Stuck paying the tab
Property owner objects to being forced to pay the previous owner’s bills
BY BRIAN WILSON
A Medford property owner is being forced to pay utility bills from before he owned the property.
During a public hearing at Tuesday night’s city council meeting, resident Mitch Mertens asked for relief from having to pay the approximately $830 bill for overdue utilities. Mertens had purchased the bank-owned property through a private sale in August and at the time of the purchase there was no public record of any liens against the parcel.
Mertens said he was not told of any outstanding balance when he contacted city hall after the purchase to have the utilities turned on and transferred to his name. It was only when he received a “second notice” statement in mid-October informing him that the city would levy the unpaid balance as a special tax assessment plus a 10% penalty against the property that he said he became aware of it.
City Attorney Courtney Graff and Mayor Mike Wellner “I never got the first one saying it was due,” Mertens said.
“I don’t feel I should be responsible for it,” Mertens said, explaining the bills were run up prior to him owning the property. He said he did not think it was right to charge him for something someone else did.
“I am being held responsible for someone else’s mistakes,” he said, comparing it to someone who did not pay a garage bill for a car repair and then selling the car and the garage owner going after the new owner for the bill.
He requested that the council expunge the bill from his name and instead attempt to collect it from the bank that owned the parcel prior to his purchase.
City attorney Courtney Graff said that she did not think the city should agree to Mertens’ request. “We do not have the statutory authority to grant the request,” she said, noting the issue wasn’t someone contesting that the bill amount was valid, but saying that it should be charged to someone else.
She went on to state that since the city was not part of the foreclosure process where the bank took ownership of the property, she said the city did not have standing on its owner to attach a lien to the property owner. She suggested that Mertens could seek legal action against the previous owners.
Mertens replied that he could see having to pay if it was a rental property he owned and the tenants did not pay their bills. “It was property I didn’t own until August 16. Why doesn’t the city go after the bank that owned it?” Mertens asked.
City coordinator John Fales said that if Mertens had gone through a realtor or worked with a title company, the overdue amount would have been caught.
“Are you a member of council?” Mertens asked Fales.
Fales responded that while he was not a council member, he advised the council.
“I will talk to these people,” Mertens said referring to the council members who would have to make the decision on his request.
Mayor Mike Wellner said the city, by statute does not have the ability to levy against the former owner. He said that Mertens would have recourse to pursue the former owners for the money.
Graff said she felt it would be “dangerous” for the city to grant Mertens’ request since sales like this are considered as is. She said it would be like going back to the prior owners if there was a defect in the property caught after the sale.
Alderman Mike Bub asked if he was buying a property, could he call the city and see if there is an outstanding bill on it. “Can the city tell me that?” he asked.
“Yes,” answered city clerk Ginny Brost.
Mertens said he was surprised that when he called to get the water turned on, nothing was said about any past due money. Mertens asked that if the city could not eliminate the fee that they give him a little time to pay the amount before filing the tax lien and that they waive the 10% penalty that was imposed for not paying it by Nov. 1. Mertens had not been able to contest the charge until Tuesday’s meeting which was set after the deadline for the penalties.
Brost explained the final amounts are not sent to the courthouse until November 16. “They can pay up to the 15th,” she said.
Aldermen approved waiving the 10% penalty provided the full amount is paid by November 16.
In a related discussion Bub questioned why the overdue accounts seemed to be much higher this year than last year. The meeting packet included $9,096.15 in overdue bills to city utility customers and another $558.83 in overdue utility bills to town of Medford residents who are connected to the city’s electric utility. By comparison in 2018, the total amount put on tax rolls was $5,022.34. Brost said many people come in before the information is sent to the courthouse. As of Tuesday afternoon, the amount was down to $7,634.
“It will be a different number by the time they turn it into the county,” Fales said. Alderman voted unanimously to assess the unpaid balances and fees against the property owners whose parcels had delinquent utility payments.
A change in how the city provides health insurance to its employees could have long-term benefits to both employees and residents.
Last month, the city approved switching to a Spectrum Employer Business Cooperative. This is a cooperative of qualifying municipalities and businesses that was formed to allow comparatively smaller employers to create a larger insurance pool. The idea being that a larger pool minimizes the insurance risk as there would be more healthy members to offset those with higher medical expenses. With about 30 employees, the city was in a small pool. Wellner explained the city was able to join the cooperative this year and in doing so saw a significant drop in premiums. The city pays about 85% of the insurance premium cost.
Rather than taking the projected savings and doing a one-time decrease, the city on Tuesday created a special nonlapsing account where the expected $100,000 in savings will be placed and be used to apply toward future premium increases to reduce insurance cost for the city and its employees.
Any withdrawals from the Health Insurance Premium Non-lapsing Account will require a two-thirds vote of the entire council. Bub questioned why the two-thirds requirement. Brost replied that the two-thirds requirement is standard for city nonlapsing accounts.
“We have moved money with a twothirds vote,” Bub said, noting he had never seen the language before. He said it is possible the city council just hasn’t created a new nonlapsing account since he was elected.
Aldermen approved keeping the insurance premium contributions between the employees and the city unchanged. For single plans the employee will pay $113.21 per month and the city will pay $641.55 monthly. For employee plus one plans, the city’s monthly cost will be $1,283.09 and the employee’s will be $226.43. For family plans, the employee monthly cost is $339.64 and the city’s will be $1,924.64.
Alderman also approved keeping the health savings account contributions the same at $2,000 for single employees and $4,000 for employees with families or single plus one.
In other business, aldermen:
_ Approved the 2020 city budget and set the city levy at $1,735,183 which is slightly less than in 2019. The final tax rate will be set in early December and will include the city portion of the levy as well as the levies from Northcentral Technical College, Taylor County and the Medford Area Public School District.
_ Approved setting the taxi contract selection committee. It will be made up of the mayor, Fales, Brost, and city hall office manager Ashley Lemke with planner Bob Christensen as a non-voting member.
_ Approved an engineering agreement with Ayres Associates for a water main replacement on South Whelen Ave. from Industrial Drive north for about 1,500 feet to the water tower. The project will include pipe bursting with minimal surface disruption. The cost for the engineering services is $17,800.00.
_ Approved an engineering agreement for resurfacing of 1.2 miles of Hwy 64 through the city between National Ave. and Hwy 13. The state-driven project is scheduled for 2024. The estimated project cost is $812,000. The cost of engineering is $112,000 of which the city is responsible for 25% or $28,000.
_ Approved a change to the revolving loan fund loan for Jacho Van der Berg for Uncommon Ground. The business plans to purchase a coffee roaster and is refinancing with a different financial institution. There was no new money from the city with the change.
_ Received notification that mayor Wellner as well as aldermen David Brandner, Peggy Kraschnewski, Christine Weix and Clem Johnson were up for reelection in Spring 2020. Incumbents choosing not to run must file a notification of noncandidacy by Dec. 27 or the nomination period will be extended. Wellner announced he would be seeking another term.