November 29, 2014

County unable to recoup unpaid taxes through foreclosure sales

Charging back city of Standish nearly $59,000

By Matt Keeton
Staff Writer | reporter@ogemawherald.com
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ARENAC COUNTY —Arenac County was unable to recover losses due to unpaid taxes through foreclosure auctions for the first time in the county’s history, according to Arenac County Treasurer Dennis Stawowy.

“Historically, we’ve made enough at auctions to cover the taxes,” Stawowy said.

Stawowy said that around 20,000 tax bills are sent out each year by various municipalities within the county, and around 3,500 go unpaid.

“Every year, the taxes go out in December, and on March 1, the local treasurers quit collecting taxes,” Statwowy said.

He said that, after March 1, any unpaid taxes are reimbursed to those municipalities by the county, which attempts to collect the delinquent taxes in order to recover its losses.

Much of the money, Stawowy said, is recovered through auctioning off foreclosed properties. He said that the county put 34 properties up for auction in August of 2010 and 27 were not sold, leaving the county around $156,000 short of what was needed to cover the delinquent taxes. He said that another auction was held in October, but no properties were sold.

“When that shortage occurs … we charge back the local units we gave the money to,” Stawowy said. “This is the first time we’ve had a large chargeback for not being able to sell property at auction.”

He said that many of the unsold foreclosed properties did not amount to much, but that several, such as the AuGres Water Funland property, which has a true cash value of $400,000 and a minimum bid of $41,700, have left several municipalities with a large debt to repay the city.

According to Stawowy, chargebacks for the city of AuGres Tax Increment Financing Authority totaled around $22,000. He said that chargebacks for AuGres-Sims Schools totaled around $23,000, most of which was due to unpaid taxes on the school’s operating and debt millages. He said that the city of Standish owes the county $58,906 in chargebacks, all of which is due to unsold foreclosures.

According to information provided by the city of Standish, foreclosed properties in the city include two residential properties, and a commercial property, where the business Tom’s Hubcaps used to be located. Stawowy said the demolition of the Tom’s Hubcaps building is included in the chargebacks.

He added that around half of the municipalities in Arenac County have already paid the county for chargebacks, most of which were for relatively small amounts of money, and that payment plans are being worked on for those municipalities that are unable to pay in full, such as the city of Standish. Municipalities have two fiscal years to pay the county, Stawowy said.

Standish City Manager Mike Moran said that the city will need as much time as possible in order to pay back the county.

“It’s going to be tough enough trying to figure out how to pay it in a two-year period,” Moran said.

Stawowy said the county will hold another auction in August, where around 40 properties will be put up for bids.

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