City Council:
AN ORDINANCE AUTHORIZING THE REQUEST
FOR PROPOSAL (RFP) FOR EXPLORATION AND
EXECUTION OF ALTERNATIVE MEASURES FOR
THE RECOVERY OF DELINQUENT PROPERTY TAXES
Whereas, by letter dated August 2, 2024, the Comptroller has requested legislation authorizing the Office of the Comptroller to issue a Request for Proposal (RFP) for the Bulk Sale/Assignment of Delinquent Real Property Tax Liens and/or for Collection Services on the Delinquent Real Property Tax Liens, as determined by the recommended list in accordance with the Real Estate Property Tax Law; and
Whereas, the City of Mount Vernon has not initiated In Rem Foreclosure Proceedings since 2014, resulting in significant property tax arrears; and
Whereas, recent federal and state laws, including the United States Supreme Court decision in Tyler v. Hennepin County, impact the cost-effectiveness of executing In Rem Foreclosure Procedures, as municipalities are prohibited from retaining surplus value from seized properties exceeding the tax debt; and
Whereas, the prolonged lapse since the last In Rem procedure has led to a substantial accumulation of properties in tax arrears, warranting the exploration of alternative methods for recouping these tax arrears; and
Whereas, the current property tax indebtedness to the City, inclusive of County and School taxes and penalties, totals over $50 million dollars, placing a significant financial burden on the City; and
Whereas, the Office of the Comptroller has actively attempted to collect these tax arrears over the past two years with limited success, necessitating the exploration of more effective solutions; and
Whereas, the City Charter provides a Tax Lien Sale provision, offering a potential alternative to the In Rem procedure for recovering delinquent property taxes; and
Whereas, the City Council acknowledges the absence of available cash reserves and the significant liabilities facing the City, including pending liabilities under appeal, impeding effective capital improvement planning and investment management; and
Whereas, the City is obligated to explore alternatives to In Rem procedures to expedite returns and mitigate additional debt incurred from the two-year collection period for the 2020-2023 school taxes due to the Mount Vernon City School District; Now, Therefore, Be It Resolved That
The City of Mount Vernon, in City Council convened, does hereby ordain and enact:
Section 1. Authorization to Explore and Execute Alternative Measures. The City Council authorizes the Office of the Comptroller to issue a Request for Proposal (RFP) for the Bulk Sale/Assignment of Delinquent Real Property Tax Liens and/or for Collection Services on the Delinquent Real Property Tax Liens, as determined by the recommended list in accordance with the Real Estate Property Tax Law.
Section 2. Payment Plans for Delinquent Properties. The Office of the Comptroller is authorized to propose payment plans for delinquent properties once the State approves the amendment to Real Estate Property Tax Law 783, subject to City Council approval.
Section 3. Implementation. The Office of the Comptroller shall take all necessary steps to implement the provisions of this ordinance and ensure compliance with all applicable laws and regulations.
Section 4. Effective Date. This ordinance shall take effect immediately upon its passage and approval by the City Council.