M E M O R A N D U M 06-101

TO: MAYOR PRO TEMPORE McLAY AND HOMER CITY COUNCIL

FROM: MARY L. CALHOUN, CMC, CITY CLERK

DATE: JUNE 6, 2006

SUBJ: COUNCIL'S DIRECTION REGARDING CERTAIN PROPERTY TAX DELINQUENCIES WITHIN THE CITY OF HOMER

Received notification on May 3, 2006 of the following delinquencies and possible foreclosures, redemption periods expired June 5, 2006. The Borough Finance Department, Delinquent Accounts was contacted on June 6th regarding satisfaction of delinquencies.

Council needs to decide if you wish to pursue acquisition from the Kenai Peninsula Borough of any or all of these parcels. An Ordinance would be presented to the City Council for acceptance of these foreclosed parcels and for designation as public purpose, undesignated or for resale.

1. Record Owner: Alice S. Smith 173-690-10-8(01), delinquent $715.56, amt to redeem $394.88 by June 5, 2006 parcel is located on Diamond Creek Place, in the annexation area. Zoned Rural Residential. Land value is $22,000.00 per KPB. Eagle View Subdivision Amended Lot 4.

2. Record Owner: Lary G. and Brenda J. Albertson 179-030-34-1(01), delinquent $2,582.03, amt to redeem $1,353.34 by June 5, 2006 parcel is located on East End Road close to Mariner Drive. Zoned Rural Residential. Land value is $22,600.00 and Structure value is $87,600.00 per KPB. Metes and Bounds description.

3. Record Owner: Andrew R. Amso Et Al 179-202-15-5(01), delinquent $5,607.70, amt to redeem $1,970.79 by June 5, 2006 parcel is located on corner of Ocean Drive and B. Street. Zoned General Commercial One. Land value is $41,400.00 and Structure value is $205,200.00 per KPB. Bayview Subdivision Lot 133.

4. Record Owner: Gary W. and Patricia Richardson 173-594-44-1 (01), delinquent $2,584.46, amt to redeem $1,467.38 by June 5, 2006 parcel is located on Paint Brush Court, in the annexed area. Zoned Rural Residential. Land value is $50,600.00 and Structure value is $47,500.00 per KPB. Bayview Gardens Subdivision Addition N 1 Lot 44 Block 6.

Page Two

Memorandum 06-102

City Clerk

Requesting that the Borough deed the above foreclosed properties to the City would be the first case for us to use our new process: Homer City Code 18.04, Disposition of Foreclosed Properties - 18.04.010. Disposition of Foreclosed Properties. There is established the Alternative Funding of Depreciation. The Alternative Funding of Depreciation will consist of the City real property classified by the City Council for sale according to this chapter. (Ord. 05-11(S)§1, 2005.) 18.04.020 Transfer of Funds for Foreclosed Properties Classified for Public Purpose or Undesignated. Any such property that the City Council classifies, pursuant to HCC §18.06.042 shall be purchased by the transfer of funds from the General Fund or the General Fund - Fund Balance to the depreciation fund in the amount equal to fair market value of the property.(Ord. 05-11(S)§1, 2005.) 18.04.030 Proceeds Derived from the Sale of Foreclosed Properties. All real property received through foreclosure proceedings and designated for resale shall be sold pursuant to the provisions of HCC Chapter 18.12 and all proceeds, after satisfying delinquent taxes, assessments and/or City costs, shall be allocated to the funding of depreciation.(Ord. 05-11(S)§1, 2005.)

It is up to the City Council as to how these parcels are designated. Something to keep in mind with regard to the residences is that if the Council designates these for resale it does provide more opportunity for the former record owner to repurchase their parcel.

The Borough has changed its foreclosure process, wherein many borough tax foreclosures within a municipality were deeded to that municipality. It is also possible that any decision by the City Council requesting that the parcels be deeded to the City are not be timely enough due to the current Borough policy and process.

We have requested information from the Borough on any redemptions that were made by yesterday's, June 5, 2006, deadline. At the time of this memo no information has been received.

RECOMMENDATION:

Agree to satisfy the delinquent taxes and request that the Kenai Peninsula Borough deed the parcels to the City of Homer and that an Ordinance will be forwarded to the Council at the earliest possible date for acceptance and designation of said property.

Fiscal Note: Initially minimal. There are some funds that were designated for property acquisition/appraisals. There will be advertising and notification costs. The City will be required to satisfy the delinquent taxes. If designated for resale, an appraisal is required before the parcels may be sold.