LD 851 (HP 602) "An Act To Require the Return of Excess Funds by a Municipality That Forecloses on Real Estate" Sponsored by Representative Elizabeth Dickerson.

On March 4, at the agenda setting meeting, I was sitting down at the tables with council and city staff, looking at Resolve #18.

It goes a little something like this:

"Authorizing Expenditure of Reserve Funds: MacDougal Building Asbestos Abatement

Be it Hereby Resolved by the City Council as Follows:

THAT the City Manager is hereby authorized to expend up to $21,000 from the City Land Sales Reserve Account to cover the expenses of the asbestos abatement work, tank removal, and other miscellaneous associated costs at the former MacDougal School building on Broadway.

Sponsor: City Manager"

The resolve is followed by a memo from Tom Luttrell, who reports there is a balance of $71,000 in the Land Sales Reserve Account, and that he recommends that the asbestos abatement money be drawn from the Land Sales Reserve Account in order to avoid strain on the General Fund Account.

None of this sounds too out of the ordinary, and if some intrepid explorer were to venture into the city records room 50 years hence, I doubt that any red flags would be raised. It sounds a mundane exercise in civic financial matters, this transferring of monies from one account to pay for an expenditure in another account.

That is, until one considers where the money for the transfer came from.

Before I tell you, I want to be fair. The staff of the city of Rockland are very helpful and caring people. I have seen city staff do amazingly creative things to help residents deal with all sorts of challenging situations. Councilors care, too. We have done whatever we can to help people who have hit upon hard times, often for the first time, and after a lifetime of contribution to the community. We've figured out ways to help people get their sewers unstuck, we've organized payment plans for property taxes, and we do whatever we can to help a homeowner who is facing… foreclosure. There. I just dropped an F-bomb.

Not bank foreclosure on a mortgage, but foreclosure by the city on a property due to tax or sewer lien.

Despite all the help that city staff and council extend to property owners, sometimes, a property will go to lien. A property owner does have one more chance after the lien kicks in. There is a state statute that allows for reconveyance. Reconveyance is a fancy word for giving something back. For example, if the city takes a property for taxes, the city can give it back if the former homeowner gets the taxes get caught up within a certain time. And, the city works very hard to try to make that happen.

But sometimes, it just doesn't happen. Sometimes, the city ends up with a property that has foreclosed automatically due to non-payment of sewer or property tax, and if not reconveyed, the city is now the owner of the property and it must be sold.

And that is where the money in the Land Sales Reserve Account, in large part, comes from. And that is why Resolve #18, though seemingly pedestrian, is something I can't just let pass by without a fight.

Wait, you ask. You mean, the city keeps the excess money left over from the sale? That's right. Once the expenses of noticing the former owner, the legal expenses, and any other filing fees are paid, if the property sells and a profit is realized, that profit gets rolled into the Land Sales Reserve account.

Is that legal?

Yes, it is, simply because Maine state law is silent on the matter. State law is not silent on a bank's handling of the same matter. For example, if a bank forecloses on a property, it may not keep any excess revenue. But, Maine state law has no specific language guiding a city or town if, after a tax sale, a profit is realized. The city of Rockland has always chosen to keep that money, and now, it is being proposed that some of that money, which was most likely gained by the sale of a foreclosed home, will be used to offset the strain on the city's general fund due to an asbestos abatement project,  which, incidentally, was supposed to be paid for from a grant that never materialized. In other words, money that was kept from a foreclosure is now being used to pay for the running of the city.

I don't think that's right, and I haven't thought so for many years. And that's one of the reasons I decided to run for state legislature.

And that is why, on Feb. 28, I was standing in the well of the House of Representatives, asking other representatives to sign my bill. I am finding support, but some of my colleagues and former legislators are also warning me there could be a real fight from the lobbyists on this one. That's all new for me: I'm learning that I am probably the least cautious politician that ever lived, and I have also learned that when I exit the House chamber, very few lobbyists seem to want to talk to me. I don't know if that's a good thing or not. Occasionally a lobbyist approaches and has something to tell me that is very helpful, such as, today, a woman from the Small Business Administration told me that she helping get word out about another bill I have drafted, and for that, I am truly thankful. So I guess the jury is out on that one. I think I will apply a slogan I learned a long time ago to my new life with lobbyists: "Take what you like and leave the rest." (Politely.) And, I will continue to rely on the people of District 47 to tell me the real deal.

But let me wrap this up and tell you the real deal about revenue that has been acquired through tax lien. The truth is: It's just not right.

My bill, LD 851, is entitled "An Act to Require the Return of Excess Funds by a Municipality That Forecloses on Real Estate." And I am proud to say Sen. Ed Mazurek is my lead co-sponsor in the Senate.

The bill was referred to the Judiciary Committee March 5 and will soon be scheduled for a public hearing.

I will keep you abreast of that date, if you would like to write a letter to the committee, or come to testify. You can go to my website, too, at elizabethdickerson.com, and sign up to receive email updates.

Please consider supporting this effort. Yes, it means that there could be potentially less revenue available for the city in hard times, but, is this the right way to gain revenue? I think not, and I hope you will agree.

Concerning public hearings on the biennial budget over the next couple weeks:

I invite all concerned residents to please come to the state house and testify in order to oppose these harmful cuts that, if implemented, will create a huge cost shift on to town and municipalities and cause a huge spike in property taxes. It is extremely important for voices to be heard.

Public hearings in Room 228 State House:

— Cuts to Education, including the shift in teacher retirement costs to municipalities: Monday, March 18, at 1 p.m.

— Cuts to Maine’s Drugs for the Elderly Program: Thursday, March 28, at 1 p.m.

In addition, there will be two off-site hearings for those unable to make it to Augusta. The first will be Monday, March 25 in the Brewer area (exact location to be determined). The second will be on Monday, April 1 in southern York County, possibly in Wells.

All hearing dates and schedules will be posted here as they become official.

Rep. Elizabeth Dickerson, D-Rockland, serves in the State House for District 47, which includes all of Rockland and part of Owls Head. She serves on the Marine Resources Committee. She is also a member of the Rockland City Council. She works as a computer science teacher at Oceanside High School.