PerformanceMeasurements

What is this in a tax office?Is it a good thing or a bad thing?

How are you doing “really”?CTx – March 2013

What is the most important function you perform?

Collecting the current grand list?Collecting your prior years

outstanding?Keeping the taxpayers happy?

We all should like performance measurement!

And the tax office is one office that we can easily show how well we are doing!

The tax/revenue office is not about collecting payments

It is about managing collections.

How does the performance in a tax office get measured?

• Outstanding balance as of June 30th?

• Collection rate of current year taxes?

• Amount suspended each year?

• Amount of back taxes and interest collected?

• Number of liens put on the land records?

Are you communicating results to others and who are you reporting to?

Many finance people come from different walks of life. What may be important to you, may not be on your finance directors/treasurers radar screen.

It is up to us to brag about our performance nobody else will.

What reports do you give them?

• Actual collections to collectable balance and/or actual collections to budget?

• Yearly comparison as of certain dates?

• Number of liens put on the land records?

Initial Collectable and Net Collectable Amounts Due.

What factors affect these amounts?

• How “clean” is the initial list.• Is the BOS or Council taking into

consideration the elderly relief and fire fighter discounts? State and Town.

• Is the Town using a solid GL# to calculate the mill rate?

Collection Rate

How do you calculate your collection rate for the current year grand list?

Current Year Collections Net Collectable Balance*

(this would be with no suspense balances taken out)

How do you calculate your collection rate for prior years?Prior Year CollectionsNet Collectable Balance*

* - Net Collectable balance is after Assessor adjustments

Example

Total taxes collected = $5,463,200

Total net collectable = $8,001,203

5,463,200 = 68.28% collected

8,001,203

Is this a good collection rate? Did you have a goal you were trying to meet?

Is this the year end rate?

Also, you need to compare it to something.

What can we compare this to?

The collection rate from last year at the same time? And to the year before that and the year before that.

% collected as of December 31st

• 2012 = 68.28%

• 2011= 67.47%

• 2010 = 66.96%

Depending on the tax software you use – you may be able to have the computer print out the % of collection throughout the year by checking a box. Ask your software vendor.

Collection Rate by Year1992 97.5%

1993 98.3%

1994 98.7%

1995 98.6%

1996 98.8%

1997 98.6%

1998 98.8%

1999 98.7%

2000 98.8%

2001 99.1%

2002 99.0%

2003 99.1%

2004 99.1%

2005 99.1%

2006 99.0%

2007 98.8%

2008 98.9%

2009 98.9%

Annual Tax Collection Rate

97.0%

97.5%

98.0%

98.5%

99.0%

99.5%19

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10

How can we find out how other municipalities have done at Y/E?

Go to:• CT Office of Policy and Management

• Municipal Fiscal Indicators• http://www.ct.gov/opm/cwp/view.asp?a=2984&q=383170&opmNav_GID=1807

• This is the Office of Policy and Management compiling the numbers using the same formula for each Town.

What is the percentage of collection by tax type?

• You can also break it down further by determining what the % of collection is on RE, MV and PP individually by using the same rules we have reviewed.

• If you numbers are higher or lower than last year – you will be able to determine if you can attribute that to one tax type or an overall increase or decrease in the entire list.

• What else can we compare our numbers to?

• To Towns with similar populations?

2010 Fiscal Year - Tax Collection RateMunicipalities 40,000 - 60,000 Population

98.9%98.7%

98.5% 98.4% 98.4%98.2% 98.2% 98.1% 98.1%

97.9% 97.8% 97.7%97.5%

95.0%

96.0%

97.0%

98.0%

99.0%

100.0%

Fiscal Year 2009Population Between 40,000 - 60,000

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

Population

Tax Revenue

Source: OPM Municipal Fiscal Indicators - November 2011

Delinquent Tax Balance

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

7/93

7/94

7/95

7/96

7/97

7/98

7/99

7/00

7/01

7/02

7/03

7/04

7/05

7/06

7/07

7/08

7/09

7/10

7/11

Delinquent Tax Balanceas a % of Tax Levy

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7/92

7/94

7/96

7/98

7/00

7/02

7/04

7/06

7/08

7/10

Delinquent Taxes

• Be Sensitive to Changes within the Fiscal Year

Delinquent Tax Balance

$5,731,934

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

7/93 7/94 7/95 7/96 7/97 7/98 7/99 7/00 7/01 7/02 7/03 7/04 7/05 7/06 7/07 7/08 7/09 7/10 7/11 3/12 7/12

Axi

s Ti

tle

If you haven’t met your goals – what can you do to increase the numbers?

• Locate people who you have lost track of:– Use the DMV Direct Database -Whitepages.com

– Amvanet

– ZabaSearch.com

– Did they sell a house in town? Look at the conveyance form for an updated address. Who was their attorney, call them.

– Any relatives in Town?

– Concord website for Businesses – send the bill listed as the companies agent if there is no updated address info.

• Manage your DMV Put-Ons and Take-Offs. Make sure you check your DMV exception report to make sure what you think you reported took at DMV.

• You must send DMV an e-mail letting them know that you have put a put-on or take-off on Tumbleweed. The address to send your e-mail to is: DMV.TAXCOLLECTOR@CT.GOV

Work with other departments

• Building inspector – do you have an ordinance that allows the building dept to hold up issuing a permit until taxes are paid?

• Health District – Let them know when someone who needs a health permit renewed is delinquent.

• Payroll Dept – garnish wages of Town employees that owe taxes.

• Accounts Payable Dept – Give them a list of companies that are delinquent on there taxes and request that any future payments be given to the tax office up to the amount of taxes outstanding.

• Zoning Dept – if someone who owes taxes is going to the zoning dept for approval – if they get it, they may be going for a building permit next. If you spot delinquents on zoning meetings it helps to contact the company or individual to let them know that they will have to pay their taxes prior to getting building permits.

• Send delinquent statements more regularly

• Put on the outside of the envelope “delinquent bill inside” (this may be a political decision)

Budget Performance

• Quantitatively Measure the Leverage of Your Budget vs. Revenue Collections = Revenue per Dollar Spent

Annual Budget

Measure Revenue vs. Staff

Collections = Revenue per Staff Member

# Staff

Budget Justification

• Trend of Tax Office Budget to Town Budget

• Compare Tax Office Budget Changes to Trend Line

• Display Components of Tax Office Budget

• Get Involved in the Revenue Side of the Budget

Total Town Budget - 1992 - 2012

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

92 -93

93 -94

94 -95

95 -96

96 -97

97 -98

98 -99

99 -00

00 -01

01 -02

02 -03

03 -04

04 -05

05 -06

06 -07

07 -08

08 -09

09 -10

10 -11

11 -12

Actual Budget

Trend Line @ 5.1%

Tax Office Budget

-

250,000

500,000

750,000

1,000,000

Actual /Proposed Budget

Trend Line @ 2.3%

Tax Office Proposed Budget2011 - 2012

-50,000

100,000150,000200,000250,000300,000350,000400,000450,000

Payro

ll

Benef

its

Posta

ge a

nd P

rintin

g

Profe

ssio

nal S

ervic

es

Suppl

ies

Renta

l and

Sto

rage

Tax Office Budget

Payroll57%

Benefits26%

Postage and Printing10%

Other1%

Rental and Storage0%

Supplies1%Professional Services

5%

Suspense Accounts

What is the purpose of suspending accts?

•So the BOF doesn’t count on getting that money in when there is little to no chance of collecting it.

•To give a more accurate outstanding balance so financial decisions can be made.

Justifying Write-Offs

How do you determine what accounts to suspense?• Full year? How many years back? Do you add to this

the accts that you know are not collectable from more current year(s)?

• Pick and Choose? • deceased with no estate – discharged

taxes due from a bankruptcy – accounts that we have lost track of the taxpayers (invalid address accts)

SUSPENSE HISTORY

• Why would we want or need to know this?

So you will be better able to project for the future what portion of the grand list more than likely will be uncollectable.

What has the trend been in the past?

Prior Suspense Amounts and Current Tax BalancesPersonal & Motor Vehicle

April 30, 2010

357311

221224

88462.18

158960

94861.95 98852.3

188241

100573133149

5908184532

122902101995.692606.1699159.85

55663

109725123000.05

224259

597111

0

100000

200000

300000

400000

500000

600000

700000

Suspense9/95

Suspense6/98

Suspense5/00

Suspense5/02

Suspense5/04

Suspense5/06

Suspense5/08

Suspense510

2005 ListBalance

2007 ListBalance

Tax Collector

Motor Vehicle and Personal Property Tax Collections

July 1, 2010 - April 30, 2011

List Balance Due Collections Balance Due % Percent Collected Total List

Year 6/30/2010 7/1/2010 - 4/30/2011 4/30/2011 Fiscal 2010 - 11 Collected

2008 306,027 183,125 122,902 59.8% 98.8%

2007 125,213 40,681 84,532 32.5% 98.8%

2006 57,768 2,105 55,663 3.6% 99.4%

2005 61,477 2,396 59,081 3.9% 99.4%

2004 76,334 3,343 72,991 4.4% 99.5%

$ 320,793 $ 48,526 $ 272,267

Conclusion

• “Managers must constantly evaluate their firms’ strategies to assess how their decisions have been performing, to modify these strategies as conditions change, and to devise new strategies to boost performance in the future.”*

• * - Financial Literacy for Managers – Richard A. Lambert