HomeMy WebLinkAboutResolution 5868-01-2024 A Resolution
NO. 5868-01-2024
ADOPTING CODE COMPLIANCE DEPARTMENT'S LIEN WRITE-OFF AND
ADJUSTMENT POLICY AND FINDING THAT SUCH POLICY SERVES A
PUBLIC PURPOSE AND THAT ADEQUATE CONTROLS ARE IN PLACE TO
ENSURE THE PUBLIC PURPOSE IS CARRIED OUT
WHEREAS, the Lien Write-Off and Adjustment Policy serves as an update to the policy
governing Code Compliance Department's Lien Adjustment Policy, last updated in 2007; and
WHEREAS, the Code Compliance Department reviewed its 2007 Lien Adjustment Policy
and identified areas of the policy that were no longer applicable; and
WHEREAS, the goal of the update is to come into compliance with the City's Financial
Management Policies, Directives, Practicies and Procedures and find that the adjustments and
waivers of certain fees serves a public purpose; and
WHEREAS, the goal of the policy is to collect the unpaid out of pocket balance, promote
future land/structure improvements, improve safety/quality of life in neighborhoods, eliminate
future City nuisance abatement costs, and save tax-payer dollars; and
WHEREAS, the policy will be effective January 1, 2024;
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FORT WORTH, THAT:
1. The Code Compliance Department's Lien Write-Off and Adjustment Policy for the City
of Fort Worth, is hereby adopted, to be effective January 1, 2024.
2. The Code Compliance Department's Lien Write-Off and Adjustment Policy serves a
public purpose and that adequate controls are in place to ensure the public purpose is
carried out.
Adopted this 23rd day of January, 2024.�c�0� ���
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Janette S. Goodall, City Secretary ��� ° 411Q0 a
Standard Operating Procedures
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Code Compliance Department
Lien Write-Off and Adjustment Policy
Date Revised: January 1, 2024
A. Purpose
This policy recognizes that reasonable adjustments to outstanding liens and
charges serves a public purpose under certain circumstances. This broadly
includes:
• Unresolved liens that cloud a title and may hamper property transfers and
could impede development or home ownership; smoothing these processes
serves a public purpose.
• Older liens or liens with timing/proper party issues and for small dollar liens,
the process of attempting to enforce the lien may cost more taxpayer
resources than would be recovered if the lien were paid off; saving taxpayer
dollars serves a public purpose.
Therefore, this policy was constructed to establish guidelines for the adjustment of
outstanding liens and account balances owed to the City/Code Compliance
Department. This policy only pertains to liens and charges filed by the Department
for maintenance, abatement, mowing, board up, and/or demolitions on privately
owned property.
In addition, since charges and liens can span a number of years and include
multiple events, the City's general write-off policy may not always be applicable.
Therefore, this policy has also been constructed to address multi-year and/or multi-
event situations.
Reference: Administrative Regulation: C-12: Financial Policies, Directives,
Practices, and Procedures.
B. Adjustment Request Form
1. Consideration for an adjustment must be submitted to the Department using
an Adjustment Request Form (ARF). No adjustment action will be taken
on verbal disputes.
Dedicated to Creating a Cleaner, Safer and more Attractive City
2. The form must: (1) be from the current property owner or a legal
representative of either; and (2) describe the reason(s) why the fees should
be adjusted. All supporting evidence, documents and/or supplemental
information should be attached to the form at the time of submittal.
3. The Director, or the Director's designee, can accept an adjustment request
that is not on an ARF provided that the request is in writing and materially
contains all the same information.
C. Adjustment Request Considerations
The request must provide a statement and any supporting documents that
sufficiently explain the adjustment request. The Department shall only consider
the following adjustments:
1. No City documentation is available to support the lien or charge, or the
documentation is incomplete or invalid for any reason.
2. Tax foreclosure after the lien was filed.
3. The property owner was not aware that a lien was filed, e.g., a lien filed after
the sale date to the new owner.
4. Lien or charge filed on the wrong property.
5. Appraised property value is less than the total amount of the fee owed. See
the adjustment table in Section H.
D. Processing an Adjustment Request
1. When an ARF has been received, the Director, or Director's designee, shall
research and review all applicable information and documentation.
2. A decision by the Director, or the Director's designee shall be documented
on the ARF and supported by attaching additional documents where
required.
3. The decision shall include the reason for not making an adjustment or
approving an adjustment and the adjusted amount.
4. The ARF and supporting documentation shall be sent to the Finance
Director for final approval.
E. Fee Collections
1. Adjusted fees shall be collected within 30 days of the decision. The Director
or the Director's designee, can extend this period for exceptional
Dedicated to Creating a Cleaner, Safer and more Attractive City
circumstances including delayed sales of a property, short-term payment
plan, etc.
2. If the owner does not meet these deadlines, the fee adjustment shall be
voided.
3. An adjustment offer will not be reviewed again in the same year unless a
new charge/violation has occurred.
4. Where no fee adjustment occurs, the Department will first try to collect the
outstanding balance within 30 days. If that cannot be achieved, the
Director, or Director's designee, may approve a payment schedule based
on the owner's stated ability to pay. See Section F.
5. In collecting money over time, the hierarchy of money collected shall focus
on the following costs in the order listed:
(a) Actual expenditure realized by the City will be given the highest priority
for full collection.
(b) Fees associated with the day-to-day operation of the Department, e.g.,
Administrative Fees.
(c) Fees from interest.
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F. Payment Plan for Adjustments.
When the total adjustment amount owed to the City is more than an owner can
reasonably make in a one-time payment, the Director, or Director's designee, may
allow the individual to enter into a payment plan. Payment plan terms and
conditions are as follows:
1. Payment schedules are determined by the amount owed:
2. Payment schedules for a balance less than $1,500 will not exceed 12 months.
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3. Payment schedules for adjusted balances greater than $1,500 will not exceed
three years.
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4. On liens greater than $1,500, the Director, or the Director's designee, may approve
a payment plan of up to 60 months based on the owner's ability to pay.
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5. The property owner may request a financial hardship to receive a long-term
payment plan greater than 60 months when the outstanding balance is greater
than $35,000. Proof of hardship must be provided and can only be approved by
an Assistant City Manager.
Dedicated to CreatingCleaner,
a Safer and more Attractive City
6. So long as the owner makes payments in accordance with the approved payment
plan, interest accrued during the payment plan will be waived at the time final
payment is received and is approved by their financial institution.
7. Payment Plan Agreement: All payments must be paid in full by the end of the
scheduled payment arrangement due date. Failure to make or complete payments
as agreed will revoke the Payment Plan Agreement and future payment
arrangements will not be made.
8. Any new charges will need to be paid in full and will not be voided in the payment
plan process.
G. Payment Plan for Non-Adjustments.
At times the Department will receive a request for a payment plan on liens that are
in good standing. While an owner always has the option to pay what they can
each month, offering a payment plan that will get the lien paid off sooner is in the
City's best interest. In this respect, the Director, or Director's designee, can
approve a payment plan following the same criteria listed in Section F above.
H. Determining Reduction Amount based on Appraisal District Appraisal
At times, the Appraisal District value of a property will be less than the money owed
to the City. In this case, the following table has been adopted to reasonably
balance the collection of outstanding principle with supporting the sale/change of
ownership and/or development of the property to reduce future City abatement
costs, urban blight impacts and safety/quality of life considerations.
Step 1 Appraisal District property value must be less than the total amount
owed to the City.
Use schedule below to determine the method for reducing the total
Step 2 amount owed to the City, e.g., what percentage of the charge should
be collected.
Appraised All out of pocket mowing, abatement, Administrative Interest
Property Value board in /securin , and demolition costs Fee
$0 - $14,999 100% 33% 20%
$15,000 - $19,999 100% 50% 30%
$20,000 - $24,999 100% 66% 40%
$25,000 - $29,999 100% 75% 50%
$30,000 - $34,999 100% 85% 75%
$35,000 - Greater 100% 100% 100%
The adjustment schedule described above is to provide for a uniform, consistent,
and equitable means to resolve disputes and requests regarding delinquent liens.
Should an exception to the schedule occur, a detailed justification for the variance
Dedicated to Creating a Cleaner, Safer and more Attractive City
will be made in writing and approved by the Code Compliance Director, or the
Director's designee.
H. Lien Release
A lien may be released under the following circumstances:
1. All approved settlement fees are paid in full and the account is cleared
by the Revenue Department. No release of lien should be issued if there
are any charges left on the account, including interest; or
2. The lien is extinguished by operation of law; or
3. A lien or charge was issued in error, lack of documentation supporting a
lien or charge, or a lien or charge has been determined to be invalid.
Dedicated to Creating a Cleaner, Safer and more Attractive City
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i City of Fort Worth, Texas
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' � ������ ���� ���������~U Communication
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| U,�0���� ��. and Council ��^�" . ". . .^�" .^�����°^~. �
i OATE: 01D3/24 K8&C FILE NUMBER: M&C24-0055
} LOG NAME: 23LEN ADJUSTMENT POLICY
� SUBJECT
| (ALU Adopt Resolution Adopting Code Compliance Lien Write-Off and Adjustment Policy and Find that Such Policy Serves a Public Purpose and
that Adequate Controls are in Place 10 Ensure the Public Purpose iu Carried Out
kiu recommended that City Council:
1. Adopt the attached Resolution adopting the Code Compliances Department's Lien Write-Off and Adjustment Policy;and
2. Find that the Lien Write-Off and Adjustment Policy serves a public purpose and that adequate controls are in place to ensure that the public
purpose io carried out.
DISCUSSION:
The purpose of this Mayor and Council Communication (M&C)is to adopt a resolution adopting the Code Compliance Lien Wite-Off Adjustment
Policy,effective January i.2024, This change is necessary due to the updated Financial Management Policy Statements(FMPS)for Accounts
Receivable in October 2O28.
The newly adopted FMPS policy for Accounts Receivable limits adjustments to 60 days.Code Compliance Department has a unique situation with
mowing, boarding,nuisance abatement and demolition billing/liens in that these charges can accumulate over many years and can take even more
years ho fully collect.
While the Code Compliance Department has used an effective policy since 2007,with the current changes to the FMPS policy, it is necessary to
update the Code Compliance Department Policy and allow for more than 60 days of adjustment.
Over time,the Code Compliance Department has worked with various city council members to establish practices allowing the Director,or
Director's designee,to approve adjustments under established parameters and guidelines when, in the best professional judgment, it is
appropriate todnso. Fees are most often adjusted because of tax foreclosure,a lien was filed after a recorded sale of a property,a lien was filed
on the wrong property,City records were lost or the value of the property is less than the outstanding balance due to the City.
This policy is established because the Code Compliance Department recognizes that under certain circumstances reasonable adjustments to
outstanding liens/charges is needed and serves a public purpose.The Code Compliance Department,as a standard practice, does not waive out
of pocket expenses on any request. Instead,the attached policy provides parameters and guidance to the Code Compliance Department on
waiving and adjusting administration fees and some interest in order to collect the unpaid out of pocket balance and promote future land/structure
improvements, improve safety/quality of life in neighborhoods and eliminate future City nuisance abatement costs. Such adjustments serves a
public purpose and the policy provides adequate controls tu ensure that the public purpose iu carried out.
As an example case,a vacant lot with long-term ownership issues,could have up to 10 mowing liens. The average out of pocket cost 0u the City iu
$70.00a mow,or$708.U0total. However,each individual mow adds a$250.00 administrative fee(accounting for officer investigation time,case
management,required notices,billing and indirect administration)or$2,500.00(three times higher than the out of pocket City expense; however, it
also discourages property owners from having the City be their mowing contractor/debt service that they pay later). With lower value lots, itiugood
public policy 10 adjust a portion of the administration fee. The Department does not adjust fees for properties with higher market values.
This policy's goal is to ensure compliance with State Law,the City of Fort Worth's Code of Ordinances,save tax-payer dollars,and promote
development on properties that are burdened with the following issues:
° Older liens ur liens with timing/proper party issues;and
° For small dollar liens,the process of attempting to enforce the lien may cost more taxpayer resources than would be recovered if the lien
were paid off;and
° Unresolved liens that cloud a title and may hamper property transfers and could impede development or home ownership.
A Form 1295 is not required because:This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION CERTIFICATION:
The Director of Finance certifies approval ofthuu recommendations will have nu material effect on City funds.
Submitted for City Manager's Offieg-by: Valerie Washington 6199
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Orictinatinci Business Unit Head: Brandon Bennett 0322
! David 8. Carson 0338
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