DATE: February 11, 2005
TO: Mayor Hornaday and Council Members
FROM: Beth Wythe
RE: DISPOSAL OF FORECLOSURE PROPERTIES TO FUND DEPRECIATION
With a continued concern for the degree of unfunded depreciation which continues to grow from year to year, I have been searching for alternative sources of revenue which might be allocated to funding depreciation. As I considered the volume of property the City has received via foreclosure, it occurred to me that the intent of the property being conveyed through foreclosure is so the injured party (the City) would have a means of recapturing their losses.
It is my proposal that we modify the current ordinances addressing the handling of foreclosure properties to provide for the recapture of lost revenues as the primary allocation of these properties. To that end, I have drafted an ordinance to change the procedures from considering retention for reuse as the first course of action. Given the opportunity, there is always some department or committee that will find a use for the property.
I propose that the properties be placed for sale and if a department or committee wants to have the property allocated for retention, they provide a method for the estimated proceeds which would have resulted from the sale of the property to be set aside into the depreciation reserve.
Proper fiscal management requires the Council to take a stronger position regarding the proper fund balance for the depreciation account. We have to give something up in order to prepare adequately for the inevitable replacement and maintenance of our assets, and the sale of lands that were foreclosed to recapture lost revenues seems like an easy place to start.
Thank you for your consideration.
Fiscal Note: NA