County gets tougher on delinquent taxes

The Sussex County Council, during its meeting on Tuesday, Sept. 22, voted unanimously to put more effort behind the county’s tax-collection activity, approving a set of policy changes for collecting delinquent taxes. The changes include plans to hire a dedicated collections manager to pursue approximately $8.2 million in delinquent taxes and other fees on an estimated 9,482 accounts.

Of that $8.2 million total, nearly $6 million in property taxes is owed to local school districts, with $900,000 in county property taxes and $1.4 million in county sewer and water fees also past due.

Existing collections policies include the sending of warning letters and obtaining of liens on associated properties. The taxes and fees are, in some cases, two or more years delinquent by the time the county obtains liens on the properties.

Current county staff makes phone calls and send letters to delinquent taxpayers and utility customers, and they work with individual account holders to set up payment agreements. More than 1,100 such agreements are already in place.

The county has also worked to settle many delinquent accounts using the “clean hands” policy it adopted in 2007, which requires that taxes and sewer and water fees must be paid before the county will issue building permits and other required approvals.

Eventually, tax sales are held for properties in delinquency, an option officials said the county will now use more often.

But with so many millions of tax dollars and fees in arrears, county finance staffers last week recommend the council approve a stepped-up collections policy, with more strongly-worded letters from the county and its attorney; posting of a list of delinquent accounts online; and a new collections manager to coordinate collections efforts that are currently handled by a variety of county staff.

The additional collections from the changes are estimated to more than pay for the costs of the additional staff position.

County Finance Director Susan Webb told council members on Sept. 22 that she is “a big advocate of hiring a collections manager.” She noted that New Castle County has four people dedicated to collections, while Kent County has one full-time and one part-time staffer working on collections.

Also recommended by county staff, an amnesty period of 30 days during which the county would waive its portion of penalties for delinquent tax payments (about 10 to 15 percent of the total penalties, once school taxes are accounted for). Sewer and water fees would be charged a 1 percent fee per month starting 30 days after penalties would otherwise begin to be assessed.

The county has not yet set a date for such an amnesty.

“This is a problem that has been growing over the years,” said Council President Vance Phillips. “It makes sense to have a coordinating position. I’m sure that the position is going to more than pay for itself.”

“By having one individual focused on collections, the County can more aggressively and consistently address this issue,” County Administrator David B. Baker said.

The county, in the coming weeks, will look to fill the position with someone trained in collections and debt recovery.

County officials said Sussex is simply stepping up its collection efforts but will continue to work with those who are behind in their taxes and sewer and water fees.

“The County Council recognizes that, in many instances, household budgets are tight and people are hurting financially, particularly in the current economy,” Phillips added. “But this is an issue of equal treatment for all. Sussex County has some of the lowest taxes in the country, and we must all pay our fair share.”

Also on Sept. 22:

• The council approved the reappointment of Brent Workman to the Sussex County Board of Adjustments.

• Council members approved disbursement of the full $15,000 of South Bethany’s annual municipal police grant, for training, computers, jackets, safety devices and more.