Details of Phila's proposed tax deadbeat program

Some 90,000 property owners -- most of them professional investors, many from out of town -- owe Philadelphia nearly $500 million.

The city plans a Request for Qualifications (RFQ) and then an RFP (for Proposals) to hire a manager to sell delinquent-tax collection rights to investors, which should generate "$90 million to $120 million" up front, plus "$25 million to $40 million" a year, under a proposal from a tax collection industry group hired by City Councilman Alan Domb, who presented the plan before guests including Mayor Jim Kenney and Council President Darrell Clarke.

Kenney has "not endorsed" the plan at this time, his spokeswoman Lauren Hitt told me, correcting my earlier post.  More from my colleague Julia Terruso here.

-- To prevent "our most vulnerable residents" (poor and elderly homeowners) from getting kicked out, a prospect Democratic elected Council members are very nervous about because it would infuriate their voters; 

-- To "establish a responsible and compliant taxpayer culture," so investors and homeowners alike find it pays to pay their taxes. "The city can anticipate that 30 percent to 40 percent of the unpaid taxes will be paid" as property owners go on payment plans as they see the city is serious about turning them over to collectors. Few properties actually end up getting foreclosed.
 
"This will raise our bond rating," Domb promised. Plus "we owe it to the tapayers of Philadelphia who play by the rules to clean up our books."

Key details:

- Lien-buyers have 30 days to tell the property owners before they start foreclosing. They have to give the owners a chance to pay the taxes, on an installment plan. The buyers have the right to recover legal costs, presumably from the taxpayers.

- The city already has the right to do lien sales. It needs new law setting up that trust to buy them (and sell invstor bonds.) Lien owners will have the same power to collect back taxes as the city has.

- Lien-buyers have to wait six months before starting foreclosures.

- Payments will be applied to the oldest taxes first.

And others.

The report ends with an admonition that, after an initial lien sale, the city should check out the impact on tax payment rates, and the inventory of deadbeats remaining for tax liens, and decide whether to keep selling new lien bonds.