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Firm pitches buying McGuffey delinquent tax liens as a cash‑flow tool
Summary
Municipal Revenue Services told the board it can purchase the district’s delinquent real estate tax liens, advancing roughly 90% of recent lien face value and returning later collections; the board was told this is a cash‑flow decision and that most clients use one‑ to three‑year resolutions.
A private firm told the McGuffey board on July 18 it can purchase the district’s portfolio of delinquent real estate tax liens and provide the district with an immediate lump‑sum payment.
"We analyze your delinquent tax liens, and we make an offer to buy all of your delinquent tax liens," Jim Geronimo, president of Municipal Revenue Services, told the board. "We go to our lender and we borrow the money that we need to pay you and the purchase price is based on 90¢ on the dollar."
Geronimo said the purchase price is calculated from the face value of the last four years because in Pennsylvania it typically takes about four years for a delinquent lien to pay out. He said the county retains a 5% collection fee and that historically about 5% of liens never pay; his firm finances its fees and repays its loan from subsequent tax claim bureau collections.
MRS said the transaction would be structured as of Jan. 1 after the December 31 turnover of delinquent taxes and that when the district’s collector turns liens to the County Tax Claim Bureau by mid‑January the firm would conduct a sale. MRS representatives emphasized that selling liens converts a slow collection stream into an immediate, unrestricted cash infusion and called the decision a cash‑flow management choice for the district. They recommended a one‑ to three‑year resolution; three‑year terms are common for continuity, they said, though renewal is annual and not binding on future boards.
Board members asked whether the district would ultimately recover most unpaid liens over time if it declined the sale; Geronimo said the long game can recover revenue but more slowly, whereas MRS provides predictability for budgeting. Members discussed timing, the effect of prior collections on the firm’s line of credit and the practical tradeoffs between immediate liquidity and future receipts. The presentation concluded with an offer to provide historical data and to return for follow‑up questions.
No formal resolution to sell liens was adopted at this meeting; the presentation was informational and the board was invited to request further details from administration and the firm.
