Saving Lives, Dollars, and Families’ Homes

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eBlog, 6/27/16

In this morning’s eBlog, we explore the signal change set to occur this week with the consolidation of San Bernardino’s Fire Department into that of San Bernardino County—a critical step to saving capital and operating costs, as well as earning new revenues—and, likely, saving more lives. The consolidation marks the successful execution of this key provision in the city’s plan of debt adjustment. Next, we turn to view the success of Wayne County’s apparently successful efforts to sharply reduce tax foreclosures in Detroit—a vital fiscal effort to restoring the city’s property tax base.

The Sharing Economy. Implementation of a key provision in San Bernardino’s plan of debt adjustment is slated to happen this week when the city’s 137-year old fire department will be taken over by San Bernardino County—producing an additional $7 million to $8 million for the bankrupt municipality, according to the city’s projections—with those estimates calculating savings from the economies of scale offered by a larger organization as well as the associated new parcel tax, which will be $148 per parcel in FY2017—and increasing by up to 3 percent each year. Because the annexation involved subsuming the city’s fire department being annexed into an existing fire protection district that already had a 3 percent tax, the tax was automatically triggered for city residents—unless 25 percent of city residents had submitted protest forms by last April 21st—the threshold to trigger a vote. Thus the San Bernardino County Fire Department will officially assume responsibility for San Bernardino’s fire, rescue, and emergency medical services this Friday, with the actual personnel changes going into effect on Sunday, July 3rd. The consolidation will involve about two-thirds of the city’s current fire personnel taking positions in the county — and an equal number of county firefighters transferring into the city. But that appears to be just the tip of the iceberg: Technical support changes have been ongoing for months, fire rigs have been reconfigured to communicate with the county communication center, and officials have met regularly to ensure a smooth transition, and, of course, the replacement of labels on the vehicles themselves has already been underway.

Trying to Foreclose on Tax Foreclosures. Wayne County Treasurer Eric Sabree expects as many as 18,000 properties will be headed to the annual tax foreclosure auction this fall, with the vast majority in Detroit—which seems like a large number until one recognizes it would mark nearly a 36 percent drop from last year’s 28,000, leading Mr. Sabree to note: “Collections are up all over the county, including Detroit. That’s a good sign. But people are still struggling. We have to stay vigilant.” Over the last year, Mr. Sabree’s office has partnered with a number of nonprofits, neighborhood leaders, and Detroit Mayor Mike Duggan’s office to reach out to delinquent owners, including mailings, personal visits and workshops. Homeowners with tax debt can still enter payment plans with the Treasurer’s office until Thursday. Of those properties headed to foreclosure this fall, 8,000 are estimated to be occupied. Half of those are renters, according to Treasurer Sabree, and the rest homeowners. Wayne County officials attribute the marked decline in part to new payment plans which sharply reduce interest rates for many homeowners from 18 percent to 6 percent, as well as assistance available to homeowners through the Step Forward Michigan program. Those interest rate reductions, however, expire in June; consequently he.is pressing the Michigan Legislature to extend the program. This month officials with Loveland Technologies visited nearly 9,000 homes believed to be occupied and surveyed about 1,800 occupants: the company was able to help 256 residents get on payment plans; a key finding by Loveland: of the nearly 2,000 homeowners they visited, 38 percent said they were unaware the property was in foreclosure.

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