LAKE COUNTY — The Lake County Board of Supervisors on Tuesday resolved to enter into a five-year contract with an online tax auction bidding service in the latest phase of the county’s attempts to increase the rate at which it sells tax-defaulted parcels.
District 2 Supervisor Bruno Sabatier objected to the price of the contract, which he said reflects a plan to put 300 properties up for auction each year—less than half the amount per year that Sabatier has said he would like to see the county auction. The county has slated a 217-parcel tax auction for May 29 through June 2 this year.
“Let’s try to create the trail that we want to walk on, rather than year-by-year try to figure out how we’re going to navigate through this,” Sabatier said.
The five-year, $262,500 contract maximum with Bid4Assets, Inc.—a Maryland-based online auctioning consultant that has performed previous auctions with the county—appears to assume that no more 300 properties would be placed on the auction block each year, Sabatier noted. Under the contract, a $175 fee per property would be collected from the county by Bid4Assets during each auction process. At a rate of 300 auctioned properties per year, the aforementioned contract maximum would be met after five years.
A description of Bid4Asset’s scope of work appended to the contract notes that the company will hold auctions of between 100 and 500 properties.
Sabatier said he would like to see between 600 and 1,000 properties listed each year for tax auction, and expressed concern that the contract would restrict that possibility.
“I just see it as being a potential hindrance to reaching our goal,” he said.
District 5 Supervisor Rob Brown said he would like to see properties come into tax compliance without being sold at auction. “I was looking at properties to come into compliance, hoping that they wouldn’t be sold and that people would pay their taxes. That’s ultimately what our goal should be,” Brown said.
Brown also claimed that data cited by the City of Clearlake regarding the total number of tax-defaulted properties within Lake County has been inaccurate. The city has recently threatened legal action against the County of Lake over a lack of tax-defaulted land auctions, and in November called for investigations into the Lake County Tax Collector’s Office.
“The numbers that we’ve been hearing, mostly from the City of Clearlake, they’re not completely accurate as to what those numbers are in terms of properties that actually have to be sold,” Brown said, noting that he has spoken with an employee in the tax collector’s office about the data.
Brown did not mention any different numbers to contradict the numbers the city has used when discussing the issue. The city has said that as of November 2019, 12,500 properties were in tax default countywide (15 percent of all parcels), and that roughly 2,024 properties at that time had been in tax default for five or more years, “automatically qualifying them for tax sale.”
Sabatier expressed frustration that Brown would claim the city’s data is wrong without providing different data. “We need to be informed directly, not on a private basis,” Sabatier said, “if we’re going to say publicly—which has been done many a time—that those numbers aren’t correct.”
In order to ratify the contract with Bid4Assets quickly, the county has claimed it is exempt from a statutory requirement (Lake County Administrative Code Section 2-38.2) to hold a public bidding process for contracts like the one now approved with Bid4Assets.
Clearlake Mayor Russ Cremer objected to the validity of that exemption, arguing that “you really are required to look at all of the potential vendors out there and maybe do a (request for proposals). I realize that Bid4Assets has been doing this for many years, but that doesn’t mean that they’re the only one out there or that we should be going with them. Perhaps they aren’t the lowest-cost provider, and perhaps the other company has got a better track record. You need to look at that.”
In its explanation detailing why it has claimed an exemption to the bidding process, the county notes that its “staff is aware of only two vendors that presently provide these services to Treasurer-Tax Collector’s Offices,” and that “Bid4Assets, as noted previously, has assisted our office for the past 15 years and is familiar with our business process.”
“I think that you should look at another vendor and do a RFP,” said Cremer, rather than sign a contract right now for five years with this vendor.
Cremer also agreed with Sabatier that the contract with Bid4Assets should be amended to allow for more than 300 parcels auctioned per year.
With District 3 Supervisor E.J. Crandell absent, the board voted 4-0 to approve the five year contract.
Sabatier moved to bring the contract with Bid4Assets back before the board on June 23 for further discussion and possible amendments.
