Lake County directs staff to draft low-value property ordinance amid losses from tax-defaulted ‘paper’ lots

Lake County supervisors on Oct. 12 heard from Treasurer-Tax Collector Patrick Sullivan and Auditor‑Controller/County Clerk Genevieve Harrington about growing financial and staff burdens tied to decades-old, undeveloped “paper subdivision” parcels, and gave staff consensus direction to draft a low-value ordinance and form a working group to study options for parcel disposition.

County officials told the board that a large share of tax-defaulted lots have very low assessed values but carry accumulated interest, penalties and direct charges that produce “deficit sales” at auction, leaving the county and local special districts with unrecovered balances. “There was a state controller investigation… it basically came to pass that we have to attempt to sell these lots. We can't just sit on them anymore,” Patrick Sullivan, Lake County treasurer-tax collector, said during the meeting.

The issue matters because Lake County participates in the Teeter plan, meaning the county initially advances tax distributions to local agencies and later recoups them. That arrangement has increased the county’s exposure when tax auctions produce no buyers or require reduced minimum bids. “A portion of it is covered by our tax loss reserve… the TTR is expected to cover about 1.3, almost 1,400,000, and then approximately 2,600,000 is expected to be recovered from the agencies,” Genevieve Harrington, auditor-controller and county clerk, told the board.

Why this came up

County staff described a long history: many subdivisions platted in the early 20th century (notably around Nice, Lucerne and parts of Clear Lake) were never developed. Those parcels now have low…