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APPROVE A RESOLUTION OBJECTING AND NOT CONSENTING TO THE PUBLIC SALE BY THE COUNTY OF SAN JOAQUIN OF REAL PROPERTY UPON WHICH THE CITY OF STOCKTON HAS LIENS OR OTHER RIGHTS TO PROPERTY TO PRESERVE CITY’S INTERESTS UPON THOSE PARCELS OF REAL PROPERTY
recommended action
RECOMMENDATION
It is recommended that the City Council approve a resolution:
1. Objecting and not consenting to the sale of certain properties which are subject to the County’s Power to Sell;
2. Preserving any City liens and other rights which it may have to property which are subject to the County’s Power to Sell; and
3. Authorizing certain City officials to send a certified copy of the resolution to the San Joaquin County Treasurer-Tax Collector and San Joaquin County Board of Supervisors.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purposes and intent of the resolution.
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Summary
The City is required to object to the public sale of properties conducted by San Joaquin County for the purpose of preserving City liens recorded against those properties, as well as preserving any other rights the City may have in a property. These rights can include, but are not limited to, Code Enforcement liens, Administrative Services utility liens, and regulatory agreements and deeds of trust securing certain property owner obligations by the Economic Development Department through its various programs. To conform with the California Revenue & Tax Code, the City must send the County a certified copy of a resolution adopted by the City Council objecting to a sale. This resolution provides a blanket objection to public sales to preserve the City’s respective interests and empowers City staff to submit a copy of the resolution as needed to object to the sale of specific properties.
DISCUSSION
Background
Several City departments record liens on properties for the purpose of collecting unpaid fines, fees, and utility bills as well as notifying potential buyers of enforcement actions and unsafe conditions on those properties. Additionally, the City records other instruments, like deeds of trust, against properties as a component of various programs to ensure compliance with program obligations and to protect the City’s financial interests.
Present Situation
From time to time, the San Joaquin County Treasurer-Tax Collector issues a public notice to the City, identifying certain parcels of property that are subject to the County’s Power to Sell and have been authorized by the County Board of Supervisors for sale at a public auction at a date, time, and location determined by the County. This notice requires the City to serve a written objection to preserve its liens and other interests upon those parcels of real property identified in the notice. Without this objection, the City’s liens, and other interests on those parcels of real property, would be cancelled as part of the sale and the City would only be entitled to a portion of the proceeds deposited in the delinquent tax sale trust fund. By objecting to the sale, however, the City’s liens, assessments, or any rights which the City may have to the property are not affected by the sale of the property and the City can undertake efforts to collect the full amount of the lien.
Currently, City staff provide the County with a written objection in the form of a letter, stating that the City objects to the sale of the properties to the extent the City’s recorded liens or other interests would be extinguished and providing a list of all applicable properties containing City liens and interests. However, staff has determined that this method of objection may not completely satisfy California Revenue & Tax Code section 3695.
While the County has thus far accepted the City’s method of objection to the public auction sales, it would be prudent for the City to develop a policy to wholly address the Revenue & Tax Code. Therefore, the City will require a resolution adopted by the City Council objecting and not consenting to the sale of any properties containing City liens or upon which City has other interests. Because the San Joaquin County Treasurer-Tax Collector does not conduct these public auctions at regular intervals, and because the notice provided to the City may not always provide sufficient time for staff to prepare a staff report and present this item to the City Council before the scheduled public auction, it is neither feasible nor economical for staff to request a resolution each and every time the County provides notice of a public auction. Instead, staff is requesting that City Council approve a resolution which provides a blanket objection to the sale of properties upon which the City has recorded a lien or possesses other interests and authorizing the City Manager to take appropriate and necessary actions to carry out the purposes and intent of the resolution, including directing appropriate departments to specifically object to the County sales as appropriate.
FINANCIAL SITUATION
Adoption of this resolution will solidify continued collection of General Fund/Other Revenues for various City Departments when properties are sold.
Attachment A - Resolution Tax Sale