Southampton Village wants to invest in own tax liens


The Southampton Village Board is hoping the village can make up for some of the interest income it expects to lose this year by investing in its own tax liens—the encumbrances imposed on property to secure delinquent tax payments.

Southampton is earning only 1.6 percent interest on its cash in the bank, said village treasurer Stephen Funsch. But the village can earn a whopping 12 percent on tax liens, he said.

At the Village Board meeting on Thursday, officials said they were under the impression that there is about $300,000 in outstanding village property taxes. Board member Paul Robinson suggested the village buy the tax liens itself, rather than selling them off to private investors.

Mr. Funsch said Tuesday that after checking with the village tax receiver he confirmed the figure is just $180,000. The amount is the total of the outstanding village property taxes that were due July 1, 2008.

Sometimes property owners are short on cash, and in other cases, they are second-home owners who just were not paying attention to their property tax, Mr. Funsch said.

The liens are sold by lottery to professional investors or ordinary citizens who attend the sale, Mr. Funsch explained. A chip is pulled out of a bag for each lien. When someone’s chip is pulled, he or she has the option of buying the lien or passing on it. The liens could be too expensive, or too cheap, for the investors, he said.

Last year, one village lien was just $7, while another was $25,000, the treasurer said.

Mr. Funsch said whoever buys the lien is then entitled to collect the tax money and the 12 percent penalty for being late. The property owners typically pay off their liens by the following July 1, he said. If the taxes remain unpaid, the lien holder can exercise foreclosure rights on the property.

The village attorney was directed at last Thursday’s board meeting to investigate the legality of the village purchasing its own liens. If the village does hold a tax lien sale, Mr. Funsch said it will take place in Village Hall on March 10 beginning at 1 p.m.

New Air Packs

Newly sworn-in 1st Assistant Chief of the Southampton Fire Department Rodney “Chip” Pierson successfully lobbied the Village Board last Thursday to approve the expenditure of about $275,000 for new air packs for the fire department.

The assistant chief said the fire department would delay other capital purchases it had planned, because the new air packs take priority. Air packs provide firefighters with portable, breathable air, when they are faced with smoke or gas at an emergency scene.

“The packs that we’ve had for so many years are to the point of deteriorating,” Mr. Pierson said. He explained that the air packs break frequently. The parts, which are made in Sweden, are getting harder to come by, he said. The department’s current packs have lasted only six years, compared to the 10 years they were expected to, he said, adding that the new packs are used by nearby departments and have stood the test of time.

The new air packs are sturdier and include trackers, which can be used to locate missing firefighters, Mr. Pierson said.

The 55 air packs and masks will cost approximately $428,000, but after collecting $154,000 for trading in the fire department’s used packs, the total cost will be $274,466, Mr. Pierson said.

The village splits the costs of running the fire department with the Southampton Fire District, and Mr. Pierson said the district commissioners also gave their blessing to the purchase of new air packs.

Facebook Comments