:46:34
The second question is, along those lines.
5:46:36
As you know, thanks to IBO.
5:46:38
I did a report over a year ago that we're missing out as a city, not just finance.
5:46:44
And 2,100,000,000 in terms of collection.
5:46:46
That's a lot of money.
5:46:47
So I'm a bit uncollectible.
5:46:49
I've been around long enough to listen to all that.
5:46:51
And I can't believe that 2,100,000,000 is uncollectible.
5:46:55
And then third, I know that this lien sale is hanging out there.
5:46:58
I just was wondering, if there ever is a lean sale because I have buildings that are in Manhattan sitting there, not paying their taxes.
5:47:07
I can't do a thing about them.
5:47:09
So I'm just wondering what that would contribute to our revenue if there ever was.
5:47:14
So those are my three questions.
Preston Niblack
5:47:17
Okay.
5:47:18
So with respect to fines that are issued during the course of Sheriff's Joint Compliance Task Force, those are almost entirely issued by the Department of Consumer And Worker Protection.
5:47:32
Some most of them are probably returnable to oath.
5:47:35
I know that some of them are not dockable, which means that they'd never come to us for collection.
Gale Brewer
5:47:39
So when that when I go out with the sheriff and he marks down, I'm making this up a I'm learning these terms.
5:47:44
So flour is, I know, $200, the blah blah blah, and they add it all up.
5:47:50
That doesn't go to oath?
5:47:52
What what happens?
5:47:53
I
Preston Niblack
5:47:54
don't know.
5:47:54
This is really a question for DCWP about what exactly goes and how much they collect.
5:47:58
I I really I can't answer that.
Gale Brewer
5:48:00
I thought it went through.
5:48:01
Okay.
Preston Niblack
5:48:01
Because, you know, the stuff that comes to us is only after it's defaulted at oath or someone hasn't paid.
Gale Brewer
5:48:08
So Okay.
Preston Niblack
5:48:09
For collection.
Gale Brewer
5:48:09
I have to
Preston Niblack
5:48:10
On the broader question, I mean, I think I'm first of all, I'm going to say yes, some of it is uncollectible.
5:48:20
A couple of things.
5:48:21
First of all, we have a collections division led by this is commissioner Pam Parker, Kurt Tihoe, that does a fantastic job.
5:48:30
The general process is with respect to ECB debt, for example, if it's if respondent defaults, doesn't shop for their hearing, or comes their hearing that the violations upheld and they're found guilty and they don't pay, that comes to the Department of Finance for collection.
5:48:49
We work that debt internally typically for a couple of months.
5:48:53
We have what's called the account executive unit who just it's it's they send dunning notices.
5:48:59
They make phone calls.
5:49:01
If they are unsuccessful after 60 days, if it's a high value amount and the the average fine that comes to us is about $500.
5:49:14
So if it's a higher than if it's a higher dollar amount, may be referred to our legal affairs division, the collections unit there, for them to do a legal proceeding like an execution or or levy on the bank account.
5:49:28
For smaller dollar amounts, it goes to 3 successive collection agencies, each of whom works it for 6 months.
5:49:35
You know, I mean, obviously, if somebody collects it the 1st round, then it doesn't go on.
Rita Joseph
5:49:38
But
Gale Brewer
5:49:38
may get paid something for their business.
Preston Niblack
5:49:40
They get paid a a percentage.
5:49:42
Yes.
5:49:43
And but they don't
Gale Brewer
5:49:44
they don't get paid if the person doesn't pay or they
Preston Niblack
5:49:47
It's only strictly on what they collect.
Gale Brewer
5:49:49
Okay.
Preston Niblack
5:49:50
And the rates are vary according to the type and the and where they are in the queue.
5:49:55
Are they 1st, 2nd, or 3rd?
5:49:59
So I think that that's this is best practice from an industry point of view, and I think that we do well on collections.
5:50:09
Parking violations are kind of self resolving for the most part.
5:50:14
Usually, we have a 90% resolution rate within the 1st 3 years after violence.
Gale Brewer
5:50:20
Your Parkinson's is here because they don't wanna lose your car.
5:50:22
Yeah.
Rita Joseph
5:50:22
Yep.
Preston Niblack
5:50:25
You know, property taxes, as obviously you mentioned, is a is a different story.
5:50:29
Right?
5:50:29
They're the only tool that we really have to enforce has been the lien sale.
5:50:35
And we're looking at a delinquency rate that's now up at, like, 3.4%.
5:50:43
That's up 4 10ths of a percent compared to last year, which may not sound like a lot, but that's almost $150,000,000.
5:50:51
We are at the current rate, we are looking at delinquent property taxes at the end of this fiscal year of over $800,000,000.
5:51:00
Historically, we've been under $350,000,000 at the end of the fiscal year when we had regular lien sales.
5:51:07
Last year went up to $700,000,000.
5:51:10
This year, it looks like it will go north of $800,000,000.
5:51:13
So it's It's not just the absolute dollar amount that I think should worry us all, but it's also the trend in people sort of recognizing that there are no consequences for not paying your property taxes, and that that just can't be allowed to continue.
5:51:27
We really have to address it.
Gale Brewer
5:51:28
I got 3 buildings, and they used to owe a 1,000,000.
5:51:31
So that's $3,000,000 right there.
5:51:34
Just finally, in terms of, like, if someone doesn't pay sanitation, etcetera, that so goes to you in terms of the collection.
5:51:41
Is that what you're saying or whatever?
5:51:43
In in Middle East Department, etcetera, etcetera.
Preston Niblack
5:51:46
Anything that's returnable to ECB and which can be docketed, meaning that can be you know, filed as a as a claim in court will come to us for collection.
Gale Brewer
5:51:54
Okay.
5:51:54
And do you break that down?
5:51:55
Like, which agency does well, doesn't do well, etcetera?
Preston Niblack
5:51:59
We we have a report that we do each year in at the end of October on outstanding ECB debt, which you know, I'm guessing it's probably something that you initiated, but I would recommend that it's very, very comprehensive
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