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HomeMy WebLinkAboutAgenda 11-11-2025; 4 - Discussion on Tax Collector’s Reports 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 11, 2025 Action Agenda Item No. 4 SUBJECT: Discussion on Tax Collector's Reports DEPARTMENT: Tax Administration ATTACHMENT(S): INFORMATION CONTACT: PowerPoint Presentation Nancy Freeman, Tax Administrator, Proposed Collections Terminology (919) 245-2735 Explanation Page PURPOSE: To: 1) receive information on the statutory requirements of the Tax Office to make available tax collection reports to the BOCC at its Business meetings; 2) receive explanations of the meanings behind the reports; and 3) provide input on the content of the reports. BACKGROUND: Each month at the early Business meeting of the Board of County Commissioners (BOCC), the Tax Office provides three Tax Collector's reports as information items: • Numerical Analysis • Measure of Enforced Collections • Foreclosure Chart At the Board's request, the Tax Office is providing a information to explain the purpose the reports serve for the BOCC and the public, the history of the reports and why they are provided. Additionally, the presentation will review each report, and the terminology used in the reports will be explained. In addition, how the enforced collection measures are used will be explained. Staff also request input from the Board on the content of the reports to ensure that the reports meet the data needs of the Board and the public, as well as the statutory requirements. FINANCIAL IMPACT: There is no financial impact on the County. ALIGNMENT WITH STRATEGIC PLAN: This item supports all the goals and objectives of the Strategic Plan as predictable, steady, and continued revenue from tax collections is fundamental in supporting all operations of County government. RECOMMENDATION(S): The Manager recommends that the Board receive the presentation, review the proposed addition of a collection terminology document to be provided with the reports, and provide input on the content of the reports. 2 ORANGE COUNTY NORTH CAROLINA Explanation of Tax Collector's Reports Board of Commissioners - Work Session Nov 1 2025 3 Purpose The Tax Office will : 1 . Provide statutory requirement to make available tax collection reports to the BOCC at their business meetings. 2. Provide explanations of the meanings behind the reports. 3. Receive input from the Board of Commissioners as to the content of these reports. ORANGE COUNTY 2 NORTH CAROLINA 4 Tax Collections Reports • At the first regular meeting of each month, the Tax Office provides three tax collection reports as information items: *.** Numerical Analysis Collections Measures of Enforced Collections *.** Foreclosure Chart and History • Reports give proof of Tax Collector's Office actions taken to collect the levy needed to fund the fiscal year budget. • Reports are measure of transparency of the Tax Collector's charge and the results of the work being done towards that charge. ORANGE COUNTY 3 NORTH CAROLINA 5 StatutoryRequirements NCGS 105-350(7) General duties of tax collectors. It shall be the duty of each tax collector: To submit to the governing body at each of its regular meetings a report of the amount he has collected on each year's taxes with which he is charged, the amount remaining uncollected, and the steps he is taking to encourage or enforce payment of uncollected taxes. NCGS 105-321 (b) Disposition of tax records and receipts; order of collection. Before delivering the tax receipts to the tax collector in any year, the board of county commissioners or municipal governing body shall adopt and enter in its minutes an order directing the tax collector to collect the taxes charged in the tax records and receipts. A copy of this order shall be delivered to the tax collector at the time the tax receipts are delivered to him, but the failure to do so shall not affect the tax collector's rights and duties to employ the means of collecting taxes provided by this Subchapter. NCGS 105-373(a)(4) Settlements. Disposition of Tax Receipts after Settlement. — Uncollected taxes allowed as credits in the settlement prescribed in subdivision (a)(3) of this section, whether represented by tax liens held by the taxing unit or included in the list of insolvents, shall, for purposes of collection, be recharged to the tax collector or charged to some other person designated by the governing body of the taxing unit under statutory authority... ORANGE COUNTY 4 NORTH CAROLINA 6 Fiscal Year Collections Data Valid Numerical Charge Through This Date Analysis Current Property Tax Collection-Tax Effective Date of Report as of September 30,2025 C O I I e cti O n S Fiscal Year Amount Charged in Amount Budgeted %of Budget Collections Tax Year 2025 FY 25-26 Amount Collected Accounts Receivable in FY 25-26 Remaining Budget Collected Real and Personal Current Year Taxes $ 199,528,253.00 $ 34,176,190.72 168,110,624.43 199,528,253.00 $ 165,352,062.28 17.13% % Of Budget Real and Personal Prior Collected as Year Taxes $ 4,098,324.06 $ 370,172.86 2,276,456.06 $ 1,288,068.00 $ 917,895.14 28.74% of Report Total $ 203,626,577.06 $ 34,546,363.58 $ 170,387,080.49 $ 200,816,321.00 $ 166,269,957.42 17.20% Date Registered Motor Vehicle Taxes $4,270,040.14 $4,464.24 $ 11,081,252.00 $ 6,811,211.86 38.53% Prior Fiscal Amount Charged in Amount Budgeted %of Budget Year Tax Year 2024 FY 24-25 Amount Collected Accounts Receivable in FY 24-25 Remaining Budget Collected Collections Real and Personal Prior Fiscal Current Year Taxes $ 185,864,645.00 $ 33,110,139.68 152,753,483.24 185,864,654.00 $ 152,754,514.32 17.81% Year Real and Personal Prior Comparison Year Taxes $ 4,227,579.86 1 $ 247,021.13 2,363,608.05 $ 2,220,412.04 $ 1,973,390.91 11.13% Total $ 190,092,224.86 $ 33,357,160.81 $ 155,117,091.29 $ 188,085,066.04 17.74% Registered Motor Vehicle Taxes $4,117,166.93 $2,045.19 $ 13,775,985.00 $ 9,658,818.07 29.89% 2025 Current Year Overall Collection Percentage-Real&Personal 16.89% Represents 2025 Current Year Overall Collection Percentage-with Registered Levy Motor Vehicles 18.61% Collection 2024 Current Year Overall Collection Percentage-Real&Personal 17.81% Percentages 2024 Current Year Overall Collection Percentage-with Registered Motor Vehicles 19.60% Comparisons with Prior ORANGE COUNTY Year NORTH CAROLINA 7 Measures of Enforced Collection Enforced Monthly totals by YTD totals b Collection Enforced Data valid y Type Collection type thru this date Enforced Collection type V Effective Date of Report: September 30, 2025 July August September October November December January February March April May June YTD Wage garnishments 97 9 13 119 Bank attachments 140 2 2 144 Certifications - Rent attachments - Housing/Escheats/Monies 28 1 29 ILevies Foreclosure Title Searches Completed - 1 6 7 NC Debt Setoff collections $808.92 $ $ 111.71 $920.63 Provides Tax Collector's efforts to encourage and enforce payment of taxes for fiscal year 2025-2026.Provides breakdown of enforced collection actions by category,and a year-to-date total. Provided in ACCORDANCE WITH NCGS 105-350(7). SEE DEFINITIONS OF ENFORCED COLLECTIONS METHODS ATTACHMENT ORANGE COUNTY 6 NORTH CAROLINA 8 Foreclosure Chart and History BLUE Orange County Foreclosures number of Title 30 Searches 25 20 ORANGE 15 number of Parcels Sold at 10 Foreclosure 5 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 W or iTITLESEARCHESCOMPLETED ■PARCELSSOLDATFORECLOSURE ■TAXESPAIDPRIORTOFORECLOSURE *Approximately 45 parcels were sold during the years 2002-2014. *Orange County has acquired 7 parcels via tax foreclosure since 2002. "Foreclosure processes generally take six months therefore properties are often auctioned in the following calendar year. _ ITY NORTH CAROLINA 9 r Definitions For Measures of Enforced Collection Explanations Wave,Rent_Bank,htousln±w_*tnn1",Escheats GlrrnlshmeriL/Attn_ehment/Geeilficailens: & Terminology NCGS105.368. Procedure for attachment and garnishment.(a)Subject tothe provisions of G.S. 105.356 governing the priority of the hen acquired,the tax collector may attach wages and other compensation. rents.bank deposits.the proceeds of property subject to levy,or any other intangible personal property, including property held in the Escheat Fund,in the circumstances and to the extent prescribed in G.S. 105.366(b).(C),and W. • Wage gamishments Local governments can attach wages for unpaid property taxes by issuing an Attachment and Garnishment notice.The notice directs the employer to withhold a portion of the A document providing taxpayer's gross wages.not to exceed 10%per pay period.topaythe debt.Taxpayers are notified atthe definitions for the measures same time as the employer and can make payment in full at any time to stop the garnishment process. • Bank attachments Locatgovemmentscan attach bank accounts tocottectdelinquenttaxes.This of enforced collections will authority,allows them to freeze and seize funds in a taxpayer's bank account to satisfy the owed be included with the three amount.Taxpayers are notified at the same time as the bank, collections reports moving • CertHkations A process in which a County reaches out to another county to request that a debt be collected on behalf of the certifying county.Used when financial agencies required in person delivery Of forward. bank attachments and no branch was located in the certifying county's vicinity.Generally unused in recent years due to changes in fmanciat agencies requirements. • Rent attachments A rent attachment is directed toward the payments a tenant owes to a landlord who is delinquent on their taxes.The tax authority notifies the tenant(the'garnishee').directing them to send their rent payments to the tax collector instead of the landlord until the past due balance is paid in full.Property owners are notified at the same time as the renter and can make payment in full at any time to stop the process.Detailed records of payments are kept for the purpose of updating the property owner of rents received for their tenants. • Housing funds attachment is issued to the County Housing department to intercept Housing Choice /� r^ 1� �T�,r Voucher(HCV)Program(formerly Section 8 Housing)funds paid to landlords whose taxes are unpaid. ORANGE V E COU 1 V 1 1 a NORTH CAR(7LINA 10 Questions? ORANGE COUNTY NORTH CAROLINA 11 1 Definitions For Measures of Enforced Collection Wage, Rent, Bank, Housing, Monies, Escheats Garnishment/Attachment/Certifications: NCGS105-368. Procedure for attachment and garnishment. (a)Subject to the provisions of G.S. 105-356 governing the priority of the lien acquired,the tax collector may attach wages and other compensation, rents, bank deposits,the proceeds of property subject to levy, or any other intangible personal property, including property held in the Escheat Fund, in the circumstances and to the extent prescribed in G.S. 105-366(b), (c), and (d). ■ Wage garnishments Local governments can attach wages for unpaid property taxes by issuing an Attachment and Garnishment notice.The notice directs the employer to withhold a portion of the taxpayer's gross wages, not to exceed 10% per pay period,to pay the debt.Taxpayers are notified at the same time as the employer and can make payment in full at anytime to stop the garnishment process. ■ Bank attachments Local governments can attach bank accounts to collect delinquent taxes.This authority allows them to freeze and seize funds in a taxpayer's bank account to satisfy the owed amount.Taxpayers are notified at the same time as the bank. ■ Certifications A process in which a County reaches out to another county to request that a debt be collected on behalf of the certifying county. Used when financial agencies required in person delivery of bank attachments and no branch was located in the certifying county's vicinity. Generally unused in recent years due to changes in financial agencies requirements. ■ Rent attachments A rent attachment is directed toward the payments a tenant owes to a landlord who is delinquent on their taxes.The tax authority notifies the tenant(the "garnishee"), directing them to send their rent payments to the tax collector instead of the landlord until the past due balance is paid in full. Property owners are notified at the same time as the renter and can make payment in full at any time to stop the process. Detailed records of payments are kept for the purpose of updating the property owner of rents received for their tenants. ■ Housing funds attachment is issued to the County Housing department to intercept Housing Choice Voucher(HCV) Program (formerly Section 8 Housing)funds paid to landlords whose taxes are unpaid. ■ Escheats funds attachment is issued to the state to collect funds to pay unpaid property taxes. "Escheated funds" refer to unclaimed funds that, after a period of dormancy, are considered abandoned by the holders of the funds,who are required to transfer them to the state.The State Treasurer holds this property in the Escheat Fund,from which rightful owners or their heirs can claim it at any time. Examples are uncashed checks, unreturned deposits,forgotten savings account. Collections staff members routinely review the https://www.nccash.com/website and compare our list of delinquent taxpayers to the owners of funds that have been escheated to the State. If we can provide a match for name and address,the funds are sent to us for payment on delinquent taxes.The number shown each month represents how many requests were sent to the State for escheated funds. ■ Monies attachment focuses on legal settlements and other proceeds which can be attached to pay delinquent taxes. Example: a property owner who owns multiple properties with unpaid taxes sells one of the properties. Proceeds of that sale can be attached and used to pay the property owner's delinquent taxes. Levy: NCGS 105-367. Procedure for levy. (a)The levy upon the sale of tangible personal property for tax collection purposes(including levy and sale fees)shall be governed by the laws regulating levy and sale under execution except as otherwise provided in this section. (b)The tax collector or any duly appointed Updated October 31,2025 12 2 deputy tax collector shall make the levy and conduct the sale; it shall not be necessary for the sheriff to make the levy or conduct the sale. ■ Levies Local government authorities have the power to levy on and sell a taxpayer's personal property to collect delinquent taxes.This is a statutory power that becomes available once a tax bill becomes delinquent.This is an option that is not often used, and generally would be used for businesses rather than personal delinquent taxes. Foreclosure§ 105-375. In rem method of foreclosure. (a) Intent of Section.—Proceedings brought under this section are strictly in rem.This section provides, as an alternative to G.S. 105-374, a simple and inexpensive method of enforcing payment of taxes necessarily levied,to the knowledge of all persons,for the requirements of local governments in this State and recognizes, in authorizing this proceeding,that all persons owning interests in real property know or should know that the tax lien on their real property may be foreclosed and the property sold for failure to pay taxes. ■ Title Searches Completed:thorough investigation of public records to confirm legal ownership and identify all existing claims, liens, and encumbrances against a property. It's performed before the property is sold to ensure the foreclosing entity has a clear title and to identify any issues that could affect the property's value, such as unpaid taxes, existing mortgages, or other judgments. NC Debt Setoff Collections Act NCGS 105A-1. Purposes.The purpose of this Chapter is to establish as policy that all claimant agencies and the Department of Revenue shall cooperate in identifying debtors who owe money to the State or to a local government through their various agencies and who qualify for refunds from the Department of Revenue. It is also the intent of this Chapter that procedures be established for setting off against any refund the sum of any debt owed to the State or to a local government. Furthermore, it is the legislative intent that this Chapter be liberally construed so as to effectuate these purposes as far as legally and practically possible. NCGS 18C-134. Setoff for debt collection against lottery prizes. (a) Purpose.—The Commission must establish a debt set-off program by which lottery prize payments may be used to satisfy a debt owed or collected by a claimant agency that is at least fifty dollars ($50.00).The collection remedy under this section is in addition to and not in substitution for any other remedy available by law. • NC Debt Setoff Collections Legal process where County uses state tax refund or other state government payments to collect a delinquent debt owed to the agency. County submits a list of debtors to the NC Department of Revenue,which then "sets off'the amount of the debt from any refunds the debtor is due. Updated October 31,2025