September 21, 2019
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Bangor’s crackdown on long-delinquent taxpayers enters tougher phase

BANGOR, Maine — One man said he failed to set up a tax account after paying off his mortgage. Another said he lost his business, fell behind, and family illness prevented him from catching up. A woman said her husband handled the finances and she didn’t realize they owed money until after his death.

These are just a few of the reasons Bangor residents have given city officials recently to explain why they haven’t paid property taxes in more than a decade, in spite of receiving multiple past-due notices.

After years of letting these cases and others like it slide, the city is letting delinquent taxpayers know it is about out of patience.

In recent months, those who have overlooked, ignored or put off paying taxes for years have received warnings from the city saying it will take possession of their homes and land if they don’t pay up or make arrangements to do so. It’s a tougher phase of a crackdown that began a few years ago with Bangor taking possession of abandoned and derelict properties with matured tax liens.

The get-tough approach has worked in some cases.

During a recent meeting, members of the City Council’s finance committee backed deals with a pair of Bangor property owners who together owed 32 years worth of back taxes totaling nearly $100,000. Last month, the city reached agreements with three others who combined for 22 years of unpaid taxes amounting to $64,500.

Past due

Of the city’s roughly 11,000 taxed properties, 383 have liens against them for unpaid taxes or utility bills, according to David Little, the city’s tax collector. Of those, 145 have at least one matured lien, meaning that, legally, the city already owns them. It typically takes about 18 months of delinquency for a lien to mature.

During the past three years, the city has found 81 properties with taxes that are at least five years overdue.

In the past, the city hasn’t taken possession of homes or land with matured liens and didn’t put significant effort into ensuring people kept up with their taxes. As a result, some owners were able to rack up substantial bills.

The stance changed in 2013 when the council directed city staff to make efforts to collect payments and take over some long-delinquent properties when needed.

Since that push started, 14 owners have paid the city what they owe, and six are making incremental payments. The city took over 16 properties, five of which have been sold, usually to abutting property owners.

Early efforts focused on abandoned homes and vacant land — in most instances, owners were difficult or impossible to find, or just didn’t care whether they lost their properties. Now, the city is hitting the more complicated situations, dealing with delinquent occupied homes.

“Taking property for matured tax liens isn’t easy, nor should it be,” said Deb Cyr, Bangor’s finance director. “It requires a significant amount of effort from several areas — treasury, legal, economic development.”

Falling behind

“I feel bad, humiliated, ashamed of the situation,” said Robert Staples, sitting in front of the members of the city council’s finance committee on March 4, asking for a break. He owns a home at 38 Jowett St. — one that has 18 years of outstanding taxes totaling nearly $40,000.

He’d agreed to pay everything he owed in full, but wanted the committee to consider waiving about $5,000 worth of interest charges he’d accrued over the years. In all, that interest amounted to $16,500. He said he purchased the home in the 1970s for $24,000.

Councilor David Nealley agreed interest that substantial can seem like “usury,” but added “it’s that way for a reason” — so people don’t go a decade without paying.

The committee, at the recommendation of city staff, refused the reduction. They didn’t want to set a precedent by giving a person a break without good reason.

Staples has lived in Bangor for 40 years, and his house has been paid off since 1998. However, he told councilors, he didn’t replace his escrow account to continue his tax payments, so they went unpaid for the next 18 years.

“We as a society are getting away from the notion of consequences,” Bangor City Councilor Ben Sprague said in a recent email. “I get it if a person is struggling or has a tough year, but more than 15 years of willful delinquency is another thing altogether.”

Staples said he plans to take out a bank loan to pay off the balance of his back taxes. He claimed he tried to pay off the taxes in 2005 after his father’s death, but that the city at the time refused to accept payment unless it was in total. City officials couldn’t confirm whether that happened.

Little said a property owner facing a lien typically gets at least four separate notifications that they owe money. First is the annual tax bill that comes each summer. If they miss their payment, another notice goes out in March, notifying them of what they owe, as well as what they might owe from previous years.

The city typically starts its lien process in May, and will send out a “demand notice,” giving the owner 30 days to pay the balance before the lien becomes effective.

Around 17 months later, the city issues a foreclosure notice saying the lien is about to mature, after which the city will own the property. In the past, that’s where the process stopped and was repeated each year without the city taking steps to take possession of the property.

Recently, the city started sending “courtesy” notices stating that the city will take over the property if the owner doesn’t respond and attempt to reach an agreement to pay what they owe. Those letters are bringing people forward, city staff say.

Some delinquent taxpayers need to take a more phased approach to pay back the staggering amounts they owe.

“We work with people who are struggling,” Sprague said. “We come up with payment plans and workout agreements. But we’ve let others go far too long.”

Lucia Young lived in a Winter Street home with her husband until his death in 2012. The property, crowded with decades worth of folk art, has 14 years worth of unpaid taxes totaling nearly $48,000.

She told city staff that she only learned of the money they owed after her husband’s death. Now, it’s left for her to chip away at paying it.

Under the agreement she reached with the city, she’ll make a $2,000 to $3,000 payment, hand this year’s income tax refund to the city, and make $500 minimum monthly payments, with a relative offering to pay an additional $10,000 over the next 10 months. It will take years for Young to get caught up under that plan.

The finance committee approved that deal with Young during a separate meeting last month. Attempts to contact her were not successful.

Another workout agreement, Michael Cassidy’s plan to pay back $58,000 of outstanding taxes and utility charges accumulated over the past 14 years, will take about 13 years to catch up, according to Cyr. That’s among the longest-term paybacks the city has agreed to enter.

“If they miss two payments, we’re going to be back here having a discussion about taking the property,” Cyr told councilors.

Cassidy said his back taxes started accumulating after his business failed. Later, he lost his job. Now, a family illness is making it more difficult to keep up because of medical bills, he said.

Cassidy told the city he plans to file a hardship abatement request to offset some of the $20,000 in interest and fees that accumulated over the years.

Chipping away

With these and more workout agreements under its belt, the city is turning to its next group of delinquent properties. Owners of vacant land on Mill Street and Finson Road and a building at 1569 Union St. have until the end of April to respond to the city’s notices. The city is in touch with the owner of property at 419 Essex St.

Seven more owners of vacant land scattered across Bangor have until the end of May to pay or respond to the city’s notice. If the city doesn’t get answers, it likely will take all seven and try to sell them.

As the city’s tax and finance staff work their way down the list, they’ll begin chipping away at properties with shorter delinquencies, including many more occupied homes.

“We didn’t do our taxpayers any favors by not doing this earlier and allowing them to get further and further behind,” Cyr said. She encouraged people not to ignore their past-due notices or the city’s attempts to get in touch.

“We can’t help you if you won’t call us,” she said.

Follow Nick McCrea on Twitter at @nmccrea213.


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