Town explores tax title auction
Eryn DionNews Staff Writer
TEMPLETON — The Treasurer and Board of Selectmen are exploring the possible sale of the town’s delinquent tax titles after a representative from Tallage LLC attended the board’s meeting Monday night.
According to Treasurer Dan Keeney, the extensive list of outstanding tax titles goes back to 1995 and the amount owed to the town in back taxes is an estimated $863,077.43, but interest and fees bring that total to a cool $1.4 million.
Mr. Keeney explained that his department simply lacks the funds to go after delinquent property owners. The town could take the owners to court, but to the tune of $2,000 per case up front before attorney’s fees, costs can rapidly spiral out of control and exceed anything the town hopes to gain.
“I have exhausted my ability to besiege this board and the advisory board to provide extra funds for my department to go after this money,” Mr. Keeney said at Monday’s meeting. “We have an opportunity before us to negotiate the sale and allow a company to bring that up front money.”
Bill Cowin of the Boston-based Tallage LLC explained the process and benefits to the board and Mr. Keeney.
“The sale of tax titles is a powerful tool for cities and towns to raise revenues and also reduce dramatically the administrative burden,” he said.
Should the treasurer decide to sell, he would select which tax titles would go up for bid and there would be a public auction. It is up to the treasurer’s discretion how many or how few titles go up for bid, and Mr. Cowin’s company generally bids on 80 to 95 percent of those that are put up for sale. Notice of the auction will be posted 14 days prior, and after, the titles will go to the highest bidder.
“By statute, the minimum bid is 100% of what’s owed to the town on the day of the sale,” explained Mr. Cowin. “That’s not only the taxes, but the interest and fees.”
After the titles are sold, the town will be up to date and the company will be responsible for keeping them that way in the future. Mr. Cowin was careful to differentiate between the purchase of the property and the purchase of the tax title.
“The property owner is still, even after the day of the sale, responsible for their property taxes,” Mr. Cowin said.
After the sale, future payments and interest would be made to the company, as opposed to the town. Should the owner fall behind, the company would be responsible for starting land court proceedings.
While companies like Tallage will bid on most tax titles, there are certain properties they will shy away from. Any property already being foreclosed upon or that is in bankruptcy is off the table, as well as owners who are already in a payment plan with the town. If there are known environmental issues on the property that prevent the owner from doing business the company will not bid on the title, or if the title has been on the books for an excessive amount of time and the company is unlikely to collect they most often will not bother. Ultimately, Mr. Cowin’s business is interested in titles they will likely see returns from and owners who have fallen into the habit of not paying because they know the town cannot take them to court.
Deals like these are not unprecedented, and are in fact quite common around the state. For bigger cities like Lowell and Worcester the tax title auction is common practice, and many smaller towns are falling suit.
Mary Barrell, Treasurer for the town of Spencer, was skeptical of the deal at first, but now agrees that it was the best plan of action for the town.
“It really brings in the money,” she said.
Ms. Barrell found herself in a similar situation as Mr. Keeney several years ago when she decided to put the town’s tax titles up for bid. Delinquent titles were piling up, causing a huge administrative burden on her and her department and the town did not have the money to pursue the cases in land court.
“It’s great because the town gets at least what they’re owed up front and it takes the pressure off us,” said Ms. Barrell.
The treasurer also found that simply letting residents know the titles might be put up for sale is often enough to open up a dialogue. Where property owners would refuse to answer phone calls before, once notice of the auction went out, many came in to her office to either get up to date on their taxes or start a payment program. Mr. Cowin said this response is common and that his company finds between 30 and 40 percent of the tax titles that are published actually redeem prior to the sale.
The benefits of such a sale are the town will be up to date on their taxes from the day of the sale, which will help bond ratings and also give them access to free cash. There will also be a dramatic reduction in the treasurer’s workload, allowing them to focus on more pressing matters.
No official action was taken at the meeting, but if the town decides to follow through with the sale, the auction could take place in as little as a month’s time.
This almost sound to good to be true!
ReplyDeleteAs the company rep told us the facts of how it works you could hear a pin drop. When this company formed in 2010 they saw a way to make money and have done this very well Being up front with the way it works and simple to explain he walked us through the way to get our towns money "QUICKLY". The one problem i can see in this process would be our treasurer. He was out front and said he did not know about the time to get the list up to date and ready to offer it!
Sounds like a problem to me,from the W2,Payroll,Deductions and a host of other issues why do we not have the issues at hand under control YET! Do we have people in places making mistakes to cause problems for the selectboard. The fact the treasurer has been open about issues with the selectmen decisions are a big problem with me when i hear it at a town meeting,like the last one.If more time was spent on the job at hand and less complaining about the state of Templetons issues things would be better.A complete log of the treasurer should be kept to see how far we are from being caught up on the issues that department has to get done.When the town lost the jem Tammy,we lost control of the major part in Templetons recovery.I hope we get an Administrator who will devote the time to provide the leadership to the department who lacks the ability to multitask our multitasking department. I keep hearing about new mistakes and for the life of me how it could be one is hard to believe. Templetons problems are more than financial for sure. That is a fact and just to add that is also on a previously uncheck or questioned selectboards watch as is the debt we are burdened with.
I support the schools and the good education we need for the children of "Templeton".
I can support the new school and also would go as far to say we have little choice but to build. Now we are being pushed into a corner and will be looking in the mirro to see what happened and what we need to do to get throught. Would it be a good thought to start project to build a addition in TC that would be turned into the new police station when the new school would be finished and thereby getting 2 for one done in a shorter time and also have the whole town in one building. A Temporary town office can be permanent and cheaper to renovate after the school turns another old build over to the town!
Portables are a temporary fix and fine for the short term. Build it to last and do it only one time. If some assets must be sold to dig out of this hole we are in and fix the towns building up I'm with "over and out"
We would shed the massive electric bills and have the income for taxes to pay the NEW electric provider.
why don't we publish the list of delinquent payers like the bordering towns do???? can't hurt !!! but we have a lawless president who feels he has to obey no laws he doesn't happen to like, so maybe we should ALL withhold payments !!!! brad lehtonen
ReplyDeleteWas that General manager you meant to write?
ReplyDeleteI just cannot even begin to think about building a school until we get the town offices in one building,and make that situation manageable. How the people in this town could go for 250 years with out attending to this matter just is beyond belief. One reason may have been in the early days, the majority of selectmen came from Baldwinville, and they liked things the way they were. Most offices were in walking distance from each other, and the real reason was voters did not want to spend the money, even when they had it. There was a kind of unwritten rule that if you were a selectman, and you wanted to get reelected, you did not try to raise taxes. If you look back in time, you will see this way of thinking carried on through today. So what we are dealing with is, prior administrations doing what ever it took to come out of the Annual Town Meeting with a tax rate pretty much level. When money was needed for big expenditures, those 40 year loans made their way to our debt. What does that mean? Loans that could have been paid off in ten years,[what other towns do] now have been dragged out, and along with the loan, comes the huge amount of money we pay for interest. When Mr. Skelton stood up in Town Meeting this past October and told us it would only cost us $135,000. a year for 252, did anyone ask for how many years or what we would pay for interest?? In case you missed that meeting, not one person asked those questions, just like they didn't year after year when the articles for big loans were presented to the town for a vote. Do you think people will learn in the future?? I sure hope so. My blogs are based on facts and my opinion. Bev.
DeleteGood. Now try looking forward instead of back.
DeletePuffy, the only way to move forward is to know how things went so wrong, so we do not get in this position again. Stick around, maybe you will learn a thing or two. For the new people in town, a history lesson will not hurt. The problems we have were not made overnight, and will not be solved tomorrow. Bev.
Delete& yet you have not mentioned nor proposed one single thing to fix the problems or advance our town moving forward. All I have seen & heard is blame, blame, blame. Be part of the solution instead of one of the cackling hens playing the blame game.
DeleteI think you should repeat your last post out loud while looking in the mirror, Puff. Bev goes to more meetings than most elected officials do. She makes suggestions, researches, and asks questions on all aspects of town government. I don't know of a person who loves their town and the people in it more than this woman. Not only is Bev determined to help out any way she can, she continues to do so even though thoughtless people like you give her a hard time. I believe Bev volunteered for the search committee for the new Town Administrator and has served on numerous boards and committees in past years. She IS part of the solution. Are you? Do you sit on any committees or boards? Do you go to meetings besides school committee?
DeleteAnd speaking of school, with your reasoning I guess we should eliminate all history classes as you stated that we should stop looking in the past. Really? Society doesn't ever improve without studying the past and learning from it. The only people who don't want to acknowledge the past are the ones who have done something wrong and want to move on in the hopes that people forget the wrong doing. And while we're eliminating courses, lets eliminate anything to do with economics. Why? Because in order to perform the basic accounting task--balancing one's checkbook--you have to look back and find out why there was any discrepancy in funds. According to you, this should be a piece of cake. Well, what if you had dozen of accounts all of which were not handled properly and also managed using an accounting method that isn't industry standard. And with software that wasn't industry standard. And managed using a net vs. gross process. Do you think its going to be quick and easy to untangle all of that and make sense of it in a timely manner? Hell no! When a forensic accountant cannot make sense of what has been done here over the past decade, you know its a difficult task to complete.
All these people that you love to criticize---these are all people that saw these problems occurring for years and have stood up to fix the problems and are doing a great job despite comments from you and several others on this blog. You don't have to like them personally, but you must respect them for their efforts.
Since your special interest is the school, you can do your part by asking the school committee how they feel about state and federal mandates. What are they doing to fight back against them in order to reduce the district's total operating costs? Have they reached out to other school boards to lobby for change or financial relief from the state and federal government? This isn't a Narragansett-only issue. You can also watch to make sure that in this next round of school budgeting the school committee makes a concerted effort to find places to cut costs that don't affect the children. Like travel expenses. Is that necessary? I remember there was one gentleman on the committee last year that questioned a couple of these costs. He was met with silence from the rest of the board. And, one gentleman even literally turned his back on him! No other member questioned costs. If you think I am wrong, go back and watch it on video. Unfortunately, I think he resigned. The attitude you sense toward the school isn't a lack of supporting the school or the "kids" or being "ignorant townies". The issue is it seemed there was no attempt to try to reduce the budget by the committee. That may or may not be true. But if the elementary school is going to pass at the voting booth, the committee better do some swift PR work and smooth over relations with us "ignorant townies". Because your leader Ms. Miller has not done a very good job at that aspect of her job requirement.
Every department and service needs to be evaluated to see if it can be streamlined, consolidated, regionalized, or sold right now. Dept heads shouldn't take such offense when citizens and officials question budgets and processes. Its not personal. Its survival. So, please, Puff, stop taking offense when bloggers discuss or criticize how the school or light dept or dispatch operate. Its our right to discuss it all in the hopes of BEING A PART OF THE SOLUTION.
DeleteI agree. & have said many times, that all Dept's need to be reviewed. However, as I just posted, the state pays 75% of the schools budget, so explain how asking for more would even sound reasonable? I believe we should be doubling the minimum contribution, not looking to cut it. Without a school, we don't have a town. Everything would die, & everyone would leave. However, I can understand level funding until the town can get there act straight & get there books in order. My problem with that is, everyone still blames schoolies instead of going after the accountants & people that screwed this up. Where is the outrage? Why do these people still have jobs & get paid by us? The school can stand on its own until you can fix your own house.
DeleteOutrage is what started this blog. Outrage is what got people like Bev and Mr. Bennett involved and asking questions. I would guess you would not approve of someone being paid over their paygrade for a long period of time even after many pointed out this incident. Outrage was why people pointed out that balancing the budget with savings was not right. I believe that started back in the early 2000s when someone made a powerpoint presentation showing what would happen to the town if this behavior continued. They were right. Outrage is why the people who refused to change the procedures are no longer in office and new people are now trying to fix it all. When did the struggle between town and school become such an issue (in many communities including Templeton)? I believe it happened back around the time that prop 2 1/2 came about. Ms. Farrell has spoken on this in detail in the recent past. If a town is limited to how much they are allowed to raise taxes each year yet the bills for things like education keep skyrocketing past a point of sustainability, then the town is going to have a huge problem on its hands. Also, when the federal and state governments put mandates on the school systems without providing funding, they contribute to the economic failure of small communities. Are those mandates necessary? Would you believe that many of the mandates are generated due to lobbying power of big business? There are companies that see education as a huge money maker and benefit from some mandates for profit. And if the government institutes these mandates, they look like they "support education" and all is good. Unfortunately, many educators have pulled their hair out trying to get the government to support methods of teaching that actually work (proven in many other countries) yet government doesn't listen. The US does not lead in any educational category in the world. Throwing money at education only makes the rich richer. It doesn't make our children smarter. We've gotten away from listening to what the teachers are trying to say works and only listening to the executives in charge. Until school committees can talk to one another and have a voice at the table that tells the state and federal government that "some of these mandates are unsustainable and if you want them implemented, provide funding for them, small towns will never be able to reach a comfortable level of finances. I believe that education should be well funded by its community but at a reasonable and sustainable level. Ask a teacher how much they enjoy the new evaluation regulations--both on their students and on their teaching. Did No Child Left Behind work? Just because the education budget keeps going up and up doesn't mean that we blindly give them what they want without question. It would be awesome if our school committee worked on looking into the mandates to see what needs to change and what is necessary. It would also be awesome if they would analyze if school choice is what our system should be a part of. If we can't sustain our own kids' quality of education, should we be accepting more from elsewhere? Oh, but we get money for those kids, right. So, then kids become a byproduct of the budget and the quality of learning is secondary. Programs like Race to the Top make school systems compete for money using some questionable criteria. These are only a few mandates that should be reviewed. My question is, how can we provide the best quality education to our children at a reasonable and sustainable price? What is the percentage of education in the town's overall budget? Is it only the town's responsibility to find solutions? Is it the schools? Or is it a partnership working all angles to achieve the common goal?
DeleteAgree, agree,& agree. This is why most small towns are struggling with school finances. But to cast the entire towns problem as school related is when I have an issue & pipe in. As I said, the state pays 75% of the budget, so they cover their fair share & then some. Right now, our select board needs to concern themselves with their own house. Where is the $505,000 worth of cuts? Why aren't the books closed? Who is not doing their job?
DeleteHi Puffy,
DeleteI asked before. I'll ask again. Please explain the minimum contribution.
The school issue is related to the town issue. These are NOT separate issues. When the school administration used the nuclear option to overturn 4 NO votes into a YES, that decision impacted the town’s finances.
Will the school administration use the nuclear option to fund the operating budget again? The decision by the school committee to use the nuclear option widened the divide between the schools and the town. Can the nuclear option be used to overturn the voters’ will for the elementary school? Will the superintendent of schools continue to pursue the process to condemn the remaining elementary schools in Templeton?
That said, the town needs to get its financial house in order. In my opinion, the crux of the matter is certifying free cash for FY 13. Once the books are closed for FY 13, the matter rests with the DOR. It can take from 1 week to 2 months from the DOR to certify free cash. That process is out of the BOS’ hands.
To address the $505,000 shortfall, I believe we will need to use some free cash, some budget cuts and possibly some stabilization money to remedy the FY 14 shortfall. We don't have a certified free cash figure. At this point in time, we don’t have enough information to give an exact figure for an override. Without an exact figure, I feel an override at this point in time will fail.
In my opinion, an override for FY 15 would have a better chance of success. We know from prior budgets that the structural deficit is approximately $500,000. The $500,000 figure is derived from the average of Free cash used over the past ten years to supplement the operating budget. If successful, use the override money for the town's operating budget. When and if the books close on FY14 and free cash is certified, ask the voters to place that money into stabilization.
And, yes, an analysis as well as action needs to be taken by the BOS to ensure the town is not is this position yet again. Hiring a full time town administrator to start July 1, 2014 is part of the "plan" to ensure the town is not in this financial mess again. In my opinion, other steps need to be taken as well.
While I agree with the Administrator, I don't believe another override will pass. Not even for 10 bucks.
DeleteAs far as the school, I hope so. The elementary schools should have closed years ago. Hell, they're non-compliant. None of them are even handicap accessible. All handicapped kids are shipped to Phillipston until Middle School. & I personally believe that the nuclear option is in place specifically for towns like ours. If town govt can't do its job, the school govt can & will. Remember, even if the whole town shuts down, the school stays open.
Really?
DeleteThe town shuts down and the schools stay open? Really?
How will the school receive its quarterly assessments from Templeton, if the town shuts down?
The schools are protected.
DeleteOkay! If you say so!
DeleteNo templeton treasurer due to town being closed = no $$$ for any department in Templeton
I'm not sure how, but I've been told by multiple sources that its not an option. School assessments are protected & payment must still be made.. Maybe its similar to snow/ice. They just bill ya later ;)
DeleteYou just gonna look past the whole noncomplying elementary schools thing?
Non-complying elementary schools have nothing to do with a town shut down and no way to access funds ;)
DeleteNo treasurer due to town shut = no way to access funds.
Maybe you should should "find out How" from your multiple sources and let us all know.
BTW, please explain the minimum contribution. Must have missed your explanation.
This does nothing as to control the towns expenses as well as personal seems this board as many see every property in town as great intrusive right to tax Private Property currently the town tax rate will be forcing many out of there homes over taxes This board does not consider selling the light and water interest too national grid yet gets nothing keeping them tax exempt . if national grid own Templeton L & W every person on fix income would get 35 % off there monthly bills if disable or on fix low income currently templeton give zip ) 0 ( and it would be no increase to those having to pay these rates and service would continue anyhow ,,, , I think the board should sell the L&W department at once making it a private enterprise owner Private and then it can be tax tax that makes continue since of correctness we taken enough shit sell it .. also
ReplyDeleteThe first L&W meeting I went to was a couple of years ago. David, Bart and Will. Spring went with his wife. We went to talk to the commissioners to see if they could help the town out, because we knew the town was in trouble. The reception that we received was something I never expected in a million years. It was "that's not our problem"," we do things right over here". When Mr. Spring asked about the help the Light Co. could provide people that qualify, he was told, "we can't do that". For every topic he asked about, rebates for buying energy efficient appliances the answer was the same...No. Well, I went home and started looking on the computer, and guess what ?? Most of what Will asked about, the people in this town could get through EMMWIC, the group of electric companies that our town belongs to, and has belonged to for many years. What the hell is wrong with the people running our Light Company that had no clue as to what was offered ?? The web site now shows the benefits a rate payer is allowed, and they would not be there today if Mr. Spring did not push the issue. As a matter of fact, the question came up at a Town Meeting as to how many people knew these rebates existed, and the only hands that went up, were the people who worked for the Light Co. The Light company is no longer ours, if you listen to the Echo Hill gang at the last Light and Water meeting I attended. I was not born yesterday, so I do know this business is supposed to run, unlike many of the much younger rate payers in this town. It does not exist for the sole benefit of the people who work there, it does exist for the people in this town, a sentiment lost about 12 years ago. Bev.
DeleteI want to clear something up. The Commissioners were the ones that did not know rate payers could get rebates. The office people were the only ones that did. Bev.
DeleteI agree with mass vocals, we should sell Templeton L&W for the reasons he has stated. I also would support the treasurer selecting which tax titles would go up for bid and have those sold at a public auction. But as stated the problem is this process would involve our treasurer. Right now I have little confidence in Mr. Keeney or Ms. Osbourne, they are sending out a third round of W-2’s, they have yet to resolve the books for FY 2013. Forcing the town to take a 2.6 million dollar loan to cover town expenses until the tax rate is set. This town’s government is so dysfunctional on so many levels; I am not surprised at our current state. We don’t even have a town hall and are forced to rent space at $50,000 a year.
DeleteWe need to right this ship.
TempletonMJH-
DeleteIf you feel selling TMLWP is the way to go, you can submit a citizen petition to do so for the Annual Town Meeting in May.You will need to gather 10 signatures for your question to be placed on the warrant.