Village lots spat heats up again
 
Jeremy Nash News-Herald.net
 
An amended bill under consideration by the state legislature could create problems for Loudon County in its ongoing dispute with the Tellico Village Property Owners Association over hundreds of delinquent properties.

House Bill 2343, and its counterpart Senate Bill 1949, authorize a county to set aside an effort to take ownership of properties delinquent on taxes if the environmental and financial risks outweigh the value.

Per HB2343, a county mayor will have 90 to 120 days to evaluate a property to determine if it fits as an environmental and financial risk, and a county legislative body can file a petition for relief of the property in chancery court.
 
Senate Bill 54, which passed in 2014 and was sponsored by Sen. Randy McNally, R-Oak Ridge, allowed “a tax entity, when acquiring undeveloped or unimproved property at a tax sale, to transfer such property to a non-governmental entity for the purpose of satisfying in full any fees assessed by the non-governmental entity, as approved and negotiated by both entities.”
 
Commissioner Van Shaver said changes in wording with the current proposal could “completely preclude it helping us in any shape, form or fashion.”
“They used the word ‘and’ instead of ‘or’, and I know this sounds like a lot of hairsplitting but if you’ll run that sentence through your mind you’ll understand why that wouldn’t work with for us,” Shaver said. “It would say that if we got 500 POA lots, we could set them aside if it would create an environmental problem and a financial problem. Well that would preclude Tellico Village lots, they’re not going to have environmental problems. The initial language was that it would be environmental problems or a financial burden for the county.”
 
Shaver said an amendment made to the Senate version also added a sentence saying POA fees and dues could not be considered in determining whether they were a “financial obligation” to the county.
 
Per the bill, “any dues and assessments established through covenants and restrictions shall not be considered as part of the financial risks to be considered.”
 
“I think what it was, I think the person that represents the HOAs saw an opportunity to slide a sentence in there that would basically null and void the bill that (state Rep. Jimmy) Matlock (R-Lenoir City) and McNally passed two years ago,” state Rep. Kent Calfee, R-Kingston, said.
 
Calfee said the bill proposed two years ago stipulated that if a county took possession of property it would not have to pay POA fees. The amendment would potentially change that.
 
“We just can’t have that, and so we talked back and forth on the phone to Buddy Bradshaw and Van and Steve Harrelson and our people in Roane County and it just got totally out of hand, and we have a meeting Wednesday with the mayor from Roane, Loudon and Monroe counties, and we’re going to try to resolve this,” Calfee said Monday. “If not, I’m going to run the bill, I’ve amended it to take the line out that got put in the Senate because that’d be detrimental to Loudon County.”
 
Loudon County Mayor Rollen “Buddy” Bradshaw was scheduled to testify in Nashville on Feb. 24, but the bill was delayed until March 2. Bradshaw is expected to answer questions from the State and Local Government Committee.
 
A “conservative” estimate on Tellico Village POA assessment dues owed on delinquent lots is “upwards of $500,000,” noting the expenditure would be reoccurring.
 
“We’ve got so many communities that have the POA groups, that could get close to $1 million annually pretty quickly,” Bradshaw said. “... As long as they were in the county’s possession, the county would be responsible for paying those POA dues.”
 
Matlock said he believed the amendment would fail. If the House and Senate have different versions of the bill, it will go to conference.
 
“We’re in an unusual situation in Loudon County,” Matlock said. “What helps Tellico Village harms the county. What harms the county helps Tellico Village. So, we’re trying to come up with some kind of arrangement. ... The bill was actually — we don’t want the bill hijacked because it was something that Calfee needed for his community, and it’s unfair that somebody jumped in there and tried put something on it.”
 
Calfee introduced the bill because of a situation in Roane County where a burned building that “may” have been valued at $15,000 cost the county $600,000 to tear down. If the bill doesn’t revert back to its original state, Calfee said he would retract it.

Village POA reacts

A statement issued Friday by the POA said Tellico Village officials were “surprised” to learn of the county’s legislative actions because “the association has been offering for over a year to take back any Tellico Village lots that the county might end up with as a result of the delinquent tax sale.” Despite this offering, the statement says the county has not responded to the POA’s proposed agreement to take back the lots.
 
Per the release, the POA offered the county a settlement in January 2015 to accept any delinquent lots that initially revert back to the county.
“However, rather than responding, Loudon County has now elected to support the current legislation,” the release said.
 
The release notes the POA is “concerned” that current legislation doesn’t address the future disposition of tax sale properties, which could be considered “contrary to the long-term financial interests of both the county and the association.”
 
“However, the proposed legislation completely fails to include a mechanism to get these lots back into the hands of third-parties that would pay both taxes and assessments in the future,” the release continues. “These hundreds of Tellico Village lots would ultimately be rendered unmarketable because the tax liens on the property would continue to increase exponentially with no end in sight. This short-sighted process could ultimately deprive both Loudon County and the association of millions of dollars of tax and assessment revenue over the next decade.”
 
John Cherry, POA public relations manager, said Village property owners provide about $7.4 million in annual taxes in the county. Dues from about 405 lots would amount to $571,536 based off the POA’s current assessment fee of $117.60.
 
According to the release, the POA thinks a “minor clarification” is needed in order to explain what happens to a title and tax liens on a property should the county withdraw its bid on a property in a tax sale.
 
“The association has been trying to work through the legislative process to include this minor clarification to the legislation in order to preserve the marketability of these lots in the future,” according to the release. “Alternatively, the association remains committed to its prior offer to Loudon County to assume responsibility for these Tellico Village lots after the tax sale, which would make the new legislation unnecessary.”

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3/7/16