Taxman Is Latest to Jump Into Internet Auction Craze

It sounds like a familiar huckster’s pitch: “Fantastic weather, magnificent mountains and Mediterranean-style villas await you at a Palm Desert time share so lovely Monet couldn’t paint a more beautiful scene.”

But the salesman peddling units at the Desert Breezes development is no ordinary real estate agent; he’s Riverside County’s treasurer (and tax collector), Paul McDonnell, and he’s using the Internet to fill government coffers.

Hoping to recoup about $100,000 in back taxes, fees and interest owed on 81 time-share units, McDonnell launched what he is heralding as “The Nation’s First Online Auction of Tax-Delinquent Properties” last week on Yahoo.

Experts say Riverside County is pushing the envelope on government use of the Internet. Such experiments hold the potential to rapidly transform the way governments operate, said Edward Schwartz, president of the Institute for the Study of Civic Values.

“I think you will see examples of what’s occurring in Riverside popping up every day,” Schwartz said.

For years, governments across the country have posted Web sites offering the public services ranging from paying parking tickets by computer to downloading applications for building permits. But in auctioning the tax-delinquent time shares, Riverside County is aggressively using the Internet to maximize its tax base.

Other governments are also pitching property online:

* The city of Ferndale, Mich., drew national chuckles last month when it used EBay to unload surplus stop signs it had acquired in the event that a Y2K power outage struck city traffic signals.

* Oregon state officials have cashed in on the Internet auction craze by selling surplus and confiscated property ranging from street signs to a white leather halter top that sold for about $50.

* Pennsylvania officials held their first online auction of a state construction project last September, saving taxpayers an estimated $500,000.

Riverside County’s auction as of late Saturday afternoon had netted bids on more than half of the 81 time shares. The units are located at four different projects in the Palm Springs and Palm Desert area.

The auction site, being offered by Yahoo at no cost, had received more than 48,000 hits as of late last week. County officials say a conventional auction typically draws 1,000 people and costs $10,000.

“It’s going like gangbusters,” said McDonnell, whose mug is prominently displayed on the treasurer’s Web site (https://www.countytreasurer.org), next to the image of a pile of money. “We’ve been getting multiple bids.”

One unit offered at a starting price of $1,311 garnered 25 bids and shot up to $4,000 within four days. County officials estimate the properties would typically sell for between $4,000 and $8,000.

McDonnell launched the auction from a Sacramento office building with the encouragement of Secretary of State Bill Jones, a big advocate of government use of the Internet. The auction concludes at 4 p.m. today.

The money McDonnell expects the auction to yield is a small fraction of the estimated $80 million in delinquent property taxes owed to the county, which was hit particularly hard by the real estate slump of the early 1990s.

Local governments--which tend to be more conservative than their private sector counterparts--have been slower to embrace new technologies, said Terry Bursztynsky, director of online services at the Assn. of Bay Area Governments.

“Riverside County is on the cutting edge with this one,” Bursztynsky said.

Online auction providers like EBay and Yahoo would welcome the future traffic.

“Our goal is to help people make money,” said Tony Surtees, vice president and general manager of Yahoo’s commerce group. “So whether you’re a public or private individual, you’re really only limited by your imagination.”

Experts caution that government use of the Internet raises the usual questions about security, privacy and access. Those concerns could limit the types of services and information that governments provide via the Internet.

A decision by the Social Security Administration, for example, to make Americans’ earnings and benefit records available on the Internet in 1997 was widely criticized as a move that put the public’s privacy at risk.

“I think most people are reluctant to sacrifice privacy for convenience,” said Kim Alexander, president of the California Voter Foundation, a pioneer in online political information.

Another hurdle is that not all Americans own computers.

Oregon officials have provided computer bidding stations so that people who don’t have computers can access their auction, which is being offered through EBay. The state has grossed about $20,000 a month since it began holding online auctions last May.

So who was the winning bidder on the white leather halter top?

“A local radio station bought it,” said Skip Morton, manager of the state’s property distribution center, “and has been using it as a Cinderella-like promotional tool where they have women try it on to see who it fits.”