County sharpens focus on Tax Delinquent Properties
By Jeremy Ratliff
Following lengthy discussion during their regular monthly meeting on June 20, the Lincoln County Board of Supervisors set the wheels in motion for local, and possibly statewide changes, to the statutory process of counties addressing tax delinquent properties.
The first resolution the board considered that evening was that of one authored by District 10 Supervisor Loretta Baughan; requesting board support in petitioning the state legislature to adjust current statutory requirements counties must meet in carrying out the process.
As stated in the resolution, Baughan compares a relatively lax and time consuming statutory process in the state of Wisconsin to that of a much more strict and time restrictive process set forth by the state of Michigan and the neighboring Upper Peninsula of Michigan.
“Under current law, if a county succeeds in selling a tax delinquent property by sealed bid, statutes grant the original owner a three-year period in which to redden said property from the purchaser,” the resolution stated.
“However, in other states no redemption period is allowed. Consequently Wisconsin’s three year redemption for tax foreclosures creates a disincentive for potential buyers to purchase these properties from Wisconsin counties. As an example to consider, the State of Michigan has a swifter, far less cumbersome three-year process, as parcels become subject to an administration fee plus interest as soon as they are unpaid, with additional fees to cover county costs at six months and one year (of delinquency). This is followed by an automatic forfeiture to County Treasures in the second year of tax delinquency. Should the owners not take advantage of an opportunity to adhere to a tax installment payment plan to pay off their tax debt by the third year, they will be subject to the consequence of Delinquent Foreclosure at auction.”
According to Baughan, the county currently sits with a delinquent property load of over 400 parcels, of which owners owe taxes over 3 years delinquent, in some cases as much as 11 years delinquent. Not only does Wisconsin statute provide 3 years for delinquent property owners to pay the delinquent tax amount and reclaim the property after it’s been sold, but a property owner must be at least three years delinquent for proceedings to even begin.
The process in Michigan initiates within 6 months and concludes at the three-year mark, with zero opportunity for owners to return within three-years, pay the delinquent taxes owed and reclaim the property.
“Some owners of tax delinquent parcels choose not to pay because they do not believe they will be subject to any consequences,” Baughan’s resolution further stated.
“Consequently, many of these tax delinquent properties are in a state of deterioration or abandoned condition. Some contain black mold or are overrun with rodents and snakes, which creates a health hazard, while becoming an eyesore and public nuisance. These parcels depress property values for neighbors and negatively impacts the county’s aesthetics, as well as our economy.”
As a result of an overwhelming show of support on the 20th, the county board officially ruled “The Lincoln County Board of Supervisors urges and supports legislative changes which improve the process for counties to collect unpaid taxes and return chronically delinquent properties to the tax roll, in an efficient, less burdensome and more equitable manner.”
Following the recommendation to the state legislature, the board overwhelmingly approved another resolution to amend county ordinance, to expedite the delinquent property process locally.
Of the changes included in the amendment is removing a provision of advising current owner of delinquency status and offering the owner a chance to re-purchase the property. Instead, the county clerk will now immediately place the delinquent property on the county liability insurance, following approval from the county board to take the property on tax deed.
If the property is occupied, the current owner(s)/occupant(s) will be notified of the county having acquired the property via tax deed, and will be advised of the need to vacate the property within 30 days. If the owner(s)/occupant(s) remain on the property over 30 days, the county will request law enforcement deliver a hand written notice for occupants to vacate immediately.
If owner(s)/occupant(s) continue to remain on the premises and all other options have been exhausted, County Corporation Counsel will file an eviction action requiring the Sheriff’s office to forcibly remove the owner(s)/occupant(s).
Upon vacation of the premises, the county Forestry department will inspect and winterize property if necessary with assistance from the county maintenance department and sheriff’s office, if needed. Notices will be placed about the property , advising the public of the property being that of Lincoln County ownership. The county will then be allowed to hire a contractor or the County Highway Department, to clear a parcel of debris or demolish a structure on blighted properties; to make them marketable, when the cost is an estimated $10,000 or less.
Appraisals will be done in a manner to allow properties to be re-sold and put back onto county tax rolls as soon as possible.
Minimum bids for delinquent property will be set by the County Land, Parks and Forestry Committee. Received bids will then be later opened, awarded and approved by the committee. Following receipt of funds by the committee, a resolution will then be presented to the county board for approval of Conveyance of Tax Deed Lands.
Another provision to be included in the amendment, will allow the county to sell a parcel of land to an interested municipality, if the municipality has taxing jurisdiction over the parcel. The sale may be completed at a sale price approved by the Forestry Committee, upon the interested municipality submitting a written purchase offer signed by an authorized representative. Upon receipt of payment for a parcel, a resolution will then be sent to the county board for approval of Conveyance of Real Estate. Revenue generated from property sales will be placed in the county treasury.
The provision allowing for the county to negotiate with interested municipalities on property purchases. could prove to be music to the city of Merrill’s ears.
By state statutes, the county is responsible for taking tax deeds, even in the city,
For some time, the city of Merrill has agreed to pay the county an amount equal to the last two years of taxes, in exchange for the deeds on tax delinquent properties in the city.
The city’s Personnel & Finance Committee met with Lincoln County Clerk Chris Marlowe in April to discuss the process for taking tax deeds.
At that meeting, City Finance Director Kathy Unertl presented a list of about 20 properties on which the taxes have not been paid since at least 2012. Currently, the city is eyeing a list of about 20 more properties that have been tax delinquent since 2015.
“The city’s position has been and continues to be that, within the city, we will take responsibility for flipping these properties,” Unertl said.
Unertl said, in any given year, 7 to 10 properties in the city hit the three-year mark of unpaid taxes. That’s the point at which the county can legally start the process of taking the deed.
At that three-year point, the owner receives a tax deed notice, giving them 90 days to pay up. About half of those property owners take that opportunity to catch up on their taxes, Marlowe said.
The county missed the timeline last year in taking the deeds on 18 properties, Marlowe said. “Taking tax deeds is a time consuming process,” he said, and at the time the county did not have the staff to dedicate the time to it.
“I do not argue that we need to get going on these,” Marlowe said. “If you guys can put pressure on the county to get help that’s what’s going to help.”
“Tax delinquent properties are often vacant and uncared for,” Unertl said, “which places a strain on city resources to do the mowing and snow removal on these properties.”
There are currently 69 properties in the city of Merrill that have missed at least one year of tax payments.
When property owners do redeem their taxes after three years of not paying, they pay 18% interest per year on the back taxes.
City Alderman Tim Meehean said he’d like to see the county following through with taking tax deeds on a regular schedule.
“It seems that process has slowed down somewhat,” he said. “Ultimately it’s in the county’s hands, we just want you to know that it’s a concerning problem for us that’s getting worse.”
“Some were on the list the city asked for in 2015 and we still don’t have them,” said City Administrator Dave Johnson.
“Property owners are as deep as $55,000 in arrears on their taxes and some have been delinquent for up to nine years,” said Mayor Bill Bialecki, who also sits as 1st District Supervisor on the county board. Bialecki spoke in favor of approving the resolutions on June 20.
“You look back at nine or 10 years, and you look at some of these amounts and that should get somebody’s attention in a hurry,” Bialecki said at the April meeting.
“The reality is that the scope of this problem is only going to get worse on an annual basis,” Unertl added.
Both resolutions approved by the board will be effective immediately.