County administrator takes lead on tax deeds
By Kevin O’Brien
As Marathon County continues to whittle away at its list of tax-delinquent properties, the county board has decided to put the county administrator in charge of overseeing the acquisition and sale of foreclosed parcels.
For the past couple of years, county officials have made it a priority to reduce the backlog of properties with unpaid property taxes going back as far as 10 years. However, the county still has over 3,000 parcels on its list of properties that have received tax certificates – official notifications of past-due taxes.
County board members have toyed with the idea of placing deed restrictions on any properties seized by the county and resold on the open market. These covenants would prevent the buyer from using any existing homes as short-term rentals for 10 years and require the construction of housing on vacant land within two years of purchase. The idea is to encourage more affordable housing for those looking to work in the county.
When concerns were raised about restrictive covenants potentially lowering the market value of seized properties, corporation counsel Michael Puerner agreed to revisit Section 3.20 of the county’s ordinances, which lays out the process for selling taxdelinquent land. At a May 7 meeting of the Human Resources, Finance and Personnel Committee, Puerner presented a comprehensive rewrite of Section 3.20, based primarily on a model ordinance put out by the Wisconsin Counties Association in response to changes in state law and a Supreme Court decision that entitles the former owner of a seized property to any sales proceeds beyond what is owed in taxes, assessments and other fees.
The rewritten ordinance also gives the county administrator “the power to acquire, manage, and sell tax-deeded lands, including the authority to determine which properties to acquire.”
Under the new ordinance language, within 15 days of the county acquiring a tax-deeded property, the county administrator must notify the former owner that he or she is entitled to a share of the proceeds if the land is sold. The administrator is then required to get the land appraised within 60 days and give the former owner and their heirs or beneficiaries a chance to re-purchase the property by settling all liens against it.
If neither the former owner nor their heirs or beneficiaries want to re-purchase the property, the administrator must put the parcel up for sale no more than 180 days after it was acquired by the county. The first draft of the ordinance revision left it up to the administrator to decide whether any restrictive covenants should be placed on a seized property before it is sold.
To maintain the HRFC’s oversight, the ordinance requires the administrator to report to the committee every April on which properties are being targeted for foreclosure, which are not, and why those decisions were made. Puerner said the HRFC would also be able to set policies and procedures for acquiring and selling tax-delinquent properties.
County administrator Lance Leonhard told the committee that the revised ordinance should expedite the process, but he’s not going to cut supervisors out of the loop.
“I’m not going to make decisions outside of guidance from this committee or the county board,” he said.
Leonhard said a lot of progress has been made in getting people to pay their past-due taxes and seizing and selling properties with long overdue tax bills, but work still needs to be done.
“We still have a lot of property that is eligible for tax-deed taking,” he said, noting that 53 parcels have outstanding tax bills from 2014, 69 from 2015, and 90 from 2016. “So, we need to make progress getting them into the funnel.”
Under state law, the county can no longer pursue payment of past-due taxes after 10 years, and since local municipalities and school districts are always made whole even if taxes are not paid, the county takes the full financial hit. Leonhard said he expects a more transparent and efficient process under the new ordinance.
The old process for dealing with tax-delinquent properties involves multiple county departments, starting with the treasurer’s office seeking payments on unpaid taxes before moving to the corporation counsel to prepare legal proceedings and eventually ending up at the clerk’s office to handle the selling of seized properties on Wisconsin Surplus.
ERC chairman John Robinson said the ordinance changes will allow the administrator to delegate those responsibilities in a way that streamlines the process and prevents the county from having to write off more delinquent taxes. Last year, the county wrote off $98,000 in past-due taxes because the 10year deadline had elapsed, and he’s worried that another $100,000 could be written off this year.
“That’s not a good business model,” he said.
Before the committee voted to recommend the ordinance revisions, an amendment was approved explicitly stating it would be up to the HRFC, not the administrator, to decide if a restrictive covenant is placed on a parcel before being sold. The full board approved the amended ordinance last Thursday.
Going forward, Leonhard said it will be his goal to make sure the county is not needlessly forfeiting tax dollars.
“To the extent I can guarantee anything, I will work day and night to make sure we are not writing off taxes for missing another deadline,” he said.
Lance Leonhard
