Tax collection contract marred by City Hall politics

A new firm will collect delinquent taxes for the city of Fort Worth for the next three years, thanks to what some city council members are calling the most political decision theyÂ’ve seen in years.

Despite four council members battling to delay a decision during last weekÂ’s pre-council meeting, the council voted to hire Linebarger, Goggan, Blair & Sampson to collect delinquent property taxes for the city. The contract will earn the local law firm about $1 million a year.

Linebarger will replace Perdue, Brackett, Flores, Utt & Burns, a Fort Worth firm that has collected the taxes since 1995.

Fireworks began at City Hall when LinebargerÂ’s political consultant, Bryan Eppstein, presented the firmÂ’s written bid for the collection contract shortly before the early morning pre-council meeting, leaving little time for council members to review the offer.

Because of the time crunch, council members Chuck Silcox, Becky Haskin, Wendy Davis and Ralph McCloud asked to delay the vote on the contract so that they would have ample time to consider LinebargerÂ’s bid.

The other five council members, however, refused to wait.

“I knew then it was political hardball,” Silcox said. “Linebarger had their five votes they needed to get the bid all lined up and they wanted to push it through right then. They didn’t want to wait until next week when a new council might vote against them.”

Three new city council members elected May 7 were scheduled to be sworn in this week. A fourth council seat is still open, pending a June 11 runoff election in district 6.

Dealing with a new council, Silcox said, would mean more work for Linebarger and Eppstein.

“They had lobbied hard for those five votes and they had their five ducks in a row – they didn’t want to have to start over with three new faces,” Silcox said.

According to the cityÂ’s finance office, $22.5 million is owed to the city in back taxes. As a fee for collecting the owed taxes, Linebarger will receive 20 percent of the collected funds. In past years, the collecting firm has netted more than $1 million a year.

The lucrative contract, Silcox said, has caused headaches at City Hall for months.

Political warfare began in December when Linebarger fired off a memo critizing Perdue, whose contract with the city was up for renewal.

Silcox said the memo spread like wildfire through City Hall. The memo claimed Perdue had failed to collect more than $700,000 in delinquent taxes from entities that had declared bankruptcy.

Although Perdue disputed the claims and eventually filed a lawsuit against Linebarger for defamation and “libelous” statements in the memo, Silcox said city officials based the decision to choose new representation for tax collections at least partially on the memo’s numbers.

“Nobody knows if the numbers are true and certain city council members wanted this new firm to take over so bad that no one stopped to check and see if the numbers were right,” Silcox said. “I guess they got what they wanted.”

During pre-council discussion, Haskin, who heads the Government Relations Committee, said she and other committee members were pleased with the work Perdue had done for the city. Since their last contract was reviewed in 2001, Haskin said, city staff had given Perdue high ratings.

Jim Keys, the cityÂ’s director of finance, said that although the city had placed Perdue in good standings, a city audit of the competing firms ranked Linebarger slightly ahead of Perdue.

“We were basically choosing between an excellent firm and an even better one,” Keys said. “Linebarger is the largest tax collecting firm in the state and just has a great deal more resources in bankruptcy that it can bring to bear. It was a tough choice, but we had to go with who we thought would do a better job.”

Silcox said both firms were equally suited for the contract, but Linebarger had one distinct advantage: Eppstein.

Eppstein is a political consultant with The Eppstein Group who has guided many of Fort WorthÂ’s politicians into public office.

The Linebarger firm hired Eppstein as a consultant at the end of last year to lobby council members to choose the firm to replace Perdue as the cityÂ’s delinquent tax collector.

After the release of the memo in December, Silcox said, the city scrapped its plan to extend PerdueÂ’s contract for an additional three years and offered only a month-to-month contract.

In turn, the Perdue firm filed a lawsuit April 6 against both Linebarger and Eppstein, citing defamation, interference with a contract and prospective business relationship, business disparagement and conspiracy.

The suit states that Eppstein was “lobbying the city council and staff to terminate the contract” with Perdue while enjoying “a close working relationship with a substantial majority of city council members as their political consultant.”

Silcox said EppsteinÂ’s involvement meant heavy lobbying was involved in acquiring the councilÂ’s approval.

“The Perdue firm just got out-lobbied,” Silcox said.

During pre-council, Haskin also said the rush raised questions about the validity of LinebargerÂ’s accusations against Perdue. One claim, she said, was that Perdue hadnÂ’t collected all of the bankruptcy money it could have. However, she said, city officials had given Perdue guidelines as to which taxes to collect and the firm was simply following instructions.

Though the final decision to hire the Linebarger firm was a unanimous vote, Silcox said the numbers donÂ’t reflect council membersÂ’ feelings about the agenda item.

By council rules, a council member must be on the prevailing side of a vote in order to ask for reconsideration of the item at a later date. Five votes are required to revisit an agenda item that was previously passed.

Silcox said he, Davis and Haskin voted in favor of LinebargerÂ’s hiring in case any of the council members want to move for reconsideration of the decision at a later date.

“Politics happen, but this was heavy politics mixed with a problem in the process.” Silcox said. “This isn’t going to hurt us in the long run, but if this kind of thing starts happening a lot, it’s going to get nasty.”

After the new council members are sworn in this week, Silcox said, he is not sure if the issue will surface again and if it does, he isnÂ’t sure it will have a different outcome. What he is sure of, he said, is that a change in policy and a careful eye are needed to avoid such displays of politics.

The rushed manner in which Linebarger presented its offer to the city, Silcox said, should not be allowed and a change in policy needs to address the issue. Only when all council members can fully read material on an agenda item, he said, is due diligence served.

“All we can do now is make sure the new firm does things correctly, and try to keep as much of the politics out of local government as we can,” Silcox said.

 

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