NAUGATUCK — The borough has not held a tax sale in at least six years, but a few properties could go up for auction by year’s end.
In past years, when people were informed that property was on the brink of foreclosure, they often managed to secure loans to pay at least some of their taxes, Tax Collector James Goggin said. The continuing economic downturn has changed that.
“These people are finding it very hard to get that money now,” Goggin said.
Goggin’s policy is to send properties to auction when their owners have not paid taxes in the last five years. He sent out about 100 letters this year to those property owners, explaining the borough’s intent to take the recipients’ property if their taxes are not paid. Out of that list, 42 never contacted the tax office. Those properties in April were turned over to attorney Andrew Bottinick for collection, Goggin said.
“The other ones are making payments, or trying to make payments,” Goggin said.
Exactly one-third of the properties on Bottinick’s collections list are mobile homes.
To stave off foreclosure, delinquents must pay the monthly interest on their taxes, while paying off their oldest delinquent tax bill, Goggin said. Payments will not apply to later years’ bills until the earliest years are paid, Goggin said.
“The town doesn’t want to be in the real estate business, and the town wants people to be able to pay their taxes,” Goggin said.
The collections list does not include many of the residents and companies that owe the borough the most because their tax bills have soared based on their high assessments rather than the number of years they have failed to pay.
The borough’s biggest delinquent, First Hartford Capital Corp., owns property that was once home to Risdon Manufacturing Co., which left the borough in 2002. The company owes about $574,000 on land on Andrew Avenue and Scott Street. The borough began trying to foreclose on those properties two years ago and remains in negotiations with the company.
“In general, we want all taxes paid, but there are economic development concerns that need to be factored in,” Mayor Robert Mezzo said. “The economic development of that site will far outweigh the taxes that are owed.”
Some properties have been in arrears for about 15 years, but never went up for sale because no one would buy them and the fees involved in a sale would be a waste of money, Goggin said. Examples include pieces of land that developers still own after building subdivisions, which are too small to develop further, and the Laurel Park Superfund site, a former dumping ground for toxic industrial waste.
The borough auctioned off a mobile home in the Valley Mobile Home Park in 2006, newspaper records show. Goggin said the last tax sale he remembered involved a Phyllis Drive house a decade ago.
One dilapidated house at 1054 Andrew Mountain Road narrowly escaped a tax auction in March when the Board of Mayor and Burgesses voted to accept a payment of about $31,000 for the house, forgiving about $28,000 in taxes owed. The house belonged to a man named Otto Petereit, whose granddaughter moved in when he died and failed to pay taxes before she was evicted, Goggin said. Buyer Greg Baker offered $48,500 for the house, which included about $17,000 in fees and conveyance taxes.
Burgesses said they were in favor of the deal because they might not make as much from a tax sale and Baker could turn the property around, resulting in a higher assessment. Burgess Ronald San Angelo voted against it, saying he did not want to set a precedent of subjectively choosing which properties go to the auction block.
The borough budgets every year for a 96 percent collection rate and exceeded that last year, collecting 97.4 percent of taxes owed. Figuring in back taxes and motor vehicle taxes, Goggin said his department was on track to collect slightly more than the budgeted amount again this year.
Mezzo said he does not dictate policy to Goggin, who was elected to his post, but that he agreed with the tax collector’s approach.
“We have used the foreclosure process for tax liens as an absolute last resort,” Mezzo said. “If people are making even the most minimal effort to work with the borough, then there’s some respect for that, and willingness to understand that people are struggling.”