Miami-Dade and 3 Other Florida Counties Use New LienAuction Service to Sell over 60,000 Tax CertificatesJune 22, 2004
During the course of two weeks — from May 19 to June 4 — four Florida counties concluded the country’s first Internet auctions of delinquent tax certificates. Orange, Okaloosa, Volusia, and Miami-Dade Counties each held Internet auctions — ranging from one day for Okaloosa County to four days for Miami-Dade County — of delinquent tax certificates.
In total, over 60,000 certificates with a face amount exceeding $150 million were sold to individual and institutional investors located throughout Florida as well as across the country.
In past years, hundreds of bidders would gather at each auction site designated by each county and wait for certain certificate numbers to be called out by the auctioneer and then shout their bids: “18%”, “15%”, “5%”; the auctioneer responding: “5% going once, 5% going twice, sold to bidder number…for 5%”. And so it would go, continuously, while the staff of the County Tax Collector’s Office would scramble to sell thousands of delinquent tax certificates. Not anymore.
This year more than 60,000 certificates were sold over the Internet at rates ranging from the state permitted maximum of 18% to a minimum of 0%, with 0.25% percent increments in between. The winning bidder is the one offering to purchase the certificate at the lowest rate of interest. After paying delinquent tax and related penalties to the tax collector, winning bidders are then entitled to receive their winning interest rate on the amount they paid the tax collector to purchase each certificate. The delinquent tax payer then becomes obligated to reimburse the purchaser the amount paid for the certificate plus a penalty based on the winning rate of interest bid for the certificate.
By conducting the auctions over the Internet, more bidders than ever submitted their bids on the Tax Collector’s new, first-of-its-kind auction websites at www.BidMiamiDade.com, www.BidOkaloosa.com, www.BidOrangeCounty.com, and www.BidVolusia.com. Deposits were taken and bids were submitted online for several weeks prior to the start of each auction.
In Orange County’s auction, “The number of bidders and the number of bids they submitted was much higher than past years”, said Earl Wood, Orange County Tax Collector. “I have been conducting tax certificate auctions in this county for 40 years, and I must admit this one is the most competitive and the most efficient. Our tax payers got the lowest interest rates ever and our local bidders won more certificates than ever before. So this Internet auction was a win-win as far as I’m concerned,” Mr. Wood added.
Internet bidding for tax certificates in Florida became possible after State Representative Juan C. Zapata of Miami, sponsored legislation last year permitting such sales.
LienAuction service and each county’s private label Internet websites were developed and are hosted by Grant Street Group of Pittsburgh, Pennsylvania. Grant Street Group is the country’s first and only Internet auction house dedicated exclusively to hosting auctions of fixed income instruments including new issues of bonds, notes, bills, certificates of deposit, guaranteed investment contracts, tax certificates, auction rate certificates and swaps. In addition to auction hosting, Grant Street Group designs, develops and licenses customized auction websites used by municipal and federal agencies and major financial institutions serving as trustees, custodians, broker-dealers, exchange agents, auction agents, remarketing agents, etc. Since November 1997, Grant Street Group has hosted over 12,500 Internet auctions of fixed income instruments totaling more than $4.5 trillion. Grant Street Group is headquartered in Pittsburgh, Pennsylvania. More information is available at www.GrantStreet.com or by calling 412-391-5555.