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1993-115E:\WPDOCS\ORD\TAX.O ORDINANCE NO. 3 ~ 116 AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT FOR THE COLLECTION OF DELINQUENT TAXES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. That the Mayor is authorized to execute a contract for the collection of delinquent taxes with McCreary, Veselka, Bragg and Allen, P.C. and Hayes, Coffey and Berry, P.C., a copy of which is attached hereto and incorporated with reference herein. SECTION II. That the Mayor is authorized to expend funds for the above referenced professional services to the firms of McCreary, Veselka, Bragg and Allen, P.C. and Hayes, Coffey and Berry, P.C. SECTION III. That this ordinance shall become effective immed- iately upon its passage and approval. PASSED AND APPROVED this the Z!L"__`day of IlAt~L 1993. APPROVED AS TO LEGAL FORM: DEBRA A. DRAYOVITCH, CITY ATTORNEY ATTEST: JENNIFER WALTERS, CITY SECRETARY CONTRACT FOR THE COLLECTION OF DELINQUENT PROPERTY TAXES THE STATE OF TEXAS § COUNTY OF DENTON § THIS CONTRACT is made and entered into by and between the CITY OF DENTON (The City), acting herein by and through its governing body, and McCreary, Veselka, Bragg and Allen, P. C. and Hayes, Coffey & Berry, P. C. (for the purpose of this contract only hereinafter jointly referred to as The Firm), 5929 Balcones Drive, P. O. Box 26990, Austin, Texas, 78755. I. The City agrees to employ and does hereby employ The Firm to enforce by suit or otherwise the collection of all delinquent taxes, penalty and interest owing to The City. Current year taxes which become delinquent within the period of this contract shall become subject to the terms of the contract upon' the following conditions: A. Taxes that become delinquent during the term of this contract, that are not delinquent for any prior years, become subject to the terms of this contract on July 1st of the year in which they become delinquent. B. Taxes that become delinquent during the term of this contract, on property that is delinquent for prior years and is the subject of a suit to collect the prior years delinquent taxes, shall become subject to its terms on the first day of delinquency as defined by the Texas Property Tax Code. C. The Firm shall begin collecting current year personal property taxes on March lst of the year in which they become delinquent. Notwithstanding the provisions of paragraph VI of this contract, The City shall not owe The Firm a fee on the current year delinquent personal property taxes collected between March 1st and June 30th unless attorney's fees are collected pursuant to Section 33.48 of the Texas Property Tax Code. II. The City agrees to furnish all necessary delinquent tax information to The Firm on all property within the boundaries of The City. The City hereby authorizes the Firm to determine the name, identity and location of necessary parties and to procure necessary legal descriptions of property and hereby assigns to the Firm the right to recover the costs of obtaining such information. Page 1 III. The Firm shall advise the City of errors, double assessments or other discrepancies coming under observation during the progress of the work. IV. The Firm shall intervene on behalf of the City in all suits for ad valorem taxes hereafter filed by any other taxing unit on property located within its boundaries. V. The Firm agrees to make delinquent tax collection progress reports to The City monthly and quarterly in a format containing information as requested by The City's Executive Director of Finance. VI. The City agrees to pay The Firm, for services rendered, Fifteen Per Cent (15%) of all delinquent taxes, penalty and interest collected by The City for years covered by this contract. The penalty imposed pursuant to Section 33.07 of the Property Tax Code is not subject to this contractual fee. All fees provided for in this contract shall become the property of The Firm at the time payment of taxes, penalty and interest is made to The City. The City shall pay fees due The Firm monthly by check. VII. The Firm shall undertake the collection of delinquent accounts for paving assessment liens, substandard housing demolition liens and weed liens. The collection of these accounts shall be undertaken on the basis of attorney's fees assessed to and collected from the debtors. The City agrees to pay to The Firm as compensation all amounts received as attorney's fees on delinquent accounts for paving assessment liens, substandard housing demolition liens, and weed liens. VIII. The Firm agrees not to represent any client who has an adversary position with the City of Denton for the duration of this contract. IX. The City agrees to allow the Firm to use its tax office computer terminals and to provide a working area for use by Firm employees. The City also agrees to provide The Firm with computer tapes and tax file access upon request by The Firm. The Firm agrees to reimburse The City for use of the working area, its computer terminals, computer tapes, and tax file access. The payment by The Firm for the above stated reimbursement and support services shall be in the amount of Seven Hundred Fifty ($750.00) dollars each month. Page 2 X. This contract is drawn to cover a period of two (2) years beginning July 1, 1993, and ending June 30, 1995. Should The City give written notice to The Firm of its desire to continue this contract, this contract shall continue in full force and effect from month to month at the option of The City, unless either party delivers written notice to the other party of its intent to terminate this contract at least thirty (30) days prior to the date of the intended termination. The Firm shall have an additional six months to reduce to judgment and sale all tax collection lawsuits filed and collect all bankruptcy claims filed prior to the termination date and shall have the exclusive right to compensation of fees earned due to these suits during this six month period. In consideration of the terms and compensation herein stated, The Firm hereby accepts said employment and undertakes the performance of this contract as above written. The City shall have the right to sooner terminate this contract for cause, giving thirty (30) days' written notice of such intention, with a statement of the cause or reasons for such termination, after giving The Firm a reasonable opportunity of explaining or rectifying the same. The City shall be the sole judge of the existence of cause for the purpose of this termination provision. In case of such termination, The Firm shall be entitled to receive and retain all compensation due up to the date of said termination. XI. The Firm agrees to collect, between July 1, 1993 and June 30, 1994, not less than sixty percent (60%) of the total dollar value of the base tax of the 1992 delinquency existing on July 1, 1993. The Firm agrees to collect, between July 1, 1994 and June 30, 1995, not less than sixty percent (60%) of the total dollar value of the base tax of the 1993 delinquency existing on July 1, 1994. If The Firm does not collect the above referenced amount each year, it shall provide The City with legal services, programming and computer services, or data processing equipment with a value not less than Seven Thousand Five Hundred Dollars ($7,500.00) or, at the option of The City, it shall pay The City the sum of Seven Thousand Five Hundred Dollars ($7,500.00) on or before August 15, of the year it fails to collect the minimum amount' specified herein. XII. This contract is executed on behalf of The City by the presiding officer of its governing body who is authorized to execute this instrument by order heretofore passed and duly recorded in its minutes. etlay TNESS a signatures of all parties hereto in triplicate originals this the Aof YZ" A.D. 1993, Denton County, Texas. Page 3 THE CITY OF DENTON BY ATTEST: e nifer alters, City Secretary HAYES, COFFEY & BERRY, P.C Attorneys at Law 101 S. Locust, Suite 601 Denton, Texas 76201 B Y~i~ e-.- Richard Hayes, Pr ident APPROVED AS TO LEGAL FORM Debra A. Drayovitch, y Attorney McCREARY, VESELKA, BRAGG AND ALLEN, P. C. Attorneys at Law Gate Way Center 5929 Balcones Drive P. O. Box 26990 Austin, Texas 78755 BY ~G~/r✓' Gilbert T. Bragg Managing Partner Denton Branch Office Page 4