Concerns over County Trustee collecting all Memphis Property Taxes

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MEMPHIS, Tenn.  -- It may be one of the most massive undertakings, letting the Shelby County Trustee collect all property taxes in Memphis.

The Trustee lobbied for it, former Mayor A C Wharton signed the $3 million deal three  years ago, and now three years later, the City of Memphis still hasn't gotten what it's paying for.

City leaders told WREG it's a win-win.

If you own property in Memphis you will have a one-stop shop to pay city and county property taxes.

"We felt there were savings out there that could be realized with one point of contact," said Shelby County Trustee David Lenoir who will soon begin collecting taxes for Memphis.

The Trustee's Office promised to do the service for a million dollars less than what the City had been paying another firm for years just to collect delinquent taxes.

Former city leaders shunned the deal, but in 2013, Mayor Wharton signed off on it, paying the Trustee's Office $3.7 million over three years to collect both current and delinquent Memphis property taxes.

Finance Director Brian Collins said savings also will come because it would eliminate the need for most of the City Treasury Department.

"There are savings everywhere that's where we have our confidence. Plus we are going to a model that is used everywhere else. We are confident it works everywhere and it is going to work here," said Collins.

The only problem is it hasn't been working according to the signed contract.

The Trustee's Office hasn't been collecting all city property taxes the last three years, even though its been paid $1.2 million a year for it.

It hasn't even finished converting its computer system.

So it's only collected delinquent taxes and can't really say how much of those.

"The success I can't really speak to it numerically and say its been successful or unsuccessful. I know if we look to August and get to the conversion I think we will see it as a success,"said Lenoir.

As the full conversion date of July 1 draws near, sources told WREG there is plenty of tension over turning over Memphis' main money source, since the Trustee's Office is not fully ready.

We asked Finance Director Brian Collins if it raised concern that the city is paying  for something it is not getting yet.

"Sure we would have liked if they had been able to take over. The understanding was we didn't want to turn that over if they weren't ready to do it," said Collins.

Yet the city continued to pay without question.

"I went back and sat down with our administration and agreed to reduce our fee to the tune of 700,000 dollars over the three-year contract," said Lenoir, in response to the Trustee's Office not delivering what was promised.

However, the Trustee's Office didn't start reducing that fee to the city until last year.

Now it is feverishly working to make sure that by July 1 its computer system can handle the job.

A lot is at stake.

"I can tell you that there is no one more anxious about that then I am. I want to be able to deliver," said Lenoir.

The contract ended December 31 and a new one must be signed.

Mayor Jim Strickland said he is meeting with all sides to go over the next steps.

If the city doesn't sign a new deal, Memphis will still need to upgrade its computer system.