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David Baker, MPA, PPSDirectorLocal Government DivisionNCDOR

State of North Carolina

System1NCLGBA July 17, 2014

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Major Issues:Average of 66% of RMV bills are paid on timeAverage Collection Rates at Fiscal Year End by County Population: RMVAnnualStatewide Average87.22% 97.91%100,000+88.09% 98.37%50,000 99,99985.37% 96.96%25,000 49,99984.01% 96.61%24,999 and Below84.08% 95.23%

*Source: LGC Memorandum #2012-14, 4/17/2012

NCLGBA July 17, 20142Old System: Billing In Arrears

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To improve the citizens experience:Reduce the number of government interactions.Eliminate the need for delinquent collections.Reduce/share costs:Duplicate mailings (postage, materials, handling, and so on)Increase Efficiency of an Existing TaxImproved collections and revenues.Improved compliance.Goals of the New SystemNCLGBA July 17, 20143Goals

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In the new system, property taxes areincluded with the invitation to renew:Assessor determines value, SITUS, and taxable status of the vehicle in advance not in arrears.File is delivered to DMV to prepare the invitations to renew the registration.Taxes must be paid in order to obtain the registration no partial payments will be allowed.NCLGBA July 17, 20144New System BillingNew System Billing

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General RulesDOT fiscal will distribute money by the 10th day of the month following collection.Counties will distribute revenues to the municipalities and other taxing jurisdictions within the county.DOT Fiscal will provide gross collections, billing, credit card and debit card costs, and net revenue.Costs will be extracted.Costs for the initial mailings were paid from the Special Account as we start the project.

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Overall the implementation has gone very good.

A few minor defects which are being fixed.

A major change but has been accepted by the citizens and other stakeholders.ImplementationNCLGBA July 17, 20146

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The implementation phase closed the end of September.

Project was closed out the end of November.

Final MOU has been approved and signed by all stakeholders.Update on Project:NCLGBA July 17, 20147

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Steering Committee has transferred the project over to the Change Control Board.

Make up of the Change Control BoardChairman David BakerSix voting membersGroup of SMEsPurposeUpdate on Project:NCLGBA July 17, 20148

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VTS Users GroupMade up of all different size counties from across the State.

Contract with VTS vendor will be transferred from NCDOT to NCDOR

NCDOR will work with all stakeholders to improve the system as we move forward.Update on Project:NCLGBA July 17, 20149

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NCLGBA July 17, 201410Project costs were paid through theSpecial Fund administered by the State Treasurer:3% additional interest.

How We Paid For It

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Interest MoneyFrom January 2006 to June 30, 2013$41,713,270.11 collected

Project Budget:$26,000,000Project cost:$25,062,346.16Money Returned $16,650,923.95

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Operational Costs will be passed to the local governments:Costs will be prorated, based on a given jurisdictions contribution to the total of all local taxes/fees. Operational Costs 12NCLGBA July 17, 2014

SB 305The issuance of a limited registration "T" sticker and the collection of property tax are each considered a separate transaction for which compensation at the rate of one dollar and twenty-seven cents ($1.27) and seventy-one cents ($0.71), respectively, shall be paid by counties and municipalities as a cost of the combined motor vehicle registration renewal and property tax collection system. $1.06 For the LPAs for the first months September February.13NCLGBA July 17, 2014

HB 1050Omnibus Tax Law Changes The LPA fee for the 2014-2105 fiscal year will be $1.06.

The DMV collection fee will not be changed and will remain at $0.71 for the upcoming year.

The Limited Registration Plate is issued by an LPA fee of a $1.27 will not change for the upcoming year.

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Operational Costs The LPA fee for the 2014-2105 fiscal year will be $1.06.

The $1.06 fee amount is retroactive for the months March 2014 to June 2014 and for any months from March 2014 to the date the DMV is able to implement the additional fee. For any month that $0.71 was charged will be adjusted to $1.06 and the difference subtracted from future revenues equally over a three month period. The difference has to be calculated by September 1, 2014.

The DMV collection fee will not be changed and will remain at $0.71 for the upcoming year.

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2014-15 Operational Costs An overhead fee is charged on each combined notice and includes but not limited to printing, postage, TEC valuation service, software licenses and maintenance, personnel costs, etc. Overhead Fee$1.21

Collection FeesLPA Collection Fee$1.06DMV Collection Fee$0.71LRP Issuance Fee$1.27Credit Card FeeVariableDebt Card FeeVariable

OtherVariableLRP Cost- $0.50 for each LRP notice mailed for taxes due.CPS- Common Payment Service 0.23 per transaction for payment processing

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Actual Gross Revenues CollectionsMonthGross RevenuesSeptember$22,867,318.79October$45,801,194.74November$42,921,999.66December$51,147,385.28January$53,763,540.81February $56,441,017.63March$64,191,509.89April$66,084,464.45May$67,411,659.22Total$470,630,090.47

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Actual Net Revenues CollectionsMonthNet RevenuesSeptember$22,867,318.79October$44,206,970.11November$42,139,411.92December$48,523,666.04January$51,960,006.06February $55,484,526.58March$61,296,290.33April$64,152,390.42May$66,352,183.21Total$456,982,763.46

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Old System CollectionsGross RevenuesData from Treasurer's WebsiteStatewide Totals2012-13 Total Revenue$570,960,352.282012-13 average collection per month$47,580,029.36Tag and Tax collection EstimateGross RevenuesStatewide Totals2013-14 average net collection per month$55,970,346.46Total Estimated Revenue for 2013-14$671,644,157.52Difference (increase)$100,683,805.25

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Actual Collections from September 2013 to May 2014Gross Revenues$447,762,771.68Net Revenues$434,115,444.67Expenses$13,647,327.01Percentage 3%

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Estimated 2013-14 Revenues Both Systems6 months on old system$285,480,176.1410 months on new system$559,703,464.60Total Revenue Both Systems$845,183,640.74

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Old system Expenses based on Survey in 2012County Share$2.65Municipalities' Share $1.00Total Cost per Transaction on a $100 tax bill$3.65

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Tag and Tax Cost per transactionCounty Share$1.84Other units share$0.79Total Cost per Transaction on a $100 tax bill$2.62

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Tax Collection PercentagesTag and Tax System80% Renewals @100% collection rate80.00%20% Issuances @ 85% collection rate17.00%Statewide Collection Rate97.00%Old System Statewide Collection Rate 86.20%

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Appeal Loss Report:Displays the effect of the property tax appeals on appraised and assessed valueAssessed Value Report by Renewal Month Displays assessed values for each tax district where the assessed value is the total appraised value minus the total exempt value in each tax district by renewal Period This report is used to estimate number of vehicles and value in each tax district

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Assessed Value Report by Transaction Displays assessed values by payment transaction date County Net Collection Report By Renewal Month Summarizes the following:tax income,tax bill data by fiscal year tax districtlevy type

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County Net Collection Report By Transaction Date Track Net collections for vehicles bills based payment date

County Reconciliation ReportLists all vehicle taxes, fees, and interest collected for each jurisdiction along with total payments, holds, reversed taxes, reversed fees, and reversed interest. Breaks down how much of the total payment was collected by credit card and debit card.

Default Situs Report Identify abstracts billed with default address based on renewal datesDefault Situs Report By Transaction Date Identify abstracts billed with default address based on transaction dates

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Exclusion Report

Lists all vehicles that are excluded from taxation based on plate issue datesExempt ReportLists all vehicles that are exempt from taxation based on renewal dates

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Finance Report Displays a summary of levy amounts and amounts collected by year and tax district

Gap Billing List all vehicles that have had a new plate issued or has had a new sticker that changes the renewal cycle where one or more months of taxes has been omitted.

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NET Distribution Report

List all collections and refunds for a specific date (Date sent to Finance) including over/under amounts

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Not Renewed Vehicle Report List the Abstract number, owner, vehicle description, plate valid through, vehicle value, and amount due for vehicles where the registration has not been renewed, but renewal miss is more than one year. Parameters are: Renewal Period, Tax Year, and Tax JurisdictionPending Refund ReportDisplays refunds (both pending and authorized) of vehicle tax and fees.

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Tax Billing Detail Report

Lists VIN, Vehicle info, Bill number, due date, Taxpayer name and address, tax District, levy type and levy amount and then total value and total taxes and fees for all vehicles in the county matching the parameters. If a subset of tax districts are selected it will list each vehicle in that tax district and then all line items including all other tax districts that apply to that vehicle

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Tax Billing Summary Report

This report may be used to project the following:number of vehiclesassessed valuestaxes and vehicle fees

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Vehicle Tax Collection Data

Displays the following: Vehicle bill informationAmounts paidSummary of total taxes and amounts paid by tax district. Vehicle Tax Collection DateBy Transaction Date Tract paid and unpaid tax bills

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State Auditors ReportIS Auditor in process results should be out soon.

SOC1 Report37NCLGBA July 17, 2014

Questions?38NCLGBA July 17, 2014