Fredericksburg City Council passes ordinance to impose collection fee on delinquent taxes

Fredericksburg City Council unanimously passed an ordinance allowing the city to impose a collection fee on delinquent taxes on Tuesday, Feb. 27, 2024. This decision comes in response to the significant number of accounts, totaling more than 5,000, that owe back taxes to the city’s treasurer.

Brenda Wood, the city treasurer, explained the purpose of the ordinance, stating, “The state provides the authority for a city treasurer to do this. The ordinance is for imposing a collection fee on delinquent taxes to cover administrative costs, attorney, or collection agency fees.” The ordinance sets forth a collection agency fee of up to 20% of the taxes owed and establishes a timeline for addressing delinquent status if appeals are filed in a timely manner.

During the council session, Ward 2 Councilor Gerlach expressed his support, citing his extensive experience defending individuals in debt over the past 40 years. “This is not uncommon for municipalities,” Gerlach remarked.

Vice Mayor Councilor Charlie Frye inquired about the potential for flexibility in staggering the percentage based on hardship or other factors. Wood clarified that she did not have control over this aspect, stating, “Whatever agency we use will decide this. The standard is usually 20% with no variables, from my experience,” said Wood.

Mayor Kerry Devine requested clarification on the current collection process. Wood outlined the existing procedures, including initial billing, delinquent notices, and utilization of state tools. She also mentioned measures such as liens on bank accounts and property seizures, although the latter has been halted since the coronvairus pandemic.

Councilor Will Mackintosh, At-large, sought information on the expected magnitude of delinquent taxes in a calendar year. Wood indicated that thousands of delinquent notices are sent annually, with approximately 5,000 to 6,000 issued for the first notice.

Ward 1 Councilor Jason Graham inquired about anticipated revenue and payment arrangements with collection agencies. Wood explained, “I cannot predict this. Taxpayers pay 20% to the agency, and the city receives 100%. The city is not on the hook for paying the agency.”

Councilor Jannan Holmes, At-large raised concerns about the timeline’s adequacy for residents. Wood acknowledged that the process would take time but emphasized that attorneys would have additional tools at their disposal compared to the city.

Following the discussion, Gerloch moved to approve the ordinance, which was seconded by Councilor Graham and passed unanimously by the Fredericksburg City Council. The ordinance is slated to take effect on April 1, 2024.

Caitlyn Meisner is a freelance reporter for Potomac Local News.

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