Council considers ways to expedite revenue from delinquent properties

At Tuesday’s common council meeting, Alderman Jim Martuscello said he was approached by several property owners who were behind on their agreements to repay back taxes, and at least one owner was willing to remit $20,000 to pay off the agreement in full in order to avoid foreclosure, provided the city was able to offer him a second payment plan.

Martuscello did not identify the owner or property location, but said in his own estimation, the property in question would only bring in a few thousand at auction, and therefore believed the deal would be beneficial to the city.

Payment agreements are offered by the controller’s office as a way for property owners with delinquent taxes to avoid foreclosure by making regular monthly or quarterly payments to repay the back taxes owed. Earlier this year, Agresta told the council that he sent out letters to any owners he determined had defaulted on their agreement, stating that their property would be foreclosed on. At Tuesday’s meeting, Agresta clarified that any owner who had fallen behind by more than six months on their payment plan was considered to be in default.

Martuscello said the property owner had indicated he had received a foreclosure letter from the city recently which had prompted the owner to reach out to him. Martuscello suggested a 2-3 week grace period for property owners who have defaulted on their agreements to pay the agreement in full so that they could enter into another agreement.

“If they are just behind, then that’s fine,” said Agresta, “but if they were part of the group that was defaulted back in April, then I would not offer them a second agreement.”

After the meeting, Agresta clarified that property owners usually need two agreements over a total period of four years to get back to current on their taxes. Owner are required to pay any accumulated metered water and sewer charges* up front in order to enter into the agreements. The monthly or quarterly payments are required to be paid in addition to payments on new taxes levied after the agreement was put into place.

Agresta stressed that it was important for his office, the council, and the mayor to be “on the same page” in regards to payment agreement policies, and believed that a consensus had previously been reached on the matter.

“I think we all sat here and agreed that if you defaulted, you weren’t going to get another one. And we’re completely within our rights to not offer them one for at least three years,” he said.

“During the last foreclosure we did, we were as lenient as we could be because we didn’t want to take the houses. But obviously that doesn’t necessarily push people towards paying their taxes on time. So we need to be more strict. So I would not in any way be in favor,” said Agresta.

Agresta said he was thinking of taxpayers who struggle to pay their quarterly taxes, sometimes paying late, but still managing to keep up.

“We’re going to allow somebody who paid nothing for at least two years, a deal that we wouldn’t have allowed to someone who is struggling to pay their taxes each quarter. It doesn’t make sense to me,” he said.

Mayor Michael Villa said, “I would love to satisfy that person and have $20,000 come in rather than see it go to foreclosure, but what precedent are you setting and what hill are we going to slide down? Especially on the eve of another foreclosure, how many people are going to be coming in asking for the same?”

The subject of who has the authority to set the policy was also discussed.

“I’d like to have a consensus on this, but ultimately it’s my office that has to set the rules for how this works,” said Agresta.

Although a resolution by the council to set the policy was suggested by Martuscello, Villa said, “I don’t know if we have the authority, because I think it rests in the controller’s office…Matt has to run that office, he has to run the foreclosure.”

Corporation Counsel William Lorman said he believed it was up to the controller to make the decision, but said he would take another look at the issue.

As the details of the situation were not entirely clear, council members agreed to look into the situation further before making a decision.

The council also considered another property situation that Agresta brought up during the meeting.

“We have, at least at this point, three properties that are on the foreclosure list, that the current owners have absolutely no intention of paying for,” said Agresta.

Agresta said the owners reached out to him and said they would prefer to give the deeds over to the city, rather than going through the foreclosure process.

Alderman Chad Majewski said he was in favor of taking the offer, given that the foreclosure process will not likely be completed until after the winter, and therefore the properties run the risk of deteriorating.

Villa also agreed and said, “Do we retain the investment that’s there, and resell it, or do we wait and let it deteriorate and become a property that’s going to be less desirable on the market?”

Corporation Counsel William Lorman advised that the city should make sure there were no major environmental problem with the properties and research the legal status of the deeds.

Majewski said, “I would have codes go through and do a thorough inspection, then I would take possession of them and I would put them on the market and hire a realtor to do it.”

Martuscello suggested that the properties could also be auctioned off directly by the city.

As a next step, Villa said he would instruct the codes office to inspect the properties.

* Previously, this sentence read “any accumulated user fees for water, sewer, or sanitation”, which was an incorrect interpretation of the controller’s comment. Overdue user fees are re-levied as taxes.

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.