Linebarger to County: Have We Got a Deal for You

County Judge Sam Biscoe (Photo By John Anderson)

Travis County officials have touched off a bristling political feud over the prospect of privatizing the county's delinquent tax collection duties. Depending on the way things go, the decision could financially benefit one former elected official and cause another to go ballistic.

At the center of the firestorm is former County Attorney Ken Oden, who left office in February 2003 to work for a law firm that is now jockeying for the county's lucrative delinquent tax business. Waging an aggressive charge to keep the system under public control is former County Judge Bill Aleshire, a political gadfly and rabble-rouser who has always relished a good political fight – even if it means taking on old friends like Oden. Aleshire left county government nearly seven years ago, but on this issue he is proving to be every bit the public agitator out of office as he was during his 12 years as county judge. He is especially protective of the current tax collection system because it's his own creation; he built the program in the early Eighties, during his tenure as county tax assessor. He insists that the responsibility should remain under the control of the tax assessor and the county judge because both are accountable to voters.

Travis Co. is the only metropolitan county in Texas that handles its own enforcement of delinquent property taxes, while a growing number of other jurisdictions are relying on private law firms to do their collection work. Aleshire makes no secret of his disdain for "scummy bounty hunters" – so named because state law allows private attorneys to impose a 15% to 20% "bounty" on delinquent taxpayers. County attorneys don't have such a luxury, though they can collect court costs and attorneys' fees on successful lawsuits. As a consequence, Oden says, the county is filing too many lawsuits, which ultimately costs taxpayers more money. Others argue that the county is just doing a better job of enforcement than when Oden held that responsibility.

Two recent developments could influence the county's decision to go one way or the other: Last week, the Austin Independent School District – the county's largest taxing entity – voiced strong reservations about dismantling a system with which AISD is "extremely satisfied." On the other end, Oden's law firm took the unusual step of promising to locate its national call center in Austin – adding jobs and revenue to the tax rolls – if awarded the county contract.

Under a consolidated property tax program that serves more than 80 local jurisdictions, the county boasts an overall collection rate of a respectable 98.5% within the first year that taxes come due. But last month, thanks to an aggressive lobbying campaign by Oden's firm – Linebarger Goggan Blair & Sampson – Travis Co. commissioners suddenly, with inexplicable urgency, decided it was time to consider whether a private firm could do a better and cheaper job of collecting delinquent taxes. Only Commissioner Karen Sonleitner put up a fuss, pointing out that the court was acting solely on a "vendor-driven deadline." She was referring to the month of May, when delinquent taxpayers must be notified in writing that the county has either retained, or is considering retaining, a private firm to enforce payment.

Still, commissioners reasoned, there is nothing wrong with making an "apples-to-apples" comparison of the county's collection record vs. the records of private firms that hold contracts in other counties. (Oden's firm, the San Antonio-based Linebarger, holds the majority of government contracts in Texas and nationally is among the top shops in the industry.) Late last month, the commissioners issued a "request for information" – sort of an exploratory first step in the pre-bid process – and an in-house committee will spend the next couple of weeks reviewing the responses they get from potential bidders. (The deadline for submissions is Friday, April 29.) The committee will report back to commissioners next month.

By that time, however, county officials may well have decided to scrap the idea altogether. AISD – wielding the influence that comes with the aforementioned status as the county's largest taxing entity – sent a letter April 18 to County Judge Sam Biscoe expressing serious concerns about the possibility of the county contracting with a private firm. AISD General Counsel Mel Waxler said he wrote the letter to ensure that the district has an opportunity to weigh in on the decision. "Clearly AISD is one of the big players in this arena," he said. "The district has had great success with the existing operation, and we've never had any cause to be displeased with it." Should the county decide to outsource its delinquent tax collection work, he added, AISD would likely seek a waiver on its current contract with the county and pursue an independent search for a private collector.

At the very least, the commissioners now seem more willing to slow the process down. "If [the numbers] are close, I say we keep it in-house," Biscoe said recently. "And it may take us so long to do our due diligence that we may not decide to do anything this year." He added that he wants to ensure that both Tax Assessor Nelda Wells Spears and County Attorney David Escamilla are "comfortable" with the commissioners' decision. So far, Spears and Escamilla say they are confident that the county's tax collection rate can stand up against the "competition."

With this in mind, Oden says, his firm has come up with a unique proposal that carries an economic development twist – although what it has to do with the actual tax collection proposal remains to be debated. In a brief synopsis, Oden said that in exchange for the county's business, Linebarger Goggan would establish a national call center – the backbone of its tax collection work – in Austin, east of I-35. The center would employ about 130 people to start, Oden said, and would add another 100-300 workers within 24 months. Employees would receive full benefits. He added that the center might end up here with or without the county contract. It's uncertain how the commissioners would respond to that offer, particularly when the sole purpose of this exercise, in theory, was to compare the county's collection rate and costs against those of private firms. But there are two things certain right now: Aleshire will argue against Oden's offer, and this story – a moving target – will have additional developments to report next week. Stay tuned.