TOWN COUNCIL
TOWN OF SOUTH WINDSOR
MINUTES Page 1 May 17, 2004
TOWN COUNCIL – Regular Meeting
Council Chambers – South Windsor Town Hall
Members Present: Mayor Edward Havens
Deputy Mayor John Pelkey
Councillor William Aman
Councillor Deborah Fine
Councillor Judith Paquin
Councillor Elizabeth Pendleton
Councillor Muriel Yacavone
Also Present: Town Attorney Barry Guliano
Assistant to the Town Manager Judy Hall
Absent: Councillor Thomas Delnicki
Councillor Matthew Streeter
Town Manager Matthew B. Galligan
(Note: There was no Work Session this evening.)
Mayor Havens called the regular meeting to order at 8:00 p.m.
5. Public Input - None
6. Environmental Health & Safety Message - None
7. Adoption of Minutes of Previous Meetings None
8. Public Petitions - None
9. Communications from Officers and Boards Directly Responsible to Council
- None
10. Communications and Reports from Town Manager
Mayor Havens, referring to a request he had made of Town Attorney Guliano, asked him to use this time to bring the Council up to date on the “tax liens sale” the Town had sought “Proposals” on.
Atty. Barry Guliano started off by stating that the Resolution passed, last Council meeting, was only to go ahead with “Requests for Proposals” to determine the extend of interest by outside companies in purchasing those tax liens, and for how much.
ITEM:
10. Communications and Reports from Town Manager (Continued)
The Town Attorney went on to remind Council that it was not required to go forward with the sale of the tax liens—including the rejection of all bids after they have come in. He continued by saying that even if the Town chose to go forward, there would still remain an opportunity to remove certain liens through negotiations with the bidders. Atty. Guliano stressed that the Town Council has not committed, completely, to anything at this point.
Saying that the Town Manager was aware of interest “out there” because he had already been contacted by several people, Atty. Guliano felt assured that several bids would be received—after which, he added, it could be decided (1) if the amount being bid was sufficient; and (2) whether or not the Council wished to go through with the sale; and (3) whether the Town might wish to add or subtract properties from that list.
Since the Town Attorney felt that there has been some misunderstanding on the part of the public regarding the way this program works, Atty. Guliano asked for an opportunity, at this juncture, to explain the process.
Atty. Guliano said that there is a State Statute that allows Towns to sell the tax liens they have (real estate taxes that are owed by residents). After the taxes have not been paid for one year, the Town, he said, places a “lien” against the real estate in an effort to recover that money. It is those liens, according to the Town Attorney, that the Town is seeking to sell to a third party.
Continuing, Atty. Guliano said that this “third party” (which is a private company) would pay “up front,” to the town, a lump sum of money for whatever liens it has been decided are going to be sold. Traditionally, he added, you do not get 100 cents on the dollar; however, the advantages are that the Town gets its money “up front;” and it doesn’t have to “chase the money.” Once the private company has purchased those liens, they can treat them as though they were a Town—i.e., they can foreclose on the lien; they can conduct a tax sale; etc., in order to recover on those tax liens.
Once the Town has sold those liens to a third party, it no longer has any “say” in what happens to those liens, according to Atty. Guliano. And, he added, the company that purchases those liens would continue to obtain 18% interest on the
ITEM:
10. Communications and Reports from Town Manager (Continued)
unpaid taxes until those monies are recovered. Another reason companies may wish to purchase these delinquent taxes, he added, is because owning them puts the purchaser in “first position” when it comes to collection through foreclosure, tax sale, etc.--ahead of the bank, the mortgage-holder, and all other debts on the property. This, he concluded, was the reason a company would be interest in purchasing these tax liens.
The advantages and disadvantages for the Town when following this process, according to Atty. Guliano, were mixed. The advantage, he said, was that it meant “instant cash;” rather than chasing after a delinquent taxpayer, you get money up front. The disadvantage, he added, was that the Town did not get 100% of its money up front.
Atty. Guliano explained that when the amount owed was a large sum, it might be in the Town’s best interest to sell the lien—even for a lesser amount. However, he added, when the amount owed was “small,” it might be in the Town’s best interest to attempt to enforce the liens on our own.
Again, the Town Attorney emphasized the fact that the Town is not bound to turn over any particular property to the private company; however, once the lien is sold to the company, it’s out of the Town’s hands. Another point he wished to make was that even if the Town sold the tax liens, it only pertains to past taxes due on the property--obviously, he added, taxes are still owing on that property every year; and those taxes the Town would still own and control.
The Town Attorney then said he would entertain any questions the Town Council may have.
Mayor Havens, stating that there may be “a name or two” Council might wish to remove from the list to be sold asked if it would be better to remove them before a proposal is accepted, or after the delinquent taxes are sold. Atty. Guliano said that as long as Council was certain of the names it wished to remove, it would probably be best to remove them now rather than after they are sold. To wait, he added, would probably require negotiations with the purchaser.
Mayor Havens next asked who determines which names or properties were to be removed from the list; and added his suggestion that it might be cleaner if the names were removed prior to the Town’s requesting proposals.
ITEM:
10. Communications and Reports from Town Manager (Continued)
The Town Attorney replied that the “Town” determines which tax liens to remove from the list; and, yes, it would be better to remove those liens prior to seeking “Requests for Proposals.”
Councillor Aman asked what would happen if all of the tax liens on a particular piece of property were sold prior to July 1 when the new tax bill goes out, when the owners pay on that new tax bill where would it be going—in the past, those monies were always applied to the property’s oldest unpaid taxes. Secondly, the Councillor also asked where, in a priority list, is the Town on a July tax bill behind the ones we have already sold—in other words, if the property was already foreclosed on, and there was not enough money to pay off all the taxes.
In answer to the Councillor’s second question, Atty. Guliano said that the position that the new taxholder would have would be the same one that the Town would have had—so, since they step into the Town’s shoes, that would be in front of the Town because old taxes are paid before new taxes are paid.
As to the Councillor’s first question the Town Attorney stressed that all of this would be set up in whatever agreement is reached with the winning bidder. The Town, he added, could have whatever terms it wished in the contract that the two parties are willing to agree to. The Town Attorney expected that if the money is paid to the Town, it would be applied to taxes that are owed to the Town—the other taxes, he said, are not owed to the Town.
Councillor Pendleton, pointing out that she was new to the Council, asked the Town Attorney to explain to her (1) how the Town got to the point where taxes have not been paid for 5, 10 years; (2) has the Town done anything about the back taxes during that 5 or 10 year period; and (3) do we “save them up for a lump sum for a tax sale?
Atty. Guliano said that the Collector of Revenue’s Office has control over that issue; and, frequently, will enter into tax agreements with people who are, for instance, out of work; have medical expenses; etc. He added that, under the Statutes, the Collector is empowered to make payment arrangements so that as long as some payments are being made they can forego other remedies against the particular property-owner.
ITEM:
10. Communications and Reports from Town Manager (Continued)
Atty. Guliano then spent some time explaining that there comes a time when it is not only to the Town’s advantage to seek these delinquent taxes, but is to the property-owner’s advantage as well. He went on to discuss the advantages to the property-owner of not allowing their tax delinquency to go on and on at an interest rate of 18%. He pointed out that, at those interest rates, the property-owner could end up with no equity left in their property.
The Town Attorney mentioned alternatives for the delinquent taxpayer such as taking whatever equity remained in their property and, perhaps, buying a condominium or a smaller house; or looking into the “reverse mortgages” currently being offered by banks and other financial institutions.
Councillor Pendleton asked, if the Town chose to execute its own procedure for collection of these delinquent taxes at the 18% interest rate, what would be the Town’s procedure? How long would it take? Is it a difficult process?
Atty. Guliano reminded her that the “one piece of the puzzle” no one had, as yet, that would be very helpful to know when deciding which avenue to take, is “how much is going to be offered for those liens?” If the Town is offered enough, he said, it makes more sense to “sell” the liens—thus shifting the “downside” of enforcement to someone else rather than the Town.
Conversely, if the Town is “giving up too much” (such as an assurance of receiving 50 cents on the dollar), Atty. Guliano felt the Town may consider doing its own enforcement. In answer to Councillor Pendleton’s further inquiry, Atty. Guliano assured her, and the rest of the Council Members, that they would have the “best information available” as soon as the Town Manager and he had received it—at which time, the Council could then decide the course of action it wished to take.
Deputy Mayor Pelkey asked if, following receipt of the Town’s letter, any of the delinquent taxpayers had come forward to pay their taxes, or set up a payment plan. Atty. Guliano pointed out that this sort of result would go through the Collector of Revenue’s Office. However, he added, there was some hearsay that following receipt of the letter, some delinquent taxpayers have set up payment arrangements.
ITEM:
10. Communications and Reports from Town Manager (Continued)
Deputy Mayor wished the public to know that the Town has worked with “some of these people, in some cases, for many years, on some sort of a plan”—and this is why they are now on the list of delinquent taxes to be privately collected.
The Deputy Mayor asked the Town Attorney what protection the Town would have in the case of a house worth $200,000, on which $100,000 in back taxes was owed, and in which $100,000 in equity remained —should that house burn down and “fire insurance” had been allowed to lapse. Now, he added, the house is only worth $50,000—what protects the Town.
According to the Town Attorney, the Town does not assume there’s going to be any insurance to cover anything—so, when we look at a piece of property we don’t use the “whole value” of the house and the lot—but only “what will the lot bring?” And, in South Windsor, he added, the lot would go for quite a bit.
Councillor Yacavone asked how many residents have not paid their taxes. Atty. Guliano said that the list provided to the Council at the last meeting had approximately 30 properties—which included both commercial and residential properties. He added, however, he did not know if their inclusion depended upon a period of time, rather than the amount owed—i.e., taxes that were delinquent over a certain number of years.
Mayor Havens asked if the Requests for Proposals had gone out as yet. The Town Attorney said he did not know; however, the Assistant to the Town Manager said she thought it had.
11. Reports from Standing Committees - None
12. Reports of Temporary Committees - None
13. Communications and Petitions from Council
Councillor Aman said that Councillor Delnicki, who was absent this evening, had asked him to mention to the Town Council that he is authoring a Resolution for the June 7, 2004 Town Council meeting that would take the additional Revenue received from the State and add it to the “Revenue” side of the Town’s Budget—the purpose of which would be to reduce the amount of taxes that people have to pay in the upcoming year. Councillor Delnicki wanted the other Members to know of his intentions prior to 6/7 so that it would not be a surprise.
ITEM:
13. Communications and Petitions from Council (Continued)
Councillor Fine reported that on May 11, she, Mayor Havens, and Councillor Aman had attended the “Eugene Police Service Awards” ceremony at the High School. The recipients of those Awards were: the “Citizen Award” went to Anthony J. Odierna (Founder of the Making America Great Involves Commitment (MAGIC) Club. The “Student Award,” Councillor Fine reported, went to Sania Mahmood, a Senior at South Windsor High School.
Mayor Havens asked Judy Hall, Assistant to the Town Manager, to see that Mike Gantick or Fred Shaw were present at the next meeting to address several questions with regard to refuse collection—particularly, what can be put out the day of the collection.
Deputy Mayor Pelkey reported on the success of the evening of Recognition of our Volunteer Board and Commission Members. He said that approximately 196 of these Member volunteers were present.
Councillor Pendleton thanked the Members of the Patriotic Commission for presenting what she referred to as a “wonderful Armed Forces Day Celebration” on Saturday evening. She described the events that evening; and then took time to thank Town staff for their work on the fireworks at the Armed Forces Day celebration; and, particularly, for their work on the ”Eagle Terrace” at Veterans’ Memorial Park.
14. Public Participation - None
15. Consent Agenda - None
16. Unfinished Business
A. Resolution Appointing a Rate Maker for Fiscal Year 2004/2005
BE IT RESOLVED that the South Windsor Town Council hereby appoints Town Manager Matthew B. Galligan as Rate Maker for Fiscal Year 2004/2005.
Was made by: Councillor Aman
Seconded by: Councillor Delnicki
The Motion was: Approved, unanimously
ITEM:
17. New Business
A. Discussion Item: “Benefits for Businesses” – South Windsor Recreation Department
Ray Favreau, Recreation Director, explained that he had come before Council in March to briefly propose “Benefits for Businesses”. The intent, he said, was to recognize the fact that our local businesses provide “tremendous sponsorship dollars” to the Recreation Department; as well as dollars through advertising in the Department’s program brochure. He added that the Department “constantly relies on these businesses to donate goods and services” to help keep the Department’s expenses down, and to support the Department’s Special Revenue Fund.
Because many businesses in Town are very “good neighbors,” Mr. Favreau had suggested that the Town think about putting together a program that recognizes these donations; fosters a better relationship with the business community; hopefully, creates a “selling point for economic development;” and, most importantly, broadens the Town’s customer base.
Referring to information provided to the Council in their recent packet, Mr. Favreau explained that this revised version of what had been proposed in March included changes he had made addressing the questions and concerns the Council had voiced in March. Basically, however, the only substantive changes that were made, he said, was (1) to “tier” the program; (2) better identify the definition of “Owner” of a business; and (3) propose a program for the “Employees” of these businesses.
He then went on to explain these changes or additions, in detail. (See attached “Benefits for Businesses Initiative.”)
One important factor that Mr. Favreau stressed was that business Owners, and their families, could be accommodated in all programs if the Town sticks to the “Tier” program. However, he continued, the Recreation Department would have a difficult time accommodating everybody if it included all the employees. The employees, he said, could be accommodated in programs that do not impact general attendance, enrollment, or registrations by the Town’s homeowners.
ITEM:
17. A. (Continued)
Mayor Havens then asked what the current cost was for an annual swimming pass to the VMP Pool. Mr. Favreau provided the following annual fees for family passes for residents of South Windsor; and for Owners and Employees of a South Windsor businesses, as follows: $140 for a resident’s family pass; $280 for a non-resident annual family pass; and $140 (the same as for a resident) for the Owner or Employee of a South Windsor business, and their families.
Mr. Favreau stated that he truly believed that many employees would now pay the $140 for the annual family pass to the Pool—where, previously, they would not pay the $280 non-resident fee. He added that large corporations such as DST Output were very interested in this program because they have indicated that many of their employees are just waiting for this offer.
Mayor Havens agreed with Mr. Favreau that not only was this proposal a great “relationship builder” with the business community, but that it was also a “tremendous” revenue stream that, at present, wasn’t being tapped. Questions then followed from the Town Councillors.
B. Discussion Item: Proposed Tax Assessment Agreements with O&W Heat Treat; ElectroMethods; MASS-CONN; and Satellite Tool
(Marjorie Anthony, EDC Chairperson, to discuss)
Mrs. Anthony distributed letters on each of the above listed firms containing Resolutions from the Economic Development Commission approving a “Tax Partnership/Abatement for – O & W Heat Treat, Inc.; ElectroMethods, Inc.; and MASS-CONN Distributors CPL, Inc.
The Chairman then went through the Development Proposal for each of these companies, which explained what the company proposed to build; what they intended to spend on the project; and the Town’s terms associated with the Tax Abatement Proposal.
Councillor Aman expressed concern with the present “tax abatement program,” stating that the original intent of this program was to, preferably, draw companies from out of State to South Windsor. He said he did not see
ITEM:
17. B. (Continued)
that developing; and, in his opinion, out of the three applications before Council this evening, he only saw one that met the original intent of the program—that being MASS-CONN Distributors. He concluded with the statement that he felt the “guidelines” for receiving a tax abatement were being interpreted “very loosely” at this time.
Mrs. Anthony disagreed with Councillor Aman—saying that the EDC has been accused, for many years, of being primarily interested in luring new businesses into Town using the tax abatement tool—rather, she continued, than being interested in offering this program to existing businesses in Town—businesses, she added, that have been here in Town for many years, and are expanding.
C Resolution Approving the Transfer of $18,810 from Salary Contingency to the Police Technical Services Full-Time Salaries Account
BE IT RESOLVED that the South Windsor Town Council hereby approves a transfer of $18,810 from Salary Contingency Account Number 1910-9015-390 to Police Technical Services Full-time Salaries Account Number 1211-2140-110, to fund the payout of accrued sick time to a retired Police Officer, in accordance with the terms of the Union Contract.
Was made by: Deputy Mayor Pelkey
Seconded by: Councillor Fine
The Motion was: Approved, unanimously
C Resolution Approving a Refund of Property Taxes to One (1) South Windsor Taxpayer
BE IT RESOLVED that the South Windsor Town Council approves a refund of property taxes to one (1) South Windsor Taxpayer, the total of said refund being $485.82, and as shown on attached Exhibit A.
Was made by: Councillor Fine
Seconded by: Deputy Mayor Pelkey
The Motion was: Approved, unanimously
18. Passage of Ordinance - None
ITEM:
19. Communications and Petitions from Council (Continued)
Councillor Pendleton, referring to a letter received from the Chairman of the Board of Education, Robert O’Connor, began to ask about the distribution of the $78,000 surplus in the Board of Education Budget. However, before proceeding further, Mayor Havens interrupted to inform the Councillor that no action was being taken at the present time on this matter.
Town Attorney Guliano then asked for a few minutes to address the Council. Atty. Guliano then referred to a previous discussion where he had brought to the Council’s attention the e-mails received in regarding the Town’s litigation with the Manchester Mall over the Appeals over Evergreen Walk.
One of the results of the discussion at that Council meeting that evening, he continued, was that The Hartford Courant did an article on the discussion, and Atty. Guliano had received a telephone call from both a “reporter” in California, and a “lawyer” in California, who had advised him that General Growth (the Manchester Mall) is involved in litigation in California which is very similar to the situation here.
The Town Attorney said that he has asked the California parties for any documentation they have; and they have since sent that documentation. He said he has not, as yet, gone through it all. Atty. Guliano also referred to the deposition of Scott Miller, a Chicago lawyer, who had signed the verifications that had allowed The Manchester Mall to intervene in all of these actions. He added that there were some serious questions with regard to the affidavit he had signed. Now, however, according to the Town Attorney, two days before the deposition was to go forward, Manchester Mall withdrew its Appeal in that particular case.
20. Executive Session - None
21. Motion to Adjourn
At 9:45 p.m., Deputy Mayor Pelkey moved to adjourn. The Motion was duly seconded; and approved, unanimously.
Respectfully submitted,
Patricia R. Brown, Clerk of the Council
Attmt. (Exhibit A.)
| 
