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HomeMy WebLinkAboutNB 1 ASSESS DELINQ'S 07-06-93AGEN NEW BUSINESS NO. 1 b, rE: ~UNE 30· 3.993 7-6-93 Inter-Com TO: NILLIAM A. HUSTON, CITY MANAGER FROM: RONALD A. NAULT, D'rRECTOR OF F'rNANCE SUBJECT: REPORT ON ASSESSMENT DISTRICT DELINQUENCIES RECOMMENDAT ION: Receive and file. BACKGROUND: The City of Tustin has two 1915 Act Special Assessment Districts designated as AD 85-1 and AD 86-2. At the present time there are a total of seven separate fixed rate bond issues. The City is responsible for the administration, collection and payment of assessments that support the annual debt service for these issues. As of fiscal 1991-92 the total levy of assessments for both issues has been about $4.7 million. Per language in the Indenture of Trust for the districts, the City is committed to begin foreclosure proceedings within 156 days of receipt of notice of an assessment delinquency; this includes the separate installments. We generally receive a delinquency report from the County within 90 days of the installment period. We use these reports to generate delinquency notice letters that go out to each delinquent parcel owner that puts them on notice as to the City's responsibility to collect the assessment. To aid staff in · the district administration and delinquency monitoring we have contracted with Muni Financial Services (MFS). They have computer systems on line using the County parcel tapes that they use to monitor delinquencies and automatically generate the delinquency letters as needed. In the 6 % years since the first assessment district was formed, we've not had to foreclose on any property. We recently came very close on several parcels that were still owned by a developer and were delinquent for 1991-92 And 1992-93. The bank stepped in and brought the assessments current. CURRENT DELINQUENCY STATUS= I've attached a schedule of delinquencies for the two years 1991-92 and 1992-93 prepared by our consultants. The delinquency percentage of the total levy is relatively small. The statewide average for all types of special assessments is in the 5-10 percent range. We are well below that at 2.71 - 3.03 percent. We have asked the consultant to review the status of all delinquencies back to 1986 but, because this requires a manual search at the County, this will take several weeks. If staff determines that foreclosure is necessary on any parcel or parcels we will bring a full report to the City Council for their direction before we proceed. COMK8~8= Staff is presently reviewing alternatives t© our presen~ sys{em of' delinquency monitoring. Our consultant, MFS, has expanded-their scope of services to include more comprehensive-monitoring and follow-up of delinquencies and include the initiation of foreclosure if it should become necessary. They have added legal staff experienced in assessment district foreclosures that can handle all aspects of the process at the direction of the gity. A second alternative that warrants consideration is the County's proposed 'alterative property tax payment schedule, commonly known as the "Teeter Plan". Under this option the City could choose to receive 100 percent of the annual assessments and the County would be responsible for follow up on delinquencies. This alternative will be addressed in more detail in another agenda item but, does appear to merit further consideration. Director of Finance RAN:is Attachment a:deL ir~lnt ~ I. iJ ii