Of these accounts, 470 also owe Brewster County property taxes in excess of ^$500. These accounts will be turned over to the legal firm of MVBA for collection as they pursue the property tax accounts pursuant to a resolution adopted by the Board at the April, 2006, meeting. These accounts represent ^$672,800 of assessment receivables and ^$862,200 in uncollected property taxes.

There are an additional 180 accounts which also owe property taxes, but in amounts of less than ^$500. Further discussion with the attorneys handling the tax accounts is in order to determine the best course of action for pursuit of our assessment accounts.

Ninety accounts pay Brewster County property taxes but have badly delinquent assessment accounts with POATRI. These accounts will be turned over to appropriate legal counsel for pursuit through the court system available to us under the auspices of the Terlingua Ranch Maintenance Association agreement.

The total delinquent assessments and finance charges represented by these 740 accounts is ^$823,682, which is 78% of our total past due assessments. These accounts also represent ^$105,080 in 2006 assessments which we must consider uncollectible.

Total Past Due Assessments in TRIPOD as of 6/30/06:     ^$1,055,727

Total Delinquencies of 740 foreclosure accounts:                   (823,682)

Collectible Delinquent Assessments                                       ^$232,045

Total 2006 Assessments Billed                                                ^$608,472

Total 2006 Assessments of 740 foreclosure accounts:            (105,080)

Net Collectible 2006 Assessments                                          ^$503,392

Receivables from December Billing                                        ^$277,803

Receivables from 740 foreclosure accounts:                           (105,080)

Net Collectible 2006 Assessment as of 6/30/06:                     ^$172,723

New Owner Assessments Receivables as of 6/30/06:              ^$26,699

60% of the net 2006 December Assessment has been collected to date, or 54% of the gross December Assessment, which is comparable to collections this time last year and slightly behind collections for the same period in 2004.

January, 2006 Collections Report:

Since July, 2004, POATRI has embarked on an aggressive in-house collections program. In 2004 there were over 1300 delinquent accounts, the largest number of which were over ten years old.

• 1994:   A collections agency was engaged and successfully cleared some then delinquent accounts. By 2003, however, the returns were little and POATRI was being contacted by persons who felt they were harassed to no purpose. In many instances the people being contacted by the agency were not, in fact, owners of Terlingua Ranch property. The relationship with the collections agency was terminated in May, 2004.
• August, 2004:   Following legal counseling, and with board approval and authorization, management began a new collections program with the mailing of certified thirty-day demand letters which generated an enormous amount of contact with delinquent owners and heirs. At the same time, we were able to begin the process of correcting our mailing addresses in an effort to generate more owner contact.
• January, 2005:    Following the demand letters we began the process of filing liens on property whose owners we either could not contact or with whom we could not complete satisfactory arrangements for payment.
• January – May, 2005:   Over 1300 liens filed on property whose assessment accounts were over one year delinquent.
• August, 2005:   300 plus new demand letters on property whose assessment accounts were one year delinquent.
• December, 2005:          Delinquent accounts of more than one year have been reduced from approximately 1250 in 2004 to 1029. Of those 1029 accounts 204 are still being researched for addresses. We are researching legal issues involving approximately 325 accounts, while almost 500 accounts are still affected by the liens filed in 2005. Recommendations regarding actual foreclosure on the outstanding liens are still pending more thorough legal review.
• POATRI has also established a better working relationship with Brewster County regarding the Association’s legal claims for delinquent assessments, which should benefit both parties in clearing delinquent accounts in both systems. We are awaiting a proposal from the county tax attorneys regarding our inclusion in the county foreclosure process.
• Between September, 2004 and December 1, 2005, prior to the 2006 assessment, past due receivables were reduced by approximately ^$92,000. This reduction includes write-offs due to county foreclosures, POATRI amnesty programs and collected fees.
• January, 2006:     Collections process included in TRIPOD system to automate the system and give us more accurate tracking and reporting capabilities.
• Recommend revised Collections Procedures for Board Policies and Procedures.

Alida Lorio

General Manager

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