Millions Falling Through Cracks

City Fails To Collect For Property Repair

July 13, 2005
By OSHRAT CARMIEL, Courant Staff Writer

In some respects, Hartford's licenses and inspections department is the emergency Martha Stewart.

Inspectors go out to unsightly properties, declare them dangerous or unattractive, then offer to help the hapless owners fix up the mess.

It's a public service program. But it's not supposed to be free.

According to a recent city audit, it's close to it.

Since the program began in 1993, the city has failed to collect on at least $9.2 million worth of repairs done on private property, according to a recent city audit. The amount is probably higher, the audit says, because the database keeping track of such things has some glaring errors and omissions.

"There are all sorts of inaccuracies that we identified, so we can't just draw a conclusion from it," said H. Patrick Campbell, the city's chief auditor. "We can't just say it's `X' dollars."

Officials in perennially cash-strapped Hartford say the problem is largely due to staff shortages and unrealistic expectations. But they say they're working to correct it.

This is the second audit of the department's property remediation program - and its related collection practices - in less than three years.

But the conclusion of this audit is much the same as the August 2002 report: The city, which sends crews to demolish fragile buildings, trim unsightly yards and detach sagging porches, has not been as vigilant in collecting on the services it provides.

Once the city orders emergency work done, officials have 30 days to ask the property owner for payment and, if payment is not received, to place a lien on the property. The lien creates a legal obligation to repay the debt when the property is sold.

Filing within 30 days guarantees that the city's liens get priority over every other debt against that property, with the exception of property taxes. Liens filed later are still valid, but they then become secondary to every other lien holder on the property.

The audit found that between June 2002 and June 2004, the city did $1.6 million worth of demolition and remediation work, using city employees and outside contractors. During the same period, it collected $429,000 in costs, some of them incurred in previous years, the audit said.

When it came to processing liens, the audit found that the licenses and inspections department did not file them in a timely manner, if at all.

During the two years examined by the auditors, the department failed to file liens for about $451,000 worth of work - or 34 percent of the cost of all remediation work done during those two years.

"In general we found that L& I [licenses and inspections department] management has not taken action to address the more significant exceptions and/or recommendations in our [2002] report," the 2004 audit says.

John Palmieri, director of development services, which oversees the licenses and inspections department, said the problems raised by the audit are serious, but correctable.

Part of the problem, Palmieri said, is a severe reduction of staffing in the licenses and inspections department - it lost at least 20 people, including the longtime director, in recent years to layoffs and early retirements - and an unrealistically short window in which to file a lien.

"There are all kinds of things that happen. Public works does a cleanup. They've got to get a bill to us that we can understand. We've got to prepare information so we can get it to the attorneys," Palmieri said. "It's a very demanding and burdensome requirement. I think we should have 60 days by statute, not 30."

"If we had 60 days instead of 30 days, I think 90 percent of the problem would go away," he said.

Sometimes the bills come in without details about the work done, Palmieri said. Sometimes they come in written on the back of a napkin.

Palmieri, who began his job with the city only at the end of the two-year audit period, said the licenses and inspections department now has a full-time staff devoted to the lien program. He said the staff, under the leadership of a new L& I director, will continue to refer the uncollected debt to collection agencies, work with contractors to get more detailed invoices and perhaps give property owners more opportunity to do the remediation work themselves.

In some cases, owners prefer that the city handle the matter. That's what Mary Phil Guinan decided in 2003, after her house was destroyed in a fire. Having a tough time reaching contractors to demolish her charred and skeletal Beacon Street home, she assumed that the city might be able to find a better (and quicker) deal.

Guinan's concern with the lien program was not the lien collection, she said, so much as the timing of the work and who might qualify for lien waivers.

The city did send crews to demolish her house - three months after she asked it to and two months after being cited by the city for not yet having razed the house.

It cost the city more than $30,000 to demolish Guinan's home and clean up the debris. Officials put several liens on her property that equaled that amount, perhaps a little later than 30 days, Guinan recalls.

"I felt that my lien may not have been [placed] on time," said Guinan, Hartford's former Democratic town chairwoman. "But whether it was on by 30 days or over was not something I was going to dicker over. They did incur that expense."

And Guinan, with some help from her insurance company, eventually paid it.

But what of all the millions in unpaid balances, some dating to 1993?

Palmieri said the city will aggressively work on the newer cases. But it might be realistic to recognize that the oldest, uncollected cases will be harder to recoup.

"I'm not sure it's going to serve our purposes to identify all liens that were delinquently placed or never recorded," Palmieri said. "We're not going to make much headway there."

"To continue to report that there's 8 or 9 million [outstanding] is probably not a fair portrayal," he said. "It may just be dated and not relevant."

A discussion of this story with Courant Staff Writer Oshrat Carmiel is scheduled to be shown on New England Cable News each hour today between 9 a.m. and noon.