Unpaid property tax bills cost Richmond County

At the end of last year, $22 million in unpaid property taxes remained on the books at the Richmond County Tax Commissioner's office.

Much of it will be collected, but a sizeable chunk won't. The reason: It's not worth it to the property owner to pay taxes on it, and it's not cost effective for the city to pursue collecting the money.

The largest amount of unpaid taxes is from real estate, totaling $14.7 million. Of that amount, $3.6 million has not been collected since 2009, making it officially delinquent and likely uncollectable.

Richmond County Tax Commissioner Steven Kendrick said he expects to collect much of the remaining $11 million in unpaid taxes that were billed last year. He said his office historically collects more than 99 percent of $140 million it bills annually, meaning that about $1.4 million will likely go uncollected.

Then there is the matter of unpaid personal property tax bills on items such as boats, business inventory and airplanes, which totaled nearly $7.8 million at the end of 2010. More than $1.5 million of that total has been delinquent since 2009.

That means at least $5 million in both real and personal property taxes are delinquent and likely not collectable. That total and the $1.4 million likely not collected from 2010 is a significant amount given the county's $9.4 million budget shortfall.

At the time most are due, Dec. 15, Kendrick's office begins the arduous annual task of deciding which of the year's past due bills to pursue. And targeted first, among 7,000 to 8,000 that typically remain unpaid, are those with the largest amounts due.

"We have to collect more money for the county, and the faster and more we collect, well, that's the way the county operates," he said.

Delinquent Tax Services, a private firm that assists with the process for a fee from the money collected, verifies titles to the properties submitted by Kendrick's office in batches of 300.

After warning delinquents that a lien can be placed on their properties after 30 days, the first set of liens goes out in February. The message usually gets through.

During January, the office was able to collect $7.4 million in taxes unpaid in December, including $3.5 million in taxes on public utilities.

By October or November, most "non-distressed" properties are sold or paid up.

"The ones that are not stay on our books as uncollected," he said.

Small and sometimes neglected parcels, typically found in blighted areas, are often deemed uncollectable because they're upside down -- the taxes and fees owed on them are more than the property is worth.

Increasing that cost often is another lien placed on the neglected property by codes enforcement to eliminate a public hazard.

It can add several thousand dollars in fees, making it even less appealing to a potential buyer.

Selling the properties by the county at a tax auction isn't free. The largest expense is advertising -- $20 per property for four weeks -- plus approximately $22 in fees, Kendrick said.

Delinquent Tax Services also charges fees each step of the process, including approximately $55 for background work, another $100 if the county begins the levying process and $175 if the property goes to auction. Those fees must be paid no matter what.

The costs lead the tax commissioner to make a "business decision" for the county not to take the property to auction, particularly if it doesn't sell the first time, he said.

"If you get a $2,000 piece of property with $4,000 worth of liens on it, what's the sense in taking it to the sale?" said Jack McAdams, the deputy tax commissioner for finance.

In many of those cases, Kendrick said his office has exhausted its remedies against the delinquent taxpayer, leaving the property to sit, incur fees and penalties but remain in the possession of its owner.

A unique position

Kendrick estimated there are "thousands" of prior no-bid properties and parcels worth less than their tax bills dotting Augusta, placing the city in a position unique to large urban areas in Georgia.

Among them is Screven County real estate investor McQue Boddiford's several dozen upside down properties left over from his 1990s buying spree at Richmond County tax sales.

He's quit paying taxes on them and is looking for help.

"Property I've wanted to keep, I've paid the bills, but there's no use dumping good money after bad," Boddiford said. "I'm hoping the county can sell it and get me out from under it."

For properties such as Boddiford's, they just move down the line on the tax rolls, accumulating liens and penalties. He owes $18,002.

Others, such as Southern Milling Co. on Twiggs Street, are both unpaid and too costly to demolish and potentially make more appealing to buyers.

Codes enforcement has demolished more than 1,000 properties over the past 12 years but can't find an affordable way to tear down the 100-year-old mill, which burned in 2008, Sherman said.

Southern Milling also owes unpaid taxes, penalties and fees of $36,161 dating to 2002, according to tax records, but the property has never been taken to auction because it's contaminated, McAdams said.

For those he takes to auction that receive no bids, Kendrick has used his "biggest bullet" to no avail. The property remains in the hands of its owner and the debts simply sit on the tax commissioner's books.

Touting a success rate of 90 percent, John Watson, the president of DTS who estimates his company has helped Richmond County collect hundreds of millions of dollars over six years, said there is little recourse against property owners who don't pay their taxes and whose properties don't sell at auction.

The liens show up on an owner's credit, but county governments can rarely afford to pursue garnishing wages of a delinquent taxpayer, Watson said.

Even Augusta-Richmond, which has the option to bid on a property when no one else does, rarely wants to do so "because then we have to take care of it," McAdams said.

"I don't think it can be understated, but a lot of money we don't collect is uncollectable," Kendrick said.

Nearly 22,000 unpaid real estate and personal property tax bills issued over eight years remained unpaid as of Dec. 31.

Among the unpaid real estate bills, nearly 80 percent are for less than $5,000. Forty percent are for less than $1,000.

Finding solutions

Ready solutions are not built into Georgia laws, but there are other options, particularly where an interested buyer exists.

Proving useful is the Augusta-Richmond County Land Bank Authority. Overseen by a board that includes Kendrick, Sherman, Planning Director Paul DeCamp and Administrator Fred Russell, the land bank buys properties and turns them over to buyers for private development, Russell said.

The land bank is willing to buy unwanted properties, clean them and return them to the tax rolls.

The land bank is the only buyer to have requested Kendrick hold a judicial sale, a costlier legal proceeding in which a judge sets the title to a property, he said.

"We would love it if the land bank would want all of them, but they don't," McAdams said.

The land bank shows approximately 115 properties with unpaid property tax bills on them, but those properties are about to be wiped from the unpaid register.

But the land bank only wants properties it thinks it can sell.

For the others, upside down and unsold at auction, Kendrick offers the suggestion that the county abate taxes or fees owed so that they might also return to the tax rolls.

It's a suggestion he'll eventually bring back to the Augusta commission after exploring the legalities of it, but asking the county to write off thousands of dollars in demolition and cleanup fees might be trickier, he said.

After 10 years working on delinquent taxes, Watson said he'd arrived at no other solutions when liens, taxes and fees are more than a property is worth at auction.

The problem is derived from old development standards, which cared little about lot or building size as people moved in.

Often the unwanted properties are unsuitable for much more than a driveway, he said.

"Unless there's some magic wand they can wave and sell the property for a dollar and set that precedent," he said.

 

Unpaid Real Estate Property Tax (as of 12/31/10)

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Unpaid Personal Property Tax (as of 12/31/10)

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Note: Data for this project was downloaded from the Richmond County Tax Commission and Richmond County Property Assessor's offices. Data collected is as of December 31, 2010.

The city's information on property owners' names and addresses came from the owners and property records. The data may contain incorrect information. Please report any errors to the city offices and The Chronicle will use the corrected data to update the database.

For the most current information about outstanding property tax, go to: http://gisweb.augustaga.gov/gisweb/default.aspx

From the map document you can enter owner or address or parcel number, go to tax bill, and form will provide the information. The Tax Commissioner’s office updates the database every night.

City aims to collect late taxes
Three overdue tax bills get paid
Delinquent properties up for sale
More late tax bills paid
Collecting taxes in Richmond County

HOW IT WORKS

- Tax bills are mailed in mid-September.

- Bills typically are due Nov. 15.

- A 10 percent late penalty is incurred if the bill is not paid by Dec. 20

- Warning notices are mailed out to those with outstanding bills in January.

- Liens are filed against the property in February.

- Continued failure to pay ends with sale of property on the courthouse steps before the end of the year.

WHEN IS A BILL CONSIDERED DELINQUENT? According to the tax office, all taxes unpaid after their due dates are considered delinquent, unless the owner is appealing the valuation or is in bankruptcy. Approximately 500 assessments remained under appeal from 2010 in January.

LATER DUE DATES: A handful of bills have later due dates, for several reasons. An owner might have done something to the parcel that altered its value after the initial bill was issued, or the property might have changed hands, prompting a new bill to be issued with a later due date.

-- Susan McCord and Sandy Hodson, staff writers

Highest individual unpaid tax bills

TAX YEAR OWNER TAXES DUE PROPERTY CURRENT VALUE

2010 BSF/BR Augusta, LLC $195,290 3000 Perimeter Parkway $16,364,660

2010 RDC Properties LLC $101,169 801 Broad St. $5,263,083

2009 Regency Mall LLC $89,511 1700 Gordon Highway $2,500,000

2010 RDC Properties LLC $77,606 753 Broad St. $4,000,000

2010 McKnight & Associates Inc.* $68,247 621 NW Frontage Road $6,705,979

2010 Development Authority of Richmond County $65,946 3137 Washington Road $4,984,411

2009 Augusta Biofuels LLC $60,760 1736 Lovers Lane $4,200,581

2010 Augusta National Inc. * $60,659 2604 Washington Road $53,100,599

2010 Augusta Biofuels LLC $56,440 1736 Lovers Lane $4,200,581

2008 BCC Management Group LLC $51,220 1249 Augusta West Parkway $3,121,088

* The bill for McKnight & Associates Inc. is not considered delinquent by the tax commission because it has been appealed. The bill for Augusta National Inc. was not delinquent because its due date hadn't been passed when The Chronicle ended its data collection on Dec. 31, 2010.

Source: Richmond County Tax Commissioner (data as of Dec. 31, 2010)

Personal property

Total outstanding: $7,845,992

Owners: 1,184

Owners who owe more than $50,000: 19

Owners with pending bankruptcies: 46

Real property in bills due Dec. 31

Manufacturing equipment and inventory: 1,431

Boats: 217

Business equipment: 100

Buses: 28

Planes: 18

Properties: 30

Source: Richmond County Tax Commissioner

 

 

Personal property taxes

Outstanding personal property

A look at the outstanding personal property taxes as of Dec. 31:

Tax Year Total bills Total due

2010 838 $6,234,380.06

2009 204 $340,904.35

2008 182 $265,750.67

2006 140 $165,153.06

2007 131 $174,530.34

2005 117 $237,585.69

2004 103 $203,122.12

2003 102 $165,798.59

Total $7,787,224.88

Source: Richmond County Tax Commissioner