SHIRLEY — In November 2009, the Tax Collection Committee asked Special Town Meeting voters for a $52,000 loan help them collect back taxes dating back to the 1950’s and totaling over $1 million.
At the selectmen’s meeting Monday night, assessor Ron Marchetti, who headed the committee, presented a status report that was all good news. A short version with visuals will be presented at the Annual Town Meeting.
The committee — which consists of Marchetti, tax collector Holly Haase, treasurer Kevin Johnston and principal assessor Becky Caldbeck — focused on process, Marchetti said, and with so much money to recoup, it involved “many, many people.”
At entry level, “up to tax-taking,” payback started with a $200,000 improvement in cash flow over last year, Marchetti said. In addition, overdue taxes from 2009 were secured. In all, 18 people who owed a total of $53,000 to the town are now on payment plans. “That’s the lowest it’s ever been,” he said of the annual tax shortfall.
The next step in the process is foreclosure. “There was never any money for that,” Marchetti said.
The oldest delinquent tax bill on the books dates to 1956. “We said the town did not carry out due diligence” to clear those cases he said, with $1.3 million owed on 130 parcels of land. That’s why the committee asked for the $52,000, $44,000 of which was for legal fees; $4,000 was for tax-taking expenses in the tax collector’s office. The rest, or most of it, was for system enhancements in the treasurer’s office, which handles foreclosures.
Just five months later, 66 of those 130 parcels are “in process,” Marchetti said. That number far exceeds the committee’s target of 22 parcels. And the million-dollar summit gets closer all the time. “We’re half way there,” he said, with $656,882 “in process.”
Cash in from the effort totals $113,430 so far, most of which is back taxes. The remainder is for unpaid sewer charges. Marchetti said $63,849 of that money is coming back to the town via payment plans over two years. But if any of the taxpayers miss a payment, the deal is off and the property is forfeited. To date, the tax attorney has $479,601 worth of property slated for foreclosure, he said.
Marchetti marveled at the success of the effort. “In November, I believed $52,000 would net 22 parcels, but we did way better,” he said. Early on, the committee decided to go for “low hanging fruit” first, but the next “batch” will be harder to reach. “We try to be sensitive.”
Linking unpaid taxes to permits and licenses made all the difference when it came to collecting recent back taxes. The new get-tough policy prohibits anyone whose tax bill isn’t paid up from taking out new permits or licenses or renewing existing ones.
Two years ago, only the building inspector and zoning board refused permits to applicants whose taxes were not paid up. Now, with every board that issues such documents is tuned in to the same purpose, the policy “did the trick,” Marchetti said. “That has never happened before.”
There’s more good news. Originally, the committee envisioned a $250,000 expenditure for collections and foreclosures, Marchetti said. Now, it may be only half that amount, thanks to a tax work-off helper who, for $10 per hour, did some of the research an attorney would have billed the town $110 to perform. The net savings were $100 per hour.
Marchetti said he couldn’t be more pleased with the success of this long-overdue venture. “The process is working very well right now,” he said.
Chairman Andy Deveau wants to see as much of the reclaimed tax money as possible funneled into the stabilization fund after free cash is state-certified.
Selectman Enrico Cappucci said that phrase hasn’t had a dollar value for years. “This is the first year we’ve even talked about free cash,” he said. “We didn’t have any.” Now, for the first time in a long time, the board will be able to put money into town coffers rather than take it out.
“That’s a great point,” Marchetti said. The recession cost the town key people and services because there was no money put aside to deal with it. Next time, he and the selectmen have said, they want the town to be better prepared. “Let’s be sure we have enough to weather the next storm,” he said.