Northampton uses law firm to collect $545,000 in back taxes over the last five years

Last modified: Saturday, December 28, 2013
NORTHAMPTON — A beefed-up effort by Northampton to get delinquent taxpayers to pay up by bringing in outside help has netted $545,000 in the last five years.

That’s a significant amount of money the city would not likely have collected on its own, or at least not nearly as quickly, said Treasurer George Zimmerman.

“If a treasurer does nothing forever, in the long run, the taxes get paid when the property transfers,” Zimmerman said. “But we are hoping to resolve these much more quickly.”

When he took over as treasurer a decade ago, Zimmerman said the city was owed about $2 million in back taxes on roughly 165 properties. That number has dropped to 92 properties totaling about $500,000 as of this month, he said. Each year the treasurer’s office gets about 20 new so-called tax title cases, compared to the roughly 30 it settles, meaning about 10 properties are removed from the list annually.

He attributes much of the success to the city’s decision in fiscal 2009 to hire Berenson & Bloom, an Easthampton law firm, to handle many of the tougher collection cases. People tend to pay more attention to a letter from a law firm than from the city treasurer’s office, Zimmerman said.

The $545,000 collected by Berenson & Bloom reflects about 49 percent of the $1.1 million the city collected in back taxes from fiscal 2010 to halfway through the current fiscal year. The firm has been able to collect about 90 percent of the $140,000 in back taxes paid to the city in the current fiscal year.

The cases the city sends to the law firm are those where owners have fallen two years behind in payments. By law, the tax collector must wait one year before turning over unpaid properties to the treasurer. At that point, the treasurer typically puts a lien on the property and spends another year trying to collect the back taxes. Zimmerman said he sends out quarterly notices to delinquent taxpayers asking them to pay or contact his office.

When those efforts fail, the city can begin the process of seizing a property. Zimmerman said the city is not in the business of being a property owner, and would rather collect the taxes.

That’s why it sends many of the tax title matters to the law firm first. The law firm typically has more leeway in the negotiating process. One strategy lawyers use is to put qualified property owners on a payment schedule. In other cases, they help a property owner negotiate a restructured mortgage with their bank.

“I regard this process as something that’s firm but fair,” Zimmerman told the council at its Dec. 19 meeting.

At Zimmerman’s request, the council voted to transfer an additional $6,000 to the treasurer’s office to continue funding the program, which costs about $10,000 a year. The city covers the legal fees but recoups them from the property owner.

In approving the transfer, the council thanked Zimmerman for his efforts.

“The total count has actually gone down pretty dramatically even when you consider the tough economic times that we just recently went through,” Ward 5 City Councilor David A. Murphy said. “The city has benefited from your efforts to focus on this and try and get everybody as current as possible.”