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HomeMy WebLinkAbout2014-04-14 14-143 ORDERCOUNCIL ACTION Item No. 14-143 Date: April 14, 2014 Item/Subject: Order,t'Adopting Matu"red •Tai Lien Policy Responsible Department: Finance Commentary: This order will adopt a new Matured Tax Lien Policy. Constituent and Council concerns have increased regarding housing and neighborhood issues. Staff has identified multiple properties, many of which have matured tax liens, which present blight issues in the neighborhood. As a result, the Council has determined that it is appropriate to increase its efforts to hold homeowners and landowners more accountable for properties with matured tax liens. If approved, the attached policy will allow for greater City involvement with potentially dilapidated housing as well as ensure a higher level of accountability for property taxes. The attached policy has been reviewed by the Finance Committee and unanimously recommend for approval. Manager's Comments: Associated Information: Fund Balance Policy Budget Approval: Legal Approval: Introduced for X Passage First Reading Referral Department Head Page _of_ City Manager nce Director Solicitor Assigned to Councilor Gallant CITY OF BANGOR 14-143 APRIL 14, 2014 IN CITY COUNCIL April 14, 2014 Motion made and seconded for Passage CITY CLERK CITY OF BANGOR MAINE MATURED TAX OR SEWER LIEN POLICY 1.0 Purpose 14-143 MARCH 14, 2014 The purpose of this policy is to provide guidance for City staff to follow in handling and processing properties on which property tax or sewer liens have matured and to insure that such properties are handled in a manner which is both consistent and which property owners understand in advance of City action. 2.0 Policy It is the City of Bangor's policy to collect, to the greatest extent possible, all real property taxes and sewer charges which are due in a timely fashion and in accordance with applicable state statutes. It is also our policy to work with individual property owners who make a good faith effort to meet their obligations. However, the City will not issue a quitclaim deed for property with matured liens, unless the property owner pays all amounts due to the City for any and all purposes and brings the property into full compliance with the City codes within a reasonable period of time. 3.0 Types of Property Subject to Liens The City will consider taking possession of properties with matured tax or sewer liens. Below are the types of property subject to liens. Vacant — Buildings and land which are vacant. • Commercial Properties — This category includes not only properties utilized in the conduct of business but also properties used for residential and commercial rental purposes. • Owner Occupied Residences - It is not the City's desire to take possession of owner occupied single family residences unless continued occupancy of the residences poses a direct and immediate threat to the health, safety and welfare of the residents or the City determines that the owner/resident is unwilling or unable to meet his or her obligations to the City. 14-143 MARCH 14, 2014 A variety of factors will be considered in making a determination as to whether or not the City should take possession of properties. These include, but are not limited to, willingness and demonstrated ability to pay all amounts due to the City, the ratio of the amount owed the City to the assessed value of the property, the effect of the property on surrounding properties and uses, the condition of the property including its overall appearance, willingness and ability to address any code issues, and exploration of other options to meet obligations to the City. The City may take possession of properties on which liens have matured if it determines that doing so is in the best interests of the City and its residents. Without limitation, such circumstances may include the following; 1) ownership of the property is required for construction or maintenance of necessary public facilities such as roads, sewer facilities, recreational trails, schools or public building, 2) the property. is located in a designated Community Development Project area and City ownership is required to facilitate a redevelopment project, 3) ownership of the property is required for expansion of a City -owned commercial, industrial, or business park 4) ownership of the property is required for expansion of City facilities, 5) ownership of the property is required to facilitate an environmental remediation project, 6) the City Council determines that ownership of the property is in the public interest for other identifiable reasons. Exceptions to this policy may be made on a case by case basis, however, in general, staff will not recommend the City take possession of any property that would result in a liability, impose a hardship or subject the City to excessive additional costs or burdens. 4.0 Procedure 4.1 Staff Responsibility The Tax Collector and/or Finance Director will review the status of currently outstanding liens at least quarterly with the Finance Committee. Staff will focus its efforts on the most delinquent accounts first, beginning with vacant properties followed by occupied properties. Prior to any recommendation to the Finance Committee, staff will make the following determinations; 14-143 MARCH 14, 2014 • Tax Collector will inquire as to whether or not the Police Department has had recent contact at the address. • Code Enforcement and/or Housing Coordinator staff will perform a site visit to ascertain the condition and status of the property. In addition, staff will leave notification at the location that the City is considering taking possession of the property, with contact information. • If the property owner does not respond to the notification left by the City, the Tax Collector will 1) ascertain that all legally required notices have been sent and that all legal requirements have been met and 2) circulate information related to the property under consideration to be taken to City departments to determine whether any easements exist or are necessary and whether or not any department has an interest in utilizing the property. • If the City does not have the required acknowledgment of the lien on file, the Tax Collector will take the necessary steps to provide notice of the City's intent to take possession of the property. • If there is no public use or need by City Departments, nor encumbrances, restrictions or conditions that would place an additional burden on the City, the Tax Collector, in conjunction with other departments, will develop a recommendation to take possession of the property, as well as a proposed plan for the property once acquired by the City. 4.2 Presentation to Finance Committee Staff will present its recommendation as outlined in Section 4.2 above to the Finance Committee. The Finance Committee will review the information and determine what if any recommendation should be made to the City Council. 14-143 MARCH 14, 2014 4.3 Council Action Approval by the full City Council is required for the issuance of a Quitclaim Deed or to authorize the City to take possession of a property on which a lien has matured. Nothing in this policy shall limit the discretion of the City Council to either take possession of a specific property or take some other action based upon the Council's evaluation of that property and its determination of what action, if any, is in the best interest of the City of Bangor and its citizens. If the City Council authorizes taking possession of a property, the Tax Collector must notify the Assessing, Risk Management, Police and Public Works Departments. 5.0 Disposition of Tax Acquired Property The City shall offer for sale any property acquired by virtue of mature tax or sewer liens if it is not in the City's interest to retain title to the property. Any conveyance by the City shall be by a Municipal Quitclaim Deed. The value of the property is negatively impacted because under Maine law the former property owner has fifteen (15) years to challenge the City's taking for mature liens. The City may, if it is in its best interest, bring an Action to Quiet Title in order to obtain a Court Order confirming the City's title to the property, thereby eliminating this issue with the title. A number of factors may be considered in determining the appropriate disposition of the property. They shall include, but are not limited to: whether it is a "buildable" lot, the condition of any structures, neighborhood density, zoning, the value of the lot, and the City's long term plans, if any, for the neighborhood. Based on consideration of these factors, City staff will make a recommendation to dispose of a tax acquired property in one of the following ways: • Retain ownership; • Convey to one or more abutters; • Issue a request for proposal; or • Convey without an RFP. 14-143 MARCH 14, 2014 If the property is to be sold, the recommended sale price shall be based on Assessing records, existing appraisals, amount of taxes discharged at time City took possession, any costs incurred by the City, any cloud on the title that may exist, negotiations with potential buyers, and other criteria that are reasonably available. If the property is likely to sell for more than $10,000 and an appraisal has not be done in over two years, an appraisal shall also be done for the property. All final decisions on the disposal of property shall be made by the City Council. 6.0 Legal Rights This policy is not intended to create legal rights on the part of Bangor residents or taxpayers. Failure of the City to follow the guidelines or procedures established by this policy shall not constitute a defense or bar to the City's foreclosure of matured tax or sewer liens, or to any legal title derived from such foreclosures. Failure of the City to follow the guidelines or- procedures established by this policy shall not constitute a defense or bar to the City's collection of any taxes, sewer charges, or other charges owed. 7.0 Policy Administration Annually, the Finance Committee shall review this policy and provide direction as to any proposed amendments.