Jim Thorpe Area School District is considering a proposal that would sell its delinquent real estate tax liens to a third-party entity, providing the district with an immediate infusion of cash.

During last week’s board workshop, Superintendent Robert Presley said the company would purchase all current and past-due delinquent taxes owed to the district, including an estimated $1.75 million budgeted for delinquent tax collection in the current fiscal year.

The deal would guarantee the district the full amount of the outstanding taxes while relinquishing its ability to collect penalties and interest from late payments.

“This company, if you use it, will buy all of our delinquent taxes right now,” Presley said. “They will buy all of our delinquent taxes, which would provide an extra $750,000 this year of revenue in the district budget.”

Municipal Revenue Services, which provided a memo to the district on how the process would work, is a company specializing in tax lien purchases for Pennsylvania municipalities, school districts and other taxing bodies.

According to the MRS memo, sent in January, the company uses a “conduit purchaser,” typically a nonprofit entity such as a local redevelopment authority, to acquire the liens and transfer the collection responsibility to a lender. The process ensures the school district receives its funds upfront rather than waiting for taxpayers to make payments through the county Tax Claim Bureau.

“The sale is designed to be a cash flow tool whereby you receive, in a lump sum, your budgeted amount during a time of the year when cash flow is poor and without having to hope that what you receive at year’s end from the County Tax Claim Bureau adds up to your budgeted amount,” the MRS memo states.

If approved, the transaction would result in an estimated $2.5 million in delinquent tax revenue for the district in the spring of 2025, representing an increase of approximately $750,000 over the current budgeted amount, according to MRS projections.

While the district would receive guaranteed tax revenue through the sale, the trade-off is the loss of penalties and interest that it would otherwise collect from delinquent taxpayers. However, district officials indicated that securing full payment upfront may outweigh the potential revenue from late payment fees.

“You’re going to miss out on some penalties and stuff like that,” Presley said. “But how much is that compared to trying to wait for your money to come in?”

The MRS memo clarifies that the company does not directly collect taxes or communicate with taxpayers. Instead, the county Tax Claim Bureau will continue handling tax collection, forwarding payments to the purchasing entity rather than the district.

“MRS does not collect the taxes. The County Tax Claim Bureau collects the taxes,” the memo states. “Whatever they collect, they remit to the purchaser through the bank’s lockbox. If you did not sell the liens, then the County Tax Claim Bureau would remit the revenue to you.”

Jim Thorpe’s board is expected to make a decision on the proposal at an upcoming meeting.