Who knew?
In total, Archon’s billings from June 2014 through January — eight months — came to about $3.15 million.
By comparison, the city paid the previous contractor, Strategic
Alliance Partners, about $3.3 million for the same service over a period
of 19 months.
Over that time, SAP charged an average of $175,000 to collect $1.8
million each month, The Lens determined. On a monthly basis, Archon’s
total charges, including the additional, unexplained items, are more
than double SAP’s charges: about $394,000 per month.
While Archon’s base fee works out to 7 percent of its total tax
collections, the figure shoots up to 25 percent when everything charged
by the company each month is included. The city’s contract with SAP,
which Quatrevaux said was a bad deal, called for fees of 9.5 percent.
In his 2013 report, Quatrevaux concluded that the work for which the city paid SAP $3.3 million was worth less than $300,000.
SAP was closely connected to Archon. SAP used Archon as a subcontractor, and Archon’s CEO was a founder of SAP.
Don't like the collections contract? Fine we'll just draw up a more expensive one with pretty much the same company. At least, that's what that looks like. It's hard to get a grip on any of this. Especially when the city doesn't provide records when the reporters ask for them.
It’s unclear precisely what services are covered by the fees on
Archon’s invoices. The firm has a separate contract with the city to
conduct a large auction of delinquent properties that the city has been
unable to offload at tax sales. But the fees do not appear to be related
to the auction. The auction process began in March, and the invoices
for tax-collection records the city provided to The Lens run only
through February.
Each invoice is just a few lines long and lists three charges,
including a “collection fee.” The two other charges are labeled “tax
code 51”and “tax code 66.” Those two charges make up more than
two-thirds of Archon’s billings.
City officials did not respond to a request to explain those charges.
Archon is required to submit detailed monthly activity reports to
the city. The Lens requested them on May 20; the city has not provided
them.
And the
judge says they don't really have to.
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