Two years after Inspector General Ed Quatrevaux said New Orleans was overpaying a consultant to collect past-due property taxes, the city is still paying too much for those services, Quatrevaux said Wednesday.

In 2013, Quatrevaux chided the city after its collector of delinquent taxes, Strategic Alliance Partners, was paid more than 10 times what he said was normal for such work.

The city has since awarded a new contract, as Quatrevaux recommended, but the new vendor, Archon Information Systems, could be doing the same tasks for between $1.42 and $59.71 less per service than it is now charging, Quatrevaux says.

The criticism is detailed in a Wednesday follow-up report to the inspector general’s initial 2013 look into the city’s delinquent property tax collections.

The new report also includes some praise for the city: Quatrevaux lauds it for holding adjudicated property auctions this year — after he said it initially rejected that idea — and changing the timing of its separate tax title sale, two steps Quatrevaux urged in 2013.

Hayne Rainey, a spokesman for Mayor Mitch Landrieu, said that “given the resounding success of the city’s tax sales and adjudicated auctions, we are surprised and disappointed by the OIG’s follow-up report.”

He said the city “followed the OIG’s recommendations to hold tax sales earlier, hold auctions for tax-adjudicated property and rebid the contract that was inherited from the previous administration. The differences that remain relate largely to the OIG’s disagreement with the city about the level of noticing and associated costs that are required of the city based upon federal and state laws and court rulings.”

The city’s collection process for overdue taxes has been controversial for years. In 1998, Mayor Marc Morial’s administration awarded the first contract for the work to the Texas-based firm Linebarger Goggan Blair Pena & Sampson LLP and a local group filled with Morial’s political backers. Four years later, it was discovered that while the two firms had brought in $40 million in back taxes and collected $12.1 million for themselves, they had held just one tax sale and had initiated no lawsuits since their first year on the job.

Former Mayor Ray Nagin later canceled that arrangement and sliced the collection fee from 30 percent to 15 percent of delinquent taxes collected, signing a deal with Strategic Alliance Partners, which has close ties with Archon, the current collector.

Under the old Strategic Alliance deal, Archon and the law firm Scheuermann & Jones LLC performed much of the work, while Strategic served as their supervisor. Archon CEO Bryan Barrios, formerly of Scheuermann & Jones, also was a founder of Strategic.

That means a firm that did the work under the old contract is still doing work under the current one.

While the pricing structure has changed since then — the Louisiana Supreme Court has ruled that having a collection fee based on a percentage of delinquent taxes owed violates the state constitution, prompting Archon to agree to charge for the actual services it performs — Archon’s itemized charges are still higher than Quatrevaux’s office says they should be.

The new IG’s report says the city’s request for proposals, issued shortly after Quatrevaux’s 2013 charge that Strategic was too pricey, was largely to blame.

First, it says, the RFP was biased toward Strategic and its partners because it featured a request for information vague enough to give a contractor with prior knowledge an advantage, included few details about the quantity of work required and did not say how the vendor’s performance would be evaluated, among other issues. The city also asked Archon for a revised pricing structure in light of the Supreme Court ruling that it did not ask other candidates to provide, the report says.

The report also says the city continued to pay Strategic and later Archon even though those firms did not submit detailed invoices, as called for in Quatrevaux’s 2013 recommendations.

Quatrevaux said two years ago that calling delinquent taxpayers to encourage payment was a costly and ineffective strategy, but Archon continued to call those taxpayers to confirm their contact information, the new report notes.

In his comments favorable to the city, the inspector general says adjudicated property auctions, as of November, have generated more than $12 million in sales and, as of July, inspired property owners to pay $1.2 million in delinquent taxes.

The city’s changed timeline for its separate tax title sale — shifted from the fall after a tax year to the spring — brings revenue to the city earlier and is in line with state law, the report says. A tax title sale is the sale of delinquent taxes on a real estate property’s title.

In his response, Landrieu spokesman Rainey said the city “has brought over 10,000 properties to tax sale and over 500 tax-adjudicated properties to auction in 2015 alone, clearing over $30 million. The city’s contractor has successfully pioneered our innovative new online auction process and only gets paid when they deliver results.”

The nonprofit news organization The Lens reported in June that Archon billed the city $918,000 for its collection of $12.8 million in past-due property taxes over eight months. That was significantly higher than what Quatrevaux said Strategic should have been given for 19 months’ worth of work in 2010: $278,987. The city actually paid that company $3.3 million.

Follow Jessica Williams on Twitter, @jwilliamsNOLA.

WHAT THE CITY PAID, WHAT THE OIG RECOMMENDED THAT IT PAY
Cost paid to consultant for collection of delinquent property taxes
Service providedArchon 2014 contract costOIG 2013 estimateCost difference
Delinquent tax account profile$10.00$2.71$7.29
Skip tracing research$60.00$0.29$59.71
Address confirmation calls$30.00$1.98$28.02
1st class notice of tax sale$2.00$0.58$1.42
Certified notice of tax sale$17.50$10.00$7.50
Public records research$90.00$35.00$55.00
1st class notice of tax sale$2.00$0.58$1.42
Certified notice of tax sale$17.50$10.00$7.50
Online tax sale$15.00$1.19$13.81
1st class post sale notice$2.00$0.58$1.42
Note: This does not include services the OIG could not provide a cost comparison for, due to differences in the way the OIG and Archon calculated estimates
Source: Office of Inspector General