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Commissioners likely to approve tax notes

County Treasurer is preparing to make municipalities whole on back property taxes.

March 22, 2013
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Kent County commissioners are all but certain to continue an annual tradition this week by agreeing to let Kent County Treasurer Ken Parrish borrow up to $35 million through short-term notes.

Parrish will use a good portion of those dollars to buy tax-foreclosed properties from all the county’s taxing jurisdictions to make those municipalities whole on their delinquent property taxes.

Last year, the county issued $28.5 million in notes, and Parrish paid those off with funds from the tax-collection process, including the fees and interest the office charged for handling the foreclosures. Parrish said the entire collection process takes about 25 months.

Commissioner Dick Vander Molen said it’s a good process that makes every taxing unit whole and it alleviates the burden of the county’s 30 cities and townships from having to collect those back taxes. “Sometimes we don’t get credit for what we do,” he said.

The county’s Finance Committee gave its blessing to the borrowing last week.

Parrish said state law doesn’t mandate that a county buy the properties, but the statute does give a county the right to do that and an overwhelming number do.

“There is one county that doesn’t do this,” he said.

The state law goes back to 1893.

Once the Treasurer’s office buys the properties, the parcels will go on the foreclosure list. Last year, 309 properties made the list, and Parrish has said he expects roughly the same number will be on it this year. “We’ve been running about 91 or 92 percent being collected by the local units,” he said of the property taxes due each year.

Then the foreclosed properties will go to the annual auction, which will be held this summer, most likely at DeVos Place. Bidders bought a record number of properties — 160 — at last year’s August auction. The sale netted the Treasurer’s office $1.6 million.

Also last summer, the Kent County Land Bank Authority bought 44 properties from the county prior to the tax sale for $422,000 to push the total take to more than $2 million. The county needed $1.9 million in revenue last year to make itself whole and was able to do that after the auction.

A second auction was held last October. It’s known as the scavenger sale because the parcels have a minimum starting bid of $1. All but nine of the remaining properties were sold then. That sale gave the county an additional $360,000 in revenue. So the sales process netted the county about $2.4 million.

“We were actually made whole after the first auction with the combination of the land-bank purchase,” said Parrish last year. “It certainly is the best one in the last four or five years … but it could very well be the best total sales since we’ve been doing the property auctions.”

Tax-delinquent properties went into forfeiture status March 1 and will go into foreclosure April 1 if the taxes aren’t paid by then. State law requires the county to add $175 as a title search fee, $20 for recording fees and an additional 6 percent interest to a delinquent tax bill.

The tax-foreclosure list is usually made public around the middle of April.

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