11:15 A.M. - (a) Consideration of Presentation of Deficit Tax Default Land Sale Letter and Memo; (b) Discussion of Potential Impacts to Pending and Future Tax Defaulted Land Sales

This item addresses the financial implications of Tax Defaulted Land Sales (TDLS) that have resulted in a deficit, meaning the sale price was less than the total amount owed in taxes, penalties, and interest. The Auditor-Controller's office is presenting a memo and a repayment schedule for affected jurisdictions, including the City of Clearlake, various fire protection districts, school districts, and other special districts. These entities are owed a total of $2,138,558.88 from Sales 160-162, with a 3-year repayment schedule outlined. The situation arises partly because Lake County does not have a low-value ordinance to remove bills too low to justify collection efforts, leading to accumulated penalties and interest on less desirable properties. The county's adoption of the Teeter Plan in 1993, which distributes property taxes based on the levy rather than actual collections, means the county absorbs delinquent payments and penalties. However, the Teeter Plan generally excludes assessments and direct charges, creating a deficit when TDLS fall into these categories. Recent litigation and state intervention have led to an increase in deficit sales, prompting this repayment discussion.