Mt Pleasant News
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Wash Journal   Fairfield Ledger
Neighbors Growing Together | Jun 21, 2018

City Development Board to pay special assessment for Mt. Union community building

Jun 14, 2018
Photo by: Gretchen Teske The City Development Board agreed to pay $384 special sewer assessment for unincorporated Mt. Union's community building; however, because the payment is due Friday, June 15, the board will have to wait until the tax sale on Monday, June 18 to buy back the property.

By Grace King, Mt. Pleasant News

 

The City Development Board will pay a $384 special sewer assessment for the Community Building in unincorporated Mt. Union.

Henry County Auditor Shelly Barber approached the Development Board a couple weeks ago requesting they pay the special assessment for the community building as the building still is legally owned by the city of Mt. Union, despite it being unincorporated. Barber is hesitant for the county to take ownership of property not in the county’s name.

Mt. Union unincorporated in 2017. Although the city no longer has debt to pay off, a $105,000 plus interest and court fees dating back to February 2016 is owed to Dan and Linda Johnson from the unincorporated city of Mt. Union, who won a defamation case against the city in December 2017. The interest and court fees date back to 2016 because that is when the motion was first filed. The decision is currently going through the court of appeals.

There is $13,000 left in Mt. Union’s coffers from property sales last year that is in possession of the City Development Board, which met via phone Wednesday, June 13 to discuss Mt. Union. Barber said that if the Development Board is able to maintain control of the community building and sell it for $30,000, for example, that could be combined with the $13,000 to pay the Johnsons.

Barber is also waiting on the Development Board to give a final dollar amount for what is owed the Johnsons, which cannot be known until the appeals are settled. This is so she can charge the residents of Mt. Union a special assessment tax.

The special assessment for the building on East Lehew Street is due Friday, June 15, which Development Board administrator Matt Rasmussen said was a deadline physically impossible for the state to meet. Because the deadline will be missed, the building will be for sale online at the tax sale Monday, June 18. If it is purchased, the Development Board will have the opportunity to buy back the property, Barber said. The property can be bought at tax auction for the special assessment price of $384.

Tax sales give property owners three years to pay the individual back for the property they bought at a tax sale. Barber said people often buy property at tax sales because they can make money off it through interest accumulated.

The community building was not sold at the auction in Mt. Union in June 2017 when other property such as the city park and maintenance shed on South Crew Street were sold because of a lien against it with the Iowa State Bank. At the time, Barber expected the bank to foreclose on the community building’s deed and go to tax sale.

Had the bank foreclosed on the property, they would have been able to sell it for at least $22,000; the amount the city of Mt. Union borrowed to pay legal fees when they sued RUSS in 2016. The bank told Barber they didn’t know how to go about foreclosing on a government entity.

“Well then why did you loan the money is my thought,” Barber said in frustration, adding that the county is hesitant to take ownership of the property without a clean deed.

The Development Board will pay for the special assessment out of the $13,000 left over from auctioning off parcels of property last year. An additional $28,000 incurred from the auction last year went toward paying the city of Mt. Union’s legal fees back to the bank.

“Do you want to pay this assessment out of the money the board still has control over with the idea you’re trying to preserve the asset for future claims?” asked Emily Willits with the Department of Justice.

“The building needs to be sold,” Rasmussen answered during a City Development meeting over the phone on Wednesday, June 13. “The only way it can be sold is if this special assessment is paid.”

Barber said there are people interested in buying the building locally.

While the board did approve paying the $384, that price point will be a moving target in light of the tax auction. The board agreed to pay any additional funds needed.

Halverson and Willits also will research resolutions on how to dispose of the community building and bring those to the Development Board at their next meeting.

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