Fort Walton Beach Council minutes — 05-25-2010 regular — reading text

on Lot 1 in Grand Oaks only. Mr. Bolduc stated that the City Attorney provided him an e- mail concurring with Mr. Lorenz and recommended acceptance of the settlement offer of $ 5, 000. On February 23, 2010, the City Council was presented with a request to settle the lien on Lot 1, Grand Oaks, at which time Council instructed Staff to have Mr. Lorenz prepare a history of the events on the case supporting his recommendation for presentation before them at a later date. Mr. Bolduc reported that on May 6, 2010, Mr. Lorenz received a second settlement offer for Lots 2 and 7 of Grand Oaks, in the amount of $ 2, 500 for each property, for a total of $ 5, 000.00. Therefore, Staff requests City Council authorization to follow the recommendation of Mr. Lorenz and accept the settlement offer of $ 5, 000 to release the liens on Lot 1, Grand Oaks, in Destin; and $ 2, 500 each to release the lien on Lots 2 and 7, Grand Oaks, in Destin, for a total of $ 10, 000. 00. However, Mr. Bolduc noted it is completely up to Council whether or not to accept the offer(s).  155 Regular Council 5/ 25/ 10 CODE ENFORCEMENT SETTLEMENT— FLORIDA PLACE CONT Mr. Lorenz explained that after the liens had been placed on the properties, the owner began transferring lots that she owned in Destin to buyers, and that three of those transactions appear to be insured by title insurance companies. The decision was to contact these title insurance companies to make a claim, and that is why there are offers from First American Title Insurance and Westco Title Insurance. Mr. Lorenz noted the issues involved in litigation including the economic downturn and how it affects residential foreclosure, and the high cost of foreclosures when title companies are involved. Mr. Reeves expressed his concern that the offer from the title companies are minimal considering the amount of the lien in the amount of $ 240,000 against the owner of the properties. Mr. Reeves stated his feeling that the presentation by Mr. Lorenz contained a lot of unknowns and feels better clarification could have been given by Mr. Lorenz. Mr. Lorenz stated he is only making a recommendation to accept the offer; if Council wants to proceed with foreclosure he will move forward with the entire amount of the liens, but the litigation would be expensive and he is providing the ups and downs to this type of litigation. Mr. Lorenz explained the courts have not been sensitive to the issue of litigation, and noted there is a homestead issue involved. Mr. Lorenz also stated that in his opinion the statute is not written correctly and is not clear. Mr. Reeves believes that when this issue was discussed previously, Council had requested a counter- offer be given to these companies so it could be discussed later, but he did not see any mention of that. Mr. Lorenz stated he was not aware of any counter -offers that he was to make, and that this is the first time he has come before Council in regards to these issues. Mr. Rynearson noted Council discussed the settlement offer at their meeting of February 23, 2010, and at that time rejected the $ 5, 000 offer and requested a push -back letter be sent to First American Title stating rejection of the offer, and that Mr. Lorenz be present to discuss the litigation. The Mayor questioned whether Mr. Lorenz was instructed to send a letter to First American Title. Mr. Bolduc responded he did not ask Mr. Lorenz to send any letter, that it was his understanding that Council wanted Mr. Lorenz present to respond to questions to determine whether or not to proceed with litigation. Mr. Bolduc apologized for his misunderstanding of Council' s request. Mr. Holmes stated his frustration that at the time of the sale of the properties, a title search was performed but the liens were not discovered and the City was not notified by the title company, and now the City is asked to accept an offer well below the amount of the liens. Mr. Reeves moved to suspend Roberts Rules of Order for the remainder of this issue and during discussion of Item 14.2. Mr. Holmes seconded motion and it carried unanimously with Holmes, Reeves, Nabors, Patterson, and Rynearson in favor (gossom absent, Seat 4 vacant). The Mayor advised Council they can 1) accept the settlement offer, 2) not accept the settlement offer and present a counteroffer, or 3) not accept the offer at all. Discussion continued that the settlement offer would not be enough to cover the cost of administrative fees, construction fees to demolish the buildings on the property, or Mr. Lorenz's time to attend tonight's meeting; and that there is a suggested schedule of mitigation percentages contained in the City's Code of Ordinances that can be followed to determine fee and fine amounts to be paid. Mr. Lorenz emphasized there appears to be three other lots that, to his knowledge, do not have title insurance, and it is his understanding that Council is only talking about releases on the three lots covered by the title insurance, and not the other lots, and a decision would have to be made in the future on whether to pursue collection against the three lots that do not have title insurance. Council confirmed they were only taking action on the three lots covered by the title insurance. 156 Regular Council 5/ 25/ 10 CODE ENFORCEMENT SETTLEMENT— FLORIDA PLACE ( CONT) The Mayor asked for public input. There was none. Mr. Nabors moved to direct Staff to work with Mr. Lorenz to prepare a counter offer based on the mitigation schedule contained in the City's Code of Ordinances for the properties located at 205 and 207 Florida Place SE. Mr. Reeves seconded motion and it carried unanimously with Holmes, Reeves, Nabors, Patterson, and Rynearson in favor (gossom absent, Seat 4 vacant). CODE ENFORCEMENT SETTLEMENT - 651 POWELL DRIVE NE Settlement Agreement for Liens on Code Enforcement Fines at 651 Powell Drive NE. Mr. Bolduc presented background of the case, stating that in November of 2007 a house fire destroyed a majority of the single family home at 651 Powell Drive leaving it uninhabitable. The property owner was unable to continue to reside in the home and over the following months she and her children worked with the insurance company to resolve the issue of whether to raze the structure or rebuild it. Mr. Bolduc continued that after a series of courtesy notices and re- inspections of the property, the Code Enforcement Board issued an Order I in February of 2009. On March 13, 2009, an administrative fee of 325. 00 was imposed and fines in the amount of $ 250.00 per day began accruing, and on September 24, 2009, a letter of intent to foreclose was sent by the Code Enforcement Board to Mr. Lorenz. Mr. Bolduc reported that in February 2010 the structure was removed and the remaining violations were removed; however a total of $ 650. 00 in administrative fees and $ 83, 250. 00 in fines had accrued. The son and the caregiver of the property owner provided a letter requesting the City settle the fees and fines for a total of $ 1, 650. 00, and Mr. Bolduc informed that Mr. Lorenz recommends acceptance of the offer, citing reasons of homestead exemption and owner competence. Discussion included that the property is in compliance at this time; however, equipment remains on the property that could result in another code enforcement case, but that has not transpired at this time. The Mayor asked for public input. There was none. Mr. Nabors moved to reject the offer of $ 1, 650. 00 and to table discussion until sometime in the future. Mr. Rynearson moved a friendly amendment to an open -ended date no later than 60 days, or the Council meeting of June 22, 2010. Mr. Nabors stated he would not accept the friendly amendment. The City Manager advised he would update and provide additional information to Council at their June 22 meeting. The City Attorney advised a motion is still needed whether to accept or reject the offer. The City Manager questioned why a motion was needed since the item is being continued to June 22, when he provides additional information and Council will be in a better position to accept, reject, or amend the offer. The City Attorney advised the original motion is to table the discussion and that is what needs to be voted on. Mr. Nabors moved to table the discussion. Motion died for lack of a second. Mr. Reeves moved to continue the item until the Council meeting of June 22, 2010. Mr. Patterson seconded motion and it carried by a vote of 4 to 1 with Reeves, Nabors, Patterson, and Rynearson in favor and Holmes opposed ( gossom absent, Seat 4 vacant).  157 Regular Council 5/ 25/ 10 MAYOR/COUNCIL COMMENTS ( CONT) The Mayor stated he also attended the Police Memorial; he attended a Broadway Concert in the Auditorium; received good reviews on the Golf Club from members of a golf tournament that was held there; the Friends of the Museum volunteers received an award; he attended the Air Force Special Operations Awards Ceremony at Hurlburt; announced Billy Bowlegs will be arriving on June 3; announced the Museum' s Last Scourge of the Gulf summer exhibit; and reminded everyone of the Special Council Meeting on budget policies on June 1 at 5 pm. INSTALLATION The City Attorney conducted the Oath of Office for Mike Minich, Seat 4. ADJOURNMENT There being no further business, the meeting adjourned at 7:45 pm. APPROVE C) J MAYOR: ATTEST: CI Y CLERK Ive Completed: 5/ 28/ 10