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Residents, council and staff press for review of tax-acquired properties and equity refunds after foreclosure
Summary
Finance Committee members and public commenters discussed a backlog of city-owned properties, the legal limits on returning equity after foreclosure and a narrow, high-profile case that committee members said needs further review at the June council meeting.
Roger Gilly, resident, asked whether the city had followed up on previously raised questions about city-owned property and whether sales could return revenue to taxpayers: “Every time I come and ask a question, I never seem to get any answers.”
Committee staff said they produced a spreadsheet cataloging city-owned parcels, categorizing (1) property the city owns outright, (2) tax-acquired/lien properties and (3) parcels subject to repick/real-estate purchase installment contracts. Sue (staff member, subject matter expert) told the committee, “we do have quite a bit of property, but a lot of it we utilize. And there isn't as much out there that we can sell that people think there is.”
The nut graf: committee members agreed the item will return to the June council meeting for fuller review so councilors can understand which properties can be sold, how proceeds flow under current law and whether changes to city ordinance are needed after a U.S. Supreme Court ruling was referenced in committee discussion.
Public speakers and several council members raised one specific case involving proceeds from a prior foreclosure and whether equity should be returned to the prior owner. One council member said the family had received “no discussions from this council or the finance committee for 2 and a half years,” and urged the committee not to delay review. Another council member said staff had followed the letter of the law and that existing ordinance and state law limited the city’s authority to return funds.
Committee staff and members discussed legal and procedural complications: some tax-acquired sales produce proceeds that first satisfy tax claims and liens and may leave no net proceeds for the city; some properties are still within statutory or ordinance hold periods; and some parcels are subject to repurchase rules that allow the former owner to redeem or repick under specified timelines.
Charlie (Finance Committee member) said the committee will put the matter on the June agenda and that staff will provide options, including the legal liability and budgetary implications of reimbursing owners if the council wanted to do so. “There’s the other piece on where does the money come from if the council wanted to reimburse that piece as well,” he said.
No formal vote or policy change occurred at the finance committee meeting; members agreed to continue the review at the June council meeting and to consider potential ordinance updates to reflect recent court guidance and to modernize the process going forward.
