Pittsburgh Collector Catches Flak for Delinquent Property Tax Fees

Pittsburgh may be the “#1 Most Livable City in America,” according to Places Rated Almanac. But some homeowners are saying that a collector is making it hard to live up to their delinquent property tax bills.

An audit for Allegheny County, Pa., where Pittsburgh is located, recently revealed that the fees that some property owners pay on their delinquent bills to a third-party collector can be twice as high as the actual tax bill.

County Controller Mark Flaherty conducted an audit of the collection activity by Jordan Tax Service after a request by the county sheriff’s department. It’s not that Jordan Tax Service is doing anything wrong or underhanded, Flaherty said. “Jordan is doing their job. It’s a problem with the process, not the company.”

The problem stems from the structure of the contract between the county and the agency. Jordan adds attorney fees on to the debtor’s bill that are often greater than the bill itself, especially for smaller delinquencies. The attorney fees and the agency fees are paid to Jordan before the county gets its money, Flaherty said, so sometimes there is no money left for the county.

The county treasurer told a local TV station that Jordan has collected about $20 million without evicting people from their homes. However, a second audit of the collection program and the percentage that Jordan remits to the county has just begun.

Jordan did not return calls by insideARM’s deadline. According to its Web site, Jordan is a 75-year-old firm that collects current and delinquent real estate, earned income and per capita taxes, as well as utility fees such as sewer rental and refuse collection. It’s worked under the current county contract for about two years, said Flaherty.

Flaherty would like to see Allegheny get at least a portion of any monies collected at the beginning, rather than at the back end. Jordan is the only outside collection firm the county uses, and the contract is up for renewal this summer.

“We’re the only county in the state without a centralized tax collection system,” Flaherty said, adding that such a system, which he favors, is a “political hot potato.” In the other counties, a centralized collection office handles all collections and delinquencies for all entities within the county, typically in a two-year period. That has minimized the need for outside collection firms, so collection fees aren’t as much of an issue, according to Flaherty.