Franklin County, Ohio, Treasurer Richard Cordray is known for walking the hallways of the Treasurer's Office in his sock feet, for working as an intern at the U.S. Supreme Court and for winning five times on “Jeopardy.” But more importantly, the former lawyer is known as a leader who takes action to solve problems big and small.

When Cordray was elected treasurer in 2002, he immediately went to work collecting $52 million in delinquent taxes, streamlining processes in the treasurer's office and gaining an intimate understanding of the challenges faced by the county and taxpayers. “He's very cerebral, very analytic, like a mechanic working under the hood of [a car],” says Mike Curtin, vice chairman, chief operating officer and associate publisher of the Columbus Dispatch. “Nothing escapes his attention.”

Cordray's persistence and unconventional initiatives have drawn the attention of leaders around the state, according to Curtin. His accomplishments in 2004 include record-breaking tax collections, a core portfolio that outperformed the market by 154 percent, and outreach efforts such as working with the elderly to keep them in their homes, creating a community-wide financial education program and establishing a land bank to clean up and redevelop foreclosed properties. For those reasons, and because the treasurer has not defined his leadership role by a job description but rather by how he can best serve the public, Cordray is American City & County's 2005 County Leader of the Year.

Tax lien sale

Cordray grew up in a rural area outside Grove City in Franklin County and learned the importance of public service from his parents. Cordray's father, Frank, was a public servant for 40 years and was a former program director for mentally disabled residents at a local community center. His mother, Ruth, now deceased, founded the first foster grandparent program for the mentally disabled in Ohio. Cordray says his father set a good example by “working for other people, trying to improve their quality of life. It made a lasting impression on myself and brothers growing up.”

Cordray heeded the call to public service after graduating from the University of Chicago Law School in 1986. He worked as a general commercial litigation attorney from 1989 to 1993, as Ohio State Solicitor from 1993 to 1994 and has been an adjunct law professor at Ohio State University College of Law since 1989. The treasurer served in the Ohio House of Representatives from 1991 to 1993. Ambitiously, he ran two failed political campaigns — one for the U.S. House in 1992 and the second for the state Attorney General in 1998. “He took a stab at trying to move up too fast, then scaled back and ran for county treasurer in a close election,” says Curtin, who has watched Cordray's career for the past 20 years. “It was the right move because it allowed him to demonstrate what he could do from the ground up.”

Cordray demonstrated his abilities to the tune of $17.5 million in unpaid back taxes in 2004 through a tax lien sale, representing 1,900 delinquent taxpayers and the liens of 1,115 others. Of the total $42.9 million in real estate and personal property taxes collected for schools in 2004, $11.4 million came directly from the sale of tax lien certificates.

In 1997, the Ohio legislature enacted changes allowing counties that exceed a population of 200,000 — the 12 largest counties in the state — to sell their delinquent taxes as well as interest, penalties and administrative fees. The bidder with the lowest interest rate wins the right to collect the interest and must pay the county 100 percent of the lien value shortly after the auction.

Previously, in Franklin County those taxes were collected through the long legal foreclosure process. “It only allowed us to attack one property at a time,” Cordray says. And the practice tied up the prosecutor's office. By auctioning the liens, however, the county could deal with the problem in bulk.

Ed Leonard, special counselor in the Tax Lien Department of the Treasurer's Office, says when Cordray came to office in 2002, he brought all of the stakeholders to the table to figure out how to make the tax lien sales work. Familiarizing himself with the process, Cordray initiated the development of a software system to bring all relevant information into a database that allowed the office to identify the best properties for a tax lien sale, excluding government properties, churches and homestead properties.

The sale was widely advertised, and letters were sent by regular and certified mail, giving people a name and phone number to call to settle their back taxes or enter into a payment plan. Cordray also made it easier for residents to make payments by providing an online payment option, direct debit and monthly installment plans that credit taxpayers with interest earned. “The main thing we did was focus on getting the message out to people that we were willing to work with them,” Leonard says. “We made it clear that we want to work with you if you're willing to work with us.”

One idea that emerged from the lien sales was a land bank that became a solution to blighted, foreclosed parcels that could not be sold at the county Sheriff's auction. With the land bank, the county takes possession of the properties, the back taxes are written off and then the land can be redeveloped through non-profit organizations.

For the good of all

While collecting overdue property taxes, Cordray soon learned that several hundred low-income seniors were delinquent. One option was to treat the group like all other taxpayers that cannot pay: put a lien on their homes and eventually foreclose. “I wasn't satisfied with that,” Cordray says, “because from a narrow perspective, it does get the taxes paid, but it is pennywise and pound foolish.”

Cordray reasoned that forcing seniors to leave their homes so the county could collect a couple thousand dollars in back taxes would cost taxpayers $20,000 to $50,000 per year in social services for those displaced residents. Simply leaving the delinquent seniors alone, a tactic that had been used in the past, also was not satisfactory to the treasurer. “We'll collect eventually, but it doesn't help their situation,” Cordray says. “We started looking from the eyes of the taxpayer.”

Cordray surmised that delinquency perhaps meant the seniors were vulnerable — isolated from family or in debt to other creditors. So, the Treasurer's Office sent the seniors personal letters with Cordray's home address as the return. The letters discussed programs residents might be eligible for, such as prescription drug discounts or Meals on Wheels. The letters also included the names and phone numbers of people to call for more information.

As a result, 400 to 500 senior households have stayed intact. In 2004, the Senior Taxpayer Education and Planning (STEP) program was formally launched to help seniors and disabled delinquent taxpayers pay their back taxes and connect to social services. Often the taxes get paid through the program. Either way, the seniors are put on a payment plan, which freezes interest. If they have money, the Treasurer's Office collects it.

One county resident, Esther Miller, 88, has resided within a six-block radius all her life with the exception of a short stint in Cincinnati for art school. Miller moved into her present home in 1962, which she shared with her mother and sister until both had died by 1985. “Their salaries disappeared, and my savings went to pot keeping the house,” she says. “[Cordray's] program has sympathy for people in my situation. I didn't want to be poor but found myself this way. We're proud of him.”

What Cordray did for Miller, who cuts her own grass, cleans gutters and has twice painted her house in the summer heat, was to personally pay her a visit. In addition to a payment plan and remission of a $400 late fee, Miller received a second visit from an appraiser who reassessed the value of her home, which is on the edge of a pricey historic district. The assistance has enabled the spry, elderly native to stay in her home. “We're trying to make government useful and willing to step off the traditional treasurer's role,” Cordray says.

Cordray is not, however, easy on businesses that default on taxes. He set up a Bankruptcy Task Force when a major grocery store chain went into bankruptcy in 2003 still owing $3.7 million in back taxes and when WorldCom-MCI filed for bankruptcy owing $2.5 million in 2002. “As agent of collecting taxes for schools, we were going to make sure that the schools got what they had coming to them,” Leonard says.

“We found the judges in the bankruptcy cases — they're government employees — and went in and objected strenuously and very publicly,” Cordray says. By meticulously following the cases through the Treasurer's, Auditor's and Prosecutor's offices, 100 percent of the taxes were collected.

In Franklin County, 65 percent of every property tax dollar goes to pay for schools and social services, such as mental health and senior programs. The remainder funds the fire and police departments, roads and infrastructure maintenance and local government administration.

The beneficiaries of Cordray's labors, including the 16 school districts in Franklin County, have perhaps most keenly felt the impact of Cordray's leadership. Chris Mohr, treasurer and executive director of business affairs for Dublin City Schools, says his school received $192,000 in revenue from the pre-sale and actual tax lien sale collections, which will be used to offset state budget cuts. “It was a great surprise to us that there was this collection mechanism available to the Franklin County Treasurer's Office,” Mohr says. “That's when most of my colleagues became aware of who Richard Cordray was because he was making an impact, and some of the districts were receiving much more than that.”

A penny saved, a penny earned