17 - Discussion regarding forgiving civil penalties on appropriate propertiesItem No. 17
Memorandum
TO: Mayor & City Council
Grayson Path, City Manager
FROM: Stephanie Harris, City Attorney
SUBJECT: Discussion of possible procedures to forgive BSC civil penalties on appropriate
properties.
DATE: August 10, 2020
BACKGROUND: As you are aware, for several years, whenever the Building and Standards
Commission would issue a demolition order, it would also assess civil penalties in the amount of
$1,000.00 per day on the property if the owner did not demolish the property in the stated time
period, generally 30 days. As a result, most of these properties now have civil penalties that with
interest far outstrip the actual value of the property, and thus, resale is very difficult. When resale
is difficult, it is difficult to get new structures built which would increase the taxable value of the
lots. In the last couple of years, Council has agreed to forgive these civil penalties on about 5
properties, three in 2020 alone.
STATUS OF ISSUE: The Code Enforcement Department and I are seeking guidance from the
Council as to how to proceed on the many, many outstanding civil penalties orders. I have been
working with Mr. Talley to compile a list of such orders and determine which of these apply to
properties that have been demolished and which might be appropriate for forgiveness. This is a
painstaking process, but to date, I have a stack of just over 50 orders on properties for which
forgiveness is most likely appropriate. This is apparently just a small portion of these outstanding
orders.
The City can continue to take these orders up on a case by case basis as owners and purchasers
bring them to our attention, or we could proactively start to forgive penalties in batches of 25 or
50 properties, at Council's pleasure. I will want to double check that forgiveness is appropriate
for each property before bringing them to you, but I could bring you a batch to forgive in a single
resolution on multiple 'occasions. In this manner we could remove barriers to resale ofae these
properties while more efficiently using Council's time. By appropriate, I mean a lot that had a
residential or other structure on it that either the owner or the city demolished, and that the accrued
penalties and interest outstrip the value of the property. Even within those parameters, there may
be extenuating circumstances that would mitigate against forgiving the penalties on any particular
property.
I do not propose that we forgive the actual demolition liens, but only the civil penalties on which
interest continues to accrue.
BUDGET: No discernable impact. I predict that Council would be forgiving civil penalties and
interest in the millions of dollars; however, the likelihood of ever collecting these penalties is
remote as they usually far exceed the value of the properties to which they are attached.
RECOMMENDATION: Discuss and provide direction to staff as to how or whether to move
forward on forgiving BSC civil penalties on appropriate properties.