Board directs staff to pursue low‑value ordinance as tax‑defaulted land deficits mount

Lake County officials told the Board of Supervisors on March 11 that a large and growing share of tax‑defaulted parcels are extremely low in assessed value and are creating repeated “deficit” shortfalls when the county tries to sell them.

Treasurer‑Tax Collector Patrick Sullivan and Auditor‑Controller Genevieve Harrington said the county has been required by law to attempt sales of long‑delinquent parcels, but most of the properties that appear in the auctions — primarily paper subdivisions developed early in the 20th century — carry assessed values of $5,000 or less and generate little or no buyer interest. Because interest, penalties and direct charges (for example, unpaid fire‑district fees) have accumulated, lowering the minimum bid to win buyers has produced large shortfalls that the county must address afterward.

Sullivan told the board the most recent accounting shows the county expects to have to recover roughly $1.3 million from county reserves (the county’s “Teeter” front‑funding program) and to seek roughly $2.6 million back from special districts and other agencies for direct charges tied to those tax‑defaulted lots. He said the bulk of the unsold inventory is concentrated in paper subdivisions such as those in the Nice/Lucerne area and that the number of low‑value lots has been rising: roughly three‑quarters of lots placed in recent sales were valued at $5,000 or less.

Harrington reviewed the operational impact: handling many tax‑sale files requires senior finance staff time, legal assistance, and outside costs. She said running more auctions without a policy change would continue to absorb staff capacity while producing few sales and repeated deficits.

After discussion, supervisors agreed by consensus to direct staff to draft a low‑value ordinance (commonly used by other counties to remove very low‑value parcels from the annual tax bill cycle) and to convene a separate working group of county departments and affected special districts to study options for resolving paper‑subdivision parcels (chapter‑8 sales, consolidation, donation to land trusts, or other disposition options). Supervisors stressed the need to protect fire districts and other small special districts from sudden budget hits; staff said they would present options for phased recovery, interagency repayment plans and other mitigations.

The board did not adopt a formal ordinance at the meeting; instead it gave staff direction to produce a draft ordinance and to open a parallel working process on paper‑subdivision disposition. Sullivan and Harrington said they would return with a draft ordinance and an implementation plan and that they would consult the affected agencies before any amounts were charged back.

What it means for residents: If the county adopts a low‑value ordinance, owners of very low‑value lots will stop receiving annual property tax bills for those parcels. That will reduce ongoing staff costs and avoid repeated deficit auctions, but the board and staff said they will first work with special districts to review the amounts those districts may have to absorb and discuss staged repayment or alternatives.

Board direction: staff was instructed to prepare a low‑value ordinance for board consideration and to form a multi‑agency working group to develop options for clearing or consolidating paper‑subdivision parcels. No vote was required to adopt the direction; supervisors confirmed consensus.