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Agenda 02/24/2009 Item #16K 2 ?,:enda Hem No. 16K2 - cebccafv 24, 2009 Page 1 of 8 _. EXECUTIVE SUMMARY Recommendation that the Board of Connty Commissioners authorizes application for tax deeds for thirty-two (32) County-held tax certificates and the forwarding of a written notice to proceed with tax deed applications to the Tax Collector. OBJECTIVE: That the Board of County Commissioners (Board) authorizes the County's application for tax deeds for a total of thirty-two (32) County-held tax ccrtificates, pursuant to S 197.502(3), Fla. Stat., and authorize the forwarding of a written notice to procecd with tax deed applications to the Tax Collector. CONSIDERATIONS: As fully outlined in the attached memorandum, the Board is statutorily required to provide the Tax Collector with a written notice to proceed in order to initiate applications for tax deeds for all tax certificates held by the County, except deferred payment tax certificates. Pursuant to S 197.502(3), Fla. Stat., the County must make application for tax deeds on all properties with an assessed value of more than $5,000.00. Scction 197.502(3), Fla. Stat., however, gives the County the discretion to apply for tax deeds on those properties asscssed at less than $5,000.00. On October 25, 2005, the Board approved a notice to proceed to make application for tax deeds on all County-held tax certificates (a total of31) for the year 2002 (tax year 2001). That tax deed process is complete, and with the exception of one parcel presently held in the Lands Available - Inventory, all 2002 tax certificates have been paid, together with all associated costs incurred by the County. This will be the first Board action relating to tax certificates since the 2002 tax deed application process commenced October 25, 2002. The County currently holds eight 2003 tax certificates, twelve 2004 tax certificates, no 2005 certif1cates, and twelve 2006 tax certificates which are eligible for tax deed application. All of the above-referenced tax certificates are for properties assessed at less than $5,000.00. As such, tax deed application on these properties is discretionary with the County. The average assessed value per property is $647.00, the average unpaid tax is $10.45, and 19 involve oil, gas and mineral rights. The costs associated with the tax decd application process, which includes application through issuance of a tax deed, are approximately $435.50 per propclty. These costs are itemized in the attached memorandum. Should the County make application on all thirty-two (32) properties, the cost would be approximately $13,936.00. Currently there is $40,000.00 in unencumbered funds available in the General Fund for tax deed applications. Aceordingly, a budget amendment is unnecessary for the 2003 through 2006 tax deed applications. Additionally, some of the tax certificates may be redeemed before the County complctcs t1C tax deed application process. I - I To reduce administrative costs. given the low number and value of tax celiificates for this period, the County Attorney elected to hold olT on this process until a sufficient number of outstanding tax certificaies had accumulated. Please be aware, however, that there are presently 1,240 outstanding 2008 tax certificates. This represents approximately $1.14 million in uncollected taxes and, if still unsold in 2010, tax deed application and processing costs in excess of $500.000.00. Executive Summary 2003 through 1006 County Tax Certificates Page 2 item No. 'jGK2 ,=eb:Li3ry 24. 2009 ;:'::j~,e 2 of a The Board has been and will continue to be reimbursed for all costs and delinquent taxes and interest on all County tax certificates when the property is sold at public sale. It is important to note that the County recovers not only the specific year of taxes when a tax deed is sold, but also all subsequent years of taxes for those properties (since it is a requirement of the sale) plus interest at the rate of 18% on the delinquent taxes. For example, if taxes are delinquent for 2006, 2007 and 2008, the minimum bid at the tax deed sale will include the taxes for all three years, even though the County had only initiated the notice to proceed for the 2006 tax certificate. However, there exists the possibility of no bidders althe tax sale, in which event, no sale is made and the property is placed on a list entitied "Lands Available for Taxes." The County recovers none of its costs until the property is purchased. The County may, dming the ninety (90) days after the public sale, purchase the property. If the property is not purchased within three (3) years after the date the property was offered for public sale, title to the property will escheat to the County and all tax certificates and liens will be canceled. Given the low assessed value of these properties, unlike prior years, it is unlikely that the County will fully recover all costs in processing these claims. It is the opinion of the County Attorney, however, that it would set a dangerous precedent to stop enforcing the payment of property taxes, as over time this would result in more and more people failing to pay their property taxes. FISCAL IMP ACT: Currently there is $40,000.00 in unencumbered funds budgeted for tax deed applications available in the General Fund. If the Board decides to take all thirty-two (32) County tax certificates to tax deed sale, the total application costs will be approximately $13,936.00. Accordingly, no additional funds should be required for the 2003 through 2006 tax deed application process. LEGAL CONSIDER.A,TIONS: This executive summary was prepared by the County Attorney and is legally sufficient for Board action. JAK GROWTH MANAGEMENT IMPACT: None. RECOMMENDATION: That the Board of County Commissioners authorizes a notice to proceed to the Tax Collector for tax deed applications for all County-held 2003 through 2006 tax certificates. PREPARED BY: Jeffrey A Klatzkow, County Attorney Item Number: Item Summary: Meeting Date: COLLIER COUNTY BOARD OF COUNTY COMMISSIONERS 16K2 Page 1 of 1 .Agenda Item I~o. 16K2 February 24, 2009 Page 3 of 3 Recommendation that the Board of County Commissioners authorizes application for tax deeds far thirty-two (32) County-held tax certificates and the forwarding of a wntten notice to proceed with tax deed applications to the Tax Collector 2/24/200990000 AM Prepared By Jeff K:atzkoVi County Attorney Assistant County Attorney County Attorney Office Date 2/10/20093:22:26 PM Approved By Jeff Klatzkow County Attorney Assistant County Attorney County Attorney Office Date 2/11/200910:20 AM Approved By OMS Coordinator County Manager's Office OMB Coordinator Office of Management & Budget Date 2/11/20093:51 PM Approved By John A. Yonkosky County Manager's Office Director of the Office of Management Office of Management & Budget Date Approwd By 2/16/2009 9:49 AM James V. Mudd Board of County Commissioners County Manager County Manager's Office Date 2/16/20095:03 PM fi le:IIC :\Allenda T est\ExDort\ 124-F ebruarv%2024. %202009\ 16. %20CONSENT%20AG END... 2/18/2009 :l(~iil r'JJ. lC~~2 ~4 ':':OU9 ~ (If 3 MEMORANDUM DATE: February 10,2009 TO: Board of County Commissioners FROM: Jeffrey A. Klatzkow, County Attorney RE: County-Held Tax Certificates; February 24,2009 BCC Agenda Real estate taxes are payable on !'-iovember I of each year and, if not paid by April I of the next year, the taxes become delinquent. The Tax Collector, after publication of the Delinquent Tax List, conducts a sale of tax certificates on the delinquent tax parcels. Section 197.432, Florida Statutes, provides that if there is no buyer of a tax certificate, the tax certificate is issued to the County at the maximum rate of interest (18%). Section 197.502, Florida Statutes, states that the County shall make application for a tax deed on all certificates on property with an assessed value of $5,000.00 or more two (2) years after Aprill of the year of issuance of the certificates. Florida Statutes also set forth a limitation on liens of tax certificates and provide that after the expiration of seven (7) years from the date of issuance of a tax certificate, if a tax deed has not been applied for and there is no other administrative or legal proceeding of record, the tax certificate shall be null and void and the Tax Collector shall cancel the tax certificate. On October 25, 2005, the Board of County Commissioners authorized tax deed applications on all 3l-tax certificates held in the name of the County. That tax deed process is now complete, and with the exception of one parccl presently held in the Lands Available Inventory, all tax year 2002 tax certificates have been paid, together with all interest and associated costs incurred by the County. On October 2, 2008, the Collier County Tax Collector notified the Board of County Commissioners, pursuant to Section 197.502, Florida Statutes, of all tax certificates held in the name of the County that were eligible for the County's application for tax deed (a copy of the Tax Collector's letter is attached). Currently, the County holds eight 2003 tax certificates, twelve 2004 tax certificates, no 2005 cet1ificates, and twelve 2006 tax certificates which are eligible for tax decd application. All of the above-refcrenced tax certificates are for properties assessed at less than $5,000.00. As such, tax deed application on thcse properties is discretionary with the County. It is recommended that the Board of County Commissioners authorize tax deed applications for the thirty-two (32) tax certificates presently held by the County for tax years 2003 through 2006. February 10,2009 Board of COtulty Commissioners County-Held Tax Certificates Page 2 Agenda Item No. 16K2 February 24,2009 Page 5 of 8 The statutory procedure for the County to apply for a tax deed is as follows: a) The Tax Collector gives notice to the Board of all tax certificates held by the County, which are now subject to tax deed application (Tax Collector's letter of October 2, 2008). b) The Board of County Commissioners gives a written notice to proceed to the Tax Collector to initiate an "Application for Tax Deed" for the tax certificates held by the County, accompanied by a check in the amount of$125.00 per certificate for title search, and pursuant to 9197.502, Florida Statutes, the Tax Collector shall be allowed a tax deed application fee of $75.00 per certificate. c) The Tax Collector files the application for tax deed with the Clerk on behalf of the County. d) The County deposits the following fees and costs with the following entities when the notice to proceed is given to the Tax Collector: I) Tax Collector - $125.00 per tax certificate for title search. 2) Tax Collector's application fee - $75.00 per tax certificate. 3) Clerk - fees for processing the application after the Tax Collector completes the title search: a) Clerk's fees - $60.00 per parcel for processing application (includes sale, issuance of tax deed, preparation of deed and disbursement of funds). b) Advertising costs - approximately $118.00 per pareeL c) Mailing costs - approximately $27.50 per parceL d) Sheriff service - $20.00 - 40.00 per parceL Total fees per parcel are approximately $435.50. e) The Tax Collector prepares and furnishes to the Clerk for each parcel a certificate showing a list of all tax certificates held by individuals, all County-held tax certificates, all omitted years' taxes and the interest earned by each tax certificate or omitted years' taxes as of the date of the tax deed application. ~- f) Upon receipt of a completed tax deed application, the Tax Collector shall have an abstract for title search made which provides the ownership and encumbrance reports for a minimum of twenty (20) years for each parcel, a list of all tax certificates and omitted years' taxes on each February 10, 2009 Board of County Commissioners County-Held Tax Certificates Page 3 /\qenca :~sm [\;0. 1 :31<2 , February 24, 2009 Page 6 of 8 parcel, and the names and addresses of all persons or firms that the Clerk is required to notify prior to the tax deed sale. g) Delivery and posting of notices of the tax deed sale. h) A public tax deed sale is then held: I) A tax deed is issued immediately upon receipt of full payment of aU applicable fees, costs, the amount of taxes owed, interest on the taxes, and all Tax Collector's fees. 2) If no bids are received at the tax deed sale, the property is entered on a list entitled "Lands Available for Taxes." 3) After ninety (90) days, the County can purchase those properties on the list of Lands Available for Taxes for the opening bid amount. 4) If the property on the list of Lands Available for Taxes is not purchased after 3 years, the land then escheats to the County and becomes County property. i) The Clerk immediately disburses the monies collected from the tax deed sale to the Tax Collector. The Tax Collector then issues checks to the Board of County Commissioners for reimbursement of the costs and the taxes recovered less the Tax Collector's fee, plus the 18% interest on the tax certificates. The above referenced tax certificates were issued to the County between May 2003 and May 2006; therefore, the Board of County Commissioners should take appropriate action to provide the Tax Collector with a written notice to proceed by making applications for tax deeds for all eligible 2003 through 2006 County-held tax certificates. JAK Attachment cc: Larry H. Ray, Tax Collector P\oenc.ia !t8m No. 161<2 ~ Febr-uary 24, 2009 F\3ge 7 of 8 qu'( ~. eat~lon. COLLIER COUNTY TAX COLLECTOR e. F.e. ..... "'" (") ~f;" ... 00 0 n C-n -I ~?5 I N 'm -. ~o :J:: 0" .:::- ::IiiI5: .. 2m .r:- CQ OCTOBER 2, 2008 HONORABLE TOM HENNING, C~AIRMAN BOARD OF COUNTY COMMISSIONERS COLLIER COUNTY GOVERNMENT CENTER !.L\?.l'~(;N T~~?_NER BUJI,r.I~~G NAPLES, FL 34112 DEAR CHAIRMAN HENNING: FLORIDA STATUTE 197.502 STATES THAT THE COUNTY SHALL MAKE APPLICATION FOR TAX DEED ON ALL CERTIFICATES ON PROPERTY VAWED AT $5,000 OR MORE ON THE PROPERTY APPRAISER'S ROLL, EXCEPT DEFERRED PAiMENT TAX CERTIFICATES, AND MAY MAKE APPLICATION ON THOSE CERTIFICATES ON PROPERTY VALUED AT LESS TP~ $5,000 ON THE PROPERTY APPRAISER'S ROLL, TWO YEARS AFTER APRIL 1 OF THE YEAR OF ISSUANCE OF THE CERTIFICATES. A SUMMARY OF TAX CERTIFICATES SO INVOLVED AS OF SEPTEMBER 30, 2008 FOLLOWS: 2003 CERTIFICATES - TAX YEAR 2002 INITIALLY ISSUED - MAY, 2003 189 REDEMPTIONS, CANCELLATI ONS & T.O.A's 181 BANKRUPTCY -0- DEFERRED -0- 8 2004 CERTIFICATES - TAX YEAR 2003 INITIALLY ISSUED - MAV 2004 137 " INITIALLY ISSUED - MAY, 2008 1 REDEV-PTIONS, CANCELLATIONS & T.O.A' oS 124 BANKRUPTCY -0- DEFERRED -0- 14 2005 CERTIFICAT!:S - TAX YEAR 2004 INITIALLY "SSUED - MAY, 2005 12 REDEMPTI ONS, C';NCELLATIONS & T. D..~' s 11 BANKRUPTCY ..0- DEFERRED -0- -.----- $ 10,979.45 10,820.30 -0- -0- $ 159.15 $ 3,418.57 921.84 3,184.61 -0- -0- $ 1,105.80 $ ~c,., . 98 90;.5.58 -0- -0- -~ 1. 30 COURTHOUSE-BLDG.C-1 . NAPLES. FLORIDA 34112.4gg7 M.V''N.colliertax.-:om 2006 CERTIFICATES - TAX YEAR 2005 INITIALLY ISSUED ~ MAY, 2006 INITIALLY ISSUED - MAY, 2008 REDEMPTIONS, CANCELLATIONS & T.D.A.'s BANKRUPTCY DEFERRED 167 1 155 -0- -0- -- 13 THE AFOREMENTIONED REMAINING TAX CERTIFICATES ARE IN OUR VAULT. SINCERELY, ,~;t:~ GLC/rej CC: JEFF KLATZKOW - COUNTY ATTORNEY./ Item hJc.":Cif<2 24. 2:JC'9 e. 'AS $ 4,656.67 4,292.84 4,517.07 -0- -0- 4,432.44