Company contracted to collect city taxes files for Chapter 11greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Don't know if this is y2k related or not. If it is it's the tip of a giant icebergand maybe research should turn to bankruptcy filings. IMHO, the most interesting part of this story is what it doesn't say.
The contracted company referred to in the story is a tax lien acquisition company (can you spell V-U-L-T-U-R-E) that services a number of municipalities in the NE. It must have a giant database. Wonder if/and how screwed up that database has gotten of late. Think we'll ever find out? I am including information from the company in question's website below the actual story
Company contracted to collect city taxes files for Chapter 11
WATERBURY, Conn. (AP) The company contracted to do the city's tax collections has filed for Chapter 11 bankruptcy protection in a Florida federal court.
State and city officials say it's too early to determine what impact the fiscal troubles of Angram Business Services Inc. will have on the city's revenue stream for fiscal year 1999-2000.
Under the contract, Angram guarantees the city a 99.25 tax-collection rate. Prior to signing the tax collection contract, Waterbury usually collected from 93 to 97 percent of taxes in a fiscal year.
''This is a big blow to Waterbury because, historically, Waterbury's tax-collection rate has been nowhere near 99.25 percent,'' said Marc Ryan, Gov. John G. Rowland's budget director. ''When the tax-collection rate is down at 93 percent, it's going to be hard to fill that gap.''
Mayor Philip A. Giordano said the city is taking steps to cut back on spending in anticipation of a possible revenue shortfall.
''Obviously we're going to take certain measures to hold back our expenditures, such as spending and hiring freezes,'' he said Thursday.
Angram, with offices in Torrington, is also contracted to collect taxes for the town of Seymour, which has reported a $3.5 million deficit.
Angram, The Company Angram, a Delaware corporation, was formed in 1995, under the auspices of Spencer Trask Securities, Inc. Certain assets and contracts were purchased from Northeast Business Services, Inc., a company that had acted as the private tax collector for the Town of Torrington, CT since 1988. In 1996, Angram entered into a three-year Municipal Revenue Assurance Program (M-RAP) contract with the Town of Seymour, CT that provided the Town with a guaranteed annual tax levy. In addition, Angram assisted in the collection process through computer driven enhancements that were made to the tax collection system. In 1997, the Company entered into a similar arrangement with North Brunswick, NJ.
In April 1998, Angram recruited Joseph T. Whelihan as President and Chief Executive Officer and elected Mr. Whelihan to the Board of Directors. Prior to joining Angram, Mr. Whelihan had been the Executive Vice President of Acquisitions for Capital Asset Research Corporation since 1993. During this period his team was responsible for acquiring more than $1.65 billion in tax liens from 650 taxing jurisdictions in 14 states. He developed the underwriting guidelines that have become the standard used by credit rating agencies for the tax lien industry. Mr. Whelihan is a member of the Board of Directors of the National Tax Lien Association and has appeared as a guest speaker on tax lien privatization for the United States Conference of Mayors and other associations and trade groups.
Mr. Whelihan has assembled the industrys leading management team to bring Angram to the forefront of tax lien acquisitions. The new management's ability to locate, underwrite, negotiate and close on tax lien purchasing contracts is a unique and valued asset, as well as a significant competitive advantage.
Under Mr. Whelihans management, Angram has purchased approximately $30 million in tax lien receivables and entered into M-RAP contracts with the City of Waterbury, CT and West Warwick, RI.
-- Carl Jenkins (Somewherepress@aol.com), February 04, 2000
Giant Ponzi scheme?
-- Virlie (MstMtnRain@aol.com), February 04, 2000.
I agree that this is a "tip of the iceberg". Texas' privatization efforts have earned the employers who pay into UI taxes a multimillion dollar deficit to make up. This was in just one program.Privatization has been one of those "pop" solutions that were seized upon and hyped to the advantage of a few individuals. There has never been surety, except in the tax-payers' increasinly flat pockets. A little jail time for defaulting vendors and defrauding contractors might do wonders for performance, however.
-- mike in houston (email@example.com), February 04, 2000.
Thread title made me wanna move, heh.
-- Hokie (Hokie_@hotmail.com), February 04, 2000.